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Customer service + World economy/Global trade + Social dividends = Environment/Sustainability
We treat people like there is not a lot of free will, but I think that because the whole system is designed like this, si people seemingly do not have their will and attention anyy more, and we turned them bakc to animals. I think government should have control over a lot of stuff, especiallyy in forcing diets (i think it might nudge yes, but not force)
but my most concern stems from idea that companies and government need to make something for customers rather than give them autonomy of choice and then also provide them with all resources anthey need. Therefore i liked idea of envrionmental/social dividends rather than putting additional p[rice for customers, or nudge with labels or something to choose wisely. I think this is not that sort of independece that people need, they need big coroporations and other kind of commercial companies and governments to stop designing them for failutre, but give them real leverages, aka money with dividende from resources
"You're very welcome to The Ticket. Our listeners will be very familiar with your voice, as this, I think, is your third appearance on our show over the last year."
"I'm a repeat offender."
"Repeat offender. I like that. Very good. But a repeat offender that adds a lot of value. Can't get enough. We always appreciate your insights. Before we get into your annual research—which is one of the key focus areas we want to talk about today—you've observed some really monumental changes in customer service over the past three decades.
Could you highlight a couple of pivotal shifts that have fundamentally changed how businesses approach customer experience today?"
"Well, several things come to mind right off the top of my head. And by the way, if you ask me this question next week, I might give you a slightly different answer. If you look at my annual article on trends and predictions, I always open with the same one because it continues to be true. It's a trend that keeps increasing or improving: our customers are expecting more from us. They're smarter when it comes to customer service and experience than they've ever been.
The reason is companies have been promising. I remember back in the 1980s, when you and I were just kids, watching TV commercials about award-winning companies. They would say, 'Yeah, we are award-winning when it comes to customer service,' and I thought, 'What does that mean?' There was an award here in the U.S., the Malcolm Baldrige Quality Award, which companies like the Ritz-Carlton strive to win. I started doing case studies on those. Over time, customers get educated by great companies on what service looks like, and they start to expect that level of service from anybody they do business with—B2B, B2C, even government. Everybody you interact with is a consumer at some level, and they will—consciously or not—compare the experience they have with you to some other experience they've had, maybe a great company or even a local shoe repair store that always knows their name. Customers walk away wondering why every experience with every company isn't as good as that one.
That's why I think it's important. A big fundamental change that's happened, and you asked me about things that have changed: I promised not to go long-winded on this. We see technology improving, and in just the last year and a half or two years, we've been bringing AI with generative AI into the support world we live in. But that's actually been going on for well over a decade. I attended meetings with IBM when they were rolling out their Watson program. They put me through some really cool educational experiences, including one called Cognitive College. I love that term. I learned about the beginning stages of digital customer support.
We're moving away from just using the phone to using multiple ways to communicate digitally, whether it's as simple as a frequently asked question on a website or something more intuitive where you can ask questions, hence generative AI. There's so much more that can be done. At the end of it all, I think it's great for the customer. Number two, companies are trying to compete by creating a better service experience, which again is great for the customer and also great for the company, because we learn service doesn't cost—it pays.
Finally, when it comes to the contact center world, a lot has changed in the way we do business and the way employees work. I think the employee experience is becoming more important for driving a better customer experience. We need to provide our employees with the same type of experience—make them just as happy as we want our customers to be. Otherwise, there's going to be a disconnect. Those are just a few of my thoughts. I think that wraps up our time on the interview. Thank you very much."
"I'm just kidding. I love those perspectives, particularly the last one around where we're moving with generative AI. I think I shared before that I have a frustration because technology hasn't been applied as pervasively to customer service and customer experience. Organizations have been slow to look at the possibilities of AI and ML, which have been around for a long time. But now, with generative AI, there's a whole new opportunity. It's great to see customer support and service organizations beginning to embrace that. I think the three dimensions here are spot on: it's changing the customer experience, changing the agent experience, and changing the business experience, so you can deliver customer service in a totally different way that adds far more value back to your business.
Now, every year, as you mentioned, you release the Achieving Customer Amazement Study and its report on customer preferences and habits. According to this year's report, a staggering 88% of customers now believe that customer service is more important than ever. What do you think has driven this shift in customer priorities and this almost maniacal focus on customer service?"
