SAP’s stock price has been satisfactory for some time now. CFO Luka Mucic announced a second SAP Capital Markets Day this year to push it a little bit further. However, customer satisfaction and confidence in SAP’s strategies are at an all-time low.
2019 didn’t start well for SAP: the Net Promoter Score (NPS) was published. NPS is a management tool that can be used to gauge the loyalty of a firm’s customer relationships.
NPS marks SAP’s downfall
The Net Promoter Score is calculated based on responses to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague? The scoring for this answer is based on a 0 to 10 scale.
Those who respond with a score of 9 to 10 are called Promoters, and are considered likely to exhibit value-creating behaviors. Those who respond with a score of 0 to 6 are labeled Detractors, and they are believed to be less likely to exhibit the value-creating behaviors. Responses of 7 and 8 are labeled Passives and are not counted. The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. An NPS can therefore be as low as −100 or as high as +100.
For 2018, SAP expected an NPS of +21 to +23. However, the company actually got -5.
This is a catastrophe for SAP, especially because its executives all know that this wasn’t just the result of a biased study or a small, unrepresentative sample. They know that this is not something they can ignore or create another marketing ploy for. Consequently, SAP’s goal for 2019 is rather modest: the company wants to get back up to an NPS of +1.
But that’s not all. German-speaking SAP user group DSAG published a survey stating that 30 percent of DSAG members do not trust SAP’s roadmaps anymore. Only 24 percent of respondents say that they are still confident in SAP’s strategy.
Some SAP executives are going in the right direction, but there are still a lot of unresolved issues. For example, Bill McDermott’s Sapphire keynotes were nothing more than show, entertainment for the masses, and customers have noticed that.
Pain points are marketing, communication and sometimes product quality. Lack of trust and confidence as well as such a low Net Promoter Score are mostly the result of bad customer relationship management.
However, as I mentioned, some SAP executives are going in the right direction. They have realized their mistake, have realized that it’s not just about products but mostly trust; that a stable Hana system is equally if not more important than customers recommending it.
It’s not enough to just build a complaint button powered by Qualtrics into Fiori apps so that customers can deliver their feedback directly to SAP. SAP needs a new, comprehensive and sustainable relationship management strategy. SAP needs to gain customers’ trust and confidence back to push the Net Promoter Score over +25 and ease the concerns of DSAG members.