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A very warm welcome to Engage with SAP, where we're kicking off a year of ideas, insights, and connections with today's virtual event. I'm Sara Richter. I have the privilege of being the CMO for SAP Engagement Cloud, formerly SAP Emarsys, and the pleasure to be your host for today. Before we get started, just a thank you for making the time to join us today. I know you're all extremely busy. Your time is extremely valuable. So, my commitment to all of you is that in return for your time, we'll provide today both thought-provoking content and hopefully a few tips and tricks that you can take back to the office. Now, this is the first in our series of Engage events this year, where you get the opportunity to get access to top-tier thinkers, globally recognized marketing, CX, loyalty experts, and they'll share stories of meaningful engagement, connected experiences, and how loyalty is being used to drive success today. So if you are in one of these locations, traveling to them, have a colleague that might be there, please do go to the Engage with SAP website and find out some more information. And during this year-long showcase, we're gonna be giving you the tools, the community, and the resources you need to win in the Engagement Era, where SAP is shaping the future of engagement. It's probably not a huge surprise that you see the same landscape that we do, which is truly shaped currently by volatility. Whether that's economics, technology, human behaviors, or frankly, all combined. But I think we're all seeing consumers moving faster than brands, aI accelerating expectations far beyond what we might have been reasonably expected, and the fact that loyalty is increasingly fragile. And in this environment, engagement is what brands must rely on to win and keep customer loyalty. So we have a fantastic agenda today that I am so excited about, and I'm delighted that you're able to join us. To start with, we'll welcome thought leader, Mark Ritson, and he's gonna give us his take on the industry and where teams need to focus right now. Later on, you're gonna have the opportunity to hear from some of our customers, including Essiy and the BMW Group. We're gonna share how they are embracing the Engagement Era. In addition, we're going to be joined by industry experts who are going to bring all of this to life by talking about technology, team coordination, and how to have a truly unified strategy. Let's dive in and start talking about why we're here, which is really to talk about "why engagement?" Why engagement now? Well, I'm excited to kick things off by sharing our latest research, which explores engagement maturity that will help you better understand this complex and volatile landscape. The research was conducted among a sample of 10,000 consumers and 4,800 executive leaders across the globe. And it introduces a new engagement maturity score that will you determine your potential to embrace the Engagement Era. Now, our data shows a widening engagement divide between brands and consumers. Only 22% of brands think they have a problem with creating seamless experiences, but that's a big gap between how 82% of consumers feel because they're telling us that they're dissatisfied with brands. That 60-point gap is what we call the Engagement Divide, the distance between what customers need in the moments that truly matter and what brands are actually delivering. And frankly, this shows that brands aren't acting fast enough to keep up with the growing needs of consumers. And if brands stick with the status quo and don't adapt quickly, this Engagement Divide will continue to grow and grow and grow. And customer loyalty itself will frankly be lost within the divide. Now, you may be thinking, justifiably, that maybe that isn't the biggest surprise. But what is shocking is that the Engagement Divide is widening at an unprecedented pace. And it's AI that's compounding this divide faster than most people and most brands realize. Why? Consumers are already switching to use AI. They're using it to compare and evaluate and switch brands in literally seconds. AI today is making customer loyalty and customer retention a hyper-competitive battlefield. Meanwhile, 78% of brands are struggling because they simply can't activate enough of their data to make AI effective to meet and exceed customer expectations. Marketers know that AI is essential, but less than half of us are able to connect the data in a way that's accessible and available in real time across our businesses. And the longer we take to recognize we have these issues, to solve these problems, that gap stays there, and it grows, and it becomes even harder to close. However, I think it's also really important to understand when you look at this that this isn't a marketing only problem. This is actually an enterprise-wide problem. At SAP, we're looking to close that Engagement Divide by unifying signals across the business so AI can act instantly, turning every interaction into connected, personal experience. But here's the shift, it's something every leader must understand. AI, if it's done right across your entire business, has the power to collapse the Engagement Divide, not just incrementally, but exponentially. And AI does not replace the human experience. It removes the friction that gets in the way. And when we pair the magic of human creativity with AI-powered intelligence, we don't just close the Engagement Divide. We build the kind of relationships that customers, with customers, to make them stay loyal for life. As we're talking about your expectations evolving in the Engagement Era, well, ours have to as well. So I'm really excited to share that SAP Emarsys is now SAP Engagement Cloud. And this evolution is far more than a new name for us. It's actually about a new level of capability for you. Engagement Cloud brings SAP's full strength together so you can connect every interaction, every insight, every outcome across the customer lifecycle. Because frankly, engagement shouldn't live in a single channel. It must live across your entire enterprise. And we're unveiling a new promise: Power Unique Engagement. And this reflects, frankly, what you've told us that you need most: engagement that feels personal, intelligence that works behind the scenes, and scale that grows with your business. Power Unique Engagement is our commitment to helping you deliver experiences as unique as the people you serve. All of this makes SAP Engagement Cloud the engagement layer for the Intelligent Enterprise and allows us to bring AI, data, and orchestration together so that you can build deeper relationships, automate those things that are slowing you down, and unlock the kind of value that only comes from truly knowing your customer. And, of course, bridging that Engagement Divide.

So we've set some foundations for today. We started to think about engagement. We started think about the challenges that we're all seeing in the marketplace and how we are all trying to tackle engaging in the most meaningful way with our customers, activating our data. So with all of that in mind, we're gonna talk about the trends that are currently shaping customer experience. What's real? What's not? What matters most? I couldn't be more pleased to be joined by our speaker, Mark Ritson. I'm sure many of you are familiar with Mark, but those that are not, you should know that he's a fearless thought leader with a PhD in marketing and 25 years experience as a marketing professor at world renowned programs, including London Business School and MIT. He's been a global brand consultant for notable brands, including McKinsey, Subaru, Shashibo, Johnson & Johnson, Sephora, Amgen and WD-40. And I'm a bit jealous of this one, I must admit. He was even an in-house brand consultant for LVMH, the world's largest luxury group, working in Paris with senior executives from brands like Louis Vuitton, Dom Perignon, and Hennessy. He stays on top of the latest trends as a column writer for Adweek in the U.S. And the Drum in the UK. So without further ado, it's my very great pleasure to please welcome Mark Ritson. Great to be here. And Sara, thanks for that fantastic introduction. My job is really twofold, to share with you some of my own experiences and also talk about the reports. And for once, I think we have a report that is genuinely interesting and I encourage you to actually have a look at it. Some of the insights, in some ways depressing, but in a good way, they set some challenges for us. So in my session, here's what I'd like to cover. I want to talk about, just step back and talk about the origins of CX, the whole customer focus, and almost from the beginning, as you'll see of the discipline, which is nearly 30 years old now, that gap that Sara's already spoken about, the gap between the promise of what we should be delivering and the reality of what customers are really getting. Then we'll talk about why. So one thing that I think the report's very good at is really beginning to look at. What's causing the problems and what causes the reasons why companies aren't able to do it. We'll then address the elephant in the room, which is of course AI, what role will it play and how and where should we be using AI in the decade ahead. And then wrap up by looking at the promise versus the reality of where we sit right now. We're gonna come back to three questions that will be the backbone of my session at the first to what degree are you market oriented so i'd like to think about this and vote on this one please and we're gonna pick it up at the end. We'll talk about market orientation in a minute but to what degree do you believe your organization is able to see things from the customer point of view we've given you three options there. Be honest it's anonymous. Poor. Average for your industry. Or actually market-leading and a proper customer-centric, market-oriented operations. Number two, to what degree is your CX consistently managed across the company? One of the things you'll see in a minute is this idea of intra and inter-functional coordination to deliver organization-wide CX. So again, using those same three options, give yourself a score. And it isn't just, do we think we deliver a good service? It's do we have the capability across the organization to join it all up together? And then finally, your third question, where do you stand currently on AI's impact on marketing? So we'll talk about this one later on, but there are three sort of dominant perspectives, there's the civic perspective, which isn't necessarily the wrong one, that it will have a limited impact overall if we jump forward a decade or so. B, that it will be significant, that the impact of marketer and AI together will have a significant impact, or C, it will be total. And what I mean by total is that we effectively are going to remove the requirement to have marketing teams really require it all and we have a closed loop, fully mechanized system. Okay, let's talk a little bit about the last decade, and actually the last three decades of CX and that sort of promise and then the trailing reality that seems to have followed it. So we're almost, almost a 30-year-old discipline. Pine and Gilmore invented modern consumer experience in 98. And really, within a few years, Bain had coined this idea of a CX gap between the promise and often the production of customer experience and what consumers were actually receiving. And it's haunted us ever since. NPS arrives and I think gives us a good empirical metric in 2010. By 2016 Gartner really puts the emphasis on CX and by 2020, of course, with our little experience with COVID, we get that kickstart into the digital experiences that we all suddenly were already having, but we're having so much more of. Now, clearly we're in an era where everyone's asking about the impact that AI will have both on consumers. So, we've had this period where the organizations, for almost three decades, that we're all part of, have had a pretty strong focus on CX. The problem, of course, is one of what I always call market orientation. For me, market orientation is the most important concept in marketing. What it essentially means is, to what degree do we truly see our business, our products, our services, our communication, our experiences from the point of view of the consumer? Not what we think they think. But what they really think. Because the core lesson of market orientation is you are not the consumer. You cannot see what they see. You cannot experience what they experience because you produce it and they consume it. And so when I work