"Well, I've already mentioned one point: our customers are smarter as a result of companies training them. Retailers, even B2B companies, train them on what great service looks like. So they expect that from everyone. But I also think they want value for the money they pay, and they're learning that value goes beyond just the product—it comes from the experience. It was predicted, I'm going to say, almost 15 years ago, that once we got into the 2020s, experience would be even more important than product. Think about this: we can buy anything from multiple sources. That changes a bit in B2B because there are fewer options, but if I walk into a mall and don't like how I'm treated in one store, I can walk two or three doors down and probably buy the same product.
Products are commodities, and once in a while you'll find something only one company sells, but generally it's all a commodity. What can we do to differentiate ourselves? There's only one thing: create an experience that gets people to say, 'The next time I want whatever they sell, I'm coming back here.' By the way, you want people loyal to your experience, not your price. There are plenty of retailers out there where the lowest price wins. If your customers are only coming to you because you have a lower price, you're vulnerable—someone else can undercut you. But when you create that emotional connection tied to the experience, that's what creates loyalty. Customers won't take a chance on going elsewhere because they enjoy their experience with you.
Even if another company promises a great experience, the only reason I'd switch is because the experience I currently have isn't what I want. If it's what I want, I'm sticking around."
"I love that. As you say, products are very much commoditized, but it's the customer experience that's the real differentiator in a world where the bar is constantly rising. Customers expect more and better quality all the time. To that point, on page eight we talk about the importance of customer service and how CX continues to increase. I've been doing this since the 2000s, and here's what's amazing: for the most part, I have four years' worth of stats. Let's talk about convenience. Four years ago, 84% of customers felt convenience was important—meaning a friction-free experience, how easy we are to do business with. Today, that number is 94%. Knowledgeable employees were important to 85% of people surveyed; that's increased to 93%. Employees that are helpful and knowledgeable—wasn't that always what we wanted?—today it's 91%. In virtually every area, it's increased.
Able to reach the right customer support person was 85% back then; today it's 93%. You can see it just continues to climb. Why? Because the business world is educating customers on what's possible, and once they experience it, they say, 'I like that. I want more of it. I don't care who I buy from; they better give me that great experience, or I'll find another place that does.' Absolutely. Customers have a choice. We really need to remember that.
Now, I want to move on, because you mentioned AI as one of the monumental shifts, and 62% of customers in your study expect AI technologies to become the primary mode of customer service in the future. How do you see AI transforming customer support in the next five years?"
"Well, let's look at a case study that's not AI but shows the transfer of customers from a totally analog experience to a digital experience. That's the airline industry. There was a time when the only way to book an airline ticket was by phone. Then one major airline said, 'We have a new way. If you go online to our website and book your ticket, you'll see it's not as hard as you think. It's actually pretty easy. And we'll give you an incentive—extra miles in your account if you book online.' Suddenly, people realized how quick and easy it was. You might remember they also started saying, 'Rather than come to the airport and stand in line for your boarding pass, especially if you have carry-on luggage, do it ahead of time.' You used to have to print your boarding pass; now it's on your phone.
They created this digital experience and incentivized the customer. Eventually, critical mass took over—there was a tipping point. Now pretty much everyone uses online reservations. Let me ask you, Declan: when's the last time you picked up the phone to book a standard airline ticket? Probably a decade or so ago, right?
Sometimes you need to call for a complex international situation, so there's room for improvement despite the industry going primarily digital. It's confusing because sometimes it feels like it shouldn't be so difficult, but whether it's airlines or any other industry, there can be complex systems behind the scenes. I've been writing articles about how we need to simplify the complicated. It may look easy to the customer, but the technology behind it can be quite involved. As simple as we want it to be, technology needs to catch up.
Absolutely. Some airlines use very old legacy systems, so there's a modernization opportunity. Back to AI, though: the potential benefits are huge, but 63% of customers express frustration with AI self-service options. What strategies would you recommend for companies looking to integrate AI without alienating customers?"
"First and foremost, test, test, and test again. If you're creating a solution that appears to be good, I want CX leaders, the CEO, the C-suite, directors, and VPs to call and experience exactly what the customer experiences. That's the only way you'll know if you've really got it. Too often, we don't mystery-shop our own companies enough. There's a disconnect between what customers perceive and what executives think. It's not a study I've done, but there's a big gap in perception. Most people think they're better than they are.
So, mystery shop, create the systems, and remember this system is built by people for people. Even though it's digital, we're trying to emulate a human-type experience. If someone has a simple question, why make them jump through hoops? For example, I had a cable TV and broadband provider, and all I wanted to know was what channel a certain sporting event was on. They insisted on my account info. I was in a different city, at someone else's house—no account info—and they still wanted it. It was difficult for no reason.
