Know Your Customer, Like You Know Your Friends

Guest Post by Parker Hathaway

customer service friend

I was in a conversation with friend this week. He’s an avid murder mystery and investigative reporting fan. He loves shows like Making of a Murderer60 Minutes20/20, and True Detective. I asked him if he was a podcast fan. He said he wasn’t. With a grin, I leaned in and said, “I’m about to change your month. Have you heard of Serial?”

We need to know our customers like we know our friends.

Serial revolutionized podcasting, coming in with over 40 million downloads in its first season as it followed a murder mystery story week by week. My buddy devoured all 12 episodes and spent countless hours reading on the web about possible theories.

And I had no doubt he would.

We need to know our customers like we know our friends. The question is, how?

Peter McCarthy, founder of The Logical Marketing Agency, has laid the groundwork for us. He describes three buckets that help you identify your customer: (1) Demographics, (2) Psychographics, and (3) Behaviors. You can read more of his work here. For the exercise, take your customer and create the below three buckets and then start asking questions. Here’s a start:

Demographics:

Where do your customers live? What’s their age? occupation? income? political affiliation? urban or rural? gender? ethnicity? These are general questions that you might find on a census. However, you must dig deep. It’s laborious, but it will serve you in the long run. At the end of this exercise you should be able to picture your customer when he/she walks through the door, and that’s huge.

Psychographics:

How do your customers think? What do they believe in? What are their attitudes towards this or that? What are their preferences? What do they love? hate? crave? What are their emotions towards a given topic? What do they value? What gets them excited?! Make a list of emotions and attach a description of your customer to each. Use what you learn to write better copy or apply it to the design of your website or, better yet, your product! When we say “we feel,” we attribute a cognitive value. Learn what your customer feels.

Behaviors:

This is where things get exciting, especially if you have access to a large data depository. What does your customer do? What do they purchase? read? use? crave? search? How do they engage with social media? Instagram more than Facebook? Twitter more than Snapchat? What are patterns that you find with your customers? Why do they drop out at point of purchase? Use A/B testing as a tool to discover behaviors.

Next time: Identifying your customer can be laborious, but it’s crucial for risk mitigation and customer growth. I’m going to introduce you to tools that will help you to identify your customer in 30 minutes. These tools are free and fun to use!

‘Hire’ This Article About Milkshakes If You’re Struggling To Understand Customer Needs

Guest Post by Gaston Viau

How the Job-To-Be-Done theory can help you understand consumer behaviors and provide you an innovation compass

There are zillions of words written about how customer centricity leads companies to success.

However, the “customer-centric” term is sometimes misused as a catchall for customer feedback or customer satisfaction results, but making people happy is not enough. To have sustained success, companies must genuinely understand what the customer wants and needs, and implement the right internal and customer-facing processes, strategies and marketing actions to satisfy them.

Hands down, the best example of customer centricity is Amazon, whose mission says it all: “to be Earth’s most customer-centric company”.

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” Jeff Bezos, Founder & CEO of Amazon

Last month, when struggling to define our customer personas at Virtual Lab better, Fede Boero recommended me to read Competing Against Luck by Clayton Christensen. This read introduced me to “Jobs-To-Be-Done” Theory, a way of looking at customers with a completely different lens which shed a lot of light on my discovery process.

Jobs Theory

“Job-to-be-done” involves a mindset change since it forces you to look at our product the way customers do. Clayton Christensen described this concept back in 2006, in this paper he wrote together with Intuit founder Scott Cook.
The theory just asks, “What job your product is hired to do?”.

People buy services and products to get specific jobs done; and while products come and go, the underlying JTBD doesn’t go away. A commonly used example is that people do not want a quarter-inch drill; they want a quarter inch hole.

JTBD theory is a change in the lens we use to understand customer needs. The Job, not the consumer, is the fundamental unit of analysis.

To understand what’s the Job our product is hired to do, we need to find which progress the customer is trying to make in a given circumstance — what the customer hopes to accomplish. This growth or accomplishment is the job-to-be-done.

All of us have endless jobs to be done in our lives. Some are small (pass the time while waiting in the supermarket line); others are big (seek a more fulfilling job). Some are regular (pack some lunch early in the morning before leaving to work); some show up unpredictably (find a nearby auto repair shop after our car broke up during a trip). When buying a product, we’re mainly “hiring” it to help us do a certain job. If the product does the job well, we tend to hire that product over again when we confront the same job. On the other hand, if it does a crappy job, we “fire” it and look for a replacement.

The Milkshake Example

The canonical example used by Christensen to explain Jobs Theory is a milkshake.

Some years ago, McDonald’s was trying to increase the sales of their milkshakes. So, they would interview milkshake customers and explain to them that they were trying to improve the milkshakes to increase the sales. They would ask them if they would like bigger milkshakes, or new flavors (like root beer or orange), chocolatier or thicker milkshakes . However, after improving the milkshakes with the interviews results, they found that customers didn’t buy more milkshakes.

Christensen was hired as a consultant to help McDonald’s to nail this problem, and he applied his brand new Jobs Theory to solve it. To understand which job arose in the lives of some customers that caused them sometimes to hire a milkshake, Christensen studied a McDonald’s restaurant for 18 hours one day. It turned out that about half of the milkshakes were sold before 8:30 in the morning. It was the only thing the customer bought, they were alone, and they always got in the car and drove off with it.

To figure out what was that job, Christensen went back the next morning and positioned himself outside the restaurant so to confront these milkshake customers as they came out. He asked them: “What job are you trying to get done that cause you to come to McDonald’s to hire a milkshake at 6:30 in the morning?”

It turned out that they all had the same job to do. That is, they had a long and tedious drive to work. And they just needed something to have while driving to stay engaged with life and not fall asleep. The customer wasn’t hungry yet, but they knew they’d be hungry an hour later. So they needed something they could hold with their right hand while driving, and keep it for the whole commute.

This analysis showed that McDonald’s milkshakes were not competing against Burger King’s milkshakes. They were competing against bananas, snickers, donuts or even bagels to do the same job. However, milkshakes were much more convenient than their competitors since they were easier to consume, only one hand was needed, and they were so viscous that it would take them the whole commute to finish them up with that thin straw.

Customers didn’t care about the ingredients. All they cared about was to be still full at 10 am and have something to entertain them throughout their trip.

Unveiling what the job was, put McDonald’s on a very different trajectory. It explained the reason why there were no results after improving the milkshake on dimensions of performance that was irrelevant to the job-to-be-done

To improve the milkshake for the morning JTBD, McDonald’s moved the milkshake from behind the counter to the front. To help them not to be late for work, they also gave people a prepaid swipe card so they could just dash in, gas up, and go without being caught behind a line. They also made milkshakes thicker to take longer to suck them up, and so on.

When McDonald’s understood that they were competing against bananas, the sales of the milkshakes increased by 7x.

Four Takeaways

JTBD theory tells us how managers should think about customers, strategy, products, growth, and innovation. Here’re some pieces of advice:

1. Design a business around a JTBD

Products become obsolete, and this is why companies should instead create a business around the JTBD, which will lead them to sustainable success. This is why Ford moved from an auto company to a mobility & transportation company, opening the doors to markets such us ride-sharing.

2. Let customers get their entire job done

People do not want to have to put together diverse services or products to achieve their needs. They want only one service/product that helps them get the entire job done.

3. Target those customers who will pay the most to get the job done best

When a market is highly underserved, the fastest way to profits is first to target the people who will pay out the most to get that job done the best.

4. Let Jobs Theory guide the future of your company

The only products that will win the future are those that help customers get the job done better. Understanding where customers struggle today to execute the JTBD indicates what a particular product needs to do in the future to win in that market.

6 of the Best Strategies to Ace Customer Engagement

Guest Post by Shane Barker

No matter what field you work in, customer engagement is just as essential as lead acquisition. In fact, 68% of marketers today say that their companies compete on the basis of customer experience.

However, many marketers still struggle with figuring out the best ways to keep their customers engaged; holding the attention of customers long enough to make an impact can be hard, time-consuming work. While old-school newsletters still have their place, they alone can’t cut it anymore in today’s competitive environment.

So, what can you do to differentiate yourself from the competition and keep your customers coming back for more? Let’s take a quick look at a few options that you can consider. Not all of these are easy and some may not suit the kind of business you run, so pick what works for you. While some options may not be cheap, losing loyal customers will be far more expensive in the long run.

1. Start an Employee Advocacy Program

Your employees are the face of your brand, and their interactions with your customers can go a long way in retaining them. If they’re excited by your brand and believe in the products you have to offer, the customers they talk to will feel that. Conversely, if they are demotivated or unhappy, your customers are definitely going to pick up on that negativity.

An employee advocacy program can help shape your company’s reputation and culture online. By having your employees share snippets of their work life on social media, they can help to build your company’s image as a great workplace with an honest, hard-working team. Not only that — you can even leverage the knowledge of your subject matter experts to create content that has depth and authority.

