One of the hottest terms in the communications space of late has been “Customer Experience.” The question is, what does customer experience mean? Having discussed the customer experiences with a number of vendors, it’s evident there are as many definitions as there are players in the CRM space.

They may be right; they may be wrong. It doesn’t really matter. What matters is the customer’s definition and how well the customer perceives a business to have achieved an acceptable level of satisfaction.

“It’s about the customer’s expectation and experience, not the company’s expectation for the customer experience,” remarked Dr. Volker Hildebrand, vice president, CRM Solution Management in a conversation at SpeechTek. “It’s about reliability and delivery on promises, and it’s about convenience.”

Indeed, reliability, delivery, and convenience go a long way in achieving satisfaction at the customer level and are all attributable to what Hildebrand refers to as the three pillars of successful CRM: operational excellence and interaction excellence.

In fact, it’s that three-pronged holistic approach to CRM, rather than a focus on purely the front office, which provides SAP’s (News - Alert) key value proposition – and has contributed to its growth over the past three years, when its products underwent a major overhaul.

Prior to that, SAP had largely neglected the relationship between the front office and the rest of the supply chain, including the user environment. A new state of the art user interface, in fact, has helped deliver what Hildebrand calls the “New SAP CRM,” which has an increased focus on usability, ease of deployment, and continuity of information across the enterprise.

In fact, Hildebrand notes there is significant value in having the CRM system tied to the rest of the enterprise, allowing the entire business to benefit, and helping solve the overall CRM picture and creating a more efficient and-to-end process. After all, customer relationship management neither begins nor ends with the CSR (News - Alert) – it flows from the top levels of an organization all the way down.

The successful business will be the one that recognizes the totality of the customer relationship can leverage solutions enterprise-wide, rather than merely providing point solutions for the contact center. The success of companies like SAP and Interactive Intelligence (News - Alert) bear that out.

When it comes to ease of deployment, few technologies have played a greater role than the cloud. Of course, the hosted model has existed for years, but its legitimacy is only now being widely accepted by larger enterprises. The cloud/hosted alternative, for instance, allows new reps to be up and running on their CRM systems in minutes without any IT involvement and, in doing so, provides remarkable flexibility to businesses, allowing them to react faster than ever to customer trends, bringing on additional support almost on a real-time basis.

SAP, in fact, has begun building a new on-demand solution, which is now in testing and planned for rollout next year, and is also looking at developing on-demand add-ons to its existing CRM core, enabling it to further extend its value proposition by developing purpose-built extensions for specific markets and businesses.

Its biggest on-demand investment thus far has been SAP Business ByDesign product, which provides large enterprise CRM features for the SMB market (a familiar rationale for developing on-demand solutions in both the contact center and VoIP industries).

But, Hildebrand suggests that while on-demand will continue to be strong in the SMB space and enterprises are also beginning to adopt cloud-based services, the dominant model going forward will be a hybrid one, which is why SAP is not putting all its eggs in either basket, but is eager to develop on-premises and on-demand solutions that can be cross-deployed.

And as for social media – the other supremely hot topic in the CRM space – it’s not something businesses control. Rather, they must seek ways to harness its power and insert themselves into its interactions.

SAP should have a leg up on many of its competition: it has built its own community network of more than 2.5 million members that includes discussion forums, blogs, and more. It’s benefit? Increased customer satisfaction and reduced support costs.

“We found that support costs went down because users were helping solve each others’ questions and issues, and their response times are often much faster often SAP’s could be,” says Hildebrand. “It’s very powerful.”

Rick Fleischman, senior director, CRM Solution Marketing, adds that, “Social media is magnifying the things that used to be secret, those things that used to be able to be covered up.”

The key to making social media work for your business is making it actionable, linking it to business practices and getting relevant social conversations in front of reps. But, while SAP is embedding social tools into its products, it does not position itself as a social CRM solution. Rather, it is holding to its holistic approach, built on the fundamental philosophy, as Fleishman notes, that, the best way to drive success, including responding to social media, is to do a better job with the basics of customer service.