with companies on this topic, I talk about this 180, a swivel that we have to do. Marketing and CX isn't about what we're doing to the consumer, It happens when we swivel things around and we see what does the consumer experience from their site truly experience from that point of view. And you see market orientation playing out literally across everything. The most famous example at the moment is, is McDonald's CEO. He's a fine CEO, but you must by now have seen his unfortunate video. He released a little video. Essentially promoting the big arch, his new sandwich, and he thought he obviously thought it was very good because you know, they, the team shared it. The impact in the market is disastrous because people are noting the fact that he clearly didn't or appears not to actually eat the burger. It's a perfect little example of, of how we think something is, is very good from a commercial corporate point of view. And yet, when it's received by the consumer, the exact opposite happens. And we see that playing out, that paradox of market orientation across communications, across brands. You know, we have this belief that our brands are super important in the lives of our consumers. Very often we miss that market oriented point that it's our whole brand. We work on it eight hours a day. We're obsessed with it. But when you spin it around from a consumer point of view, she has literally hundreds of brands in her life and we're much less important. And we come to mind much less than we perhaps imagine inside the organization. I love working with companies on competitive sets, because what you find over and over again is companies don't actually know who their competitors are. They think they know, but they've defined it from a company point of view. When you actually spin it around and talk to customers, what you learn is they're not competitors, they're alternatives and many of them come from different categories. Many of them don't look like competitors that the company thought they were competing with. But for our session today, the key recurring thing for me is market orientation and the impact on CX. Because over and over again in the report and in the data, what we see is companies that are delivering something that they think is adequate, and yet when we turn it around and we look at it from the consumer point of view, the consumer is giving us damning feedback. It's not there. And I think it's a perfect illustration of the challenge of market orientation, not what we're meeting out, but what is the consumer actually receiving? And so for me, the report is a phenomenal reminder of market orientation, Sarah will go into more detail later about how you can download it and I'm truly not f***ing you. We get a lot of industry reports. This is one that has, I think, spectacular insights within it and is worthy of your time. I want to pull out a few things from the report. As we go through my session. So first, we get this recurring story from consumers that they're fundamentally disappointed with the general levels of service that they get. They obviously don't speak about engagement. They talk about the pointy end of engagement in terms of the service they get, but note, first of all, the importance of the overall experience, exactly what Pine and Gilmore told us 30 years ago, it may be for at least half the market, more important than brand itself is the actual uh, experience that we provide for them. And yet, if we take one particular touch point, 58% of the consumers in the survey said that most marketing emails they receive from companies are simply not relevant to them. And, and I would encourage you to do this and to be, be a consumer yourself. Don't be a marketer for a few minutes later on, go to your inbox, pull out your junk email, or even just your non-important emails and gaze at that elephant's graveyard of corporate commercial marketing emails that are being sent out blindly by companies who are like, well, you know, we send out, we send an email to 8 million customers every day, right? There they sit, unread, completely pointless. A really sad indictment of the state of engagement and of customer experience. I've done it in this case for Qantas, which as I'm an Australian resident, I love Qantas. Don't get me wrong. I'm a very, very valuable customer to Qantas and when I say valuable, I would say, uh, $300,000 plus per year asset to them. Yeah. I'm right at the top of their tiers. I'm very brand loyal. I love Qantas genuinely, but I have to tell you, they send me inane nonsensical messaging that fortunately I don't see anymore because it's filtered out. But it's incredibly generic and to the point of the data, simply irrelevant to me. Another data point from the report, 37% of our consumers believe brands don't personalize to their needs. Again, I want to pick on Qantas here. So I've lived on a Qantas plane now for 20 years. They know everything about me. I have my health insurance with Qantas. I order my wine through Qantas, I travel everywhere with Qantas, my kids travel very conscious. I spent a lot of time with Qantas, right? They have enormous amounts of data on me. Um, you know, huge amounts, probably more than my wife has on me, right. This last Christmas as a gift, cause I'm one of their platinum one top hundreds, whatever they sent me a bottle of gin for Christmas. Let me tell you about how I feel about gin. I hate gin. I like generally drinking any alcoholic beverage except gin. It's the thing I don't like. I, I hate everything about it. And yet here was my Christmas present from Qantas who know everything about me, which was a bottle of gin. Yeah. It's a perfect illustration of not just not being personalized, but actually just completely failing the personalization test after 20 years and easily 2 million bucks, you still don't know anything about me at all. It's, it's, it's a slap in the face. And yet we get back to this central point. I am not alone. 46% of the sample say customer service feels impersonal and it feels impersonal because it, for the most part is impersonal. And the cost of that lack of engagement, the lack of personalization, the lack of what we would say in France, savoir faire and doing it well is gigantic. We, we estimate that more than a trillion dollars, the cost of poor customer experience. And we all know from the existing data that whatever the ratio, the cost of getting these customers back, having spent a lot of money and time acquiring them is sensationally high. So I think we're seeing, if anything, a widening of the gap, you know, that engagement divide that Sarah spoke about earlier is getting worse, not better, despite all the technology and focus that we're now applying to it. And SAP have coined this term, The Engagement Divide, the distance between what customers need in the moments that matter and what most organizations can actually deliver. So there is this, you know, I think growing chasm between the two. And I have to tell you, one of my big thoughts about this whole process is I keep hearing from CX professionals that AI is going to save the day, yeah, that AI is going help organizations close that gap. Personalized services, improved CX. That's entirely possible, but I have to tell you, it's the less likely bet. The more likely bet from where I'm standing is customers will use AI faster, more efficiently, more effectively to essentially do their own thing. And it will, if anything, make organizational attempts to offer service look even more second rate in comparison. I'd like to give you a personal example, straight from my own CX life. So I had a medical last year and it wasn't good. Like I'm not dying or anything, but it was like, you know, the medical, which was pretty extensive was kind of like, I'm 56, so you never expect it to be great. But it was kind like you're kind of, you're below average, even for a 56 year old relatively fat man. And so I took it quite seriously. And I got into my supplements quite a lot last year, and I really did change my lifestyle a bit for the better. And I use Thorne, so Thorne you may know are probably the most advanced supplement company in the world. They've got a really incredible portfolio of products and a very good website and an extremely efficient approach to CX. I've found them to be very good. So all my stuff was coming through Thorne, six or seven supplements. I had an idea in January, which was why don't I upload all of my medicals for the last three or four years into Claude, my friend Claude AI Claude and just see what Claude thinks. And Claude, first of all, did a, I would say five times better job than the medical team that usually look at my medicals and then got very proactive very quickly with me and said, look, your supplement choices here are all wrong. You need to change them. And it quickly gave me, as you can see here, the Ritson stack, which is my new collection of fantastic supplements, but my point here is only one now of my eight supplements comes from Thorne. The rest, thanks to Claude, have been moved elsewhere. And if you want a perfect example of how brands like Thorne are going to lose out to consumers like me, armed with AI, there you have it. I think we're being, consumers are being weaponized Through AI to be far more effective at building their own experiences separate from the companies. And I really worry we're missing this perspective. AI isn't exclusively for corporates. It also works on the other side of the divide. And my bet is it will make this bigger. And if you look at Sara's point, customer expectations are moving at a new speed with AI at their fingertips, people compare, decide, and switch in an instant and those micro-moments now define whether a brand wins or loses a relationship. You thought the customer was hard to please 10 years ago, weaponize them now with AI, you've got to run even faster because I don't think AI just works one way. So why do companies keep failing at CX? The report is fantastic on this. So let's go back and look at the gap that's been there pretty much since the start of CX. Look at Bain's original identification of the gap 20 years ago. 80% of brands believe they're delivering superior customer experience. 8% of customers agree. Perfect example of market orientation mismatch. If we jump forward 10 years, the very famous Capgemini study, which I cite all the time, 75% of brands in their survey thought they were very customer-centric, but only 30% of the customers of those companies agreed with them. So again, there was a sense of, you know, almost arrogance and certainly ignorance about what was really being delivered. And I really think with the new SAP report, what we have is a timely update 10 years later to basically confirm the same issue is there. 78% of businesses believe they deliver seamless CX and 25% of consumers agree. Give or take the odd percentage point in definition, what we're seeing is essentially the same gap. Yeah, we're not getting any better. If you look at the reasons behind the gap, they have been changing. To begin with, it was channel fragmentation. Then it was the fragmentation of data. Data has been more unified, as we'll see in a minute, but the organizational fracture around CX now appears to be the biggest single burden. The problem on data first. So brands are certainly investing in AI and investing in CX, but they, they don't have the data ready to build that system. When I talk about customer data, I often use the analogy of irrigation. Every company has data and it's almost like the water. Yeah. But before you start pumping water into anything, you need to have the channels of irrigation in place to make sure it goes everywhere, goes to the right places, is managed. What we find is most organizations don't have that infrastructure. 78% of businesses say AI is essential for retaining customers, but less than two in five are actually able to share their data with the CX or CRM platforms. The irrigation just simply isn't there. And if you look at the reasons behind it in the report, 60% of companies suffer from dark data. So they have it, but they're not using it. 54% can't access and use real-time data, so they're missing out on a huge trove of information. 