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CX - Your Key to Customer Retention

In Episode 3, Andrew explores CX, its role in customer retention, and how eCommerce fits in.

Welcome to The eCommerce Experience - the podcast that turns YOU into an eCommerce expert. Your host, Andrew Rogencamp, shares his wealth of B2B and B2C business experience to take you on an eCommerce adventure.

Each month you'll hear from industry experts and meet people just like you - looking to take their business to new heights online.

 All right, welcome to The eCommerce Experience, and this is podcast Number 3. My name's Andrew Rogencamp, and this is a podcast to help people out there to get the best out of eCommerce, both in B2B and B2C. 

So, here we are in, I guess, Month 2 of COVID-19. And I think everybody has sort of gotten fairly used to what's going on now and really looking forward to those restrictions being lifted, certainly down here in Australia; I'm not sure what it is around the rest of the world. 

But here, we're seeing a lot of companies that have learnt how to work remotely. We're seeing a lot of companies that are really taking this time to do a lot of things, especially around eCommerce, that they don't really have time to do when they're too busy in their business-as-usual sort of phase. So, that's really good. That's encouraging. 

We're certainly seeing a lot of B2B companies that have quickly implemented some B2C capability, especially in that food services area where they really need to sell those products. A lot of those products, if they don't sell them soon, they're going to the tips. So, that's really important for those customers and those sorts of sites are really starting to take off. 

And we've seen a lot of customers out there out in the, you know, talking to customers that are doing some really unbelievable numbers. And it really depends on the type of products you're selling. If you're selling fitness equipment, you're doing pretty well. If you're selling stuff that people can do at home while they're not going to sport and that sort of thing, they're doing well. 

Of course, if you're selling anything in PPE, interestingly, PPE was a term that not many people knew six weeks ago, but everybody knows what PPE stands for now. So, that's really interesting as well. 

So, today's topic we want to talk about is Customer Experience. You often hear it called CX. And I think in today's environment, especially with a lot of sites getting customers that they've never seen before, a lot of eCommerce is happening with individuals out there that have never chosen to do eCommerce before. 

I think customer experience is super important. You've got customers that are hitting your site that are going to be first-time customers and depending on how you treat those customers will determine whether they come back to you long term or they're just a COVID-19 customer. 


B2C Approach to CX 

So, today we've got a gentleman called Danny Phillips and he's from a company called Arkade and he's a CX expert. So, welcome along to the podcast, Danny. 

Danny: Thanks for having me. 

Andrew: So, Danny, maybe you can give us a bit of background about what you do, where you've been, and what you can give to the podcast today. 

Danny: You know, we've worked mainly in the discretionary retail industry. So, very much on a B2C approach for almost the most of the time. But we've been going on for over 20 years in our company. We sort of started out as a design studio that moved into communications and digital. Social media, when that was a new way of getting to customers, then we started doing more in the eCommerce and transactional space. And it's really only the last five years that we've decided to lock ourselves in on this concept of customer experience. 

Because we felt that the term digital was kind of obvious goings of a digital agency. 

Andrew: It’s pretty broad. Of course, it is. 

Danny: Yeah. And of course, there's digital involved in everything. So, I think the term digital, whether it be in a role, title or in an agency or a business, is a bit redundant these days. You're not digital, then you've got some problems. 

Andrew: Exactly. 

Danny: Yeah. So, customer experience for us is basically the sum of all the experiences a customer has with the brands. So, as an agency, we really wanted to not sort of put ourselves in a corner and only do eCommerce work or only do app work or customer service work or email marketing work. It's all sort of combined together. 

To sum it all up, it's the concept of retention, really. It's how do you retain customers? We're not really in the acquisition game. Genuine loyalty, genuine advocacy is what we're trying to do. I know Seth Godin is a bit of a go-to person. 

Andrew: Yeah, I look at his blogs. 

Danny: But he's got a great idea of the sort of minimum viable audience, the idea that as a business, you really need to focus on making sure that you're appealing to the minimum number of people that you need to appeal to in order to be a viable business. It's less about trying to be all things to all people. So, having that focus is important.

Andrew: Yeah, I often talk about that 80/20 rule; that often, 80 percent of your customers make up 20 percent of your revenue and 20 percent of your customers make up 80 percent of your revenue. So, you can have a really high cost to serve on that 80 percent that aren't really generating a lot of revenue for you. 

Danny: Definitely. 