To encourage participation, you can maintain leaderboards and offer incentives to employees who post the most or get the most engagement. Shoe retailer, Zappos, is well known for their employee advocacy program — snippets of which you can see on the official Zappos Culture Twitter.

2. Keep Customers Emotionally Connected

The best way to keep a customer engaged is to find ways for them to interact with your brand, even when they aren’t necessarily interested in buying one of your products. You can do this in a number of ways.

Build a Community

Build a sense of community around your product or service using free tools, such as a designated Twitter handle, Facebook Group, or other online forums where people can meet and exchange ideas.

The idea is to draw your customers into a social circle that is based on the love for your brand or products. Not only are people in these groups more likely to continue buying your products because others are passionately sharing about them, but they’re also likely to recommend them to their other social circles. Their involvement in the community will ensure that they are fully aware of your latest offerings with little marketing effort needed from you.

As an example, BMW manages official “Owners’ clubs” that help their customers connect and learn from one another. Their clubs have grown a big reputation for offering exclusive content, advice, and rewards for car lovers who buy from their brand.

Host Live Events

Hosting events,conferences, or webinars that will be of interest to your customers is a great way to engage them in a non-transactional setting. Many gaming studios take advantage of in-person events to meet and get feedback from some of their most loyal fans. For customers, it’s an opportunity to see what the company is working on, meet like-minded individuals, have their voices heard by game developers, or play demo builds of upcoming games.

BlizzCon by Blizzard-Activision and QuakeCon by Zenimax Media both draw in thousands of attendees each year. And tens of thousands more people watch the live-streams of the events online. Attending larger conventions is also an effective (and much cheaper) way to engage with your fans. However, hosting your own event is a great way to keep the focus entirely on you and your products.

3. Gamify the Customer Experience

While gamification of a customer experience can be difficult, it allows you to engage customers using the sense of instant gratification.

Digital contests and giveaways are great ways to spur customer engagement for mutually beneficial results. For instance, hair accessories company Whirl-a-Style hosted a web contest asking customers to share their #WhirlMyStyle hairdos for a cash prize. The company earned tons of customer testimonials and marketing UGC at a very low cost.

Similarly, you can introduce badges or achievements for customers who’ve hit a certain milestone or completed a particular task while using your products. This is incredibly useful when it comes to making sure they use your product or services often.

Gaming is already well known for the concept of unlocking achievements. Companies like Fitbit and other fitness tracker makers have had good results by introducing similar aspects to their products.

4. Target “Whales” for Customized Services

Loyalty programs are a great way to help keep customers engaged with your brand. But you can take it one step further with a tiered loyalty program. Identify customers who spend significantly more than average on your products and consider giving them some sort of V.I.P. status.

While more loyalty points or discounts are nice, customized services are even better. For example, access to a personal stylist at a clothing retailer who offers expert advice in styles suiting body types and personalities.

A personal touch is extremely valuable when it comes to instilling a sense of loyalty in your customers. While you may not be able to offer that to all your customers, make sure your “high-rollers” feel like they’re getting V.I.P. treatment.

5. Be Socially Responsible

Often maligned by older generations, millennials tend to be more environmentally and socially conscious than any other generation. (And considering that millennials are already the largest generation in the labor force, their loyalty will soon determine whether your business lives or dies.)

Millennials are far more likely to support brands that not only offer valuable products but also support social or environmental causes.

Consider picking a cause that you are interested in and promoting it regularly in your marketing efforts. It can be anything you want as long as you care deeply and sincerely about it. The sincerity is important because millennials are better than previous generations at spotting disingenuous marketing.

For example, Leesa donates a mattress to a homeless shelter for every tenth mattress sold. They even plant a tree for every order received.

6. Streamline Your Customer Experience

This option probably takes the most effort to put in place. Depending on how your business operates, it could require small changes or a total overhaul. The key here is to reduce the number of steps needed to complete a transaction. This applies to both physical and online stores.

Every step required to complete a purchase increases the likelihood of customers walking away from a purchase. In stores, these could be long lines, a slow checkout process, or lack of assistance to help make choices.

Fast food giants like McDonalds have attempted to improve the experiences of their customers with the addition of self-service kiosks. These help to drastically cut wait-times without needing to increase staffing requirements.

Online, Amazon introduced 1-click ordering, allowing existing customers to purchase items with a single click. This uses billing, delivery, and payment information that’s already linked to their account.

Another great way of improving your customer experience and managing excellent relationships is to use a CRM tool. Tools like Salesmate allow you to keep all of your customers’ contact information in one place. You can use it to run email campaigns that include informative and highly-targeted content. You can even do timely follow-ups for any sales queries or interest they may have shown.

Orginally published on Zoomph.

About the Author

Shane Barker is a digital marketing consultant who specializes in influencer marketing, product launches, sales funnels, targeted traffic, and website conversions. He has consulted with Fortune 500 companies, influencers with digital products, and a number of A-List celebrities.

Build Customer Empathy by Listening to Their Stories

Guest Post by Demian Borba

Whenever I start a conversation with someone, I think about how I can best connect with that person. Sharing stories is an excellent way in.

Stories not only reveal details about the storyteller, they allow you to connect on an emotional level. In fact, the connection may go even deeper.

study at Princeton found that during storytelling the brain activity in persons listening to a story closely matches that of the person telling it.

The analysis revealed that during successful communication the listener’s brain responses become similar to the speaker’s brain responses. This implies that people understand each other by mirroring each others’ brain responses. (Image courtesy of Uri Hasson during the Princeton study).

Stories can help create alignment. They can take you along on the roller coaster of the storyteller’s experiences, letting you in on the highs and lows, successes and defeats, and, importantly from a product manager standpoint, the needs and pain points they hit when working with a particular product.

As I noted in an earlier post, design thinking aims to build products people want, products they’ll find useful, and products that can reasonably be built given current technology. It’s the process that’s guided development of Adobe XD from the beginning.

Design thinking seeks to identify needs rather than solve problems. It follows five phases: empathize, define, ideate, prototype, and test.

Empathizing with your customers means understanding where they’re coming from, what their needs are, and where the pain points are. We are not looking for hard truths here — we’re seeking insights.

To build empathy, we can lean on several anthropological techniques: watch people as they perform an activity, experience performing that activity ourselves, or conduct interviews with a selected subset of the people we want to learn about.

Successful interviews draw out stories; and successful interviewers know how to ask questions without getting in the way of the story.

Seek quality over quantity when collecting customer stories

Because stories are subjective, interviews must be qualitative, not quantitative. Rather than quick interviews with 100 people, you get better insights by talking to fewer people for a longer time. When forming your interview pool, look for a good mix of experience and interests.

For example, if your target number is 10, you might recruit six designers who fall within the mid-range of users and two to four “extreme users” — long-time users who have seen the products through multiple evolutions, or designers who use the products in an unusual way.

When interviewing, I typically follow a step-by-step process, outlined in the chart below.

First, I introduce myself, then the project and its purpose.

The next — and critical — step is to establish rapport, finding those moments in a conversation where you connect with your subject. You can create these connections through stories. Stories allow you to explore emotions and identify pain points.

Remember, you’re not trying to solve problems here; you’re just looking for the needs, driven by what users say or do, and by what users think or feel. Try not to limit your interview to a set time — allow time for the interview to evolve.

When you’ve finished, wrap it up, thank the interviewee, and you can move on to unpacking your findings and creating empathy maps.

Here, I’ve listed some practical tips for conducting interviews that can lead to powerful customer stories.

Get authentic customer stories with these nine interview techniques

1. Ask open-ended questions

Think about how you phrase your questions. Avoid starting with comments like “you know” or “normally,” which can influence the response. Ask open-ended questions such as, “tell me about the last time you did x or y.” This type of question will encourage your subject to tell a story rather than just answer “yes” or “no.”

Even if the stories aren’t true, they can reveal what the person thinks and feels. Moreover, in telling a story, the interviewee is likely to recall details he or she may have forgotten.

2. Always ask why

Be the curious kid. Even if you think you understand what the interviewee is describing, ask why.

In another post, I describe the five whys framework — that is, by asking five whys, you can get to the root of any problem. Never assume!

3. Look for inconsistencies

Sometimes, interviewees will describe a process that they don’t follow or make statements that aren’t true. You can usually tell based on their answers.

Inconsistencies are important because they can lead to insights about implicit needs — perhaps they’re explaining how something could be done better, if only . . .

4. Look for nonverbal signals

If the person you’re interviewing is fidgeting, twirling their hair, or avoiding eye contact, it’s possible that what they’re saying isn’t 100 percent true. There’s a vulnerability in not telling the truth, and it’s worth exploring.

People tend to act out how they feel, especially when they’re uncomfortable or nervous.

5. Don’t be afraid of silence

This can be one of the hardest tips to follow. It’s natural to want to help someone if you think they’re stuck or unsure. If your interviewee is silent after a question, give him or her time to think through the answer. It may take a minute or two, but be patient. You’ll get a better response.

6. Never suggest answers

Stay as neutral as possible. Often, if you propose an answer, the person you’re interviewing will agree, whether or not it’s what he or she wants or feels.