55% say data isn't structured correctly. They just can't get added. And two thirds, it's a giant proportion, are still unfortunately dependent on third party data and haven't managed to create any kind of first party data pool. So we're falling behind in the data area and data is the essential ingredient. And there's a lovely quote in the report from Christian Wandel. Who runs performance marketing for CHRIST, which is Germany's biggest jeweler. When you have more data, you can learn more about your customers. Our challenge was that we had many CRM systems and silos for data collection. We wanted to be more efficient and improve communications with customers to increase repurchase rate. SAP Engagement Cloud was the best product we evaluated. It fit our demands to bring all the data into one tool, and that tool with an omnichannel perspective. So what we're trying to find are irrigation systems that can manage this information. So first challenge is absence of data. Second channel is many companies have got too much focus in the wrong places. It's a very common thing. One of my first ever big consulting gigs was working for a very famous car company who'd spent millions of dollars. Training all their salespeople to be customer oriented. And when I went in and did the analysis work much later, what I discovered was very clearly the central node in giving a dealership either good or bad service was the receptionist sitting in the middle of dealership. This was typically a woman in her early twenties who'd had no formal training in customer service or anything else, was usually high school educated, and if she was good, the service was good. If she wasn't so good, the service wasn't so good. They spent all the money in the wrong place and they'd missed what was essentially the most important touch point. And we see that same process to some degree going on here. If you look at the mismatch in the report between where consumers are experiencing brands and where companies are spending their time, money, and focus, what you see is a bit of a mismatch. If you looked at those first two examples, social apps and social content. Because they've essentially been highly promoted and focused upon by very large companies we all know the name of, they've occupied the thoughts of organizations perhaps a little too much. And we've ignored the other channels, basic online, mobile apps, and in particular in store, where actually there's still an enormous need to focus. This one is for me a particularly surprising finding. So only 40% of decision makers believe their departments are truly coordinated. And yet 45% say customer service feels impersonal as a result. So what we've got here is again, this mismatch. And I think intra-departmentally, so within each organizational department, what we find is many of them do not have the capability for engagement. So let's be clear what SAP mean by that. They've got this nice definition where for them, engagement really comes back to a combination of capability and outcomes. So they've pulled the two things together. And we look at this continuum within SAP where many companies are just reactive. If they're further down the continuum, they become proactive. And if they truly get it, if they really reach that zenith and almost no company does, we become predictive, which is the most lovely customer experience of all. They know what I want before I even know I want it. They anticipate it, right? It's almost a marketing myth now. If you look at how the different departments within organizations score on that engagement maturity. What we find is everything is back to front. So a department like procurement scores relatively well on its engagement. But the customer facing departments, customer support, for example, is actually among the lowest scoring in terms of their ability to engage with actual consumers. So we've literally got it the wrong way around. Quite a stunning statistic. And then challenge number four. We're finding that complexity is the enemy. And as we invent more tools and grow, complexity becomes a significant enemy. And here again, we face an interesting market oriented paradox. If you look at customers, they have one incredible superpower, which is no matter how many different things you throw at them, no matter, how many different media touch points, complications, departments you throw to a customer, when you look it from their point of view, they're instantly able to integrate all together in a single perspective, which is their customer experience. And yet when you turn it back around again, we have this organization of spaghetti, delivering all these different things in all these complex ways. If we have to replicate the simplicity of the customer and the simplification in order to match them and deliver proper CX and you see it in the data. What are the reasons why brands admit that there are barriers here to delivering you know, a better engagement and a better service. Top of the list, complexity within the marketing department. We're our own worst enemy. Lack of integration across systems, lack of visibility beyond marketing into the other groups, engagement, not an overall business priority. So the complexity and the barriers within an organization are stopping us doing it. And I really want to highlight Brian Niccol's work at Starbucks. I think he is the best CEO in America right now. I think is fixing Starbucks. And at the core of what Niccol is doing is very simply applying these principles. He's simplified the menu, the customer experience, the overall approach. I think what he's been able to do is take a classic example with Starbucks. They had one of the best apps, best as in did the most functionality in the market, but it was a **** show in terms of complexity for the consumer, a completely depersonalizing experience. Niccol, who is himself a former marketer, now CEO has gone in, he has simplified, he's given service the core visibility and he said the way we engage with customers is at the heart of our problems and as you probably have been following and trust me it'll get better over the next three years, what we're looking at is someone that is turning around Starbucks before our eyes, same source sales going back up and at the heart is removing complexity and delivering a better CX and it comes back to what Balaji's point has been, I think for the last two or three years. The brands winning in engagement aren't running more marketing campaigns. They're building engagement as a comprehensive enterprise wide capability where AI is grounded in everything else. So the key word here is enterprise wide. So with that in mind, let's look at AI and whether AI is the solution that many of us hope it will be. If we step back, you've got to, first of all, take a point of view on AI and marketing. And goodness knows, it's all we talk about at the moment. I think there are three perspectives, similar to the question I asked you at the start. There's the skeptical perspective. AI is just automation with better PR. It's not going to change anything. It's there. Okay, it is there. You can use it as a little tool. We're overstating the impact. And this really comes down to a marker that believes. A smart person is always going to be better, more creative, more switched on than even the finest piece of AI. At the other extreme, we have the zealots, and there's plenty of them around in marketing. AI will replace marketing entirely. We won't need marketing departments in the future. We won't need marketers, essentially a closed-loop, tech-driven system. The CMO, if she or he remains, doing little more than managing a tech system. And in the middle we have the pragmatists. You know, we see AI as a horse, but they still need a jockey to ride the horse. AI makes good marketers great and bad ones worse. AI is amplification. It isn't necessarily going to replace everything. These are three perspectives genuinely I see right now playing out. For me, the two extremes are, I don't want to say incorrect, but my guess is they will be wrong in the longterm. I think the skeptic is right about, we still need fundamentals. But wrong on the scale of impact that we'll see with AI. And I think the zealot also wrong in the sense that, yes, there is big change coming, but it isn't changed to the hundredth percentile. We are still gonna need that human AI dyad to be successful. So for me, the pragmatist is right. And I would say just because it's the middle path, I don't think it's gonna be a 50-50 balance between marketer and AI. I think AI will be. The dominant part of this relationship. And the reason I say that, if you haven't seen it yet, another report came out this week. Anthropic did a big piece of analysis looking at 800 different professions and looking at what each profession did and how much of that profession's work, ultimately, keyword ultimately, will be deliverable using AI. And as you can see, market research and marketing finished fifth. Now you would think at first sight that looks like it's mid table, right? We're in the middle. We're not That's the top 10 of 800 professions. We are in the top one percentile of what I would call vulnerability. 65 percent of our tasking will ultimately, eventually, be AI replaceable. So I think the pragmatist is right. There's still 35 percent of room simplistically for us but we expect a revolution and the revolution will come. So, where is AI working right now, specifically with thoughts about CX? I think already, and you see this in the report, 89% of our marketers said AI is already essential for acquisition and for targeting. I think it's brilliant at identifying human patterns from data inputs and I think identifying who to go after is already something that, you know, I think is becoming second hand. We've all talked about the second one, campaign efficiency and content generation. This is the year where we are now generating ads using AI, which are as good as, if not superior to, ads that were created without AI. I don't think it's the biggest part of the revolution, frankly, but 71% of retail marketers confirm they're speeding things up using AI. The other one that I think is gaining ground is product recommendations. Again, a dirty admission of the industry. If you ever visited even the biggest and most data customer-centric companies, their product recommendations were essentially poor. If you look at Amazon, for example, it really never got it. I've noticed an incredible uptick in the quality of recommendations. And again, we can point the finger at AI. And finally, yes, it's true. In terms of predictive churn and loyalty metrics, we are now beginning to use the complex algorithmic power of AI to really improve our ability to retain, and that, as you know, has enormous impacts on the bottom line. That takes us to what I think Anthropic would say is about currently about a 28% penetration of tasks. It's going to get to be 65% as we saw, but some things aren't happening yet. What's not happening yet? We're still a couple of years, I believe SAP will, I think we'll tell you it's a bit faster, Sara will disagree with me, real time operational engagement fusion. So being able to pull everyone together using AI, we're still a couple years away. The agentic revolution that I think is the real start of the process, still yet to truly emerge, although we talk about it all the time. The autonomous closed loop end-to-end journeys, still a bit away. And for me, the one I'm excited about, cross enterprise, AI decisioning, strategic frameworks, building the marketing plan from directly AI, it's coming and it's huge in its implications, but we're not there. So when I look at the impact of AI on marketing, I come back to what marketing truly is, yeah. And for me, marketing is three things. Yes, it's tactics and yes, it is communication. We have a terrible tendency in our industry and our discipline to start with tactics and particularly start with communications that the lesson of my teaching and training has always been step back, go to the other end of the spectrum and begin with diagnosis, understand the market. Understand the segments understand where we're playing and do that first with data Then we get to strategy so often missing from so many big marketing companies. My definition of strategy in marketing is very simple and I encourage you to adopt it because goodness knows we've complicated this one. You have a good strategy if you can answer three questions coherently. Who am I targeting? What's my position to those targets? And what are my objectives? Those are simple questions which are hard to answer. I find the vast majority of companies cannot answer those questions and cannot answer them coherently. So based on diagnosis, can you build a strategy? And once you've done that, then we get to tactical execution. My point is AI is already beginning to have massive impacts. In the area of synthetic data, those of you working in B2B will know this, we've reached a point where I think synthetic data is at