How to Better Understand Your Customers Artwork

Spend Advantage Podcast

Welcome to The Spend Advantage™ Podcast by Varisource, the competitive advantage for your spend. Get access to discounts, rebates, benchmark and renewal savings for 100+ spend categories automatically for your company

We interview amazing people, companies, and solutions, that will help you 10X your bottom line savings and top line growth for your business --- https://www.varisource.com

All Episodes

Spend Advantage Podcast

How to Better Understand Your Customers

May 30, 2024 • Varisource • Season 1 • Episode 60

Welcome to the Spend Advantage podcast by Varisource. Spend advantage is the competitive advantage for your spend across 100 plus vendor categories. This podcast is all about interviewing amazing people, company, and solutions that will help you ten x your top line growth as well as bottom line savings for your business. 2s

Hello everyone, this is Victor with VariSource. Welcome to another episode of the Spend Advantage podcast. Today I'm excited to have a Wale Huffman with inmoment. With us. Will is the principle of customer experience advisory at in moment. In moment is an all in one AI customer experience platform that helps you collect, understand and act on every customer signal. Welcome to the show. Well

thank you Victor. Very nice to be here.

Yeah, super excited about, um, the conversation today because personally I love customer experience, customer journey and all of these topics. So if you don't mind, maybe, um, give, uh, the audience a little bit of background about you and, and, uh, kind of the company story would be great.

Yeah. Great. Um, yeah. So in moment, uh, we were founded back in 2002, um, by three entrepreneurs who had a real strong passion for using technology technology to really understand and transform the experiences that brands were providing to their customers. And so they really kind of set out to automate and analyze that feedback from from real customers, transforming the way brands really identify problems and opportunities and and experience, which that really meant, emphasizing the importance of being present and attentive to customers and really fully engaged to create those memorable moments. Hence the name in moment. Um, so, you know, fast forward a decade or so later, um, and with the massive of, you know, evolution of technology and overarching CX strategy, it's really enabled in moment to turn the idea of traditional surveys on its head. So, um, you know, a 4 or 5 years ago, we introduced this concept of, of experience improvement. It's actually we call it x I, which is also the name of our platform, um, with a solution designed to help our clients really reap true business value from their experience efforts. And that starts similar to what you how you introduced us, by identifying and prioritizing and then taking action to improve those moments that matter. So I got started in the industry a long time ago. Um, I was actually at a conference, um, in a customer engagement conference back in, uh, gosh, this is probably 2006. Um, and Tony Shea, who was the CEO of Zappos, was there, um, presenting, and he was introducing his new book called the the the Art of Customer Happiness. And it really kind of introduced the concept or the discipline of KCS. And I was hooked. Um, you know, being an avid reader. Um, started reading, um, the Ultimate Question, uh, by Reichel and Maki, which, which are the, the inventors of the net promoter system? Um, and it really got me hooked, and, and I truly felt that it was the great opportunity for brands to truly differentiate themselves, especially in markets that are highly commoditized. So, um, I've been working in this space both leading, uh, organizations within fortune 500 companies. But also over the past few years, I've been working with, um, working within moment, um, to, to help others do the exact same. So with the with the advent of this great technology that we have and with the strategic insights and the strategy, um, we're, we're really showing companies how to, to, to take advantage of it. Yeah. Uh, first of all, I love working with people and partners who, uh, obviously you have a lot of experience, but you're just passionate about your craft, man. Like you really, you know, love and understand, um, you know, this customer experience and and. Yeah. Have a couple of examples. We have tons of questions to go through, but I think of, um, you know, customer experience, it's it can go so deep. Right. And I think it really a good customer experience I personally believe really determines the, you know, the customer success. Right, the overall success of the business. And uh, but, you know, I look at customer experience similar to like a voice over IP or cloud. What I mean by that is it's it's such a big word. It's so broad. Right. It sounds amazing. But then a lot of times people have a hard time understanding what it all is and what it includes and what it means. So in your kind of expert, uh, you know, expertise, um, can you kind of define maybe what you think, um, you know, customer experience, uh, means. 2s Yeah. You know, if you were to ask my wife that back and say 2012, I was actually listening to her try to explain what I do for a living at a at a party that we were at. She was talking to some of her friends, and I was, like, flabbergasted by her response because she was like, well, he does customer experience. Um, and the response was was, I'm not quite sure what that means, and that's no different than what we hear. Thankfully, it's becoming less frequent, but it's no different than what we typically hear. Um, in the market of like, hey, customer experience, that's a really nebulous, uh, definition or a phrase. So is it is it customer service? Is it customer engagement? Is it marketing? Um, is it fluff? And so, you know, we've kind of set out a on a mission to really define what KCS means. And so the best way that I, I've come to describe it is it's, it's really it's really the, the, the rational and irrational thoughts that a customer has after interacting with the brand. Like that's that's probably the truest definition. Uh, and so if you think about it from let's say that you're a, you know, you think about your, your telco, um, your, your internet provider, and, you know, you'll get a monthly bill, you'll interact with the product. God knows that. You know, if you have an outage, you're probably going to have to contact customer service. So you have all these different interactions ranging from, you know, the, the rational, um, meaning, did I get my problem solved to the irrational of do I really feel like this is providing value? And so if you take a step back and think about, hey, is this provider the right provider for me, you take all of those, um, considerations into hand. So with what we're trying to do is not only help the the transactional experiences, the rational experiences, but also better formulate the opinion of that organization and the customer's mind. Um, to help with that overarching relationship. That's that's really how sex is, um, is defined and really how to, how to start thinking about it is and I honestly, I think a lot of organizations are, are still treating as really just customer service or just transactions. And where they're kind of missing. The point is, is on that relational level, how do customers think of us from like pure value?