Instead of asking, “This is a good idea, right?” say, “What do you think of this?” or “How might you do this?”

7. Keep your questions concise

Long questions lose people. They’re confusing and people often aren’t sure which part of a multi-layered question to answer first.

As a general rule, I try to limit questions to 10 words.

8. Stick to one question at a time and one person at a time

It might be faster to interview several people together, but you’ll lose out on quality. Interviews are most successful when they’re one on one, so resist the urge to pull your teammates in as well.

Don’t overload the interview with multiple questions. Take your time and make sure each question is answered before moving on to the next.

9. Be sure to record the conversation

You’ll want to save the conversation for later unpacking. You can use audio, film, video, or even have someone sit in taking notes. You get the most immediate and authentic feedback when interviews are in person because there’s typically more friction when people meet face to face. However, interviews over Skype or the phone can yield great material as well.

Putting on your anthropologist hat at this first phase of design thinking will help you gather the stories you need. And those stories will ultimately help deliver products that meet the design thinking goals: desirable, usable, and technically practical.

“Always Start With The Customer Experience, Not With The Technology” Former Apple CEO John Sculley Shares The Secrets Of Steve Jobs’ Success

Guest Post by Yitzi Weiner at Authority Mag

We had the pleasure to have a conversation with Jon Sculley, the former CEO of both Pepsi and Apple

Thank you so much for your time. You have been at the helm of two legendary companies, Pepsi and Apple. Do they have a common denominator? Can you break down the recipe for their success?

John Scully: In 1970 I was 29 years old and Pepsi was out sold 10 to 1 by Coca Cola in 50 percent of the U.S. At the time, I was in charge of the U.S. operations and we realized that Coca Cola was the most valuable brand in the world. So we saw that Coca-Cola owns reality but perception leads reality, so if we can own perception, then maybe we can change the ground rules of competition, and we did that by creating a campaign called the ‘Pepsi Challenge’, which was quite different than anything that anyone was doing in marketing at that time. Instead of the company saying, look how good my product is, we did just the opposite. We said, take the Pepsi Challenge, let your tastes decide, and we had a blind taste test that would run all over the country and people would see that it was a real taste challenge between Pepsi and Coke. By the end of the 70’s, Pepsi had passed Coco Cola and become the largest selling consumer packaged goods in America.

When I first met Steve Jobs in the early 80’s, he came up to me and said, “How did you do that? You had no money to speak of it, Pepsi. “How did you pass Coca Cola?” And I responded, “Well, we call it experience marketing.” The focus was on selling the experience, not the product. Jobs expressed that he wanted me to Apple and teach him how to do that. Steve was building a product at that time, and it was under development. It wasn’t brought to life yet, to be called ‘Macintosh’, and it was for creative people — non-technical people, to do amazing creative things. He stated that he wanted to learn how to sell the experience such as I did previously. The experience is more important than the product.

The thing I learned in both Pepsi and Apple was that you always start with the customer experience. Steve said, “I don’t focus on the technology. I focus on what’s in it for the customer. I want to give the customer an incredible experience.” He used to call it an ‘insanely great experience. Whether it was the “Pepsi Challenge” or whether it was the Macintosh.

The early advertising project we worked on started with the 1984 Super Bowl commercial, which was the first a mega commercial ever done on the Super Bowl. We were always starting from the perspective of what’s in it for the customer.

You look at people today, like Jeff Bezos, he does the same thing and focuses on what’s in it for the customer. He always says, “My customers are amazingly loyal until someone else offers them a better deal. With so many tech companies that start with cool technologies tend to forget that the technology ultimately mock commodities. So it’s always what’s in it for the customer, always the experience.” I find that the great companies can turn into legendary companies.

I think so because back when Steve was, I remember I met him when he was 26 years old and he was still forming his principles and the foundational principles. The early 1980s can be found and is still the foundational principles of Apple today.

Steve believed that you had to do what he called a ‘zoom in, zoom out.’ You connect the dots, zoom in to simplify and if you look at Apple, the innovation always takes place at the convergence of different industries. So here was Kodak in 2007, who had actually invented the digital camera and was actually the largest photo finisher printer in the world. They doubled down on silver halide manufacturing because they were in a marketing battle with WalMart with a single use film camera.

Steve Jobs was looking beyond and he said, I can connect the dots between 3G wireless, which was just coming into the world of wireless. 2G was fax, 3G could do other things, including photos. He understood miniaturization of consumer electronics because he built the iPod before the iPhone. He said, “Do you know if I can connect the dots and put a phone chip in an ipod to make the screen bigger, I think that will give the ability for people to be able to send photographs, wirelessly.

It seems so obvious, right?” So most of the brilliant people that I’ve had a chance to work with are really seeing possibilities ahead of the rest of us that are completely obvious when we understand them and if you think about what Steve Jobs created during his lifetime, all this success, it seems so obvious today. They weren’t obvious in the context of the world that he was living in at that time.

When he brought me to Silicon Valley, nobody was talking about marketing. Nobody was talking about a consumer experience. Nobody was talking about the creative tools for non-technical people and yet it’s obvious today. That’s what the world is largely about. I always remember one of my favorite professors at MIT media lab was Marvin Minsky, and Marvin is known by many as the father of artificial intelligence, but he also, had to bring an insight that I still remember. He said, you don’t really understand something well until you understand it more than one way and just going back to Steve Jobs, Steve had a curious mind. He was curious about everything. He was not actually an engineer.

If you saw the first Steve jobs movie that Ashton Kutcher was in, I remember Ashton came up to me, a month and a half ago. We were at an event together and he said what you think of my Steve jobs and I said, well, actually it was OK, but I said it really hurt Wozniak his feelings. He said, what do you mean? I said, you made Wozniak into a service tech and you made Steve Jobs an engineer. Steve wasn’t the engineer. Steve was the brilliant genius who conceptualized and had a great sense of design, all Wozniak ever wanted to be was the world’s greatest engineer. You crushed him. So you have to appreciate that. What makes people like Leonardo Da Vinci and Steve Jobs, along a few others, could work with her left brain and work with their right brain to start connecting the dots. Steve, who founded and led the most valuable technology company in the world, said that, the lesson he learned is how important the humanities are in leading and creating a great company and meeting that, art, design are just as important as the technology.

Rarely Apple is the first at doing anything in technology. Most of Apple’s technology is actually gotten from somebody else, Bill gates used to come to me and said, I just don’t understand why Steve gets so mad at us copying the Macintosh user interface when he stole everything that Apple has from Xerox, Palo Alto Research Center.

One of the things you find with talented people is they have no embarrassment about borrowing great ideas from someone else and why should they? You stand on the shoulders of the people who came before you.

Which social impact issues are important to you? How do you bring your values to your work?

John Scully: Well, I am really maybe the last person standing in my generation from high tech who’s still actively working. I don’t run companies anymore, but I mentor talented people who I think have the potential to change the world. So for instance, up in Boston, I spent a great deal of time up there now because I’ve been working with the founder of a company called RX advance . He’s building an absolutely amazing company in healthcare and it all starts with a noble cause.

So many people start with a business plan. No, you start with a noble cause. You start with something that’s going to make a difference in the world. It almost made you want to start with the people who are going to use whatever you are creating a product or service which was following the customer and it always starts with having a curiosity that has to be a better way. So I’m inspired by anything that will stimulate curiosity, anything that will show that the power of diversity is so incredibly important to innovation. I’m only involved with companies that have the potential to be transformative in their industry sector. So when I see that there is discussion in the government that we want to shut out immigrants to come into the United States and when I know that in Silicon Valley, maybe 70 percent of the leadership of companies in Silicon Valley are actually immigrants. It just sounds like, wow! How could anyone even think that way? So I think that what makes America great and I’m proud to be an American, is that we have been a country with an open mind, a country that has been willing to, invite people of talent and merit, who will work hard to come in and participate. So I hope we will be able to say that in the future. I hope that we realize that our education system is still designed for a different century and a different economy, and that if America is going to be as successful in this century as it was in the last century, then we need an educational system that has foundational context with the exponential technologies that are available.

I grew up in Silicon Valley, in the early days of Moore’s law for a while. We have robots, we have artificial intelligence, we have precision medicine, we have driverless cars where you had the world of sensors and all these things are growing at an exponential rate or change. So simply put that compounding math that means you go 2, 4, 8, 16, and 32. So the speed at which exponential algorithms compound is hard for most people to absorb because we’re all used to linear time, we’re not used to exponential time and yet the world we’re living in today. Anyone who was young and is going to be living through the rest of the century is going to be better understood in exponential time, which puts a stress on learning, on curiosity, on education, on diversity, thinking about things in a different way and so I try to mentor when I can, people who are going to be part of that world.

Throughout our careers, we’ve all run into roadblocks, so can you tell me about a time that you failed and how did you motivate yourself to get back up and keep going?