least on par with a lot the consumer data we see. I think in terms of strategy, we now find targeting, positioning, objectives, all of the things essentially that we're looking at in terms of strategic development are being fed more and more by AI. And then tactically, we've already seen it, communications, yes, pro development, yes, and pricing, yes beginning to have an impact. But in the area of CX, we see, I think, a genuine opportunity for AI to offer that improved level of engagement and that cross-organizational feel. So let me finish with what I think is gonna be the link between AI and customer experience. So the first point is, as we said earlier, customers know what great engagement should look like and how they experience it. You know, they know what they're looking for, often unlike the organizations, seamless, connected experiences, personalized product recommendations. Localized content, highly personalized content. So using data to give me what I want and maybe why I didn't even know that I want it. So the consumer knows what they want. And yet at the same time, they're very skeptical that AI is going to help deliver that engagement. Marketers think 80% of the time that AI's going to add a lot of value to the CX experience. Consumers don't believe that. And I want you to focus on that statistic because it's super important. Consumers know what they want from really good proactive CX. They don't think that AI, is going be the thing that delivers it. We've learned from our data, it probably will be essential. So how do we answer that conundrum? Let me tell you a story by way of introduction. So I spent many happy years working for LVMH, the luxury goods company, at a very senior level, working with all the CEOs of all the great brands. And we have an LVMH house, which is basically the internal strategy team for the whole operation. And one of the challenges I was given by Mr Arnauld, the big, big, big boss was he wanted the whole of LVMH, all of its luxury brands from Dom Perignon to Christian Dior to Louis Vuitton to Tag Heuer to more embrace the customer, to embrace segmentation, because luxury brands had turned their back on marketing, at least on listening to customers. They felt we should tell customers what they want. And Mr Arnauld quite correctly said, that's too simplistic. I need us to also focus on customers some of the time. None of the presidents agreed with that. The presidents were opposed to research, segmentation, anything that came from what they perceived to be P&G consumer goods. It was a big challenge for me. I couldn't get any of them to buy into it. So in the end, we did something spectacularly clever and spectacularly successful. So we had a big dinner of all the CEOs of all of the luxury brands within LVMH. We had it in London at our headquarters, the LVMH headquarters. And we essentially brought these 45, 50 men and women together for a sensational evening, some speeches, some very senior famous people. And we served this spectacular meal. You know, it's a luxury house, which has many, many, many wonderful brands, often in wine and spirits. And so there were eight tables, very interesting table assortments from different brands sitting together. And it was one of the most amazing nights of my life. And in the morning, when we got everyone together for our big meeting, I said to them at the start, how was dinner? And even by their standards, everyone in the room said, spectacular. One of the best meals I've had, amazing wine, amazing company. And then I got out the data that we got from their survey, from their PAs. And I said, to them, we actually asked all of your consumers, we asked all you what you liked and what you preferred and what your tastes were. And then we clustered you using behavioral clustering, and then we found there were six different clusters. So we had six different tables and we went to a different Michelin chef and a different sommelier from some of the world's top hotels, we gave them the brief and we asked them to create a custom menu cooked just for you last night, a custom array of wines. That's what data is. That's, what the segmentation is. We never told you, you just had an amazing meal, but that's why. Data and segmentation can be so powerful and it was the start of a market oriented revolution within LVMH. Now, what is the point of this long story? I think this is how we use AI in CX. I don't think the front end AI stuff is really where the value is and I think the consumer is switched off. I think us talking about we've got an AI chat bot, we've generated all these ads using AI, what do you think? I think it isn't just not good. I think its negatively received on the part of the consumer. I think the paradoxical role of AI in CX is in the back end. Go back to LVMH. We didn't talk about segments. We talked about an amazing wine that was exactly what this person wanted that we got from doing the data and doing the segmentation. I think where we will see AI having its impact is in doing predictive segmentation, in real-time personalization, in all of the inventory stuff just being available at the right time, in protecting customers before we lose them. All of it is done by AI. None of it, is labeled AI. Now that's a challenge for you because right now everyone in your organization is being asked, how are you using AI? And so you're forced almost to talk about the front end, less valuable stuff. I think we get to a better place of maturity and better engagement when we use AI as a backend tool, seamlessly, inter-departmentally connecting everyone together, yeah? But the less we talk about AI paradoxically, and the more we do AI, the better our engagement and the better service will become. So let's return to the gap before I close. I believe that there is an opportunity here in the gap for each of you. The companies that, I mean, I was talking to Sara about this this morning. When you look at the report, there's, there're relative scores on engagement. And what you see is some companies are better than others. Some countries are more engaged than others, but what, what overall, what the data says is we still aren't closing that gap. Look at the gap as your opportunity. A competitive opportunity to win in the most important arena of all. Because so far the bar is low, but the rewards are enormous. Look at that data that SAP have revealed to us once again, 78% of businesses believe they deliver seamless CX and only a quarter of customers agree. I challenge you to do better. I challenge you to unite the organization to use data better and to create, for the first time in the 30 years of CX, using technology and using AI, but in a backend manner, a truly seamless, proactive, why not predictive experience for consumers. They want it, they respond to it, and so far in the third year history of CX, we haven't for the most part delivered it. And I do see I have to say SAP as a key partner in that process. And I remain significantly impressed by the capabilities of what SAP can offer and to fill the gap. All right, back to you, Sara. I've said enough good stuff about you, I think. You can never say enough good stuff, Mark. Come on. I think the report, I have to tell you, when you asked me to do this and you sent me the report I was like, oh my goodness, here we go. It's a great report. Congratulations. I think it's brilliantly done and there's a lot of insight. Thank you, Mark. That is genuinely appreciated. As was your session, which I think was fascinating and insightful. I hope everybody else got as much out of it as I did. The good news is it will be available on demand. So if you want to go back and listen to it again, because there was actually an awful lot in there, I think, to process and think about. And I love the idea of the challenge. I just think that's such a great place to end, to go away and think, how can you do something better? That's what we're all striving for. And that's what- I think that's what drives a lot of creativity in the marketing space anyway is how can we do it better? How can we bring something different to it? You're right Sara just I think that point's key why I don't want to sound negative about the gap or the divide I think it's opportunity right? That's what we've got to say to clients that it's so important and so potentially doable. The gap is your opportunity here, and I don I don't want to leave with it leave you with a negative thought I think its a great opportunity for those that want to take it. I absolutely agree. Let me pose a question to you, though, which I think goes really naturally from that. So you've asked, you've asked people to take it as an opportunity, as a challenge. So if you were looking at a leader, and they said, please give me that single piece of advice that's going to help me accelerate engagement maturity in 2026. What's that piece of advice? What should they do? What comes out from the data over and over again is I thought about it when I was reading it is there's an old joke, right? That marketing is too important to be left to the marketing department. And I think in the same way, I think we have to say the same about CX. What comes our again and again is that unless we can have a truly organizational wide belief in the importance and delivery of what we're doing, you'll never get engagement, right. I think, I was very careful in choosing Niccol at Starbucks, it's not easy, but it's easier when you're the CEO to bring in that cross-organizational focus and that's literally what he said from his first day in the company, right, was, listen, we're not doing it, we need to get everyone together, this isn't a marketing issue. So I think it's that idea that marketing has to market the importance of customer experience and get everyone involved in it and that is a difficult task. I couldn't agree more, but I think it's fundamental. And that sharing is how you understand a customer. I mean, there is, whether you call it customer centricity or all of the various things that we talked about, it's still about thinking about that and dragging your customer, kicking and screaming into the center of every conversation you're having about what you're doing as a brand. Look at what we've done in our discipline, right? We've got market orientation, customer centricity, customer obsession. We've even complicated the simple thing that was meant to be at the heart of what we do. And, and executives get really confused. It all means the same thing. It means exactly what you just said. That at the end of the day, the customer's in the center of this. And if you follow the money, all of that share price, all of that revenue, all that profit, if you've followed the money all the way, it comes back to those people who pay for everything. And for me, I'm 30 years in this game now. The great paradox of marketing is that what the people on this call see when they see their service or advertising or pricing, what they see is not what the customer sees. You cannot see it without data. You and I cannot judge this podcast because we're producing it. So we shouldn't bother and even think about it. We should look at the data afterwards about how we did. If you understand that, you're a marketer, but then you need the data to your point, and then you have to do something about it and bring the whole organization in together. As you see from your data and from all the way back to Bain's data, we've not managed to do this yet, which is stunning. When you look at how much money has been spent by how many companies, we still don't have predictive customer experience. Except as a very rare occasional moment, right? Your average, your engagement scores are 25, 30% for most companies, right. Everyone's failing at it. We haven't done it yet. Agreed. For the few that are doing it, what do you think they're doing differently? I mean, we can leave everybody with this thought. It always begins with market orientation, the importance of the customer and realizing we're not the customer. Then I think you've got to manage that data, right? Every company has too much data, but many of them are drinking from the fire hose. So putting in the irrigation systems that allow us to feed that data in the correct way I think has to be the second stage. And then the third one, which we've talked about too is, and then it's about making sure Marketing on its own does not have enough power or influence or impact to make this work. Service is a company-wide challenge. I'm going to make it the case for something that will never happen. We need more market-oriented CEOs. It's very hard when a lot of them come from finance because without that leadership at the very top, I think it's a real struggle. That's why Nickel is... Well placed, he's a marketer that now runs the company and he can pull everyone together. So for me, market orientation, data, and then that industry-wide acceptance that it's, you know, again, there's an old joke here, right? We've got to get finance and marketing and operations and procurement and logistics to work together, almost like they work for the same. Shocking idea, truly shocking. Right. Well, I am genuinely sorry to say that I think we have run out of time, but thank you so much, Mark, for your insights, for the time you spent, for sharing that, for spending the time to report and pulling out so many gems. I hope everybody has enjoyed this as much as I do. And Mark, we look forward to seeing you again soon. Looking back, we have spent the last hour or so really deep diving into the engagement index. And I thought it was so great to have Mark's external perspective on that data and then looking at it such a different way. And then how we can all take that and actually use that as a tool for ourselves to help us improve how we continually engage with our customers and how we continually improve. The experience that our customers are having with our brands. And I think it resonates with some of the things, hopefully, that I said earlier about the volatility of the world that we're currently in and the absolute fundamental importance of engagement in that world today.

