The Modern Customer Podcast

Instead of just being employees, Honeywell employees are now considered Future Shapers. It’s part of the company’s digital transformation and move to create a smart, convenient future for its customers. Future Shapers are dreamers and doers. As Ken Stacherski, Honeywell’s VP Enterprise Transformation, shared, the company’s internal motto is “The future is what we make it.” With those words in mind, Future Shapers are transforming Honeywell inside and outside for their customers.   The move towards Future Shapers starts with Honeywell employees who make the future a reality. Stacherski said that as the new initiative took hold, a storm of energy went through the company because employees were so excited to embrace the concept and create the future. They wanted to work for a company that rewarded risks and innovation. Future Shapers extends from employees to more widespread digitization efforts. Honeywell’s digital transformation helps connect the dots across its 35 business enterprises to build more efficient processes and systems internally and externally. By streamlining things internally, Honeywell can also offer its B2B customers more streamlined services. The goal is to create a forward-thinking and connected company that is easy to do business with. Stacherski shared Honeywell’s three focuses as it expands digitization: Differentiated customer experience. Honeywell aims to interact with customers consistently through the buying cycle. That means creating consistent experiences starting with digital awareness and moving all the way to after-market support. Data-driven decisions. Honeywell hopes to standardize processes with strict data governance and a coherent IT structure. With a solid and consistent data framework, it can make informed, timely decisions for employees and customers. Operational efficiency. By cutting through red tape and replacing outdated systems with more efficient models, Honeywell can work more accurately and provide a better experience for customers. The three goals show the shifting power towards customers. As Future Shapers work to define the future, they are expanding Honeywell’s customer-centric culture and connecting with customers from end-to-end touchpoints. In the future, Honeywell hopes to continue on its digital transformation path. The Future Shapers initiative puts the company on the cutting edge of new technology and empowers employees to create the future instead of being disrupted by it. Focusing on customers and driving innovation creates a powerful company that could transform how companies do business.    

If you had great intentions of playing the guitar but gave it up after your first lesson, you aren’t alone. As many as 90% of new guitarists quit within their first year. But that might not be the case much longer. Fender Digital is building a thriving subscription model that teaches guitar skills that people actually stick with—and so far, 100,000 people are on board. Fender is known for its iconic guitars, but customers are much more valuable if they actually stick with the instrument instead of making a one-time purchase and giving it up. By reducing churn of first-time players by just 10%, Fender has the potential to double the size of the entire industry. The challenge was in how to reduce churn and teach novice guitarists with short attention spans who are always on the go. The subscription model of Fender Digital allows musicians to learn at their own pace while also addressing many of the issues of why people quit. According to Ethan Kaplan, GM of Fender Digital, one of the most common reasons people quit playing the guitar is because it hurts their fingers. As a result, the first thing taught in Fender Digital is how to play without it hurting. The basic model of Fender Digital is a subscription that moves students through a variety of guitar learning modules. The course is based around data and customer feedback to teach basic skills and more advanced concepts. Students get immediate value once they join and have access to the material. The subscription model is also enticing for customers because it automatically updates with new content instead of requiring people to have to buy new versions of a course. Kaplan says that most people are linear learners and work through the modules in progression, but Fender Digital also allows people to jump around and focus on the skills or songs that are most interesting to them. Giving power to the students can go a long way in keeping them engaged and motivated with the guitar. A subscription model really comes down to providing continual value. Fender has found that when a company provides value, people want to subscribe. The key is to continually provide value for guitar students at all levels. For Fender Digital, that means opening channels for communication with users and regularly editing and adding new content. Testing the content to help people if they get stuck and putting themselves in students’ shoes helps create a high-quality experience. The product is constantly evolving to match what people want to learn. Fender Digital also complements the main Fender brand. Kaplan says the two sides work together to create a lifetime of engagement for loyal customers with everything from products to services and experiences. The subscription model is growing increasingly popular because it provides more ways for customers to connect with brands. Fender Digital is taking subscription services to the next level by providing value and strong content.