John Scully: What you will discover is if you believe in making a difference, you’re bound to make a lot of mistakes and some people would just risk averse. They don’t like making a mistake. They don’t like to be humbled, embarrassed. They don’t like to have to pick themselves back up and try again, maybe they aren’t going to want to participate in the entrepreneurial life, but for a lot of us we know that you can’t be a successful entrepreneur unless you were prepared to make mistakes. The thing that takes awhile to really understand is that you’re probably more trapped in your successes. We often become a victim of our success because we often misinterpret why we were successful. Now a good deal of the time people are successful just because they were in the right place at the right time and so something goes well which will lead them into thinking they are genius. They misunderstand why they were successful. So it’s only when you fail that you actually get a chance to kind of get the wind knocked out of you and say, OK, that didn’t work. Why didn’t it work? What did I do wrong? So failure is so integral to the process of deep learning. Success actually can be a distraction and it can take you off in a different way. So my advice is get comfortable with making mistakes.

Now, many countries have cultures where making mistakes is not acceptable. If you’ve been to Germany and spend any time there, Germans don’t want people to believe that made mistakes. It’s a very competent economy. It’s much disciplined. It’s very process centric, it plays by the rules, but it doesn’t have much of a place for people who make mistakes. That’s quite different than our culture where we say, OK, you made a mistake. If you’re in Silicon Valley and you say, boy, I made a mistake, I blew it. The first thing somebody will ask you is, well, what did you learn? And so culture is a very big part of being successful. It’s not that the U.S. has smarter people than the rest of the world; it’s just that we have a culture that’s very forgiving in terms of making mistakes and picking yourself back up and try again. So I’ve made lots and lots of mistakes.

I’ll give you some examples. I remember when we were at the end with the 68,000 microprocessor, which Motorola made and the Macintosh was based on a system processor, which meant there was a complex instruction set computer and if you look at what was happening back in the late 80’s, there was a lot of attention going on with risk reducing instructor set computing. So when I went to our best engineers and I asked, what should we do? We were at the end of life on this microprocessor. They said, well, actually you can choose any risked machine you want, doesn’t make a difference which one. Risk is the future. Just don’t pick a system process. At that time, Andy Grove was coming over and making a pitch that we ought to adopt the Intel processor and in those days Intel was not a floating point processor. It was integrated based, meaning he was integer arithmetic and it wasn’t designed to do graphic algorithms. So we made a mistake. I made the mistake because I was the CEO, we didn’t go with Intel and we ended up going with the power pc, which was a joint venture between Motorola and IBM. The big mistake was that we didn’t consider that the huge industry that Intel had created for all kinds of blue chips and other components, but things around it which will all available by various companies along South East Asia. That it wasn’t just the microprocessor that we should be focusing on. When we made the decision to go from one to another, it was the entire system and the reality was by going to the IBM power pc, which at the time technically may have been better microprocessors than the Intel assist processor. The reality was the economics couldn’t even come close to the complete system bill of what you could do with an Intel processor because of all those other related components that sat around it to make it a complete computer. So that was a terrible mistake because it set Apple on course in a direction that was eventually going to mean that it was going to be less and less competitive with the rest of the computing world.

Steve Jobs was running Next, at that time, he made the same mistake. He went with the power pc as well with next. Next was not a very big company and unfortunately for Next almost went bankrupt. They had to drop out of the hardware business, but kept going with its software operating system, which ironically when Steve came back to apple years later, ended up becoming the Kernel for the Mac operating system.

Who is your hero in your business or personal life and how do they inspire you to become the person that you are today?

John Scully: My biggest hero is my wife Diane. Diane is a computer scientist. She’s also a mathematician, but what she has done for me is that for many years after I left Apple, I sort of disappeared. I was working in investing in startup companies, sort of staying out of the limelight and just going on with my life then when I met Diane, it was about 10 years ago and then we got married five years ago, she completely changed my life, really our life. She said, John you’ve been so lucky, you’ve been working with some of the most talented people on the planet and you need to share those experiences with other people. So we started going around the world that we had various invitation.

So we were invited to Chinua University to speak there, same lecture that Steve Jobs, Elon Musk, Mark Zuckerberg were invited to ETH in Switzerland, which is the top technical school. We were invited to MIT many times. I’ve been involved with at MIT for many decades through the MIT media lab and what I realized was that I wasn’t out of date, that actually the things that I had experienced were actually of interest and of some value to the next generation, so when I say I’m sort of the last person standing from my generation because everyone else is either retired or dead, I’m still very, very active and I spend my day, I am up every morning at about 5:00 AM, reading a lot and communicating with people. I love talking with people as we’re doing right now and my goal in life now is to work on a few noble causes, but also to be able to mentor and to pass on what I experienced in hopefully useful ways to people in your generation.

My company is celebrating its 10 years in business and we’ve always had perpetual growth. One thing that really struck a chord with me, which you’re talking about, was the challenges and how you face those. I’m in the Whitewater right now. I don’t know if you’re familiar with that terminology, but I’m about $5,000,000. I’m trying to break through 10 or 15. I’m really trying, but there’s this barrier here and I’m ready for that and I know you have much bigger business experience, but I feel like the principals in the set and so I don’t know what kind of advice or things that you recommend for me, how to look at myself, our company maybe introspective with find a way to break through that because it’s something I really would like to do.

John Scully: So here’s what I’d say is that people who are in big traditional corporations have very, very little personal experience if any, with true innovation, and it’s not that they aren’t smart people or hard working people or competent people, it’s that they’re trapped in cultures. The one thing that every large company has in common, it’s culture, is that it empowers middle managers with the authority to say no and being an entrepreneur is all about the thinking of the possible ways you can get to yes and so it always amazes people in big companies to realize that when I was working with Steve Jobs in the early days of Apple and Apple was still in a several houses, it had tilt up building with a pirate flag flying over, which was Steve Jobs office for the Macintosh, the average age of the people on the Macintosh team, they were over 100 of them in total, including manufacturing and everything else was 22.

People just assume that companies like Apple and Microsoft were always big companies. They weren’t always big companies. They were at one point they were $1,000,000 companies. There were $5,000,000,000 companies. The Silicon Valley has an old saying, what got us here, won’t get us there, meaning when you’re starting out and you’re trying to get to $1,000,000 revenue, let’s say, you have to get through proof of concept. You got to recruit enough talent around the table to be able to deliver something that’ll get revenue and the bigger question then becomes, so how do we get from 1,000,000 or 5,000,000 to 10,000,000 to 20,000,000 or even larger? And you realize that you sometimes have to go back and deconstruct what you’re doing and think about when we solve this business at a $20,000,000,000 business the same way we’ve been solving it successfully as a $5,000,000 business and what’s so important about what I learned working with Steve Jobs was that you lay down foundational principles. One of Steve’s principles was you have to have a very clear focus. This focus was how do we build bicycles for the mind? Now that’s what he was really building bicycles for the mind. He didn’t think of it as building personal computers, he thought about he’s going to enable people to have this incredible accelerator which is going to help them think and do things that you couldn’t do before the Macintosh came around and why was the Mac so important to Steve? You know, the Apple 2 had been a huge success. He said, well, the Apple two was so limited because you require that someone, you know, learn how to use a keyboard. They had to learn how to use alpha-numeric commands. He said with the Macintosh, they don’t need to know anything about technology. So he had to re-conceptualize what is a personal computer and he said it’s all about point and click and he would use metaphors, he’d say, well, you know, we need to have a desktop metaphor. We need to have file folders. We need to have, ways of thinking about paper and putting objects on paper and things like that. Well, those sound so obvious to us today, they weren’t obvious almost 40 years ago. So I would say think about why you’ve been successful as a $5,000,000 business, and then say will a $5,000,000 business be solving the same problems when it’s a $20,000,000 business as it is at a $5,000,000 business. Will it be a different customer? Will the customer be using your service or product differently? Are there other things going on around the world, around the economy, which will make things possible for you to solve even bigger problems? And you have to stretch your mind. Always be curious, always observing.

I know a lot of people have said, John, you’re so lucky. You got to work with all these talented people. You were working in different industries. You’re still doing it. How come you’re so much luckier than the rest of us? And the answer is because I’m constantly observing, constantly curious. I think about learning is much more important to me than making money and you’ll find that particularly in the century you’re going to live the rest of your life in this 21st century, that the ways that we think about things are going to be so fundamentally different than anything that was around when you were born.

Think of something as simple as this. The prior industrial age was enabled by two things. The distribution of electricity, now going back to a Tesla and Westing house, with alternating current and it was enabled by the fractional horsepower electric motor and if there hadn’t been a fractional horsepower electric motor and it hadn’t been distributed electricity, there wouldn’t have been any in the twentieth century industrial age. So what did that lead to? It lead to mass production, it led to mass channels about the mass marketing and now we’re in a different century and you say, so what is the comparative to electricity and the fractional horsepower electric motor? And what are the, the rebuttable effects out of those comparables? Well, I think that artificial intelligence, that’s both machine learning and deep learning and how that progress progresses in the future. Artificial intelligence is going to be foundational to everything that goes on in the world for the rest of the century and it will become more apparent, it’ll become commoditized and it will be as fundamental as electricity and oil were in the last century, meaning that they can be delivered as a service, now embedded in all kinds of different things.