We're going to focus on tech trust and absolutely hardcore real-world CX wins. And I am delighted that I have such a distinguished panel of experts joining me for our next session. We have Sunny Neely from SAP, and he's going to help to connect the dots between our research and how Engagement Cloud helps brands move into the Engagement Era. We have Venky Naravulu from Sinch. He gets to see up close the operational realities of getting enterprise-wide engagement actually right, some of the things that Mark was talking about. And last but absolutely not least, Daniele Tedesco from Essity, who's representing brands who are already transforming and proving what great engagement looks like, but what it looks like at scale. So my pleasure to welcome all of you. And what I'd like to do first is ask you all to perhaps introduce yourselves a little bit with a little bit more detail than I was able to give. Daniele, maybe you could kick things off for us. Sure. Thanks, Sara. Thanks for having me. I'm Daniele Tedesco. I am from Essity, a global e-commerce process owner. And a simple way to describe my role is really with three S's. Streamlining, optimizing our e-commerce business processes internally. Speed, this is an external one focusing on accelerating our go-to-market, getting our shops up and running in our different markets and really focusing on the customer. And seamless. This is where we really touch that engagement part, so building that seamless customer experience across all of our digital experiences. And we really feel that, or acknowledge that Engagement Divide. And as a brand, as our different brands and as Essity, we really focus on our professional buyers as well as our consumers. Essity is not a household brand or household name I should say, but our brands touch one billion people every day, and that gives me goosebumps to think about it. One in every eight people are using our products, and our products are touching their skins. Our products range from incontinence to household products like Tissue Town soap and sanitizer, as well as medical devices, compression garments, we're in your hospitals or your airports and our factories and schools. So yeah, I'm happy to be here, excited to share more about my experience with engagement and then customer experience. Thanks so much, Daniele. And it's exciting to talk to a brand who really is everywhere we are all going. So that's really quite exciting. And Venky, can I ask you to spend a few minutes chatting a little bit about yourself and your experience? Absolutely, thanks for having me here, first of all. Thanks, Sara. And of course, hello, everyone. I'm Venky Naravulu. I'm the Director of Partner Solutions at Sinch. I've been at Sinch for about five years now. I come with about 20 years of experience at the intersection of digital communications, customer engagement platforms, and enterprise cloud solutions, how they come together to deliver those in a privileged experience across different verticals, Retail Healthcare Financial Services. At Sinch, my focus is product management of native integrated solutions with enterprise platforms, such as the SAP Engagement Cloud. Together, we enable brands to reach their customers across every relevant messaging channel, be it SMS, WhatsApp, RCS, and there are a dozen more. Sinch is a global leader in cloud communications and like Daniele said, even I get goosebumps. We power billions of customer interactions every year across various channels for thousands of enterprises worldwide. What makes our partnership with SAP Engagement Cloud particularly powerful is the combination of Engagement Cloud's AI-driven orchestration, the personalization engine, along with Sinch's messaging reach and also the reliability, collectively giving our brands the ability to deliver the right message on the right channel and at the right moment on a global scale. Once again, thank you for having me. I'm really privileged to be here. Pleasure, Venky. We're delighted to have you and thank you for that. So why don't we kick off our discussion and start talking about some of the teams that you are working with. And these are teams that are already operating successfully in an Engagement Era. And they're delivering, they have connected data. They've simplified around omnichannel, and Venky, I think he just touched on some of that. They are delivering real-time personalization, and they're doing a lot of that with intelligent automation. So I would love to look at a brand or an example where you've seen, where you really can focus on engagement and how it's really been done right. And where you looked at it and thought, wow, this is exactly what the future looks like. This is where we're going and where really successful brands need to go. Venky, could you kick things off? I have a feeling from chatting with you have an example that fits this question really quite perfectly. Yeah, so in terms of doing engagement right, the brands that are doing it right are the brands who are already adapting to the evolving dynamics of customer engagement ushered in by the AI driven technologies at the same time. So in fact, a recent Gartner article titled "Top Priorities of CMOs in 2026," they advise on a zero-based approach to channel engagement, meaning you have to start over; you cannot just rely on past successes, blindly speaking. So this better prepares brands to transition to the agentic buying in a scenarios and the channel engagements, which are rife with AI touchpoints. Now, just to quote the Loyalty Index, I know you all have got different stats, but it helps to drive home the point, 23% of consumers said batch-and-blast marketing actively damages their loyalty. So the brands that get engagement right are those who make a shift from broadcasting to customers to conversing with them. That is what means by engagement done right. So brands treat engagement as a continuum rather than a campaign. To throw in a quick example, a premium retail brand reaches out to a customer, for example, who perhaps recently browsed one of their favorite items, be it a dress they liked or a pair of running shoes, which was out of stock. Now SAP Engagement Cloud, with its collective capabilities, can trigger a personalized back-in-stock notification over any channel powered by Sinch for the specific product along with associated complementary products. And all of this is backed by predictive analytics like Mark also just mentioned, right? So the customer now is pleasantly surprised. Somebody is not throwing at them a message about a product, but they're throwing them with options to interact, and interaction is very common in channels like RCS or WhatsApp. Now the customer can now pose a question. They can ask a question about the durability of the product and the quality of the products or any other questions they may have. And this is where an AI agent already trained on a curated knowledge base of the brand's specific products and services, can do a fantastic job of answering a quick question in an automated fashion on the same channel. Say the customer then decides to ask a question which may need a human touch. The agents can do warm transfer, seamless, frictionless to a human agent who can then jump in and address the other question. So what happens here, they're going from conversion, from awareness to conversion within a few seconds. And that is what I mean by saying engagement done right. Now, there are three things that stand out in such an engagement, right? The customer data is unified. Once again, something Mark had brought up. So every message and engagement reflects a real context. And this channel is chosen based on the customer preference, not the brand convenience. Last but not least, have AI agents automate the personalized experience with the option to seamless transfer to a human agent as possible. Hope that helped answer that question. I think that was a great answer. Thank you very much. Daniele, I think you have a bit of perspective on this. Do you want to dive in a little bit? Sure, yeah. I mean, I guess taking from the other end of the spectrum, you know, Essity's products are essential and necessity, so that's where Essity comes from. So the other side of the spectrum of, you know, luxury brands is, you know, these products that maybe don't they don't have a lot of thought maybe behind the purchase process as the same as a luxury product. But engagement is still extremely important, and especially when we talk about our global incontinence brand, TENA. This is both in B2C, so it's found in retails, pharmacies, but it's also a B2B product where we're selling into hospitals and nursing homes. So we have this gambit of customers that we have to engage with all the way from the patient, the caregiver, maybe a loved one who's doing research, and then all the way to this professional buyer who's really task-oriented. The brand team behind this and all the leaders at TENA have really done a good job at compartmentalizing and segmenting these needs, and we've built a strong B2B and B2C e-commerce platform out of that. And I'm happy to share, you know, I can't share specifics, but the past two years that we've been live, we've been experiencing double-digit growth, and it's been phenomenal. And one of the successes around that and to hit on Venky's comments is, really, we focus on the fundamentals. The success is built on, rooted in the fundamentals, and it's not just AI for the sake of AI, similar to what Mark was talking about. We're really looking at product data, pricing, inventory, and maintaining simple things like customer identity. These are the things that we, these are the levers we pull to really hone in and drive that consistent experience and engagement with the customer despite the market, despite the touchpoint. And as a result, we've seen fewer ordering errors, faster conversion, and more repeat buying is what we're really driving for when we talk about our D2C solution. That's fascinating. Thanks, Daniele. So let me flip to our to our last of our panel. Sunny, I'm delighted that you've been able to join us. So I'm like, hi, so as part of this conversation, maybe you could start by intro-ing yourself in just a sec. But my thought as I was thinking about handing things to you is that listening to Venky and Daniele, there's a lot of commonalities between what they're talking about and the stories they're telling. And, for me, a lot of them boil down to this ability to orchestrate engagement across the entire enterprise. So maybe after you introduce yourself, you could tell us a little bit about how Engagement Cloud is powering those kind of experiences. Absolutely. Thanks again. Well, I'm Sonny Neely. I am a global industry advisor for the consumer products industry at SAP. Prior to SAP, I was a brand manager at Coca-Cola and Ferrero, so I'm kind of bringing a practitioner's perspective. I'm grateful to be a part of this panel. I think for me, when you talk about Engagement Cloud, I feel like SAP is in the most uniquely, the most strategic position to help brands connect operational data with customer data. And that's