How does a 100-year-old company continually reinvent itself to change how the world works? By relying on and driving a high-quality customer experience. IBM’s current success is built around its historic roots and the customer-first culture that has existed from the beginning. For CMO Michelle Peluso, that means standing on the backs of giants while also looking towards the future. The goal of IBM’s customer experience is to create more one-to-one interactions and move away from mass marketing and experiences. Peluso says the most important thing is seamlessness. Silos are common in large companies like IBM, but IBM avoids them by creating agile teams that are focused on a common goal. Each agile marketing team has a mix of specialists from different areas, such as IT, marketing and product design. The teams are tasked with thinking about how to sell a particular IBM product. Bringing together different backgrounds and skillsets for a common goal allows for unique perspectives and a seamless approach to customer experience across the entire organization. Marketing plays a large role in making sure the client journey is well instrumented so that IBM gets feedback when things aren’t going well. The right client feedback at the right points highlights areas for improvement. IBM’s customer experience is driven by data and includes new technology like AI. Peluso’s agile marketing teams use IBM Watson to get proactive alerts each morning about areas where they are underperforming. Watson also gives the teams reasons for the lack of success and suggestions for improvements. Instead of the human employees having to manually dig through endless amounts of data, Watson’s AI capabilities provide proactive alerts that allow teams to move more quickly and accurately. Peluso says emerging technologies give customers more control and puts them in charge of their own experiences. This will only continue to grow in the future of marketing and customer experience. Along with AI and agile teams, Peluso believes blockchain will have a large impact on the future of customer experience and marketing. Instead of moving through a complicated process like media buying with numerous moving parts and limited accountability, blockchain could potentially connect different parts of the supply chain with one record of the truth. Media buying could potentially be more accurate and targeted to provide personalized customer experiences. A high-quality customer experience doesn’t come from a single action or person, but from the collective efforts of many people working towards the same goal. At IBM, that translates into leveraging new technology and ideas while still holding strong to brand values from the past to continually driving forward-thinking solutions customers crave and expect. 

Taking a relaxing trip by rail or hopping on a high-speed commuter train to the next city is common in Europe and Asia, but it’s a foreign idea for most Americans. Virgin Trains USA is hoping to change that by bringing the future of train travel to the U.S. The sweet spot for train travel is between highly populated city centers that are within 200 to 300 miles of each other. It’s a distance that most people drive instead of fly, but the trip by car can be full of traffic, construction and detours. Instead, the goal of Virgin Trains USA is to create a network of high-speed passenger trains along busy highway corridors so that travelers and commuters can get where they need to be more in a way that’s quicker, easier and more eco-friendly. Virgin Trains USA president Patrick Goddard says trains are 90% safer than cars and provide faster and more reliable travel.   Virgin Trains’ first big foray in the U.S. is revamping an old rail line in Florida. After updating the line to connect Miami and West Palm Beach, Virgin Trains is now endeavoring on phase two to extend the line to Orlando in the next few years. Trains that can reach speeds of 125 miles per hour will soon be zooming past people stuck on the freeway on the three-hour drive between Miami and Orlando. Virgin Trains also has plans to build a train route between Los Angeles and Las Vegas that could cut the three-hour trip to just 75 minutes, as well as other potential sites that could link neighboring cities. But Virgin Trains is hoping to gain a following not just for its speed, but also for its experience. As the company expanded in the U.S., it brought it architects, designers and visionaries to create an amazing experience in the station and on board. Goddard taps into his hospitality background to ensure the experience disrupts and changes the status quo of train travel in the U.S. and around the world. A large part of that is the digital experience. Virgin Trains strives for a digital experience that will ultimately involve as little interaction from the user as possible. That means keeping things seamless and simple, such as integrating all forms of transportation from start to finish in a single booking and allowing passengers to order food to their seat from the station or the train. Train travel has the potential to give passengers their lives back instead of being stuck in stressful traffic jams. The future of train travel is here, and as Goddard says, it’s not your grandma’s train service. A modern network of high-speed trains could transform how people travel and do business as it connects cities and passengers with amazing experiences.  