Online, I could have gone to a search bar and typed, 'What channel is the hockey game on tonight?' That's it. I shouldn't have to log in or give my mother's maiden name. So, if you're going to create a digital experience, test it to make sure it's easy. Once it is, release it. Also realize if the system is great for customers but creates a lot of extra work for employees, that's not good either. The employee experience is just as important as the customer experience."
"I love that—looking at the end-to-end journey, including when AI or automation hands off to human support. In our organization, we hired a conversation designer who walks the customer's path, looking at all those handoffs to remove friction. Your advice really resonates.
I want to switch to a really interesting concept. You did a special report on the 'dangerous customer.' I always do a report on the crazy things like how many customers yell or swear at you, and so on. No, this is really important. I think I finally nailed the question that gave me the answer I've been chasing for years. Basically, you're asking about the 'dangerous customer'—the 'satisfying' customer, right? Because if someone is simply satisfied, that's an average rating. Here's the question: on a scale of one to five, where one is bad, two is fair, three is average or satisfactory, four is good, and five is excellent, how likely are you to return to a company you rated a three (just okay)?
I finally got a reasonable answer. By the way, I asked the question different ways to different audiences, and it aligned well. That's important for accuracy. The answer was 23%—nearly one in four—who rate the experience as a three won't come back or are unlikely to return. Another follow-up question: have you ever been somewhat satisfied with a company but not bought from them again? Seventy percent said they wouldn't return. That tells us we're in what Joe Pine and Jim Gilmore call the Experience Economy, where experience trumps everything else. The product still needs to work, and it should be somewhat competitively priced. About half your customers say, 'Give me a great experience, and I won't be as concerned about price,' as long as it's somewhat competitive. Price isn't irrelevant; it's just less relevant.
Jeff Bezos once said about Amazon that we shouldn't need a customer support department—we should be that good. But the reality is people will have problems, sometimes not even our fault, yet we need to fix them anyway. So, yes, the best service is no service because you're that good, but you still need to be available when an issue occurs. We want the same great experience when there's a problem as when we buy the product in the first place. We don't want to frustrate customers."
"Love that. You've highlighted that 'satisfactory' isn't enough for customer retention. How should businesses redefine their metrics for customer satisfaction to better predict loyalty and repeat business?"
"I wrote a book called I'll Be Back: How to Get Customers to Come Back Again and Again. It doesn't refer to Arnold Schwarzenegger and The Terminator, but yes, that's where the line came from. I wrote it because I'm fixated on numbers, things like NPS, CSAT, and anything that gives a clear snapshot. I worked with a company that felt the same but also looked at the customer's cadence. For example, let's say someone gets a haircut once a month. If, after four months, they don't come back the fifth month, something's up. By measuring that behavior, you learn far more than just the sentiment from a survey. It shows whether they're actually coming back.
It's similar in other industries. If a customer begins to disengage, it often leads to churn. But in many businesses, if customers don't contact you, you don't always know if they're happy or not. If you don't sell directly and use a distributor, you'll have to rely on other data. But if you're direct to consumer or B2B, there's no reason you can't get feedback and track behavior. If you don't, you're assuming you know how they feel, and that can be a big mistake. Growth might mask a 20% churn rate. AI tools help us analyze data in deeper ways, so it's good news for all of us. You can even use ChatGPT to generate clever graphs and visuals. It's amazing.
You touched on the report indicating that 81% of customers prefer personalized experiences. What are some innovative ways you've seen companies successfully implement personalization at scale?"
"That phrase 'at scale' means you aren't personalizing one by one in a manual way. Micro-personalization is when you treat each individual distinctly, like greeting a hotel guest by name and asking if they want the same room they loved last time. But you can also personalize in buckets, or 'personas.' Companies typically have four or five customer personas, and they market, respond, and interact a bit differently with each persona.
Nike is a great example. If you join their loyalty program, they look at what shoes you buy—running shoes, golf shoes, etc.—and then send content and offers about that category. It feels personalized. AI in the contact center supports the representative, showing them relevant info so they can focus on empathy and EQ. The customer feels known, which is different from the older ways of doing business. Personas are still useful; AI just helps break them into even more precise categories.
As we look to the future of customer experience, what emerging trends should businesses prepare for to stay ahead?"
"Let's circle back to where we started: customers are smarter than ever. Some companies worry it's expensive or risky to invest in new technology. You don't have to be the earliest adopter, but pay attention to what's happening inside and outside your industry. Something a company outside your industry does might work 100% for you, and your competitors haven't discovered it yet.