the only way they're going to be able to deliver the personalized omnichannel engagement, not just for marketing, but at scale and across the whole enterprise. And so, you know, what does that mean in practice? Well, I mean, we talk about the end to end all the time, because I'm not just looking at CX when I worked with consumer products, large, complex consumer products customers. They have to bring marketing data, but they also have to connect that with the ERP data, like inventory, pricing, supply chain fulfillment. And that's how you make this customer experience a business reality, right? So, this is all about brands tying directly to revenue, margin, like Mark Ritson was saying, these real metrics that affect the stream, that affect bottom line of these companies. And you know like Mark said, look the Engagement Divide is real, and it can be really expensive, too. So I think it's critical that we think about these different functional areas. I've worked, when I was working in marketing, you had to align very closely with finance, with supply chain, with commerce, et cetera, in order to properly execute and see these results. And I think just one example, right off the bat that comes to mind for me is Molton Brown, the premium beauty customer that we have. Molton Brown was in a very disorganized state, fragmented data, et cetera. And what they ended up doing is looking to SAP Commerce Cloud for its complete commerce capability, its personalization capability, but then integrating that with Engagement Cloud so that they could deliver all these new capabilities of Engagement Cloud, AI-powered lifecycle management, ease of use for testing, et cetera, but also have the ability to link that to the ERP to bring in those real business metrics, profitability, cost of goods sold, et cetera. And the results were stunning, you know, 20% uplift in repeat purchases, 5x increase in revenue from email, et cetera. So a fantastic story for how we were able to help a customer really bridge that Engagement Divide that we're talking about. Thanks, Daniele, I think that's a really, really fantastic example. And I think it leads us very naturally, I'd say the elephant in the room, but we've talked about AI a lot already today, and I think we'll probably continue to do it. But one of the things that Mark talked about, what is clear in the index, is that consumers are already embracing AI to simplify their decision-making. And on our end as brands, we're still figuring out how to truly operationalize it, to really get what we need from it. So I think the question that we're probably all ask ourselves a little bit is what's the balance? What role does AI really play in helping brands keep up with the pace of consumers in this Engagement Era? What does good AI actually look like in practice rather than, as Mark said, just talking about it for the sake of talking about it? Daniel, could you kick us off on this one? I think you've got some thoughts here. Yeah, absolutely, Sara. And I fully agree. I think AI is there, it's everywhere now. But when it comes to brands, and I think when the best brands and the best leaders who I hear talking about AI, effectively implementing AI are not talking about how... They're talking about how AI is empowering and accelerating their people, not replacing them. So this is definitely Essity's approach. Essity has worked really hard over decades to build trust and brand loyalty and brand equity on some complicated and taboo products like femcare, incontenance, and lymphoedema. So in general, Essity has a bit of a cautious approach to exposing our customers directly to Gen AI, but with that being said, in the background, we're utilizing AI every day and empowering our people to use AI. So what does that mean in practice? Our product and experience teams are using AI to automate configurations and content generation. So they're spending less time coding and more time optimizing the customer experience, and we're seeing that shift of like task-oriented to value-oriented, and that's the message that we're kind of trying to drum up and create excitement around it. I think there's a lot of opportunity as as discussed before to speed things up, what Mark is pointing out, but when the consumer sees that, it feels a little bit synthetic. It can feel a little bit like this is an AI agent. It's secondary, but when you use it maybe to create product content or really create segmentation behind the scenes, I think that's where the power really lies. And that's what we've been trying to really reduce friction and close that engagement gap, as you guys have been talking about. I think for me personally, I like to really focus in on what I call the post-purchase journey. I think this has a lot of opportunity for really streamlining and building a stronger experience at Essity, and we can leverage AI to empower that. So this is like, having empowering our customer service agents to answer complicated medical questions about our products, and not having to rely on a product manager, for example, or empowering our partner sales teams, these are our distributor sales reps, to really build a targeted portfolio of products that will best answer that janitor or that customer's demographic. So this is where we're leaning into and building some excitement about internally, and it's going to create some future growth. I think that's really exciting, Daniele. It's all about connecting across the enterprise, which is what we've been talking about really for the entire event, and I think that brought it to life really beautifully, so thank you. Venky, can I ask you to jump in? I think you have a pretty cool WhatsApp story that you could share. Just to basically set the tone here, I believe brands are already paying attention. If not, they better start paying attention to AI. But they should not adopt AI just because it feels urgent to check a box. Because if you do so, you will end up with automations that not only confuse your customers, you'll also frustrate your own teams. I'm trying to quote Gartner's hype cycle for AI technologies. This is from June '25, fairly recent, in my opinion. The title said, "AI has immense unrealized potential." And they also add that AI agents now are at the peak of inflated expectations, whereas the generative AI solutions are failing to achieve this unrealistic high expectation. So what does this mean for this Engagement Era? Meaning choose AI investments wisely. I think Mark also said, don't just jump in. There could be a lot of prep work done upstream which will reap the benefits downstream. To accentuate this point, there were two more stats that even Mark brought up. 84% of brands don't excel at differentiating themselves with personalization, and 40% of consumers said brands don't understand them. So all of these are opportunities where the good AI can be applied. And my recommendation is to apply it in bite sizes. No need to boil the ocean, start with those high-frequency engagement moments, which are ideal to optimize the customer engagement experience, plus you reap your rewards and you get positive feedback. So to give a quick example, there's a premium appliance machine for premium coffee machines, which are out in the wild in offices and elsewhere. So they came up with a very easy to address in a solution. They pasted a QR code next to the coffee machine, and any problem that occurs, you scan the QR code, you are instantly put in touch with skilled agents who are trained to address various questions, right? But it also is important to realize which channel was enabled. So they started with WhatsApp. So what does WhatsApp do? It is truly conversational by nature. But guess what? You can also take a video of what's going on with the machine, and you send it across to the agent, who can receive it in the same channel, and they are able to quickly address the problems. But imagine putting an AI agent here as well, which is already trained, going back to my example from a previous question. It's trained to address the most routine problems or issues or FAQs on these appliances. It can skillfully be handled by an AI agent. Once again, it will be trained on a curated knowledge base, so it minimizes hallucinations, right? And at any point, it can easily transfer to a human agent. All of this coming together is to basically saying, start narrow, you prove the value, and then you scale. And if you combine the Sinch's conversational messaging capabilities with, as I mentioned, SAP Engagement Cloud's AI-driven orchestration, the predictive analytics, all those things come together, you can make the progression, it is basically practical and also measurable to achieve those results. See, I knew you were gonna have a good story. Thank you very much. Thank you, that was great. I love the video on WhatsApp and that activation of all of this, it's amazing. Okay, let's toss this back to Sunny. Sunny, you are exposed to so many different customers across SAP. And I have a feeling that you probably have a couple of ones you can bring to the table for this conversation. So you talk about when AI is successful. I mean, if you can scale it, I think that's the key. If it's just kind of a niche solution, it might not have an impact, but you're going to really achieve the success and get over the hump if it can scale and start impacting those really meaningful metrics. And an example I love to talk about is Nike, where Nike really wanted to, deep in their customer relationships. They were thinking about segmentation, automation, and also customer lifecycle tracking, which they hadn't been doing before, but using AI, they were able to identify a lot of different facts about their customers, but also where they were in the buying cycle and start to understand what they specifically needed during those different stages. And so they created initiatives, campaigns around welcome when people join the platform, birthday, abandoned cart, or browse abandoned. And since the implementation of this this capability that required a lot of data and sophisticated AI application, but since implementation, they've seen conversion rates for these campaigns shoot up 110%, and proper segmentation has allowed them to target the right audience with the right message, so even purchase rates are up by 8%. So another example of how AI has been successful. And then, one other example I like to throw out, we often share this video, I mean, work closely with Wella, but, Wella recognized early on that AI is all about data, right? It's about connecting the data, and you're not gonna be able to do very effective AI without it. But by pulling in all this additional data, they were able to move from personalization to real hyper-personalization because of all the additional data points and insights that they had on the consumers, and they were able to deliver against a wide range, a broad array of customers, because they have small stylists, large chains of salons on the B2B side, they've got the consumer side with B2C. But even for this broad array customers, they were to deliver the right service products and even tailored experiences at scale. And it's cool because their philosophy is about empowering and making their customers successful. They say, "if you grow, we grow," and they're talking about their B2B business. And it really delivered valuable, tangible insights. One of the key AI breakthroughs was product recommendations, even where it might not seem obvious. And that was part of what led to a really strong uplift in sales for Wella as well. So another example of customers working to make AI real and not just an experimental phase. I love the Wella example and also the fact they have such a complex business because they're both B2B and B2C simultaneously, and they have so many different brands that they're also dealing with in so many countries, so the level of complexity is really quite large. If you haven't checked out the Wella story, I recommend doing it. I think it's a really, really interesting one in the way they think about data and the way they think about customers and the insights they bring to it, I think are really quite startling. So it's a nice one to delve into. All right, well, you don't do any of that terribly well, unfortunately, unless you actually can get teams to come together and get those teams that have come together to be thinking about a truly unified customer profile. It's not a new term. It's something that all of us in marketing, I think, have been talking about for a long time. The current climate makes it just that much more important to be thinking about it. And if