The Modern Customer Podcast

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.

Embarking on a full-scale customer experience transformation is a huge undertaking, especially for an organization as large as Cisco. The company has made huge strides recently as it evolves its customer experience to build on its existing customer-first culture. Cisco Live is the premier event for education, inspiration and making connections for technology professionals. This year had 27,000 in-person attendees and more than half a million online views of the keynotes and sessions. Cisco Live is also a great opportunity to showcase and celebrate Cisco's ongoing customer experience transformation. It's rare to see a large company make such bold moves on customer experience. But as Cisco Senior Vice President Ish Limkakeng says, the goal is to become the best customer experience company—period. One of the reasons for Cisco's success is the clarity of vision from executives. According to Jason McLaurin, Managing Director, Customer Experience – Japan, the bold moves from leadership help customer teams move quickly and keep up with changing trends and demands. That laser-focus on customers starts from the top, and sharing the vision with all employees creates an energizing culture ready to make positive change. Mike Adams, Vice President, Learning at Cisco, says successful change starts when executives commit to sticking with the transformation during its ups and downs. Empathy is vital to driving customer experience. McLaurin recommends spending time in the customers' shoes and consuming their technology. Learn what it really means to live their work for a day. Find their end goal and trace back the requirements. Customer experience should be outcome-based and driven by a strong vision of how to help customers achieve their goals. Part of helping customers reach their goals is providing useful solutions. Many of Cisco's products have transitioned to subscription and cloud-based models in recent years. Adams says those updates change how the company engages with its customers and pushes the need to add value at every stage of the customer lifecycle. The goal is to create a friction-less renewal process because customers see the overwhelming value of the products. Limkakeng says Cisco aims to help customers realize the full value of their investments. Culture plays a huge role at Cisco. Employees are encouraged to innovate and put customers first. Customer experience is ingrained in the culture and is part of everyday life for all employees. Limkakeng also lives by the principle of explaining to employees what's in it for them so they can see how what they do every day fits into the overall business strategy. When employees know their role in the puzzle, they are more engaged. Cisco's customer experience transformation is one of the biggest in recent decades and can be summed up in five words: move fast and move big. Cisco is well on its way to becoming an experience leader across all industries.

Embarking on a full-scale customer experience transformation is a huge undertaking, especially for an organization as large as Cisco. The company has made huge strides recently as it evolves its customer experience to build on its existing customer-first culture. Cisco Live is the premier event for education, inspiration and making connections for technology professionals. This year had 27,000 in-person attendees and more than half a million online views of the keynotes and sessions. Cisco Live is also a great opportunity to showcase and celebrate Cisco's ongoing customer experience transformation. It's rare to see a large company make such bold moves on customer experience. But as Cisco Senior Vice President Ish Limkakeng says, the goal is to become the best customer experience company—period. One of the reasons for Cisco's success is the clarity of vision from executives. According to Jason McLaurin, Managing Director, Customer Experience – Japan, the bold moves from leadership help customer teams move quickly and keep up with changing trends and demands. That laser-focus on customers starts from the top, and sharing the vision with all employees creates an energizing culture ready to make positive change. Mike Adams, Vice President, Learning at Cisco, says successful change starts when executives commit to sticking with the transformation during its ups and downs. Empathy is vital to driving customer experience. McLaurin recommends spending time in the customers' shoes and consuming their technology. Learn what it really means to live their work for a day. Find their end goal and trace back the requirements. Customer experience should be outcome-based and driven by a strong vision of how to help customers achieve their goals. Part of helping customers reach their goals is providing useful solutions. Many of Cisco's products have transitioned to subscription and cloud-based models in recent years. Adams says those updates change how the company engages with its customers and pushes the need to add value at every stage of the customer lifecycle. The goal is to create a friction-less renewal process because customers see the overwhelming value of the products. Limkakeng says Cisco aims to help customers realize the full value of their investments. Culture plays a huge role at Cisco. Employees are encouraged to innovate and put customers first. Customer experience is ingrained in the culture and is part of everyday life for all employees. Limkakeng also lives by the principle of explaining to employees what's in it for them so they can see how what they do every day fits into the overall business strategy. When employees know their role in the puzzle, they are more engaged. Cisco's customer experience transformation is one of the biggest in recent decades and can be summed up in five words: move fast and move big. Cisco is well on its way to becoming an experience leader across all industries.