In my book I'll Be Back, I have six steps for creating the 'I'll be back' customer. We ask questions like, 'Why would someone do business with us? Why would they do business with the competitor? What is the competitor doing that we could adopt? Which companies outside our industry do we love doing business with and why?' Then, 'Is there anything they're doing that could work for us?' We might be in the music retail business, but learn something great from an automotive company. You incorporate that and ask again, 'So why would they choose us?' That's the cycle.
AI is definitely an emerging trend. But it's not AI for AI's sake—it's about solving a real business problem. Also, the cost has come down dramatically. Even small businesses can afford AI solutions that were once available only to big enterprises.
Shep, we want to thank you for joining us today. You've given us some great insights into the industry and current trends. It's always great to chat with you. We really appreciate your time."
"Well, thank you so much. Great to be back, and I can't wait for the next time."
The Evolution of Customer Service: Pivotal Shifts and Trends0:06You're very welcome to The Ticket. Our listeners will be very familiar with your voice as this, I think, is your third appearance on our show over the last year. I'm a repeat offender. 0:16Repeat offender. I like that. Very good. But a repeat offender, that adds a lot of value. Can't get enough. Can't get enough. There you go. We always appreciate your insights. Before we get 0:24into your annual research, which is one of the key focus areas that we want to talk about today, you've observed some really monumental changes in customer service over the past three decades.0:34Could you highlight a couple of pivotal shifts that have fundamentally changed how businesses 0:40approach customer experience today? Well, several things come to mind right off the top of my head. And by the way, if you ask me this question next week, I could give you a 0:48little bit different answer. If you look at my annual article I do on trends and predictions, 0:54I always open with the same one because it continues to be true. It's a trend 0:59and it's the trend that keeps increasing or improving. And that is that our customers.1:04are expecting more from us. They're smarter when it comes to customer service and 1:10experience than they've ever been. The reason is companies have been promising. And by the way, 1:16I remember back in the 1980s, back when you and I were just little kids, right? I was 1:22watching TV commercials about the award -winning companies and they would say, yeah, we are award 1:28-winning when it comes to customer service. And I thought, what does that mean? And ... There was an award over here in the U .S., the Malcolm Baldrige Quality Award, 1:36and it was the award that companies like the Ritz -Carlton strive to get and win. And so I started 1:43to do case studies on all of these. And what happens over time is that customers get educated 1:49by great companies on what service looks like, and they start to expect that level of service 1:55from anybody they do business with. And it doesn't matter if you're B2B or B2C or even government.2:02Everybody you interact with is a consumer at some level and they will, 2:07whether they consciously do it or not, compare the experience they're having with you to some 2:12other experience that they've had. Probably with a great company that could be a huge company or it could be maybe the local dry cleaner down the street or the shoe repair 2:23store that always knows the name of the customer when they walk in that always...2:28Says your shoes will be ready on Friday and they get a call on Thursday. Hence under promising and over delivering and, and customers walk away going, 2:37why should every experience with every company be as good as that one? And so that's why I 2:42think that's important. A big fundamental change that's happened. You asked me for things that have changed. I promised not to go so long winded on this. we see technology improving and just in 2:52the last year and a half, two years, the idea of bringing AI with generative AI.2:58into the support world that we live in. But know that that's actually been going on for 3:04well over a decade. I attended meetings with IBM when they were rolling out their Watson 3:10program and they put me through some really cool educational experiences, one of them called Cognitive College. I just love that term. And I learned what 3:20the beginning of the idea of digital customer support looks like. So...3:25We're moving away from just using the phone to using all kinds of different ways to communicate digitally, whether it be as simple as a frequently asked question on a website to something that's 3:36more intuitive where you can ask questions, not just look up questions, but you can ask questions, 3:43hence the generative AI. You know, there's just so much more that can be done. And really at the end of it all, I think it's great for the customer. Number two, I think...The Impact of AI on Customer Support and Service3:52companies are trying to compete to create a better service experience, which once again is great for the customer. It's also great for the company because we learn service doesn't cost, 4:02it pays. And finally, I just want to say that when it comes to the contact center world, boy has a lot changed in the way we do business and the way they, meaning the employees that 4:12we have work. But I think the employee experience is becoming ever more important 4:18to drive a better customer experience. So we need to make sure we provide our... employees the same type of experience. I'm