your data is in silos and your teams aren't collaborating, you aren't going to be able to achieve this, and you're not going to cross the Engagement Divide as a result. But getting there is sometimes about tough conversations, rough relationship building across a business that sometimes may seem to have competing priorities. But to get there, you actually do get a truly single view of your customer and the benefits that come to that. But I think a lot of teams look at it, and while they absolutely recognize the value of the end result, they think, oh gosh, how can we actually go about doing this? What are the tangible steps that we can take to get from where we are today to get us on that journey and really make some real progress towards that unified customer profile and the benefits that we know it will bring not just to our brand but actually to our customers? Venky maybe you could kick things off on this one for me and chat a little bit about how channels can actually help because they can be leveraged to capture data and create even richer engagement than what exists today. On the unified customer profile, the challenge most brands face is not lack of data. I think they have a lot of data. The problem is the data are in silos, once again, something the report also identified. So the recommendation here is to identify a finite desired outcome that calls for a finite set of customer attributes to work together. No need to solve all the problems, right? For example, you can capture attributes that most directly influence the quality of the next customer interaction. For example, purchase recency, channel preference, the last support interaction they had, and what loyalty tier they belong to. Getting all of these connected to a single customer view first is important. And further, you can take SAP Engagement Cloud. It's already designed to ingest and activate data from across the SAP ecosystem already, commerce, ERP, service cloud, and so on. So that will be an ideal intersection of bringing this data together. And then in effect, this will reflect a real operational context, not just the marketing behavior, right? See, one thing that stood out in the index report was the trend loyalty. It said, one day you're trending and next you're forgotten. So what do you do? How do you capture related attributes at that time of moment, which is very important. This is where conversational channels could be very helpful. I think it's best to explain with an example. If there is a brand offering premium services, could be fashion, could be like a boutique spa, and I've seen this happen in the context of a boutique spa where the spa encourages their customers, existing or new customers, to scan a QR code or start a chat. It is either a QR or tap-to-chat widget on their website, to engage in a conversation and fill out what they call it as a fashion profile or the spa usage profile. So this could be in the case of the boutique spa, something like, how often do you use your spa? What are your preferred services? How much are you willing to pay? And if it's a multiple location facilities, then they will even ask, which facility do you mostly prefer? So imagine all of this happening in the context of this trend loyalty in a construct, so to speak. And capturing these attributes in a very easy-to-use channel like WhatsApp or even RCS these days, and ingesting those attributes into your customer profile and quickly turning around and using them to leverage and provide personalized products and services. That, to me, is a very meaningful application. Again, the conversational channels are conducive to leverage these quick interactions instead of waiting for email outreach and so on and so forth. Hope that explained the answer. I think it did, thanks very much. Daniele, you have some similar challenges and to some of the things I was chatting about with Sunny with Wella a few minutes ago. But I also know that you've managed to create a single strategy across the markets for managing your customer portfolios. You manage to stay GDPR compliant, which is always a challenge when you're working in certain regions. And you figured out how a brand, with one brand and many different touchpoints can actually engage with a customer. Can you chat a little bit about that for us? Yeah, the Wella example is near and dear to my heart. In a company like Essity, we have customers that interact and engage across multiple brands, multiple channels, multiple go-to-markets like the B2B and B2C. We sell in over 100 countries, right? So, getting engagement right is crucial. And a practical pain point is the worst thing we can do is treat our customers like a different person each time they engage with Essity as a company, right? So the steps that we took to build this was, creating a compelling and common vision with our business and brand leaders. So that a very simple way, it was one identity system across our markets and brands. That really creates that one customer, many touchpoints, one profile vision that everyone can buy into. It's simple, it's compelling. And then the second major step was, as you said, Sara, like minimizing that internal tension, right? Is moving the conversation away from solution to capability. What's really important to you as a brand? What's important to your customers? Owning that customer experience, perfect. Let us handle the solutioning. And that helped kind of reduce the friction and get us on the right track. As a result, we ended up leveraging SAP Customer Data Cloud, CDC, across not only our SAP Commerce Cloud templates and e-commerce solutions and web shops, but even our non-SAP sites, so like our pure brand sites to deliver one strategic vision for the company. And I think it's important. I think behind the scenes when I talk to our compliance team, GDPR is important, but you can't start with that with your brand teams. That's important because for our products, there's some sensitivity around that, and our customers are maybe hypersensitive to how their information is shared. But you can't lead with GDPR. You can't lead with these nuances that are important to us as a company. You have to start with talking their language. Couldn't agree more. Sunny, I think you've got another great example to share, but I think this one might be Ferrara, am I right? That's correct. Having worked in the candy industry myself for the parent company of Ferrero, I'm always happy to talk about this example. It's a fascinating success story. This is a company that is producing snacks. Snacks are consumed at all different kinds of usage occasions by all different kind of consumers. By leveraging, like Daniele, we leveraged the customer data solutions for SAP with them to create a unified profile for these consumers. And with that unified profile, bringing together all the different information, you can obviously treat them much more curated way, not like strangers every time they come in, of course, but you can also dig in and find these amazing insights that wouldn't have risen to the surface without it. And in this case, there was this realization that so many of Ferrero's consumers were video gamers and that they were eating Trollis and other Ferrara snacks while they were gaming. So there's this kind of almost new usage occasion that people hadn't really thought about, specific occasion that's actionable, right? So with that, you know, there's a great integration between Customer Data Solutions and Engagement Cloud. They were able to deliver personalized experiences, personalized video game-oriented sweepstakes and messaging to the consumers, who obviously would be very receptive because it's a passion point of the, established proven passion point of theirs. And when they did this, it was fantastic because you had this nearly 60% increase in contactable customers in the database, and you had a 20% increase in terms of open rates beyond what you would normally have in the industry standards. So just a great success, proving the value of unified data and the ability to deliver personalized experiences based off of it. I love that example, and they've discovered a whole new segment of customers, didn't they, that they didn't even realize that they had and they weren't serving in the way they could. It just opened up another world. I think it's fascinating. Great case study for understanding who your customer actually is. Well, and in an established category where, you've kind of got these swim lanes of usage occasions, and when you can find that new growth opportunity, it's really, it's rare and it's great that they will respond quickly to capture it. You know, so. Couldn't agree more. So we talked a lot about the data. So Sunny, I'm gonna stick with you if I could for a second, and let's look at the other piece of it because the data is absolutely critical. I don't think any of us would disagree with that. But if you haven't got the cross-functional alignment, you're probably not getting to the data, so Sunny, how do you start that? How do you get data sharing across teams? I'm glad to be involved. I mean, obviously as a marketer, I love the CX space, but this goes way beyond CX. And honestly, this is why SAP is so well positioned. I've been talking about this on LinkedIn. If you wanna do AI for your company, you need to do AI with your data, right? And where does that data rely for so many customers? It's in the SAP systems, financial data, things like profitability, cost of goods sold, operational data. So being able to leverage that treasure trove of SAP data is critical. And we think about it in kind of three layers. We call it the flywheel, right? Because they kind of interact with one another. But the bottom layer is the application. So you've got your supply chain application, your ERP, your CX applications. Those generate data in a layer that we call the Business Data Cloud. But it's not just kind of disorganized data or some big data lake. These are structured data products. Where the data is in a standardized format and can be shared across functions, so between marketing and sales and supply chain. And then it's on top of that layer that you have the AI layer where the AI agents can delve and capture the insights and perform actions on the data. So it's very exciting, and I think about consumer products, for example. A lot of consumer products companies are doing, they're trying to integrate marketing, trade promotion, which anyway works in consumer products and is such a huge investment, and retail execution, how you're managing your sales force in the field. I'm sure Daniele can identify, you've got this fantastic engine you're building for CX, but what if that demand, that increased lift that you're driving with that CX engine overshoots your available inventory, and you don't have a real-time connection. You can just go straight into a stock out and waste all of your marketing and sales expenses. On the other hand, what if you've got this massive inventory built up and you haven't right-sized your investment toward demand to make sure you can drive the velocity and go through that inventory? That's where the standardized data layer can drive the connections, the real-time connections, between back office functionality and your front office consumer and customer engagement. So to me, this is where the real, the big, big AI impact happens. I'm really excited as we see more and more customers tipping their toe and starting to look at how they can connect this. I think your enthusiasm is infectious there, Sunny, and I hope everybody else is feeling it. Can't wait to get their fingers dirty and actually go and solve some of these challenges and take the challenge that Mark threw to us at the end of his session about it being an opportunity and getting better because I think you've talked exactly to that and given something very practical that people could go do. Venky, I think got a slightly different perspective on this, and maybe you could chat a little about some of the team dynamics and how you think that comes to play. Cross-functional alignment is definitely integral for successful outcomes. And this is where most organizations also stall because the unified profile, it could be a marketing initiative, but as I think I made a note, marketing on its own cannot achieve its own. That's what Mark said. So it definitely needs a collaboration from IT, commerce, customer service, and operations. So my recommendation, as I mentioned before, find a single high-impact outcome or a use case that will require at least two teams to collaborate. So once again, my mantra here is start small and