Andrew: And it becomes, as you say, not viable to be doing that. So, if you've got a model that 90 percent of your customers are generating, 10 percent, you've got some real problems there because the cost to serve 90 percent of your customers is way higher than it should be.

Danny: Yeah. And I'll find brands or businesses do spend, if they've got a retail footprint out in the real world, and they've got their eCommerce efforts or their online efforts, I often find that they will proportionately spend the amount of effort serving all customers equally. So, 90 percent of your effort and your investment is going to making sure those 90 percent of people that make a very small portion of your revenue happy. 

So, whereas a CX-centred strategy is really about standing shoulder to shoulder with your best customer, looking back towards the brand and going, “Okay, brand, I as a customer are part of your top 10 or 20 percent. You as a brand defined part of who I am as a customer. I buy from lots of brands, but this brand that I'm talking about now, I buy a lot through them. So, they are defined by people like me as a brand and I as a customer is defined by this particular brand. Because you're one of my special brands that I deal with.” 

CX strategies, functions, features, utilities, approaches, the whole thing, should be disproportionately centred around what that small number of people want. And everyone else be damned or both. I'd rather see you happily turn someone away. 

I saw a great example during this Covid-19 thing where in my local area there's local butchers and even the local Woolworths supermarket was turning away people from outside of town that are obviously coming in there to scoop up bulk buying meat from the butcher. And the butcher would be going, “Well, I don't know who you are. I've never seen you before. And I don't know why you want to buy 20 kilos of mincemeat.” 

So, the Covid fling customer, you mentioned up at the front, I think is a really good point. 

So, that was always true. This concept was always true. You shouldn't have your best customer lining up behind an average customer. You know, if you go to, say a Guzman y Gomez, your burrito company, you'll see that their best customers do download the app. They do get that sort of, I just want to reorder what I ordered yesterday and they'll walk straight up to the counter and pick up their order while everyone else is lining up. Then everyone else who is lining up, is just going, “I want a burrito today. I'm not even paying attention to that brand logo. They just sell the food that I want.” 

They're making some money, but they're happy to line up and they're not part of the best customer, because that customer might buy a burrito today and you never see them again. Whereas the one that's got the app that's walking out, that's getting the better experience, that's the best customer experience.

Andrew: And I think it's important to enforce that those customers experience, I think a really good example of a company that hasn't done that well out of doing that sort of thing and they've improved recently is Qantas, when it comes to the business class line and the platinum line and things like that. 

So, until recently, there's always been two lines, but they do not enforce who lines up in each line. And that makes those really high frequent fliers, the people that are flying with Qantas week in and week out, infuriated when you see a whole lot of people lining up in those lines. That, you know, is not being elitist or anything, it's just that you spend half your life on a plane, you're loyal to that brand and you want some recognition for it. 

Danny: Definitely. I mean, I think it's funny watching. We often use the frequent flyer programs as an example when we start talking about maybe loyalty or known customer programs. Often, it's because the executives we talk to, that's one of the only loyalty programs that they really engage with. So, they think -- the one thing I sort of, just before I respond to your point, the one thing I'd always like to point out is be very careful about differentiating a brand that is a grudge purchase versus an enjoyment purchase. They're very different types of categories. 

So, shopping, flying, insurance, fintech, anywhere where you have to do it anyway, it's a grudge purchase. Like I need to be in Sydney. I don't need to fly, but I have to as I'm not going to walk. And they do a really good job of making that as good an experience as possible, whereas buying fashion or apparel or toys for your kids or anything else is not really a grudge purchase. It’s like you enjoy the purchase process. 

So, I sort of mentioned that because the whole priority queue thing, I think here in Australia specifically, that sort of whole tall poppy thing, the idea that for a while their customers did, even people that had the priority queue access wouldn't line up in it because they didn't like sort of showing off in that sort of queue; everyone would just line up with everyone else. Now, this is a decade or so ago. 

But very quickly, that's turned around now. And this idea of a two-speed experience is almost expected now. And I think Qantas and Virgin have done that. But then by breaking that rule themselves, they've really undermined something that they've sort of fought so hard to create in the first place. And the fact that sometimes the priority line's longer than the average line. 

Andrew: Well, I find that true. Yeah. The priority line, depending on which airport you're at; if you're in Perth where pretty much every fly-in-fly-out workers are gold or platinum frequent flyer, the priority line is a lot longer.

Yeah, and then they let them through both at the same time. So, it doesn't really -- I just get into the economy line, because often it's shorter and they go through at the same time. 

But now what they're doing is quite good as they're just letting all of those priority people go through and then letting the other ones go through. So, letting them get settled and take their priority.