How do you take on an industry giant and deliver innovative solutions? With a customer-first culture that becomes a competitive advantage. Mike McDerment created FreshBooks when he couldn’t find a great accounting solution for his small design business. He designed the product for business owners, not accountants. Now, the company has over 10 million customers and is the #2 small business accounting software in America, after giant QuickBooks. From the beginning, FreshBooks had a customer-first culture and focused on building close relationships with customers. McDerment and his team focus on building customer proximity where the people buying the product aren’t far-off numbers, but rather real people who are always the center of the company. Every new FreshBooks employee spends their first month working in customer service. They learn about the products and then spend time answering phone calls and chatting with customers. McDerment says starting all employees with the customer service background helps them understand the products and keeps them close to the customers so they remember who they work for. The customer service team even designed and runs the onboarding process because it is that central to the culture for new employees. FreshBooks has always invested money in customer service, even before many other companies caught on to the need to do so. McDerment says that customer service isn’t a cost center, but rather an opportunity. Some companies view investing in customer service as a necessary evil, but it should actually be viewed as a revenue generator because of all of the gold found in customer experience. McDerment says that if you listen carefully, the customers have all the answers, from where to focus the company’s effort to what products to design for the future. Customer service is a valuable feedback loop that helps FreshBooks get insights to pass on to the correct teams to put into action. Aside from its unorthodox approach to customer service, FreshBooks also used a unique method to build the next version of its product. Knowing that competitors would be watching to see what FreshBooks would do next, the company built a seemingly competing product under a different brand name so that no one would steal its ideas. Once the new version was proven, it became the main FreshBooks product. Building a successful company comes with its ups and downs, but McDerment says that focusing on innovation and remembering to put customers first makes all the difference. The biggest factor to success doesn’t show up on the balance sheet; it’s the culture that makes all the difference.  

Most people don’t think about their luggage when travelling. The goal is to focus on the experiences themselves instead of the product that’s carrying your clothes and supplies. Samsonite is a staple in the travel world. As Chief Digital Officer Charlie Cole says, the goal is for customers to talk about the vacation and not about what they’re packing. A good suitcase quietly gets the job done without adding headaches to the trip. The growth of the experience economy in recent years has led to more people traveling than ever before. Samsonite has updated its approach to customer experience to reflect a new wave of travelers. The company may be 110 years old, but it has a fresh digital approach. One of the reasons for its current mindset is the fact that Samsonite pays attention to changing trends and technology. Cole says it’s important to embrace change instead of resisting it. Samsonite acknowledges things that are changing and then decides how it will attack them, which can either be by reallocating internal resources or adding an outside acquisition to its diverse portfolio. Samsonite is actually an entire portfolio of travel products and websites, including Tumi, American Tourister and Ebags.com. Staying brand-aware and constantly self-assessing helps Samsonite recognize what it needs to do to change and stay ahead of the industry. Samsonite leverages data to provide a strong digital experience.  Cole says the importance of data will continue to evolve. Samsonite aims to use data in a way that helps the organization be more efficient and customer-focused. Staying in tune with what customers are looking for helps the company create the right products and market them to the right people. Another impactful trend for Samsonite has been the growth of D2C businesses. Samsonite has strengthened its own D2C role in recent years to match other D2C companies. It built out its entire D2C capability, from systems to people, to create a powerful way for customers to get exactly what they need straight from the brands. At the same time, Samsonite maintains its wholesale relationships with suppliers like Amazon and Kohls to keep another arm in the industry. Samsonite bridges the gap between a long-lasting company and an innovative startup that is constantly evolving. Leveraging data and creating a strong brand portfolio helps the company be prepared for whatever happens next as it continues to build a strong digital experience.