going to say the same type. We need to make them just as 4:29happy as we want our customers to be. Otherwise, you're going to have a disconnect. So those are just a few of my thoughts. And I think that wraps up our time on the interview. Thank you very much. 4:38I'm just kidding. No, I love those perspectives. Particularly the last one around where we're 4:45moving with General AI. I think I shared before with you, I have a frustration that...4:50Technology hasn't been applied as pervasively to the customer service, customer experience world. You know, organizations are very slow to look at the possibility of AI ML, which has been around 5:00for a long time, but it's obviously taking on a whole new opportunity now with generative AI. 5:05And it's great to see that customer support, customer service organizations are beginning now to really embrace the opportunity that it offers and really being focused. And I 5:15think the three dimensions here are spot on. It's changing the customer experience. changing the agent experience and changing the business experience 5:21that you can actually operate and deliver customer service in a totally different way that's adding far more value back to your business. Now, 5:29every year, as you mentioned already, you release the Achieving Customer Amazement Study and its report on customer preferences and habits. And according to this year's report, 5:38a staggering 88 % of customers now believe that customer service is more important than ever. 5:43What you think has really kind of driven this shift in customer priorities and this kind of almost maniacal focus on customer service. Well, I've already mentioned the one in 5:53that our customers are smarter as a result of companies training them. You know, the retailers, 5:58even in B2B, the companies train them on what great service looks like. So they expect that from everyone. But I also think they want value for the money that they pay. And they're learning that 6:08value comes beyond just the product that comes from the experience. It was predicted probably.6:15is, I'm going to say almost 15 years ago that experience when it came into the 2020s, 6:21which we're in the middle of now, that experience would be even more important than product. And think about this, we can buy pretty much anything from 6:29multiple sources. Now that changes in the B2B world. There's probably less options, but if I walk into a mall and I don't like the way I'm being treated, I go to a store, 6:39two or three stores down the hall and probably buy the same product. But here's the point.6:45Products are commodities and once in a while you find something where, well, this is the only company that sells this. Well, that's unique, but really is a commodity. What can 6:54we do to differentiate ourselves? There's only one thing we can do and that's create an experience 6:59that gets people to say the next time I want whatever it is that they sell, knowing I can 7:05get it ever, you know, in other places, I'm going to come back to this place. And the only way to make that happen is to create the experience that makes people want to do that. And by the way,7:14You want people loyal to your experience, not your price. There's plenty of retailers out there. 7:20We'll use retail as an example, where the lowest price wins. And if your customers are coming to 7:26you because you offer a lower price, realize that you are in a very vulnerable position, 7:32that if somebody offers a lower price, that is the only thing they're loyal to is price. However, 7:37when you create that emotional connection that ties to the experience that creates loyalty,7:43customers will say, I'm not going to take a chance on doing business elsewhere. Why 7:48would I? This is what I enjoy doing. So I'm not going to give that up. And that's one of the reasons why when you look at price, prices, you know, 7:56products the same price is different. Products the same experience is different, but why would I, 8:03I mean, I, even though somebody promises me a great experience, the only reason I'm going to go there is because the experience that I currently have isn't what I want it to be. So.Personalization at Scale: Innovations and Strategies8:12If it is what I want it to be, I'm sticking around. I love that around, you know, as you say, products very much commoditized, but it's the customer experience that is the 8:21real differentiator. And the differentiator in a world where the bar is rising all the time, as you say, customer expectations are increasing if they expect more and better 8:29quality all the time. And to that point on page eight, we talk about the importance 8:35of customer service and how CX continues to increase. So I've been doing this since, well,8:41in the 2000 and teens, and this is what's amazing. For the most part, I've just had the last four 8:47years worth of stats. Let's talk about like a convenient experience. Four years ago, I couldn't 8:52have gone back further, 84 % of customers felt convenience was important. And by convenience, 8:58I'm talking about that friction -free experience, how easy we are to do business with. Well, 9:03today that number is 94%. Knowledgeable employees were important. 