Second of all, I would say that platforms are as important in this century as mass production factories were in the last century. Remember, most of the US economy in the early part of the last century was around manufacturing. Today, the majority of successful companies that’ll be around in the middle of the 21st century will be platform based companies. So it won’t just be Microsoft or Amazon or Google, few companies, what they called Fang. Every company will have incorporated in platform architecture and so things that seem unique are just going to become obvious mainstream.

I remember when I was in college, there was something called the interstate highway act that President Eisenhower put through and sign the bill for which enabled the interstate highway system and it was intended to be able to move missiles around during the Cold War so that the Russians wouldn’t know where our missiles were. They could be moved around on trucks at nighttime over the interstate highway system. The interstate highway system became as foundational to the economy in the 1960’s, 70’s, and 80’s as the Internet is foundational to us today. Now to think about if we’re going to redesign the internet, we would really design it the way it’s designed today. Remember, it was designed back in the early 1970’s, so the Internet today would have much greater security. It would be a much more thoughtful in terms of how it integrated into sensors. The sensors didn’t exist, obviously when the Internet was first created and there will be tens of billions of sensors connected with everything, even by 2020. So the Internet would be far more secure. It would be far more integrated into all kinds of things, it would be integrated into the platform architecture companies that would be, you know, into all kinds of devices, not just with flat screens, but images that can be seen like Holograms, a hollow lens if you notice something that Microsoft’s been working. The possibilities of what the fundamental will be for any kind of business, in the middle of this century are just in the eyes of the beholder right now.

They haven’t really been deployed yet and yet they’re going to be so obvious. When you’re my age, you’re going to sit back and be explaining to people your age, that there was a time once when there wasn’t a broad-scale artificial intelligence, when every industry was a platform company, when the sensors were connected to everything, when block-chain was built into every transaction and then people will look at you and say, really? There was a time like that? And yet this is all going to happen and it’s going to happen in exponential time meaning that it’s not going to take a 10, 20, 30 years for these things to happen. It’s got to happen over the next five years, 10 years, to an exponential time, you know, its compounding math. Keep thinking about and don’t be afraid to ask other people say, like what do you think about this? And don’t be afraid that someone’s going to say Michael, that’s a really dumb idea.

Did you plan to end up where you are, or did that “just happen”?

Well, when I was very young, I really didn’t want toys. All I wanted were electronic parts so I could build things and I discovered I was better at taking things apart and turning them into something else but when I put them back together, I always had parts left over. So I realized I was not going to be a great engineer. I didn’t have a precise, detailed mind like my wife who was an engineer. I was more of a designer, I like to figure out different ways of doing things, with the idea of there had to be a better way and I was interested in designing things ever since I was a child. So I would be building things. I built a go kart. I built early television sets, I built one of the first color television sets when they were sending out signals that was called few sequential television where you had a spinning wheel of red, green and blue and then when I was 14, I invented a color television cathode ray tube and I applied for the patent on it and eventually got knocked out by Dr. R Lawrence, who eventually Lawrence Livermore labs was named after and he invented something that knocked out about 8 of my 12 claims and he eventually sold his invention to ABC paramount. ABC and paramount studios were combined in those days and then they eventually sold it to Sony or became Sony Trinitron too so years later when I met Akio Morita, the founder of Sony, he had remembered the story that when I was a kid, I had invented something very similar to what Dr Lawrence did. So he introduced me to the team who were still at Sony, who were the original Sony Trinitron team and so I was always inspired by ideas and I was always curious. Curiosity was who I was. I was not a particularly good athlete; I was like, OK, so I was much more interested in, thinking about things in my head and building things.

I had a really bad stammering problem, I couldn’t talk. So when I was a kid I couldn’t even talk on the telephone. I couldn’t even talk in the classroom when I was at school, I stammered so badly and I was very embarrassed and the teachers would say I was stupid because I couldn’t answer the questions. So it was very humbling to put it mildly but then it turned out that I eventually went to a medical hypnotist and learned how to get over my stammering and by the time I got to college, I discovered I was actually very good in mathematics and so I was an exceptionally good student at a higher math and when I was in graduate school, I was doing a Monte Carlo Game Theory and mark off chain analysis and basic statistical modeling and things like that. Didn’t seem to have any purpose in those days but as we know today, they’re kind of fundamental algorithms. So sometimes things happen and they don’t seem quite full at the moment. Um, as things that happened s things happened to me in my childhood but so much of what I do today, Tracy spatter, I was interested in when I was very young and the things I was doing when I was very young.

You had a remarkable career thus far. I was curious what it is that it takes to build like a career like John Scully in general if there is such thing.

John Scully: It’s not very complicated. It takes an incredible curiosity, it takes a willingness to work extremely hard and it takes, I think, respect that there are other people who can do things better than you can and if you can work together, you know, and great companies are always built by teams. It’s not, it’s not one individual, but it’s always a team and so the team doesn’t have to be exactly like you.You have to say, so what am I good at? What’s missing in the company? How do I find someone who’s good at the things which I’m not as good as they are? And they will find that the most successful companies that they always have a leader who has a very clear vision of what she or he, you know, wants to accomplish and that’s why the noble cause is so powerful. The more you can conceptualize the company in terms of something that is noble for the world and the fact that it makes money is one of the outcomes is not the sole purpose. That’s what attracts the best talent because the best work from people. The brilliance of Steve Jobs was as much about his ability to articulate what he thought could be possible, not probable but possible and his ability to recruit talent. He was an amazing recruiter of talent.

You’re one of the great minds of business. You definitely got to work with one of them as well and Steve Jobs. What is it that you saw that, I mean from your relationship with him, from what you saw that it takes to build a Steve Jobs if there is such a thing for that or to build a career as such as this?

John Scully: It always starts with that there has to be a better way. You think about something and it may be something very small. When Steve did the ipod, it wasn’t the first MP3 player. There were a lot of MP3 players before the ipod, but what Steve realized was, it was when Siemens came out with this little tiny rotational disc drive that can hold a lot of content on a small miniaturized, no powered product that he came up with the idea of the ipod working with Tony Fidel, and Tony was the one who actually designed it and Steve was the one who knew how to explain it in ways that non-technical people would really appreciate it. So he didn’t say, here’s the best MP3 player you’ve ever seen, look how powerful it is, look how small it is. No! He said, how’d you like to have a thousand songs in your pocket? How would you like have a thousand songs in your pocket? And people said, wow, I never thought of that and he was very clever. He went to one of the most powerful industries in the world at that time, the Hollywood music industry and was able to convince them to stop selling songs as an album, but to sell them individually for 99 cents a song and of course that’s what the whole idea of itunes, it became the ipod and things like that. So the ability to connect dots to see things that weren’t obvious to other people was part of his brilliance. So we can all learn from that.

You spoke about the principles. What are principles? could you detail more about them specifically?

John Scully: I’ll give you Steve’s principles. Always start with the customer, not with the technology and other one is, it’s more about design and cool technology. Steve actually couldn’t draw, when he came up with an idea…I went to Rhode Island School of design and School of architecture and so I would draw his ideas often because he couldn’t draw, but he can visualize them, he was a very visual person. Steve loved to use metaphors because when something didn’t exist, he could explain it by using metaphors to explain it, well, it’s like this, and it’s like that. You believe in, no compromise and so his designs… I remember when the first Macintosh was getting ready to go to market and the first Mac was inside a sealed case because Steve didn’t want people tempering with it inside and wanted to be in complete control and one of the engineers was just finishing up the motherboard and Steve looked at it and said, I don’t like this motherboard. I don’t like the way it’s laid out. I want you to go back and do it again and the engineer said but Steve, we don’t have any time left. We’ve got to ship the product and anyway, no one’s going to see it. It’s inside a steel case, no one’s going to know, and he said, “I’ll know” and that was Steve Jobs. Now the original Apple logo that looks like a four color logo because Apple was the first color computer, it has color logo on those days and Steve insisted that it’d be printed with 6 colors, not with four colors and I remember someone saying, Steve, he realized how expensive it is to print a logo in 6 colors as opposed to four colors and nobody will know. He said, “I’ll know”.

Thank you, it was a real honor to talk with you!

Conversational AI: An Introduction

Guest post by Nine Connections

Is customer service dead?

The other day, my 73-year old father, was grumbling about something he read in the news about automation of processes at the local bank.

“People don’t talk anymore. In my day, customer service meant talking to someone, saying hello, asking how your day was. Now it’s a recorded voice or reading tiny print online. Customer service is dead.”

That got me thinking. The role of a traditional customer service representative has evolved over the years. Once the domain of primarily the service and hospitality staff, the role of customers and our relationships with them has seen several costume changes — the phone IVR, surveys, forms, smiling uniformed people, you name it. But even as the modes change, the role of customer services and engagement has only just increased. Today customer relationships have become a full-fledged industry. 70% of buying experiences are based on how the customer feels they are being treated. The more people feel they’re being listened to, the happier they are and the more money they’ll spend — or that’s the hope. An Adobe report even suggests that customer service can deliver a higher ROI than marketing. Customer service, once upon a time, used to be about happy people, lots of solicitous questions and a solution with a smile. While it’s certainly true that the human factor seems to have declined over the years, the key tenets of a human interaction customer service have remained — conversations, solutions and a smiling demeanor.