win big and then scale. For instance, you can connect post-purchase service interactions with the next marketing touch point. There's something even Daniele also brought up. So for example, say a customer contacts customer support about an order. You use that interaction to personalize the next marketing touchpoint. So what if it was a negative experience? So how would you handle it? Should you perhaps suppress the next broadcast email or different messaging that goes out? Or should you also kick off what is known as a win-back campaign for that customer? Could be personalized too, right? So such a small but tangible outcomes will provide valuable feedback in this case for both the service team as well as the marketing teams. Now, to recap, the cross-functional team alignment on a shared unified customer profile and a shared definition of what good engagement means is pretty important, and no doubt, this will definitely provide a consistent experience across all touchpoints. This directly impacts the metric, once again, quoting from the index report, 37% of the consumers are more loyal to brands that provide a consistent experience. So how do you do this is this cross-functional alignment. Love how you wrap that up, Venky. Thank you. Exactly that. Right. One more thoughts on this. Daniele, you have a totally different point of view on this, and I think it comes from your very personal experience of a role that began within an ERP project and now has expanded to all of these other things, including working with IT and delivery. Can you shed a little bit of light on that and your perspective for us? So my role was really born out of our digital transformation program, a really an ERP transformation program part of S/4HANA, RISE, and our journey. So alignment is in my DNA, if you will. And to quote Mark, marketing is too important to leave to marketing. I got to remember that one. I really like that. But I think that the thing here with what Sunny was talking about and building these like core capabilities in this data layer that's so crucial to build everything on top of. I don't think a pure marketing person really appreciates, unless they have some technical background, a PIM, for example, a product information management tool. And, fortunately, I stand on the shoulders of giants, right. So I had a global PIM initiative happened at Essity five years before I got started. So we were on that track of building, and now we've built customer data management tools, we've built consent tools as we're talking about. But when I talk to my peers that are are starting their PIM journey, I'm like so grateful for having that in place. Because once you build these capabilities and have these things that are so foundational, like a, as simple as a PIM, you can move super fast. You can adapt to the changing winds of AI very quickly. And now we're talking about Agentic Commerce, right? The core of Agentic Commerce is really having that structured machine readable data, if you will. So, coming back to where I was born, my role was born out of having this strong alignment, having this person that sits between business and IT to really help navigate and identify the key business processes and these new solutions that are coming into the market. Thank you. And I think all of your perspectives just demonstrate how, from different parts of the organizations, we're all coming at it from different perspectives. And we have different drivers and different experiences, all of which need to be taken into account if we're truly going to build that unified approach and think about it. And we all bring something unique to it that, to your point, if you haven't been in a specific role or a department, that you may not understand a piece of the puzzle that doesn't seem important to you, but actually in all of these things you want to do in fact hinge on it, and the data that comes from that may be absolutely critical to moving things forward with your customer. So thanks for that, that was really interesting Alright, let's bring ourselves home and come back and chat a little bit about the future, always everybody's, always a favorite topic, right, and of course the future of engagement. If we were all to get together in 12 months' time and have this conversation again, I would love to know what it is you think we'd be talking about and what's gonna change the quickest as more and more organizations move into the Engagement Era. And I know you're all gonna have really different perspectives on this, which I think is really exciting. So Venky, I'm gonna toss it to you to begin with. I have a feeling you have some thoughts about channels here. Fancy sharing this? Absolutely. I think it's appropriate to bring up here a quote from our CPO, Dan Morris, mentioned recently. We have moved on from an omnichannel era to a conversational era. So that's what we should keep in mind. This conversational era is where AI is front and center in various capacities, right, to collectively accomplish the desired positive experience in this engagement era. The CLA report mentioned email, SMS, and direct email, sorry, direct mail as the preferred channels for customers. But what is accelerating fast, and I see this on a day-to-day basis, is the rise of a channel like RCS as a genuine conversational surface, not just a channel, right, to reach out to somebody, because this is not just an upgraded SMS. They're interactive, the rich media environments where a customer can browse, query, transact, get support all within the same messaging app, but without downloading an app on its own, right? So this is very important to recognize and leverage. Of course, WhatsApp is also another inherently conversational channel, but I just wanted to mention RCS is rising. And a quick example to further explain this. Imagine a loyalty program member is getting an RCS message or even WhatsApp. This message is not just a notification because It is designed to provide that interactive experience. They can check their points balance, see the personalized product recommendation, maybe reorder a previous purchase, or escalate to a human agent. All of this can be done with those interactive experiences that is already inherent in this conversational channel. How do we make this happen, right? See, SAP Engagement Cloud orchestrates the intelligence behind it. If you recall what mark said, there is a lot of in the prep work done in the backend, in the back office. All of that come together to deliver that rich personalized experience, which is where Sinch comes in and delivers that experience on any channel the customer prefers. So the brands that get ahead in this engagement era are those who stop thinking of channels as just broadcast pipes, but treat them as relationship interfaces and ensuring that conversations stay seamless, whether it is in SMS or WhatsApp, and engaging them in an automated fashion, personalized, and also being able to hand off to a human agent at the right time. I love that, Venky. I love the idea that it's, you have to remember that engagement needs to be conversational. It needs to be two way. Otherwise, what's the point? I think that's, I think that's right. Thank you. All right, I'm going to flip to our practitioner point of view, which as we all know, is Daniele. So Daniele, before you start, keep us grounded here. We need, instead of blue sky thinking, I really like your perspective as somebody who's on the ground and getting your hands dirty with this. What's your perspective on this for a business? What's your team headed for in the future? And what are the key things that actually might not be realistic this year that you really see as initiatives for 2027 and perhaps even further? I really love Venky's description of the future's conversation. I think this is very true. I think when it comes to AI product discovery, comparison, and maybe eventually purchase, these are definitely a midterm future that you can see. What I believe is consumer adoption is still in the early trust phases of when it comes to the purchase part and the commerce part. And research is clear that customers rarely abandon a trusted channel. So when it comes to a commerce transaction. So, but discovery might shift and it is shifting, right? So, there's this wonderful opportunity, especially when we own, in Essity, we own a couple of our own direct channels. So, we can control some of the discovery part, and we can also outsource some of it and bring it back. So, in the next 12 months, I see the shift really going from consumer to professional. That's where I see expectations changing. Just like in B2C shopping experiences, we're all Amazon purchasers in our daily life. If you're a professional buyer, you expect an Amazon experience, right? And that's where we started our B2B learnings were built off of what consumers expect. I think the same shift is gonna happen with agentic and gen AI, where, especially around the discovery part, is professional buyers are going to have new expectations in 12 months that Essity, I believe, is well prepared to handle. It's going to take some time to do that final transaction autonomously, but there is going to be this middle period where you're going to be expected to really make these friction points seamless and and AI is going to help that, right? So, for Essity and especially our B2B health and medical or our medical assortment, excuse me. There's a really complex product assortment there. It's hard to navigate. One material has 500 variants. So these are the friction points that I think in 12 months, they're going to, consumers and professional buyers are going to expect to be much more smoother. And they're gonna expect kind of quicker answers, more accurate answers, and help navigate that purchase journey. I think it's a really exciting time, and I think really B2B has a lot to benefit from this shift. Thank you. I love the practicalities there, the hardcore... These are the specific things that people are going to be looking for, and they're things that we can all relate to, whether we're on the brand business side of things or the consumer side of things, because all of us here flip across that line all the time. Right? Don't we? So it's our expectations that we're hearing on the brand side as well, which I never fail to be amused by. But it is inevitable, right? But that's how it works. All right, Sunny. You could go blue sky here. So talk to us about what you think about the future. Where I'm thrilled, you know, I mean, when I joined SAP five years ago, you know, because as a marketing practitioner, I was attracted and I saw this cool vision of SAP being really one of the only companies that's in a position to integrate marketing and CX, I think with the back office and with the larger enterprise function. And I'm thrilled, of course, with Engagement Cloud becoming more integrated into the, into the SAP ecosystem. And my hope is we just see more of this connection in the future, not just with marketing and CX touchpoints, but as I was saying before, connecting with partner teams, commerce, finance, supply chain, and kind of teaching. This is something that Mark Ritson talks about is like speaking with a unified language. I think a lot of different departments can have their own kind of vocabulary and like, let's bring the unified language together so that marketing's impact can be recognized for what it is, a key driver in both top line and bottom line growth, and I think that's going to really be the linchpin in closing the Engagement Divide we've been talking about. Thank you for bringing us home beautifully, Sunny. Right, I'm afraid we have run out of time, which is a shame. I think we can all keep this going on this fascinating conversation. So thank you so much to our guests of Sunny, thank you, and Daniele for providing your thoughts, perspectives, and insights. I found it fascinating. I hope everybody else did, too. And please everybody, if you're interested in connecting with any of our panelists, please do so on LinkedIn. I'm sure they'd be happy to get in touch and continue this conversation outside of the event. And let's face it, if this panel makes anything clear, the Engagement Era isn't a theory. It's a reality, and it's one we are all living in today. And some brands are absolutely charging ahead, and others are hanging back a little bit, getting ready to try to get ready to make that leap. And the requirements are the right data, the right orchestration, the right technology. And if you have those things, then you can deliver connected, simple, real-time experiences that your customers expect.