85 % of the...9:10people we surveyed. By the way, this is a US survey based on the US census. So the general population of 18 to 60, I think it's 68 year olds. So 85 % is increased to 93%. Employees 9:24there are helpful and knowledgeable. Well, isn't that what we always want? Well, 85 % of the people we interviewed a number of years ago said, yeah, that was important. Today it's 9:3291 % in virtually every area. Here's a good one. Able to reach the right customer support person.9:40Well, back then it was 85%, today it's 93%. So you can see, it just continues to 9:45increase. Why? Because we're educating, we, the world is educating, the business world, 9:51our customers on what you could have. And when they experience, the customer says, I like that, 9:57I want more of it, I don't care who I do business with, with whatever I'm buying, they better give me that great experience. Or else, I'll find another place that does.10:05Absolutely. Customers of choice. That's one thing we really need to remember. Now I want to move on because you actually mentioned AI as one of the kind of monumental shifts and 62 % of 10:16customers in your kind of study are expecting AI technologies to become the primary mode of 10:22customer service in the future. How do you envisage AI transforming customer support in 10:27the next five years? Well, let's take a look at a case study that's not AI, but it's transferring10:35the mindset of a customer from a totally analog experience to a digital experience. Again, not AI, 10:43and that is the airline industry. You may, it was a long time ago, remember there was a time that the only way to book an airline ticket was to pick up the 10:52phone and make a phone call, right? And then I think it was either Alaska or Delta. I actually 10:59wrote about this in the convenience revolution, but one of these major airlines said,11:05We have a new way of doing it. If you would go online to our website and book your ticket online, 11:12you'll see it's not as hard as you think it is. It's actually pretty easy. And by the way, we'll give you an incentive. We'll give you miles in your account if you book online. And 11:22all of a sudden people said, wow, this works. It's easy. It's actually pretty quick. And you may remember they also, the airline started to say, rather than come to the airport,11:31and stand in line to get your boarding pass, especially if you're carrying luggage on, why don't you do it ahead of time? Check in and you used to have to print your 11:40boarding pass today. It's on your phone. It's an app, but what they did over time is they created this digital experience and they trained and gave incentive to 11:49the customer to use the technology by giving them extra points. Well, eventually critical 11:54mass took over. There was a tipping point and pretty much everybody now uses online.12:00reservations and let me ask you Declan, when is the last time you took a trip that you called the airline to book your ticket? I mean, let's international trips, 12:10sometimes it's a little bit more complicated, but if you're just going, you know, somewhere, even in Europe on the other side of the pond, or you live over there, when's the 12:18last time you picked up the phone and called the reservation? For a standard reservation, it's probably a decade or more before I, yeah, yeah, that's the point. Yeah. However,12:28And this was kind of the opportunity. I did have a complex situation not that long ago 12:34where I was forced to call the airline to make what I thought were the reason be simple change, but they did a complex change. So I still think there's an opportunity for improvement despite 12:44the fact that's - no doubt. You know, the airline industry has gone primarily digital. There are edge cases like that. I won't tell you the name of the airline, 12:52but there is an airline out there whose slogan is, we're not happy till you're - not happy. But seriously, sometimes, and it confuses me, why should this be so 13:06difficult? Does that make sense? Well, apparently, whether it's the airlines or any other industry, 13:13there are systems in place to make things work smoothly, and we don't know how complicated those 13:19systems are. I've been writing a lot of articles lately. I just wrote my third one about ... One of the things that we need to always be thinking about is how can we simplify the 13:30complicated? And when we think of, OK, shouldn't it be easy? Just go online, do this, make this 13:37change. Well, it may appear to be easy, but to make it really work behind the scenes is often 13:43pretty complicated. So as simple as we want the concept to be, technology needs to catch up to it.13:49Absolutely. And some of these airlines are running on very old legacy technology. So there's definitely a modernization opportunity for lots of businesses out there. 13:59I want to go on again on the AI question because like the potential benefits, like 14:0463 % of customers express frustration with AI at self -service options. Like what strategies would 14:11you recommend the companies looking to integrate AI without alienating their customer base? Well,14:17You know, the first and foremost thing is to test and test and test some more. If you're going to create a solution that appears to be good, and I'm going to go to the CX leaders on this one 14:29and I'll go beyond CX leaders. I want the CEO and anybody in the C suite. I 14:34want director levels. I want vice presidents to all call and experience what the customer 14:40experiences. That'll be your first clue to either you've got it or you don't. And so.14:46I think that too many times we don't mystery shop our own companies enough. And there is 14:51a huge disconnect and it's not a study that I've done, but when you take a look at what customers 14:57perceive a company's experience to be versus an executive that perceives the same experience to 15:04be for their own company, there's a pretty big gap that, you know, there's a misconception, whatever 15:10you want to call it, that most people appear to think they're better than they actually are. So.15:15mystery shop, create the systems and recognize the system is