So, in terms of customer experience, I think if you look at it, the concept has been around forever. It's been around way before eCommerce came out. That whole, you know, it's nothing new. This is not a new concept to do with eCommerce. It's really just wrapping that whole go-to wow experience up. But eCommerce is a big part of it, obviously.

Danny: I think the best way to describe the evolution of CX is that 20 years ago, we had a thing called good old-fashioned customer service. And the customer is always right. And businesses were small enough to be able to, when a customer that they knew walked in the door, they could pick up where they left off because the employees have been there for 10 years and people weren’t moving around that much, so that the local store was their local store. All these factors meant that customer experience was just a native --

Andrew: It was largely face to face. 

Danny: Yeah, exactly. So, then what happened is over the -- Yeah, and agencies like me are responsible for some of this downfall. I think we've sort of created the problem in the first place is we've helped brands or help sort of completely fragment their experiences. So, there's so many ways that a customer can discover, can browse, can decide, can shortlist, can purchase a return, can recommend across so many different channels now that it's fragmented. And in order to manage that, the brands had to invent eCommerce departments and marketing, all these different departments that have got misaligned KPIs and metrics that they're being judged on, that all of a sudden, started working against concepts of good old-fashioned customer service. 

So, CX, I think, is the discipline of bringing back good old-fashioned customer service. Often, we get sort of knowing the smiles from the older executives in the room because they go, “This sounds very familiar and I'm sick of being bamboozled by technology. This is great. We're starting to talk about this now.” 

So, it's one line I like to use, because often CX and marketing get lumped in the same back and I like to differentiate the two and say, “Well, marketing is using the customer to solve business problems, whereas CX is using the business to solve customer problems.” 

Andrew: Yeah, that’s a good way to put it. 

Danny: So, once you identify what the customer problems are -- And another way to frame that is the job's to be done for the customer or what the customer uses your brand for. Not why do they love you, but just what jobs do they get done by using your brand? 

Once you define those things, then you say, “Well, okay, how do they do those jobs and how does our brand help them do those jobs?” And yeah, an example I can often use here in the sort of apparel retail is I go to your website, I look at seven different pairs of pants, and then I go to your store and say, “I want to buy the black pants that I was looking at.” And the store person goes, “Well, I've got lots of different pants and lots of black ones. I don't know which one you're looking at.” And then I'll say something like, “Yeah, but I'm pretty sure those pants I looked at have been following me around the Internet all week because of your very clever advertising technology. Why don't you as a brand know which one I was looking at?” 

Because there’s a lot of things on their website. I did even maybe saved it into my wish list on the website and you don’t know. How come you don't know?” “Well, I'm not the eCommerce department, but you need to talk to the eCommerce guys about that. I'm the retail department.” And the customer's going, “Yeah, but you're the brand, right?”



eCommerce Channel Conflict 

Andrew: Sometimes stores see the eCommerce side as their competition, almost.

Danny: Oh definitely. Yeah. I think the channel conflict, which normally is more about wholesale and retail, we've seen channel conflict within a brand that's fully integrated. Stores are losing sales to their eCommerce team and the eCommerce team --

Andrew: That often are actually doing click and collect for the eCommerce team as well. 

Danny: Yeah, so we find that a lot like part of the CX strategy is looking at and realigning KPIs and attribution, so that you're not actively working against your customers.

Another good example of reference quite a few times is the in-store availability feature on our website using imagery from your store network. So, obviously, if you've got accurate store inventory, which I'm sure is a battle for most brands, anyway. 

So, here's another reason to get it right. If your story is accurate, that on your website, you can say, “Well, you're looking at this particular product at our Chadstone store, we've got 23 in stock” or “We've got adequate stock.” You can sort of use fuzzy weasel words if you need to. 

Now, will that feature on the website increase the conversion rate of the website, which is the key KPI of the eCommerce manager? No, it might actually hurt the conversion rate. 

Andrew: Yeah, it will. 

Danny: So, now all of a sudden, you've got an eCommerce strategy going, “Why would I prioritise this feature on the website? It's going to hurt my KPI.” Yet when we go and look at the customer service logs or the in-store, we do a straw poll at stores and say, “Can you count the number of phone calls you got today where you were doing a stock look up for a customer who's deciding whether to walk into your store or not?”

And yeah, it's 40, 50 percent of all calls to stores and 40 percent of all calls to the head office customer service is an in-store look up. 