So can a bot — the latest entrant into the customer service role — actually deliver these admittedly-human qualities?

Chatbot as the perfect concierge

Businesses that recognize how much time consumers spend on messaging apps such as Facebook Messenger and Slack have developed automated messaging technology. In 2015 messaging apps surpassed social networking apps, and chat apps have higher retention and usage rates than most mobile apps. Today, brands are looking at bots to become the next concierge, to understand what the customer wants, which direction they’re headed on, to involve them in interesting content, spread brand awareness and indeed, carry on conversations with a smile. But is all of that realistically possible?

On paper, it’s the perfect solution. Bots are machines, easily duplicated and incapable of human drama. They can be taught to function perfectly with a specific set of rules or through machine learning. These capabilities, limited as they are, can be trained to emulate the perfect customer service person’s skills — kindness, patience and solution-oriented. A machine can be taught to never be sarcastic and to always have a listening ear. And because it doesn’t have human failings such as fatigue or just being an asshole, it’s becoming an increasingly widespread phenomenon.

Any company with a chatbot interacting in the marketplace has the opportunity to gain valuable customer information. This has benefits in several areas — more personalization, targeted marketing, sales strategies as well as manpower allocation.

Not there yet

While bots were also a hot topic at the recent Corporate Social Media Summit, the jury were admittedly slightly skeptical. Bots are still very much in their nascent stage. And there have been several failures. In the rush to develop the next Siri or Cortana for their businesses, what most companies have ended up with are simplistic, underdeveloped tech with limited capabilities and faulty data. Of course there are the filthy people of the internet. It took less than 24 hours for Microsoft’s Tay to turn into into a filthy Nazi racist troll and two weeks for the cute little hitchbot to become roadside shrapnel. Even if the world were a perfect place, everyone was sunshine and unicorns and keeping empathy and other qualities aside, the actual functions and solutions given to customers by these bots need to work. That requires very skilled developers — but even they aren’t free of error.

Having said that, the possibilities for a bot are immense. Even though the big tech companies haven’t quite cracked how to make it work. Our co-founder Chris has a strong vision on the problems with Conversational AI, and perhaps more importantly — he offers solutions. He will share his vision 26th August on Startup Friday (still some spots left) and will start to share his vision in our blog series about Conversational AI that’s coming up here on Medium.

I know I will be paying attention. My own life have tons of bots — from the local Asian store from online magazines to Facebook to even my fitness wearable. Chatbots might very well be the face of the future one day. Now if they only knew how to smile.

The Conversational Gap Model – A Personal Journey to Conversational Commerce

Guest Post by Paul Sweeney

Many years ago a Chilean gentleman named Fernando Flores developed an interaction model that modelled workflows as conversations. At it’s core was the concept that there were four distinct phases to a conversation, but that in general, organisations did not model these phases accurately or with enough granularity. It was the breakdown in the integrity of the conversation between people that led to the breakdown in the business process because we were not being specific enough where we needed to be, and were probably being overly prescriptive where it didn’t matter to the ultimate delivery.

From the diagram above, some of you may recognise this way of thinking from your exposure to The Lean Start Up. It’s basically a methodology for running a discovery process.

I was very ready to be persuaded as to the usefulness of such methodologies after a three year masters in new product development processes and buyer supplier relationships in the automotive industry, a theory based on lean manufacturing and lean enterprise. My research involved disentangling the effects of good internal new product processes from the attributes of buyer supplier relationships. Foremost here was the importance of getting the design specification right up front, but not defined “too tight”, such that you lock out the expertise of the supplier. Many times, you defined the “outcome” such as “this switch must work in environmental temperatures ranging from -40 to +40. How you achieved this as the supplier, was up to you.

The relationship, communication and trust factors between the car company and it’s suppliers were then really important in guiding and steering through course of inevitable adjustments and adaptations. Getting to market in a much shorter development cycle time, and then iterating faster than the competition made Toyota a learning machine. The same factors are at play when people collaborate. We need to understand the nature of our relationship, we need a “common background of obviousness” in our communications, we need a history of interaction that has built a base of trust. Only then do we trust to iteration.

CEBP — Communications Enabled Business Processes

In 2003 Graham Brierton and I were co-founding team at a first generation SaaS company. We recognised that automated communications could be used to address the millions of “small interactions” between companies and their customers that could be better managed through more accurate preparation, negotiation, performance, and acceptance routines. With the rest of our team we identified a range of “lags and drags” in business processes, where if they could be handled more efficiently at scale, it would free up organisational resources. We saved companies millions of dollars. We won a global innovation award, national and European customer service awards, but yet, we felt that there were bigger “conversational problems” out there that we had not yet tapped. The problem was that we couldn’t “get to” the granular data that was locked in the enterprise, voice recognition wasn’t good enough at that stage, and there was still a chasm between the communications channels and the emerging, enterprise digital infrastructure. We could see all this potential “white space” in the enterprise, but there was no way of “wiring it all up”.

Martin Geddes — The ten conversation gaps

Around 7 years ago I was at a Future of Voice workshop run by Martin Geddes and Dean Bubley and the concept of “Conversation Gaps” was advanced. Again, this was an example of modelling out a typical process and demonstrating how telecommunication services could be used to remove friction, and help business processes complete more efficiently. I’m going to quote it in full.

  1. The cost gap: The difference in operational cost between human labour and an automated system is several orders of magnitude, and errors introduced by humans cascade into further cost.
  2. The confidentiality gap: Human beings are asked to handle sensitive data, and such data can leak.
  3. The customer experience gap: The customer’s time is wasted on tasks that do not create value. The ‘cost’ of the service to the user is the combination of its price, and the effort to use it; thus poor customer experience is a form of cost shifted on to the customer that reduces demand and willingness to pay.
  4. The capability gap: Our tools of conversation assume a one-size-fits-all and do not provide features reflect the diverse roles people adopt in their daily lives, and the different demands that arise as a result. For instance, a next-generation Caller ID would command different levels of caller information disclosure for each of ‘child’, ‘friend’, ‘customer’, and ‘stranger’.
  5. The co-presence gap. Ideally conversational media would provide parties with an experience as good as ‘being there’ together. If the conversation is locked into a narrow range of media types with weak interactivity, then it falls short of ‘being there’.
  6. The coverage gap: The ‘coverage’ is the range of situations in which the media make the conversation possible at all, despite ‘not being there’ together in the enterprise’s retail outlet. If a customer’s available modality of conversation is Skype, and the enterprise cannot originate or terminate Skype calls, then they cannot converse, and the enterprise loses business.
  7. The capacity gap: Each tool has to be able to scale to meet the needs of enterprise use. This is not just a question of networks scaling to accommodate load, but also of the user experience being able to scale to prioritise, filter and route an ever-rising number of requests for interaction.
  8. The conformance gap: The tools of conversation fail to meet the legal and social norms of each jurisdiction, and thus limit their use in commerce. The current controversy over encrypted BlackBerry messenger use that cannot be intercepted by the governments of the UAE, Saudi Arabia and India is an example of this.
  9. The culture gap: Each society has different norms and historical associations with communications, such as Americans having a higher propensity to use voice compared to text-centric Europeans. What is acceptable and ordinary use of personal data in the USA is regarded as unethical in Germany, even if it conforms to legal constraints. Tools of conversation need to reflect these differences.
  10. The ‘cool’ gap: The other gaps address functional shortcomings of our tools of conversation. However, an increasing proportion of the value we receive from goods and services is provided by non-functional aesthetic and social value. People want to use communications services that make them feel and look good. If teens are tweeting and texting, then asking them to talk might as well be asking them to telex — it just isn’t going to happen.

Digital Conversations

Around 5 years ago, we noticed more widespread adoption of “customer journey”. The digital glue for this journey was going to be “social”, but at the customer level and at the organisation level (employees). Social didn’t turn out to be great for engaging and collaborating across all environments and businesses. Gaps were emerging between online digital and the traditional sets of communications tools at the contact centre. While there is still a great deal of promise in the community model of customer support there is little actual adoption of it.

My Personal Mobile Experiences

For me, three customer experiences seemed to be fascinating me, and seemed important.

(1) Instant, Visual, Services: Hailo was an app that I used a lot. I opened it, it found my location, showed me little icons of cabs, showed me arrival times. I hit one button, and I had booked a cab. The cab drivers were unfailingly polite, the journey route and choices were always explained to me in advance, and the bill was always so easy to deal with. I just stepped out of my car and caught my train. Why weren’t digital interactions with all companies this simple I thought?

(2) Private Social Networks: WhatsApp: I was speaking with a long time friend and former colleague who was running a small service company, entirely on WhatsApp. What I said? yeah, we open up different groups for each subject. Basically he was nearly able to run his business, and his customer interactions, from a mobile messenger app. combined with what I was already witnessing with the adoption of Slack, I could see a new assisted interaction paradigm emerging.