being built by people for people 15:22to use. So even though we're calling it digital, we're doing as much as we can to emulate a human 15:29type experience. We're just doing it digitally. So if somebody has a question, 15:34why should they have to jump hoops just to get a simple question answered? So if I call, 15:40I'll give you an example of this. I won't tell you the name of the company, but it was a cable TV broadband type company. And all I wanted to know is because I was in a different city, 15:50I wanted, if it was the same cable network, I want to know what channel did this sporting event, 15:57I couldn't find it, where the sporting event would be. And all they wanted me to do before they would give me this simple answer of its channel, whatever it is, 16:07well, do you have an account with us? No, I'm at somebody's house. But I do have an account with you in another city, but that's not what's important. I'm 16:13at somebody's house, same company. I just need to know what channel. Well, can I get your account number? No, I don't have it. well, I need to look you up. Why? 16:22All I want is to know what the channel is. And you see what's happening here. It's just so darn difficult. And it shouldn't be that way. Well, when you go online, 16:33that's the kind of question that you can simply go into a search bar and type in. What channel is the, you know, here's my St. Louis Blues logo of my favorite hockey team. 16:43What channel is the hockey game on tonight for the St. Louis Blues versus whomever? It's an easy one. I don't need to log in, give my account information, tell you my firstborn child's name, 16:53my mother's maiden name, et cetera, et cetera, et cetera. So the digital experience, boy, 17:00check it out. Make sure it's easy. Ask questions. Is it intuitive? Test, test and test some more.17:06and find out if it's working and then once it is, release it. And I want to add one other thing. Realize that if you're going to create a great experience for your customer, that it 17:16doesn't cause a lot of burden on your employees as well. We may create a system that's great for 17:21the customer, but it causes employees to take an extra two or three steps if they are contacted 17:26as a result of something, customer has a question or a need that they couldn't get digitally. So...17:32We want to be very aware of that employee experience as well as the customer experience. I love that about looking at the kind of end -to -end journey, including what happens when you 17:41get a handover from AI and automation to human support. Again, in our own organization, we've 17:46hired in what we call a conversation designer, and they really look at that conversation. We 17:51make sure we walk the path that the customer walks, and understand all those handoffs, making sure we're taking out as much friction as possible out of the process. So yeah.18:00I love that advice. It really resonates. I want to switch to a really interesting concept. So you did a special report on the dangerous customer. yeah. OK. Yeah, 18:10I thought, yeah, there was there's I always do a report on like the crazy things like how many customers yell at you, cuss at you, et cetera, et cetera. No, 18:19this is a really important question. And I think I finally nailed the question that gave 18:24me the answer that I think is realistic. I've been trying to get the right answer. for several years. Basically, you're asking about the dangerous customer is the satisfying customer, 18:34right? So satisfactory, you will ultimately lose if you understand that if all a customer is is 18:42satisfied, that's an average rating. So here was the question. Let me go back into history. 18:49Probably about 15 years ago, maybe even a little bit longer, I read a stat from two 18:54professors out of Vanderbilt University here in the US, Nashville, Tennessee. that Roland T. Rust and Anthony J. Zahorek, these guys studied consumer 19:03behavior and they found that 25 to 40%, depending on what industry you're in, 19:09of customers that are satisfied don't come back even if they're satisfied. Now that always intrigued me because everybody says we want to satisfy our customers. And 19:17I think what they mean is we want to not satisfy them, but what they really mean 19:22is we want to create an experience that gets them to come back. Okay. That's ultimately ... We're using the wrong word if we talk about satisfactory. So on a scale of one to five, this 19:33is where, here's the question. If you were to rate a customer experience on a scale of one to five, 19:40where one is bad, two is fair, three is average, four is, three is average or satisfactory, 19:47that's where I put satisfactory in there, four is good, five is excellent. How likely,19:55Is it that you would return to this company or brand if you rated them a three, which is average in the middle, just okay, satisfactory, fine if you will. And finally 20:05I got an answer that seemed reasonable. And by the way, I asked the question different ways to different audiences on the study, which was great. We had a number, so many 20:17questions this year that we fielded multiple studies and we would ask some of the questions.20:24a different way to see if the answers would align. That makes sense. So we want to make sure we get accuracy. 