Andrew: Yeah, exactly. Yeah. So, I've seen one where they've got, not only what they've got on stock in the store, but this is a company that sells DJ equipment. But they'll also say what they've got on demo. 

And if you think about buying anything where you want to, you know, you can look at a speaker online and say, “Yeah, that looks really good”, but you're buying a speaker for what it sounds like. 

And so, if somebody knows that they can go into -- this company has got stores in every cap city -- is that they can see that it's on demo. They jump in their car and they can listen to it. It's a big selling feature for them.

Danny: I think that's a hugely important point. And I think coming out of this into the new normal, there's a phrase that I've sort of coined called Intentional Commerce. That the idea that people aren't going to be just browsing anymore, people aren't just going to walk into Chadstone and just walk around and see what jumps out at them anymore. They're going to go to a website. They're going to see that they like the product, that it's in stock. And to your point, that I will be able to go in there and demo it at that particular store and then and only then will I plan my trip and I come in there and I will go.

And so, I'd expect conversion rates in stores to be lifting just like they are online --

Andrew: Because people are going to look forward going to be in public places unless they really have to be. That's the message I'm hearing out there.

Danny: Definitely. I mean, I think even if we get the complete all clear, which is still going to be, what, a year or so away, I think psychologically, people are going to be are going to just be different. They're not going to be able to just switch it back into the normal mode. 

And that's great. Yeah, if you think about what that means, it means we're not having a whole lot of retail zombies walking around or consumerism zombies walking around, just taking up time. 

It’s a waste for everyone. It's a waste for the store teams. It's a waste for the stock because people buy stuff and taking home and bringing it back. It's all these sorts of {crosstalk 17:54 – 56}

Andrew: They bring them home and then take it back the next day or after they've used them in some cases. 

Danny: Yeah. Well, I think that's another good topic to talk about. I think if you're looking at what good CX strategies are, the whole managing the returns process and thinking about your returns strategy is a really good one. 

I think often, we see the evolution of returns, it works this way; customers buy from eCommerce and then have to return to eCommerce. They're not allowed to return to store because of all that general conflict attribution we talked about earlier. 

Then brands realised that that's a bit inconvenient. So, they start letting customers return to wherever they want to return. 

The next evolution is stores start going, “Well, if you return to a store, that's an opportunity to upsell or cross sell or try something different.” So, they start waking up to the opportunity and that's kind of good. 

Then the next thing that happens is eCommerce teams start seeing Dennis just bought three shirts of the same style in different sizes. He will be returning something, obviously. So, let's make sure we put a return bag in there, rather than make him request it and then go through all the process.

Andrew: Yeah, that makes sense. So, you're actually feeding into their intention. You're fine. You're saying, “I'm fine with that. It's the same way you do it in-store. So, I'm just giving you that in-store experience, except you're getting it at home.”

Danny: Exactly. And then you think about the idea that, “Well, we will give that to Danny because his annual spend with us is over $1500, whereas we're not going to give it to Andrew, even though he spent the same amount as Danny did today because we've never seen him before. So, maybe we don't give that experience to him just yet.” 

So, yeah, again, aligning your best experiences to your best customers, because often brands will say, “Well, I can't afford to give a return bag to a customer.” And we're saying, “You don't have to give it every customer.” 

Andrew: Yeah, that's right. 

Danny: Yeah. So, I think that sort of returns is really a remote change room experience with a deposit or just treating it that way is the way to think about it.

Andrew: Yeah. 

Danny: So, yeah, there's an evolution. Every brand's sort of working through where they're at with that and sort of making peace with some of the decisions. 

It’s sort of like evolving from transactional thinking to more sort of customer value thinking. If you're trying to make your strategic decisions around the value of this transaction, “I'll only do free shipping if it's over a certain amount today. And then who cares what value this customer has?” That's like where a good CX strategy allows you to have a bit more of a broader view.

Andrew: Yeah, just to get those customers that are important to you to continue to buy from you. It's a no brainer for them to buy those products. 

Danny: Yeah. And I think if you've got transactional rules in place, then a really valuable customer might say, “Sorry, you can't have free shipping because you've only ordered $70 worth of stuff.” 

And I could have ordered that $25 thousand product yesterday and now I've just got one cable for that and I'm going to be charged $15 freight.” 

Danny: It's a great example. 

Andrew: Yeah, 

Danny: Yeah. So, it's about making sure that the logic is attached to the customer, not to the transaction or the action. 



Blending B2B with B2C

Andrew: That's really important. Yeah. What about in B2B, Danny? I know you've got a lot of experience in B2C. Have you done much work in B2B around the CX type thing?