(3) Customer Empowerment: I was in a hospital and found that I had absolutely no record of my conversation, and no way to capture the record of my interaction with that hospital. There were many errors made, and the hospital was the only party to the interaction that was “allowed to keep the official record”. Why?

Conversational Commerce

The bridge between your communications and digital infrastructures turns out to be the Messaging app on your phone. If you could @ message a company and have them respond over Messenger, you save a lot of time, effort and frustration. I don’t have to look up my flight information because KLM not only shares my ticket with me in my Messenger, but also my updated gate number, and the time it will take me to get to my gate. The conversation is the service. When I want an Uber it can be summoned from within my Messenger. When I want a receipt it can be shared into our messenger conversation. When I want to remember what was said or agreed, I can scroll back in our conversation. I can absolutely see that in many professional services interactions I would want to keep a record of the preparation, the negotiation, the performance, and the acceptance stages of an interaction.

What we are sure about at Webio is that the future of interaction will use all the capabilities of mobile, from icons and emoji, to micro-sites and bio-metrics. It will us the camera and it will use augmented reality. It will use intelligent messaging, messenger apps, disposable apps, instant apps, sms, webrtc voice and video. The availability of this channels “everywhere” gives companies the ability to bridge many of the conversation gaps originally proposed by Martin Geddes.

Powerful Artificial Intelligence (A.I.) engines such as Tensorflow are also coming on stream at the same time as all these channels, bringing the possibility of predictive interaction to conversational interfaces. For simple, easy to formulate questions, for which there are simple, structured, easy to present response options conversational interfaces should be easy to implement. Where there are more complicated questions, that requires data from numerous enterprise applications, the ability to generate these response options is more difficult.

But, What’s So Interesting About This, Really?

Chatbots are the trojan horse for artificial intelligence products. They are really augmented conversations. They will start simple and small in places like customer service. What devices will do for us “automatically” is only in it’s infancy. Using image recognition on x-rays is one of the areas where A.I. assists doctors and behind that is the fact that A.I. is capable of keeping the alternative diagnoses “in mind”, their potential interdependencies, and their risk weightings. While human experts may be right 95–99% of the time, A.I. is helping chase down that last 1–5% and weighting it for potential impact. If A.I. is assisting doctors in diagnosis, and assisting drivers to remain safe on the road, it is hard to think of an area that will remain untouched by A.I.

In 10 years, machines that help us keep these options in mind, and help us to better exercise our judgement will be the norm. Today we think that Google Assistant is pretty good at recognizing our voice search requests. We mostly think Siri is funny but not as good as Google. We really haven’t seen mixed reality solutions such as Hololens used in our day to day lives yet, but can you imagine going back to a world without Google Maps? Could the whole “on demand Economy” work without Google Maps? At the moment not really.

The conversational interface will be like maps of conversations. At first it helps us get from A. To B. Future generations of services will be built upon this this basic metaphor. If maps were about locations, their killer app was “step by step turn instructions”. It was about the navigation. So if our conversational interfaces are mostly about our “intents” what services will emerge based on these intents? What is our turn by turn navigation equivalent? What is the killer app for augmented conversations? For me, it’s personalization. Conversations are where we explore, create, define, and share our preferences. While these may start out being functional and factual preferences such as remembering our shoe size, and our color palette preferences, they may evolve into preferences that surprise us, that delight us. Spotify can play your favorite album all day long, but all anyone talks about is how amazing their Discovery Weekly playlist is. How many of us get up on a Monday morning and hit that first thing? It’s now “a thing” that many of us do on a Monday. What if we had our “banking conversation” on the first Monday of the month? What if we had a target of having at least “four hours of direct conversation with my child” every week? What would happen if there was some way to know that “25% of people you work with don’t seem to want to communicate with you”?

In an era of quantified communications, we will have augmented conversations, assisted by artificial intelligence that holds a repository of our preferences.

 

Reaching Consumers Through Social Media Conversations

Marketing and social media should be best friends. They have to be for most products and services to reach a mass market of any significance at a relatively low cost.

I’m a ‘supermarketaholic’ and enjoy visiting the biggest store close-by. Walking the lanes recently was both nostalgic and different. Nostalgic because I know this experience will change in the future as it has from my childhood. Different because I was seeing the products through a different set of eyes on that day. In the past I would be looking out for the new highly advertised product ‘seen on the television or newspaper’. Now, I’m checking out the deals and new products flittering across my mobile as I check my Facebook messages. Yes its different.

Facebook advertising works so well one does not even associate it with advertising. The images we see sometimes can draw us in with very few words. If it’s good, then the comments will get a brief review. Sometimes I will comment if I really like a product or feel interested in finding out more. If I have a bad experience, its shared by writing a negative buzz /response, that’s my act of community service to people I know.

What drives consumer spending now is much more than a hyped-up, interesting product and disposable income. It goes beyond the borders of influence and up the alley of social media marketing and promotion. Its that defining comment which resonates and reminds of a feeling!

Social media marketing & promotion

From my experience, social media marketing can be described as a mixture of penetrating a marketing image with a social media conversation strategy. The product promotion takes place in the ‘comments’ of a thread. This is then shared, over and over, by consumers who can effectively describe a ‘feeling’ of value in a few words. Indeed it is the trigger from these conversations which cannot be easily monetized as advertising, for commercial gain by a hosting platform. This has helped many brands in introducing new products. In the case of ‘the platform’ like Twitter and Facebook capturing the real commercial value is difficult based on the nature of the promotional asset — online subscribers.

There are very few ads on Facebook which will generate a feeling from me, to look further, in their present format. They give me that feeling from the past, of getting up during the commercial breaks to go for popcorn or a drink!

I’m sure the ads are pretty and relevant and I may miss a deal or two, but hey they do not impact on what I’m going to buy or where I will shop in many instances. So what is wrong with the present ‘validated promotions’ (commercial FB ads), and why don’t they appeal to many consumers like me?

Storytelling in social media marketing & promotion

One of my theories on why some ads on social media do not appeal, has to do with ‘verified experience/value added’!

The comment threads can act as a storyteller! Yes. It’s like opening a book and reading a dialogue, complete with human feelings and stimuli. I’ll share a couple examples from my consumer vision;

The Pub — There is a new outdoor mall with a pub I wanted to visit every-time I passed and saw its sign. I was caught by the name and graphics on the sign. As I scrolled one day on Facebook I glimpsed a comment on the pub, shared by a friend of a friend. There was a dissatisfied heading announcing ‘poor service at $200 per meal’. I scrolled back, and read the few lines posted on the consumer experience, and then noted a few comments listed, mainly negative feedback. As I read, I thought — “I won’t be spending $200 to be insulted anytime soon, or ever!” That was instinctive. A few days later on another thread, I read an experience one of my closest friends had at the same pub, and she keeps going there. I’m not convinced I want to give it a try, having noted the time she and the dissatisfied customer visited were very different. She also appears to know the owners, and could be getting preferential treatment. Full story ending indicates, I’m not convinced to go!

Soaps — I’ve been noting a few friends keep sharing this ad about a new line of bath soaps with herbal and natural extracts. I like Dove, but as I read the comments I’m catching a scent and feel of a different experience. Something soft, mild and without a lot of additives, and it smells divine based one comments from people I don’t know. As I hunt the lanes in search of this product, I can only recall the name and the experiences driving me not to give up! Its not on the shelves, and I go to the supervisor to ask if they carry the product line. She says “no”, but asks for a description — I pulled it up on my Facebook screen for her to see (I shared it on my timeline to have easy access)! I can check back with them on my next visit, and they will try to get some in the store! Wow, I will be going there soon.

Marketing and social media can deliver an experience, which is replicated through the buyer/consumer conversations. Good or bad, everything can get validated through the stories we hear via comments. At the end of the day, marketers need to move the customer to exchanging cash for product/service. That is the objective.

Facebook sharing is big and can lead to great success and feedback insights before a brand can be severely damaged. It should be a part of most product marketing strategies. Going beyond the superficial is the new generation marketing challenge for those able to create the authentic /real stories consumers want to read and act on. A marketing savvy person/company shares user experiences effectively. Let’s get those consumers to feel our brands, through conversations!

About the Author

Donna Luisa is a a corporate business veteran, with practical experience in a diverse range of industries — Safety/ HVAC / FMCG /Industrial Equipment /and much more . Sales, Marketing, Business Development & Coaching are combined to deliver over 30 years experience.

Customer Service: Its Importance and Value

Customer service is often overlooked by many companies because it’s hard to measure the direct value of providing great customer experience.

In today’s highly competitive market, businesses have to make tough calls on what to focus on next to survive, and unfortunately, providing customer satisfaction is usually on the lower end of the list.

Without being able to properly quantify the direct value of great service, many businesses can’t justify spending time and resources on providing it. Other businesses just see customer service more as a pain, and choose to be reactive, rather than proactive to customer expectations. However, the truth is, great customer service is absolutely crucial to the long-term survival of the business.

customer-service-happy

The Importance of Customer Service

You can argue that price is the main reason your customers choose you, so you focus your energy and resources on being the most affordable. I’m telling you, there will come a day when a competitor comes in with a better product for a cheaper price.