Yeah, I love that definition. And there's so much to unpack there. Um, but let's let's break it down a little bit, kind of based off of what you said. So, you know, obviously customer signals can be, um, you know, in so many, so many areas and so many things. There's so many data points. Um, so what are customer signals? Um, and why do you think most companies don't have a full picture of it? 2.4s Great question.

That great question. So so customer signals are really customer data points either structured or unstructured data, um, that exist in the overarching relationship with the brand. So let's let's double click into that. So sometimes like a customer could be talking directly to you like in a survey or a customer service, uh, phone call or chat transcript or maybe sometimes they're talking about you right on social on review sites. Um, or sometimes they're not even talking about you, but they're talking about your competitors or your industry. So those. These customer signals that you mentioned, they really come in a many different forms surveys, reviews, chat logs, even the the call notes that your agents are entering after a customer service transcription or email threads that that maybe your sellers are having with their prospects. Or maybe it's the call, uh, the call center transcripts. So you've got a lot of these various, uh, signals that are out there. And like I said earlier, they come in like a structured form, meaning, you know, kind of defined or numeric and unstructured, which is like this free form text. And so the so the real bottom line is that these customers signals, they come in so many different shapes and sizes and channels, and they can be really noisy and siloed, and really they can be quite expensive to capture and make sense of. So, you know, I think back to an organization that I've worked with quite a bit. Um, and they had a survey platform. Right. They had a review platform and they had a call center, and every one of them, every one of those, those, those either the telephone platform or the email platform or the review platform, they all had their own various ways of analyzing that data, but none of them were synonymous with each other. And so when the leader went to go and try to analyze what what was happening, what are the friction points, what are customers like across all of those touchpoints and all of those journeys? They couldn't get a good they couldn't get a good picture of it. They needed a better way to analyze it cohesively. So that's what we're trying to that's what we are

doing. I, uh, I love that. So you mentioned a couple key words. I want to, uh, break that down a little bit. So you mentioned obviously unstructured data, unstructured data. And again, you and I kind of deal in this world every day. So we kind of understand what that means and the and the impact of it. But if we were to talk to, you know, executives. Right. And who are not maybe dealing with these type of data on a day to day basis, but they obviously care a lot about, uh, customer happiness, customer success and customer uh, satisfaction, all these things. So you guys had a data point, uh, where you mentioned 85% of customer experience data is unstructured. First of all, can you kind of define what, you know, unstructured data means and why are these data unstructured? And how does that make it more difficult for companies to utilize it. Does that make sense? 3.5s Yeah. Um, yeah. So, so structured data. Um, is, is really any of that, that freeform text or freeform data that we can, that we can collect and, and there's, you know, a massive proliferation of the way in which companies are aggregating all this, this unstructured data to to today the structured data is is, you know, very kind of fits in a nice neat bucket. Um, typically it's, it's numeric or quantitative in some way, shape or form. Um, and you can easily analyze it.