Danny: Not a whole lot. I mean, we've worked in some medical spaces, sort of a bit of a side life, doing some things there. I think some of our retailers are quite big purchasers, whether it be home wares or something else. So, I think when it comes to spending 

Andrew: So much so when it comes to {indistinct 21:16}. 

Danny: Well, yeah. Yeah. And also, we've got, when you're talking about the best customer. So, we've got someone like an apparel brand that's got a customer that does spend $30 thousand a year. Now, that’s B2B in my book. 

So, I sort of see it as a blurry line. I think at the end of the day, these are the same humans, they're the same humans that buy a shirt that say “Yes” to a one $300 thousand order on refrigeration parts for a national tender. So, the same rules apply. I think people are saying, “I've got jobs to do; make it easier for me.” 

One example we've had this sort of B2B is in the tool space. So, we've got an app for traders that buy through tools retailer. They hate passwords and don't like websites; they want to do it on an app because they're on their mobiles all day. So, great. We just use SMS-based password login to activate the app rather than trying to make them remember passwords. Yeah, that's sort of an idea. 

And there's somewhere inside the app there's a way to export a CSV of the last financial year purchases that gets attached to an email that we guess that they forward to their account. 

So, it's the idea that, yeah, it's showing your purchase history is something that you'd expect a brand to show their customers. But repackaging that up, from a business context, to be something that's useful for that small business is -- 

But we just see that as a power user; we just see that as customer experience as well. So, it's just about understanding that a B2B customer is just a customer that has very high needs for specific utilities. And if they had to choose between vendor A, B or C, they're going to pick the vendor that makes their day easier; that helps them get their job done. 

Andrew: Yeah, and that's what I also talk about with B2B is that, you know, I'll call it, you know, in B2C you're calling it a shopper or a consumer, but in B2B it’s really buyers. 

And their job during the day, they don't leave home and say, “Oh, I'm off to work to go and buy some stuff.” That's just often part of what they have to do; it’s their normal job. So, it might be somebody who's the office manager that has to buy stationery from one of the big stationery companies. And they just want to get that transaction done quickly, efficiently, and then move on. And that whole CX part of it, that that goes all the way from when the sales rep first spoke to them about pricing to how that pricing debate on the website, to how the products were delivered, what they looked like when they delivered, were they delivered to the right departments within my business, and all of that sort of stuff, gets down to that whole CX.

Danny: I mean, I don't know why I keep using airlines as an example, but I used to book my own Virgin flights using their consumer portals. I became a power user and I started to get annoyed by just all of a sudden, “Oh, you're buying a flight. This could be the first and last time you ever buy a flight. So, let's throw the full kitchen sink at you.”

And then we set up a business account and the business account is super lean, super light, works on mobile, it’s just about who's flying, where they're going, it’s done; all as quick as possible. 

Andrew: You’ve already made your decision. 

Danny: Yeah. 

Andrew: You know, they're not trying to sell you anything. The fact that you've got to fly has already been decided. You just need to get it done. 

Danny: But isn't it disappointing that that amazingly slick, super-fast experience isn't available to the average consumer?

Andrew: Yeah, I had no idea that was there. So, we book all of our flights on Qantas, just on the standard And yeah, you go through that whole experience every time, whereas we do the same thing every time; we just want the same sort of flights.

Danny: Yeah. So, saving my details, saving my credit card, saving all my delivery address, being able to pick up where you left off, they’re the sorts of terms that you should be asking yourself, whether it be B2B or B2C, “Can my customers pick up where they left off?” 

CRMs get thrown around a lot as a solution to this problem, but I think CRM isn't there to help the customer or the client or the buyer, it's there to help the seller, the marketer. So, those tools are designed to help you sell more, not to help them buy more. 

Andrew: Yeah. 

Danny: There's a big difference. 

Andrew: Yeah, that's right. And I guess ERP comes into it as well, because without the ERP system, they're being able to fulfill and efficiently ship the products and let other systems know about that transactional data that occurs, it's very hard to make customer have a good experience.

Danny: Yeah, it's interesting. As we build out these sorts of ecosystems, you're trying to decide the roles that all of these platforms play and how they work together. 

What we've found, and this is where the omni product, which is a bit of a shameless plug there, that we've developed; sort of we've decided to fill a gap where we find that between, say, an ERP and a CRM or any of those sorts of things, they've got all that. I call them the final facts. That's where the product, the price, the transaction, the customer record, the customer ID must live in your ERP. It's the final facts for your accounting for all those sorts of things. 