In the the same way, you can also argue that you focus on innovative developments and that’s why your customers buy from you. Again, there will come a day a competitor swoops in and take your customers from you because they made better innovative progress. Do you know what you can invest in that your competitors can’t take away from you? Loyalty. Good old customer loyalty.

The best way to gain customers’ loyalty? You charm them with your service.

By continuously engaging with them through customer service and marketing efforts, you are fostering a relationship with them. It’s hard for people to walk away from someone or something they have formed an attachment to.

A study conducted by Forrester Research found that strong emotional connections with a brand is a stronger driver than other factors like ‘ease’ and ‘effectiveness’ across 17 different industries.

So now you know why it’s important, what’s the value of providing great customer experience and service to create highly engaged customers?

The Value of Customer Service

1. Retaining customers is much less expensive than acquiring new ones

It’s true. Acquiring a new customer can be anywhere from 5-25 times more expensive than keeping a current one. You don’t have to spend so much time and resources finding a new customer and converting them. Instead, you just have to make sure they’re satisfied and will repurchase from you.

Customer support contributes a large portion to the retention and satisfaction of customers. Many companies put a lot of time and resources in their sales and marketing teams, when just as much emphasis should be put in support or success teams. When done right, they can have a bigger impact on your bottomline than new acquisition activities.

2. Repeat customers generally spend more than new ones

A study by McKinsey found that eCommerce spending for new customers on average is $24.50, compared to $54.50 for repeat customers. Even better, highly-engaged customers buy 90 percent more often and spend 60 percent more per transaction.Making a customer happy shouldn’t be a one time thing at the beginning of the relationship. Most relationships are more valuable the longer they are. Businesses should be putting more emphasis on their customer service, success and support teams because the financial growth potential is much larger than in newly acquired customers. Plus, the probability of selling to an existing customer is 60 – 70%, whereas the probability of selling to a new prospect is only 5-20%.

2. Great service reduces the severity of overall problems.

We’ve all had problems with companies before. In the moment, you might be upset, angry, annoyed or all of the above. If you had to talk to a rude customer service rep on top of all that…I’d imagine you wouldn’t be too happy. What originally may have been a small problem would go from 0 – 100.

In the same way bad service can escalate problems, good customer service can reduce them. When delivered well, customer service can diffuse negative emotions from the customer and the situation. Excellent customer service can turn the situation around into a positive. Small things like apologizing, empathizing and being genuine can go a long way to reduce a customer’s negative emotions and the severity of the overall problem.

82% of satisfied customers will “likely” or “very likely” keep shopping with a company and give it another chance if something goes wrong.

3. Builds brand awareness with minimal effort.

Customers are being more and more vocal about how a company treats them and how a company makes them feel. Considering your customer service team are likely to be the only people in contact with a customer, they play a crucial role in shaping their customer experience, and by extension, whether they have good or bad things to say about the company.

It is therefore important that every interaction with a customer should make them feel valued, listened to and supported. Extra points for going beyond expectations like Paul from Zappos. It was a simple response to a customer whose shoes were falling apart, but he made it so much more. This ended up being shared on Reddit, Hubspot and Helpscout and championed as customer service at its best.

Zappos Customer Service

Source: Reddit

4. People remember the service a lot longer than they remember the price.

Think back to a purchase you made a couple of years back. Heck, think back a couple of months even. I can’t even remember the price of something I bought in the last few months!

What I do remember though, is the service, the delivery and the effort I had to put in to make the purchase. It’s not about the destination, it’s about the journey. And in this case, the price you paid is the destination, and all that leading up to the purchase, is the journey. People will talk. If they liked the journey, they will recommend it to others.

5. It’s a competitive advantage no one can take away

With rapid innovation reducing differentiation between one product and another, and competitors just a click away, customer service is one of the last frontiers of sustainable competitive advantage for businesses.

Many businesses will pay lip service to the value of customer service, all the while cutting costs and resources to provide it. This will only ensure they provide the bare minimum to support customers, it doesn’t mean it’s anywhere near good enough to be a advantage. When normal customer service standard means going above and beyond for a customer, that is when customers will choose your business over someone else’s.

Customer Service Takeaway: Customer service is becoming more important than ever as competitors increase and are closer than ever. A customer is 4 times more likely to defect to a competitor if the problem is service related than price or product related. No one wants to do business with someone they don’t like. The product or service doesn’t matter anymore. They can easily substitute with other products or services that function similarly. Customers would rather deal with the slight inconvenience that the competitor’s product or service doesn’t function the same way, than to deal with the huge inconvenience of not being supported by your business.

Customer service, when delivered to the satisfaction of customers, not only creates a powerful marketing opportunity for the business, but also helps with the bottomline. Not only are return customers easier to sell to, they will spend more per transaction and would pay extra to guarantee better service.

customer service charter template download cta woveon

Using Smart Technology for Smarter Customer Service

Smart technology is rapidly changing the world we live in today. From smart houses to high-tech artificially intelligent robots, the world we live in is being saturated with advanced technology that simplifies our lives today. One industry that is fully embracing artificial intelligence is customer service. Companies across many different industries are jumping on board and using artificial intelligence and machine learning to create chatbots, remember customer problems, and create suggested responses. These are just some of the few incredible capabilities that AI and ML and other smart technologies are bringing to the field of customer service.

How Artificial Intelligence is Leading the Smart Technology Revolution

quick-intro-ai-ml

Smart technology is transforming the customer experience, but there’s also a more self-serving business benefit from its use. Those teams enabled and empowered through the likes of AI and predictive intelligence have higher rates of employee engagement. This is because agents feel more empowered and experience first-hand the positive impact this personalized style of service is having on the customer. There are two main ways that businesses are augmenting their customer care units with AI: “front-end AI-powered bots” and “AI-assisted human agents.” A front-end AI-powered bot is a conversational computer program that interacts directly with a customer without human intervention. On the other hand, an AI-assisted human agent is a human customer service representative who is supported by AI technology. Both these models are being used in service departments across industries.

Chatbots

Of all the fields in the chatbot-crazed world, customer service is one of the prime targets for automation. Virtual customer agents (customer service-focused bots, or VCAs) are intelligent systems able to understand what users ask via chat and provide them adequate answers.

In 2015, the number of people using messaging apps overtook the number using social media. Beyond communicating with friends and work colleagues, individuals are increasingly using messaging apps to interact with brands. Messaging services are a brand new space for organizations to connect with existing and future customers. Businesses now have the opportunity to create new revenue streams using real-time, customized customer service bots within messaging applications. More than 34,000 chatbots on Facebook Messenger alone are a reflection of this opportunity. The airline, clothing and tourism industries are already leveraging this space. Consumers are connecting with brands through messaging apps to purchase airline tickets, book hotel accommodations and receive fashion advice. It’s only a matter of time before the other industries catch up.

The WeChat Messenger bot deployed by China Merchant Bank, one of the largest credit card issuers in China, is another example of a front-end bot. According to the AI technology provider Xiaoi, the China Merchant Bank’s front-end bot handles 1.5 to 2 million customer conversations per day, an inquiry volume that would typically require thousands of additional employees to answer. As most questions relate to card balances and payments, automation via a bot interface presents a relatively easy and cost efficient solution.

These above examples of chatbots already in use give a great introduction of the possibilities that AI brings to the field of customer service. AI makes it possible to create these large indexes so that the bot can respond back with pre-understood phrases or suggest responses to the human controlling it.

Suggested Responses

AI and ML are frequently misunderstood in the business world. They are not taking over jobs, but further enhancing current human positions. With suggested responses, companies can get through all of the requests at a much faster pace. AI bots can be used to read through customer requests and find the problem they are having. If you have repeat customers, customer conversation history is extremely important tool for your AI and ML. It can learn from past experiences and more accurately detect the problem the customer is having.

Conversation History

Woveon, a startup that provides intelligent customer service, uses AI programs to enhance its customer conversation history. Conversation history is simply saving past conversations between the customer and the business. Customer service representatives can then go back and use this data to help future questions the customer may have. Woveon is using this to essentially make a 3D diagram to further help the representative. The program will be able to go into the conversation history and track down the problems. It will then make a web with the biggest points being recurring problems. Branching off of the bigger problems will be other related problems that customers often have. This program, though still in development, will change the way customer service is able to work with customers. Woveon’s software, as mentioned above, is an AI-Assisted Human Agent and proves the importance of human interaction as it simplifies and speeds up these interactions.

Smart Tech Integration to the Business World

“As humans, we advance, that’s what we do. And the rise of AI in the customer service field is just another step in our advancement and should be looked at as such. There might be some growing pains during the process, but we shouldn’t let that stop us from growing and extending our knowledge. When we look at the benefits these chatbots, suggested responses, and conversation history can provide to the consumer and the business, it becomes clear that we are moving in the right direction.”

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