For years, customers have traded their personal data for digital services, rewards or promotions. In order to gain access to a new program, get discounts from a company or connect with friends on social media, we’ve given up much of our personal information. But is it a fair trade? Data privacy issues have been growing in intensity for years, leading to a world where customers aren’t in control of their own data and trust between customers and companies continues to erode on a daily basis. Countless questions face technology and business professionals today, but perhaps none are more important than those surrounding data security, fairness and trust. Data used to not be worth anything, so customers gave it away freely. They didn’t think anything of giving out their email address or personal information in exchange for services and information. But over time, companies like Google and Facebook turned personal data into currency. Now, that information we used to give away freely is incredibly valuable, but customers are no longer in control of it.   Stephen Messer, co-founder and vice chairman of Collective [i], says it all comes down to the tradeoffs customers are willing to make. In general, customers love the personalization that comes from data, but they’re concerned about how their data is used and shared. Most people are willing to share their data with Netflix if that leads to personalized show recommendations, but they likely aren’t as willing to share their data with an unknown e-commerce company just to get a small discount. Each person’s tradeoff value is different. Many of those tradeoffs involve not understanding how companies collect or use customer data. A major contributor to the lack of trust is that companies aren’t transparent or careful about how they use data. Messer says trust is the hardest thing for companies to earn, and it’s nearly impossible to gain back after it’s been lost. But how can companies regain trust and help customers feel secure about their data? Messer says it starts with companies being open about how they’re using data and the safeguards they use to protect it. Google, for example, anonymizes its data. It doesn’t care who the data is from; it simply wants customer data to make its products better. If more customers were aware of those types of safeguards, they could possibly be more willing to share their data. Customers need information so they can make choices and have control over their own data. Tom Wilson, president and CEO of Allstate, believes trust should be considered in terms of relationships. Wilson suggests having a global standard of three data sharing agreements, ranging from restricted data use to open data use. Depending on what the data will be used for, customers can opt in to different levels based on their comfort level. If a customer wants to be in complete control of their data, they would select the restricted option, but if they’re willing to share data in exchange for certain recommendations or perks, they could select the controlled or open options. Another solution would be for companies to charge customers to control their data. A small monthly fee could potentially allow customers to opt in to protected data on social media sites. Wilson and Messer agree that data privacy and trust are complicated issues. No matter the solution, it starts by being transparent and giving power back to customers. Providing them with resources and information can create more informed customers and make a large step towards regaining trust.  

There’s a lot of talk about innovation in the business world. But innovation is more than just a buzzword—it should be the culture and mindset of customer experience professionals. The best customer experiences push beyond the norm to provide creative, unique and memorable experiences and services for customers. According to best-selling author Josh Linkner, customer experience is a platform for creative expression. Every single person is creative, and one way we can manifest it is through finding creative and innovative customer solutions. Innovation will ultimately drive value for the brand. Linker recommends thinking of customer experience as a blank canvas and finding new ways to win. In order to do that, brands need to examine every touchpoint they have with customers and look for ways to improve the interaction and outshine the competition. Creativity doesn’t always mean trying something out of left field. In many cases, innovation happens with simple ideas that challenge what’s always been done. Linkner gives the example of a company in Korea that started packaging its bananas based on ripeness so that customers could work their way through the package and have a ripe banana every day. The simple, innovative solution led the company to charge three times more and crush the sales numbers. Many companies fall into the rut of focusing on efficiency instead of encouraging innovation, but efficiency can only get you so far. In our fast-paced world, we can’t rely on models of the past. Customers crave innovation and new solutions. Creativity is the one thing that can’t be outsourced or automated. It can become a powerful competitive advantage. Many companies overestimate the risk of trying something new and underestimate the risk of standing still. Leaders and employees at all levels need to encourage creative ideas—both good and bad—to get people talking. Removing judgement and building resilience can create an environment where innovation thrives. An innovative mindset can also help companies evaluate existing processes and mix things up from what’s always been done. Ben and Jerry’s does this by holding a funeral for retiring flavors and literally burying them in a casket. It isn’t a mark of failure that a flavor didn’t sell well, but instead a celebration of what the brand accomplished and a signal to start fresh with a new idea. All it takes is one person to look at something they’ve seen 100 times with a creative point of view to find a new solution. Innovation is the root of customer experience. Stale and stagnant experiences don’t build strong relationships with customers and will get overlooked for innovative ideas from the competition. To lead the pack and best serve customers, Linkner says individuals and companies must bring their creative souls to the surface and see what amazing results ensue.