But those tools generally aren't accessible in real time while I'm trying to do a job or while a customer is trying to do a job. 

Andrew: Yeah, exactly. 

Danny: Or the interfaces aren't optimized for getting jobs done. They're designed for interacting with facts. 

Andrew: Yeah. 

Danny: So, what we find is you end up with either some clever interfaces through middleware or other platforms where you have what I call functional facts; what's the customer's copy of all this information? So, when I'm actually talking to them on the phone or in real life or they've got their own phone in front of them, that they can access their functional facts to get jobs done quickly.

And then if any new facts get created, like I'm repurchasing that thing I bought last time, then I knew that happens in that nice customer optimize experience and then it will end up as a final fact back in the big dirty ERP where the final truth is. 

Andrew: Yeah. 

Danny: So, that that sort of thinking around CX software and CX strategies is try to find experience-focused software that is designed for the customer to help them buy and then integrate it back into the into the core things which are there to help you sell and help you understand your business and help, when you close all the doors to your customers and go, “Right, what's going on?” they are the tools you look at; your ERP and all those things. 

But when you open the doors to the customer; whether it be a website or a selling process or a salesperson's tablet or whatever else, those tools need to be superfast, be able to be changed, interfaces should be thrown out and redone every six to 12 months.

Andrew: Well, that's not going to happen in ERP. I mean, ERP, I've been working in ERP for 30 years. And my experiences is that some customers upgrade once every three years. Now, I'm with a customer that hasn’t upgraded their ERP since 1998 and they still run efficiently on it. 

But when you compare that to eCommerce, where you've got customers really upgrading the eCommerce functionality; UI, UX, all of that, maybe every three to four months, the cycle around it is phenomenal.

Danny: And that should be true. I mean, I think that's where agencies like ours and like yours are providing that service to say these are the big monoliths and the glacial parts of your business that need to move slowly, because when you change them, it's a big deal. 

And they maybe don't need to change, as long as you've got an interface out to your business logic and then that business logic can be exposed in real time to experiences that humans use. As long as those interfaces exist, then that takes the pressure off needing to move ERPs all the time. I think you can do a lot with some pretty old state. I mean, those old ERPs are still --

Andrew: Yeah. The role of ERPs. Certainly, when I first started in ERP in the early 90s, it was everything. It did everything from the accounts, the inventory management, CRM, rentals, manufacturing, all of that. 

Whereas these days, the role of ERP, almost call it the plumbing. It's the plumbing system and now you've got all these other systems that are quite not easily integrated, but integratable to those systems. And ERP is sort of really, as you say, just that transactional end at the backend that stores that source of data. You know, that one truth at the backend.

Danny: There's one there's a few terms that go around when we talk about CX and I think that can sort of cause problems. It's this idea of a single view of customer or a single point of truth. It's a utopia that is impossible. 

So, it's about talking about a shared view of customer. It's this idea of rather than thinking in the terms of a suite, a big monolithic suite that everything's in, like the old ERPs, you talk about a stack where the ERP plays a role, but you've got a best of breed delight customer service engine over here and you've got a marketing tool there and you've got an eCommerce funnel over there and an app framework over here and a sales rep app that we've developed that might lean on top of the eCommerce stack. 

Andrew: Truly, it’s the way it works these days. The days of having one application that is all things to all people is just way gone. 

Danny: No, because as soon as you do that, it won't move fast enough. 

Andrew: Yes. 

Danny: So, I mean, it can be challenging. And I think some businesses that are out there start getting a bit sort of worn down by the complexity. They go, “Well, now managing 12 different vendors. And I've just got this one going and now feeling I will have to change that.” 

But I think that's the world. I think you've got to have a team that is comfortable with doing that. And if you're not re-platforming, at least one part of your business, always there should always be reassessing, I'd be very surprised if your entire stack remains best of breed for your customers and your industry for more than three years. 

So, I'd imagine that you should always be updating something, for the right reasons, because you're delivering a better experience, getting better efficiency, saving money. I've seen some brands go from hugely expensive e-mail marketing stacks or components of their stack and then going to much lighter ones, because I realized they didn't use 80 percent of the features of that big marketing tool that they were sold. So, there's a lot of opportunity to save money and do better things.



CX Strategy

Andrew: So, you do CX strategy. What does it see a strategy look like? What does it entail? There's a lot of talking to customers, I imagine, and then coming up with a strategy and what components are in there and what the steps are to implement?