So, um, the, the, the stat that I mentioned, except that you mentioned is, you know, 85% of, of customer experience data is being unstructured. 1.2s

It's it's kind of a bit surprising statistic to some. And and in fact it came from IDC. Um, and they actually said that not only is it 85% of the data that organizations have on their customers, it's unstructured, but they've also stated that it's growing at a rapid pace.

And it's you know, I would argue it's the most important and insightful element of data as this unstructured data. It really tells you the why behind all of those quantitative metrics. 1.6s So, you know, if you if you talk to key leaders or insight leaders, they're ecstatic about this proliferation of unstructured data, right. Because, you know, if you think about traditional surveys, they've stood the test of time and they will still be there for, for for the long for the long term. But really they only represent about 6% of your customers if you take into account, you know, response rates to surveys and deliverability and things of that nature. Um, but so, so they're giving good feedback, but it's, it's not representative of 100% of your base. Um, and it's more than likely not including any of your potential customers. So with this unstructured data, brands now have the ability to understand the remaining, say, 94% of customers that exist. Right. And that comes in the way of call center transcripts or email reviews, social reviews, all these other means, uh, case notes, all these other means that unstructured data, you can now understand really the meaning behind.

Yeah. Um, and this and that kind of gets us to the next, you know, topic that I'm really interested in. Curious to get your thoughts on. Um, you know, people talk about you can't optimize what you can't measure. And when I kind of apply that to, you know, what versus does for clients? Um, you know, obviously we focus a lot on spend optimization. And, uh, you know, when I look at the vendor spend or the vendor side, most companies are measuring their vendors, their suppliers across multiple tools. Right. You have spend. Spend is in finance, right? And you have contracts and legal right in another tool. And maybe it's a bunch of spreadsheets and it's just all over. And a lot of that is also unstructured data, meaning it's not in a database somewhere. It's not cleaned up. It's just again in a PDF, it's in an image. It's in a file. Like you can't extract it. You don't. Right. And so I think there's a lot of similarities. And I bring that up because if you if your vendor supplier data is in so many different places and you don't have kind of that clear picture of it, of that vendor spend and risk and obligation, how can you optimize, right? How can you try to improve on your pricing and all those things? And obviously that's what we do for clients. But I just see a lot of similarities when you talk about kind of the, the, the gaps that companies have today, as far as all the data is either unstructured or it's all siloed in different tools and different places. And so, you know, I guess, which makes it hard for them to, to measure and optimize. But if you are speaking to a CEO or, you know, a, a executive, how if they can't, you know, obviously, uh, optimize you know, that that how does that affect a company's ability to make decisions. You think? 4.3s

Yeah, it's a really interesting question because it's it's, um, it's it's an easy problem to fix. Uh, to be able to analyze all of this data, both structured and unstructured. Um, you know, a few years back or maybe, you know, 5 to 10 years ago, that would be quite a large exercise, uh, and quite a costly one. And today, it's just not that. It's just not the case. Um, especially when you start mixing in, um, tools like generative AI into the mix to start analyzing it. Um, and so, you know, I think that the, the typical measures will persist. You know, your, your traditional metrics like NPS or customer satisfaction, they will always have their place. But but really, in order for a business to, to, to impact, you know, to have a strong impact, they're now moving from what we call from metrics to meaning. Right? So, um, if you're, for instance, if your business outcomes or customer metrics, maybe they're flat and, you know, most of the time what's going to happen is that, um, customer listening is going to be the first place that companies start to examine. And then from there they'll. They'll seek to understand from that unstructured data why these trends are moving. And especially like when these metrics drop, they have to get to the stories that are behind them. I think about, again, I'm going to go back to a telco example. Um, there was a, uh, when I was leading at one of them, we had a region in the country that we were not seeing any growth. In fact, we were seeing cost, um, you know, kind of skyrocketing. And, and a lot of the acquisitions and TVs were, were flat. Um, and it wasn't until we started getting behind the scenes, both in the customer listening, but also with the employee listening, um, that we were able to start isolating what the key challenges were. And, and in many respects it was it was some, some broadband performance in a couple of different regions. And the answer, um, now that you start hearing all this data together, was actually not that difficult relative to the return that you would start to get out of it. So, um, it's it's, you know, having that data readily available, um, it absolutely starts to influence the outcomes. No, I love that. And I totally feel that on a daily basis. Um, you know, I think I think what you, you know, what you're solving for again, that, that customer experience side. Same thing on the vendor side. I think, um, once you put all the data together, it turns out customer actually has a lot of leverage. Um, and, uh, but without, you know, to negotiate and during renewals and, and, you know, all those things. But I think it just, you know, a lot of companies just don't have that, um, way to aggregated data. But, you know, the next question kind of goes into let's say, you know, uh, once the data is aggregated through you guys or through, you know, customer, uh, kind of platforms, can you give like maybe 2 or 3 examples of what type of insights can companies expect and benefit from, uh, for their business? 2.6s Yeah. 3.4s