Many companies think of customer service as just what happens when a customer calls with a problem, but Cisco has transformed customer experience to include the entire customer journey. According to Alvio Barrios, SVP Americas Customer Experience, the goal of customer experience is to proactively engage with customers and help maximize the value of whatever products they're getting from Cisco. As the market transforms, Cisco's products and services have also transformed. The same is true with customer experience. Customers want to get to market faster and be competitive, which means Cisco must proactively help customers and find opportunities to better optimize their solutions. A number of factors contribute to Cisco's customer experience transformation. It starts with a commitment from executives across the company. Customer experience impacts all functions of the company, so all executives need to be on board. Employees must also be engaged in customer experience. At Cisco, employees understand what's happening in the industry because they're experiencing it themselves. Part of Barrios' job is to leverage customer focus and turn it into customer obsession to create an open, customer-first culture. Customer experience transformation must happen fast because trends and technology are constantly changing. Cisco uses a feedback loop to listen to customers and find ways to improve its products and services so it can deliver a better experience in the future. Cisco also uses analytics and insights to find potential challenges and opportunities. Barrios says the most important thing about moving quickly is to be bold and totally committed. Challenges will arise, but a deep conviction and bold actions can help push through the trials. Transformation doesn't happen overnight. Change takes time. Cisco celebrates the small wins and works to eliminate silos with a company-wide customer experience blueprint. Getting all employees on the same page and being honest will help everyone see success and the purpose of customer experience. The best customer experience is proactive and comes from companies that are obsessed with their customers. Cisco shows that like the customers themselves, the experience should also be constantly transforming to provide amazing, proactive solutions. This podcast is sponsored by Cisco.

Imagine having a human assistant to look after your money 24/7 and proactively find ways to save more and keep your money secure. It may sound like an impossible dream, but Capital One makes the same service available for its customers with a virtual assistant named Eno. Capital One has always been a pioneer in conversational AI. It was the first financial company to launch an Alexa skill that allowed customers to check their balance with a voice command back in 2015. In 2016, it introduced Eno as a text bot. Now, the revamped Eno is more intelligent, responds to conversational text and voice commands and even makes proactive recommendations and alerts. If you made an unusual charge that could be fraud, paid an astronomical tip that's out of the norm or spent more in a certain area than normal one month, Eno will send you an alert. The bot not only reaches out, but also allows customers to quickly take action right within the channel instead of having to log on to a computer or call customer service. The goal of Eno and Capital One's dedication to conversational AI is to remove friction and have real conversations with customers. Before Eno, Capital One had an SMS fraud alert system that would text customers to confirm or deny unusual charges. However, the company realized that half of the responses weren't confirmed or denied. Customers would respond with things other than the Y or N that the system recognized. They were interacting with the service, but not in a way that the machine recognized. The move to conversational AI allows humans to talk as they normally would. Ken Dodelin, Capital One VP Conversational AI Product Development, says it's a move to teaching machines to talk like humans instead of the old method of trying to have humans talk like machines, which was ineffective and frustrating for everyone involved. Eno's conversational AI technology allows it to understand more than 99% of customer queries and responses—a major jump from 50% just a few years ago. Customer expectations are changing, and how brands design systems must also change. Conversational AI isn't something to take lightly. When done well, like in the case of Capital One, it can be a major component of the company's overall strategy. Dodelin says it's important to have humility when designing the program. Customers don't always act how companies expect them to, which means teams have to be agile to find what best matches what customers will actually do. Eno's proactive approach has resonated with customers and had a very positive reaction. Eno and Capital One show the power of conversational AI to build bridges and improve the customer experience. Dodelin says that no matter the company, the goal of AI should always be to be helpful. The right technology can create extremely helpful solutions for busy customers.