Danny: Yeah, I mean, we sort of break it into three parts. There's good old-fashioned goal discovery, like what is the brand trying to achieve just in general? I mean, customers are obviously going to play a role in that, but we just need to know, from the brand's point of view, what are you doing? How do you value things? How do you choose what to invest in and how your appetite for risk and all those other things? So, that's what we call sort of goal or viability. 

Then you do a feasibility. That's where we go, “Right, show us your tech stack. Show us where everything talks to each other. Where are the gaps? What are the disasters? What are the skeletons in the closet? What are the things that are working really well, from a technical point of view? Do you have the culture and capability to support it? Are your vendors on board? Do they move with you or not? So, that's what we call the feasibility or platform discovery step. 

And then we do what we call the desirability step, which is about customers. So, what do the customers want from you? Who are they? What jobs do they have to be done? What channels do they like to use? 

We typically don't go out and do a big research piece, like a customer research piece. We're not trying to understand customer segments or personas, necessarily from a marketing point of view, we're trying to understand that jobs to be done. 

So, we often find sometimes you work alongside branding agencies or marketing agencies or strategists that are doing that kind of thing; back to that whole using customers to solve business problems analogy I used before. 

So, put all those few things together and you've got desirability, feasibility and viability sort of world that everyone can understand. And then it's just the backlog of features. 

So, what's next? Click and collect. Great. What's that going to cost? This amount of money. What's next? 

Andrew: Get the low fruits first and to start working down from there. 

Danny: All of that. 

Andrew: Yeah, yeah, yeah. 

Danny: Yeah. And often, what that'll entail a regular catch up with all departments and going, “What are the top three things that are causing you problems right now, you or your customers problems, and how might the customer experience ecosystem on a whole help you?” Maybe it can't. Maybe there's a particular problem which is got nothing to do with customer experience and we can't help you. But sometimes we're surprised. 

So, if the service team, if the sales team, marketing team, logistics teams, the CFO all bring out their top three problems, you might find that, okay, if there really are the top three problems and if one of those was to go away in the next two months, that's a big deal. Then great. Well, let’s pick an initiative that's going to address that.

Andrew: So, you mentioned a lot of departments there. Who owns customer experience in a business?

Danny: This is the exact this is a huge problem. I've had CEOs say we are customer-centric, so therefore every head of those departments owns the customer. And I go, “Great. So, no one does because you know that. Everyone knows those rules.” 

So, unless you've got a CXO and you've got a top CX department, then no one is in charge of it. And that's the problem. 

Andrew: Yeah. 

Danny: It's a huge problem. And I'd say the CEO has to own the CX because they are the representative of the customer ultimately, or they decide that they have responsibility to the shareholders. So, it's kind of different. 

So, yeah, not having a CXO is a huge problem. And marketing is the wrong department for it to be under. That's often who gets it. 

Andrew: I agree. Not the right department. 

Danny: But I find that it's usually a problem. I mean, if it's a retail brand, then we'd say probably retail operations probably is the next most likely owner or maybe the customer service teams. But customer service teams are usually the -- they're fixing other departments’ problems. They're not really proactive.

Andrew: So, a CXO really is vital if you're looking to retain customers. And that person needs to be somebody that works well with all the other departments because often what that CXO wants to achieve, they can't do themselves. It's got to be done. So, if you were all of a sudden be doing track and trace, well, you've got to be speaking to your logistics people and all of that.

Danny: A CFO can't do everything either. So, a CFO can only have a point of view that everyone else has to -- Like, “I need emails to cost less.” So, they'll go to the email marketing department and get them to fix it. 

So, it's a C-suite thing. And for that very reason, I think a pattern that we've found is that a CX strategy, by definition, includes two or more departments, because if it doesn't, then it's just an eCommerce strategy or it's just a marketing strategy. 

So, that was sort of an accidental by-product of our thinking, but it just goes, “Oh, so whenever we have to pull people together that don't normally work together, it looks and smells like a CX project.” 

Andrew: That's a good that's a good way of thinking. 

Danny: Yeah. 

Andrew: Yeah. All right, Danny, anything else you want to add? I think we're probably getting towards our limit on the podcast. But, yeah, is there anything else you want to add, especially around Covid-19, what you're seeing out there? 

I've certainly seen two models; one where people have just said, “I'm going to use this to blow these new customers away.” And another one that said, “I'm going to cut my staff while this is on.” And I just think that's the wrong strategy, personally. I would be putting into eCommerce and that whole customer experience, every potential resource you've got to make all these new customers coming on board just go, “Wow, I didn't know this company existed. Aren't they fantastic?” 