Oh, certainly. Yeah. With all those signals combined, brands really know where to start to focus and drive their teams for the biggest impact. So, you know, a couple examples. Um, so so one is, hey, what's working? Well, um, and what can we be highlighted in marketing initiatives? So, um, you know, when you start to look at who are your biggest promoters of your brand or those that that score you very high, what are they saying about you and how can you better leverage that in customer acquisition efforts? And then maybe you think start to think about, hey, what could be improved? Um, you know, one common place that brands start to look at is, is their touchpoints with customer service. Um, and more likely than not, first contact resolution on that service call has the biggest influence on those outcome metrics. Um, and so they want to start understanding. Hey, okay, I understand that first contact resolution is important, but but what am I supposed to do about that. Right. And so, you know, you start to look at like a, say, a B2B organization, you're starting to see a quarter over quarter decline in account level responses. And maybe you combine that with increasing negative sentiment in that account, um, that you can hear in the phone calls from the transcripts. So in the past that you may have been blind to that a bit. And now with the advent of all these signals combining, now you can get in front of it, um, and start taking action. And we call that closing the loop, but really taking the action and, and averting some of that potential churn. And then and then you can start to look at, hey, which which of our customers are likely to buy more? Which one should we go out and market to um, and try to increase that, that LTV?

Uh, and then finally, I think one of the insights that a lot of folks tend to neglect is what are our non customers? What are they saying about us and what are they saying about the competition out on social media or in other signals. And so now you're you're you're blending together these insights from your, your the experiences that you're providing to your customers, but also to the perception of your brand out in the market. Uh, and

so, yeah, those two combine 100 more use cases, a lot of similar to you. I mean, obviously data is oil, but I think, uh, you know, like people still need to figure out how to, how to work with that data. So so the next question I think is $1 billion is the billion dollar question here. Um, because I think if most company understands how to achieve this, then they can all potentially become billion dollar companies, which is data is amazing. I mean, first of all, people are operating without the data and knowledge and insights to that mostly. And that's why I think the, you know, platforms like yours are are so amazing. But I've also seen enough, uh, across the industry to know that having data, uh, is not enough. You also have to take action right on that data. Now, the billion dollar question for you, and the challenge is sometimes to to take that action. One, the company needs to kind of one know, be able to decipher the data and figure out what the actions are. Number one. But number two is sometimes to do those actions in their mind is very difficult. Maybe it involves, you know, changing processes. Maybe it involves, uh, you know, changing, uh, things across multiple departments. And again, anytime you do any changes, it's hard. It's difficult. Right. And it could be a slow

process. So

based on what you've seen with customers that are very successful with you guys, how would you, you know, kind of answer that two part one is, you know, how do you how do you guys help customers take that action? First figure out what the action is. And then two is how do you see companies really be successful in taking those actions? Because sometimes it might be a to them in their mind, may be a big process or, you know, a lot of changes. 7.5s