How does a company that has been around for more than 100 years still provide innovative and customer-focused service? For Nordstrom, it comes down to understanding customers and evolving the experience to meet their needs and exceed their expectations. Shea Jensen, Nordstrom’s SVP Customer Experience, says the brand’s goal is to make customers feel good and look their best. But what sets Nordstrom apart is how the brand meets the customer where they are. Many other companies think of themselves as channels, but Nordstrom provides a complete omnichannel experience by considering itself a brand, not a channel. Nordstrom’s digital transformation revolves around finding ways to win with customers in a digital world. The seamless experience between channels allows customers to get the great quality they depend on from Nordstrom no matter how they shop. However, digital transformation didn’t mean completely abandoning physical stores. Instead, Nordstrom updated its physical locations and added extra services to make the experience as convenient and easy as possible. The goal is to provide access to the brand and its products at a time and place that works for customers. Nordstrom stores are for discovery and inspiration. Jensen says 35% of online purchases begin with moment of discovery in store and around 85% of customers who shop in store started their journey in some digital capacity. The company currently operates three Nordstrom Local stores that serve as service hubs with personal stylists, online order pickup and alterations that are right in the neighborhoods where customers live and work. Nordstrom Local customers spend twice as much as customers who don’t shop at Nordstrom Local. Jensen says the convenient touchpoint becomes part of their daily lives. Nordstrom Local and traditional Nordstrom stores also use well-trained employees as personal stylists, but the services are often augmented with AI and new technology. The Style Board function allows salespeople to curate an assortment of products for a customer, send it to their phone and then be available for a live chat. When the customer is ready to purchase, it’s as simple as shopping on Nordstrom.com. The experience moves between channels in a way that makes sense for customers. At Nordstrom, customers are in control. They choose how, when and where they shop, and Nordstrom works to provide a high-quality and personalized experience every time. The shopping journey is no longer linear, but creating a digitally driven omnichannel experience puts customers in the drivers’ seat and gives them control.

What’s the secret sauce to successful businesses? How do the best companies continually innovate and grow? According to Tiffani Bova, Global Customer Growth and Innovation Evangelist at Salesforce, there’s not one secret to success. Growth and success don’t come from just focusing on employees or building a customer-centric culture or going through a digital confirmation—it comes from a combination of all of those things and many more. Bova created the idea of Growth IQ from her more than 20 years as a sales and marketing practitioner and academic. Her framework is designed to help companies looking to accelerate growth or recover from a growth stall. The foundation of the Growth IQ is based on three principles: Pause and get context. Before growth can begin, practitioners and companies need to understand the context of their market. They need to know their competitors, what’s happening in the market, why they’ve won or lost in the past and their strengths as an organization. Taking time to look at the industry context creates a strong foundation instead of barreling forward without a full view of what’s happening. It’s never one thing. Growth doesn’t come from one path or action in isolation. Sustainable and meaningful growth is a combination of multiple growth paths that creates a flywheel to drive continued growth. Sequence matters. The order that companies do things in helps them have a better likelihood for success. The steps matter, but the order they are taken in is also crucial. These growth principles are extremely important as industries change and are no longer protected from outside competition. Technology has made a huge impact on all industries, but Bova says the modern connected customer is more disruptive than new technology. That means companies need to focus on creating a customer-centric culture by putting their employees first. When the culture is right, everyone knows their roles in delivering meaningful customer experiences. That’s when real growth starts to happen. Employees also need to be on board because everyone owns customer experience. However, Bova says someone needs to set the strategy that all employees follow. If the CEO isn’t involved in the employee first, customer-centric culture, those ideas won’t become integral to the company’s DNA. Sustainable growth doesn’t come from just one area. It’s more than just putting employees first and creating a strong customer experience, although those definitely play large roles. The challenge is knowing where to focus first. But Bova says once a company decides, they need to stick with it and commit. True change and lasting growth is a process and don’t happen overnight. Committing to Growth IQ allows for a real impact on employees and customers, and ultimately on the bottom line.