Danny: If I had a team of really well performing store sales people that weren't able to work right now, if they're not on live chat rostered almost 24/7 a day, then you are missing a massive opportunity. 

We don't expect them to be outbound sales reps. They're not the sorts of people that can get on phones and call people because that's not how they work, but they can be there to help. 

So, I've seen some brands, even in light of all this, because of the cost savings, we can't afford any new agent accounts on our customer service software. If you put one new agent on your customer service and live chat, they will make the cost of their wage and their agent fee back in two days of the month and rest of the month would be {indistinct 38:02}. 

Andrew: Absolutely, yeah. The ROI is a no brainer on it at the moment.

Danny: Yeah. 

Andrew: Yeah. 

Danny: At the end of this crisis, you will probably double the number of multi-channel customers you have; the number of customers that are willing to buy online and in-store. Usually, with most brands, it's about ten percent of their customers would be willing to buy online, 90 percent of the customers would only ever buy in-store. So, if that's not doubled by the end of this, you've done something wrong. 

And we know that multichannel customers now can purchase from you 24/7. Once everything starts waking up, that's a huge opportunity to get a real long tail increase of customers that have now been booted up the butt to purchase in different ways. It's a great opportunity.

Andrew: I guess the other risk there is if you even if you stay with the same amount of resources you're putting into customer experience now, because the volume on a lot of these sites is -- some sites are doubling at the moment -- what you could be doing is now, all of a sudden, all those customers that you were treating well, you no longer treating well because your bandwidth is just blown out and you're going to lose those good customers that you had.

Danny: We bought from an Australian toy retailer. And given that toy retailers have generally had a bit of bad run lately, up until this point, two and a half weeks ago, for my son's six-year-old birthday, which was yesterday, and none of it arrived, no customer service reply's, phone rang off the hook, they're not -- Yeah. And we bought, I think it was like $400 worth of toys. All of these toys from one place. 

Two and half weeks ago, probably cutting a little bit fine. But yeah, you'd think -- and you'd see what's happening with another discount department store that's got a queue to wait to get into the online store. 

Andrew: Crazy. That is madness. 

Danny: Yeah. I mean, I feel for them. I know exactly why that's probably happened to them, but it's spending money or what money you've got. The problem is that some branches don't have the money; they don't have the war chest. So, I would really have some pity for them.

Andrew: Yeah, that's a good one. Not everybody's got an unlimited war chest to just do that sort of thing. 

Danny: Especially in retail too. I think, as much as these strategies for you and me sound obvious, I just think literally they just can't. They'd love to. They just can't. 

I'm hoping with the JobKeeper thing coming in that they'll be able to activate some staff again. 

Andrew: Absolutely. 

Danny: But yeah, I think there are opportunities there. I think the other thing I'd say at the end of all of this, people often talk about the ROI of CX. The back of the napkin ROI I usually throw out people is, what's your ATV? What's your average order value? If it's $100, if it's $1000, whatever it is. And then how many active customers do you have in a year? How many customers shop with you as a known customer, at least once in a year? Great. 

What if one in five of those people shopped one extra time next year or one in two or all of them shot one extra time on average? Because that'll be the sum of your CX improvements will be they'll just buy that one extra time. It might even just be bringing a transaction forward. 

But if you go from one in ten to one in one customers buy one extra time a year at your ATV, what does that add up to in your new revenue? That's what you've got available to you. 

Andrew: Because you don't have that cost of acquisition on their buying again. 

Danny: And then as a result of them buying again, what's the chances of a portion of those active customers advocating that someone else should buy through you?

Andrew: Yeah, absolutely. I mean, good news travels, but bad news travels faster.

Danny: Exactly. Give everything you've got to your best customers. Don't let them down. I mean, I see so many brands spending so much money on acquisition. Marketing one on one costs five times more to acquire a customer than to keep one. But I don't see any brand spending anywhere near enough time on the concept of retention. And that's the number one thing to look at. Just how many customers shopped with you for the first time last year that haven't shopped again? That's unacceptable.

Andrew: Yes, that's it. That’s a failure. 

Danny: Yeah. 

Andrew: Okay, Danny, thanks for your time today. I really appreciate your insight. I've learned a lot about customer experience. And yeah, hopefully, our podcast listeners have as well. Thanks very much, Danny.

Danny: Always a pleasure. 

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