Change management is is AI is hypercritical and in customer experience. And some of the best leaders are those who are who are able to influence and and and in order to influence, you really kind of need those data backed inputs, um, to, to, to show value, um, because otherwise organizations are going to be reluctant to, to devote any of their resources because, as we all know, every company out there has a list a mile long of things they want to work on. So so

it's a fantastic

question. And this is one of the things I'm super excited about. Uh, and I talked to to our customers about it almost daily, which is, um, the answer to your question of, of how do I know where to focus and, and where should I prioritize all of these, you know, these improvements or these enhancements? Um, and so what we have a tool that we call what we call impact predictor. And impact predictor is really just a way of of bringing together all of this data into one common platform. Um, and then running some really nice regression, um, methodologies behind it. Um, and it basically says, hey, if I want to influence retention or if I want to influence acquisition or I want to lower my costs. What do I need to do? And so this tool runs regression against all of this data that we've brought into the platform and says, these are the top five areas where you need to focus. And it's an order of the, the of impact. So let's take for an example, uh, something that I used earlier say say within the your customer care center and you're getting all these phone calls that are coming in and you're seeing first contact resolution being, you know, a very important feature, but you're also seeing other drivers such as, you know, maybe it's wait time, or maybe it's things like agent helpfulness or professionalism. And so what it's able to do is a understand what those drivers are that are influencing. Say um, your, your, your cost within the call center. But now it's able to start interpreting which ones have the most impact. Couple that with um generative AI. Um, now you're able to go say, okay when we talk about first contact resolution, what does that actually mean. And so this generative AI model is now through a tool that we call Smart Summaries is you're now able to go out and say tell me what I need to do to improve first contact resolution. So you start with a what's the most important. And now you're starting to interpret all of these signals, whether it's chat transcripts or call logs or survey responses. And now you're able to see instances of what what are customers saying regarding first contact resolution. And then it's going to tell you what it's going to make suggestions as to what you need to do to go and improve. So now you've kind of got the quantitative backing coupled with the customer feedback customer coupled with employee feedback. All of this kind of being analyzed through generative AI. Now you have that business case to go and take to your ELT to start. Yeah. And, um, you know, the the follow up to that. Um, I'd love to get your feedback is first of all, I'm, I'm a very passionate. I'm just like, you're very passionate about. I'm very passionate about what I call spend advantage, which I, you know, we look at as and that's obviously the name of the podcast as well is companies spend a lot of money on a lot of things. And you know, what is the ROI, what is the. And yet the interesting thing is they spend all the money, yet they have none of the leverage the vendors have. And so, you know, I look at it as you know, you know, how can we partner with the right companies like yourself to provide that spin advantage, which is the competitive advantage for their spend? Similar to how you're doing it for CJ and to give that company a competitive advantage over their competitors. Right, or, uh, for their customers. Um, so, you know, the question is what what kind of ROI, uh, you know, can companies expect when they implement something like this and how long does it usually take? But I want you to go a little bit, maybe more, you know, provide some numbers, provide something that, um, you know, the sea levels can really take it and, and, um, kind of think, think about it. 3.6s Sure.

Yeah. You

you look at this category and it's a couple of the, the analysts services have come out and said, you know, 1 in 5 programs are at risk of being pulled because they're unable to prove ROI. And so that's scary. And it

doesn't necessarily have to be there's

there's plenty of ways in which organizations can calculate their impact, um, with ROI. So I'll give you a couple examples. Right. One one of the first ones is is is how can you tie the impact of CX on customer and revenue retention? 1.2s Uh, and so one example is we were working with a financial services company that were really focused on tax tax software. Um, and so we were able to identify, you know, kind of what the, the companies that were or the customers that were at risk because of really low, um, scores and able to not only just determine what, what were the root causes of those, but also the means of which they can go back and, and save. So, you know, if they only save 10% of those customers who are at risk, that would have saved a little over $1 million in, um, in revenue. So. Right. So to just 10% of those that we identified as at risk, you could have saved a little over $1 million in revenue. So now you start to look at, you know, the return versus the investment of, let's call it a several hundred thousand dollars, um, to bring all this together for them. Now you're starting to look at a 3 to 4 x ROI right out of the gate. 1.1s And now you start to look at, um, you know, the ability to acquire new customers as a result of. Great. And so, you know, I've worked with a large consumer products brand that found that their promoters spoke positively about their brand of those that did, and they talk about it to roughly seven of their friends and family members. And so when you start factoring in to typical conversion rate, multiply that by the average lifetime value of a new customer. That equates to about $700 of revenue generated from customer referrals. And and that's a that's a very easy extrapolation into what your overarching return could be when taking to account the number of customers that are, um, that are promoters. But a very common example is really in cost reduction. 1s Uh, so, um, you don't all be, you know, sometimes you don't really tie the hey, if I provide, great, I'm going to reduce my cost. But that really is a great byproduct or outcome of it. So we've partnered with a quick service kind of fast food chain to identify friction points within

their drive through experience. And these friction points were were driving not only frustrating customer experiences, but it was also costing the company roughly $6 million as a result of a bunch of broken processes within that kind of, you know, fast food drive through experience. So through our feedback and analysis, we were able to identify like five steps to resolve and avoid those cost and improve those experiences. So that's that. That equated to roughly about A5X return on investment just in the first year alone. So it's it's really kind of measuring, you know, when you think about the overarching measure of ROI. It can be done through a single one of those instances or through really all three of them. But I think one of the really powerful ROI proof points that exist came from Forrester, and they published a study last year that showed that companies with high levels of, of of alignment across their customer facing functions, they realized 2.4 times higher the revenue and nearly double the profitability compared to those with very little alignment in their customer facing functions. And what ties those customer facing functions together is this strategy and more importantly, the art of listening, analyzing and acting

on those experiences. 1.2s

I, uh, so as we kind of wrap up with a couple last questions, I mean, I love everything you just said there. Um, and I love you, you know, kind of giving out the numbers. That 1 in 5, even though they implemented. But then they couldn't see the ROI. And that is so fascinating, is just there's a vision to it. But sometimes because of the way companies implemented or manage it, they're not generating that immediate ROI. And so maybe executives then look at it as, oh, like, well, you know, it's hard to then tie it back to the revenue and those things. And that's why I love the examples you gave. So maybe one of the last question is if you were speaking, you know, to a CEO, uh, of a company of any size, how would you, you know, in a short period of time, maybe in less than a minute, explain why this is a must have versus, you know, a nice to have of, hey, do you want to. Because let me kind of break that down a little bit because you could go to a executive or anybody in the company and say, hey, do you want to know what your customer think about you? Like, of course, like, I hope so. You know, like, don't you want to know like, don't want to increase your Ram. Like you want all these things, right? Like, don't you want to know if your customer is unhappy and why and where. Like I would hope every person would say yes. Like they would want to know, right? But why do you think then, that they still see this potentially as a nice to have versus a must have. Right. And so I think it's a it's a love to kind of have you maybe if you were talking to a CEO, how would you kind of describe it in a short period of time?

Yeah. You know, I think there's so many ROI proof points that, you know, several of which I just stated, showing the impact that great stacks can have on on performance that really companies, they can't afford not to invest in improving the experience that they provide to their customers. So, you know, as we all know, all of our customer expectations are constantly changing and are often being set by brands both inside and outside of their of their primary operating category. And so so they have to be prepared to listen to their customers, analyze what's happening with their customer base and start evolving, uh, their, their organization to, to meet and exceed those expectations. You know, I, I really do believe that that company is looking to grow and most importantly, grow profitably. They must have at the forefront of their organizational strategy. Not only is it really the right thing for their shareholders, but also for their employees and ultimately their customers, it's it's an absolute game changer if they've done it correctly.

Yeah, I, uh yeah. No, we're super excited about about the partnership to, uh, bring that ability, uh, through our spin advantage program to, uh, to all these companies. So the last question will we always ask, um, our guest is, uh, you've seen a lot. You've done a lot. If you have to give maybe one personal and or business advice, uh, maybe you know that you're passionate about. What do you think that would

be? 2.1s

I am a avid believer in improving value and always, you know, trying to uncover the impact that any initiative that you're going to be working on is going to have. And I and obviously, I'm a staunch believer in, in. And I, I believe that doing right by the customer is is the right thing to do for them and for your organization and for you to be able to go back in and always think about how am I going to attach value to every one of these initiatives that I'm working on, whether it's to you personally or whether it's to your company? Always have the value in the back of your mind.

I think that that's the that's the golden nugget that I would take away that is uh, I love that man. I actually yeah, I always thought to myself, if I were to get, uh, two tattoos of words, it would be value and leverage, and, uh, it just, uh, unpack so much, but but now this has been a great conversation, man. Thank you so much for for joining us. And. 2.5s

That was an amazing episode of the Spend Advantage podcast, where we show you how we can help you ten x your bottom line savings and top line growth for your business. Hope you enjoy the conversation and if you want to get the best deals from the guest today, make sure to send us a message at sales@varisource.com.