23%, that's almost four out of five, one in four customers 20:35who have a satisfactory average experience are not likely or will never return. Boom. Wow. Now, 20:46one of the reasons you'll get 70, 70 % of your customers to come back after a satisfied experience. That's basically what it is about three out of four will come back.20:54Is it, they don't have an alternative or it's not as convenient. They'll settle because they don't 21:00have to drive an extra 15 minutes to get to the competitor. And then when you factor in price, but here is, I think it's worth noting that we asked a follow -up question. If 21:09you've been somewhat satisfied with a company yet not bought from the again, okay. Which is another way of saying it. So have you been somewhat satisfied, 21:18but not bought from them again? The answer was 70 % said, I don't go back.21:24And I think that's very telling. We are now in, you know, to coin a phrase from Joe Pine and Jim Gilmore, we're in the experience economy 21:34where the experience trumps so much. I think the product needs to do what it's supposed to do. It 21:40needs to be somewhat competitively priced because we found that just about half your customers say, 21:46give me a great service experience. I'm not going to care as much about the price. As long as you're somewhat competitive, doesn't make price completely irrelevant. It just makes it.21:54less relevant. And when you start to look at all of that, you realize the experience is extremely important. By the way, in our world with contact centers and CX leaders, 22:02they need to recognize, you know, let's go back to what Jeff Bezos said about Amazon. We shouldn't need a customer support department. We should be that good. The reality is somebody 22:12is going to have a problem. It may not even be our fault. You know, we ship a product out and maybe one of the major carriers doesn't deliver it. Well, that's not our...22:20our fault, but it is our problem that we need to fix. So you realize that even though the best service is no service, because you're going to be that good, 22:29there are going to be issues that customers have. So we need to be available. And when we are, the experience we want them to have when they buy from us needs to be, 22:39we need to create the same experience when they need service from us. And if you want to call it 22:45service, you know, they have a problem, an issue, a complaint, a question even. We don't want to frustrate them. Love that. You have highlighted that satisfactory isn't 22:54sufficient for customer retention. How should businesses redefine their metrics for customer 23:00satisfaction to better predict loyalty and repeat business? So I wrote a book 23:05called I'll Be Back, how to get customers to come back again and again. By the way, I'll Be Back has nothing to do with the Terminator and Arnold Schwarzenegger. However,23:14I did realize about three sentences into my outline that he made that line famous, which is why it was in my head. But how does that apply to business? And the 23:22reason I wrote that book is I'm fixated on numbers. I love numbers. I geek out 23:28over numbers. I like NPS is a great survey tool, general CSAT questions, anything that 23:35if I can get a number that gives me a pretty good snapshot of what's going on, that's great.23:40And I was working with a company who said, you know, we believe that's extremely important, 23:45but we also take a look at something else. And that is the cadence of the 23:51customer. So give you an example. And one of my clients is a hair salon company. They have, 23:58I was speaking to this audience of over a thousand managers of hair salons. And 24:03imagine they hired the bald guy to speak to managers of hair salons.24:08And one of the things that they look at is they want to know if you're happy with your haircut. They want to know if you're happy with your stylist. They want to know if the 24:14experience was great. But here's what else they want to know. When did you plan to come back? Because let's say you're like the average person. We'll just use a general, 24:22let's say this customer comes back once a month for a haircut. They're going to measure this customer's cadence. And by the way, with computers and AI and the 24:31ability to look at data, this is real easy to do. Measure the cadence of that customer.24:38They come back once a month and after four months, they don't come back the fifth month. Hmm, what happened? Then the sixth month, 24:46they didn't come back sixth month. You know what? We need to find out what's going on or we need to give them incentive to come back. So it's so important to measure the behavior of the customer, 24:58not just the sentiment of their experience. Yeah, I know. I love that focus on the 25:03behavior of the customer because you can see some really kind of interesting trends. even in our own kind of business, we were looking at trends in terms of customer behavior. 25:12And it's very telling if a customer begins to disengage with you from a surface point of view, it can lead to kind of, it can lead to churn, right? That's a number you need to pay very close 25:22attention to. But it's kind of counterintuitive in some ways because in many businesses, to go back to Jeff Bezio's point, like no service is the best service. So sometimes you're actually 25:31trying to ensure that your customer is getting to use your product and service really easily.25:36They don't have a need to contact you, yet if they're not finding a need to contact you, that can be a kind of a telltale sign, a metric that law infuses at risk. Well, 25:47that's only because you don't know if they're happy or not. The fact that if they don't have to contact you ever, why would a customer take a chance? You're going to lose some people, 25:58no doubt about it, but why would a customer take a chance on doing business with a company that ...26:04is competing against the company you never have a problem with. But to your point, 26:09you don't know that as a customer experience leader, I do not contact. Well, you don't know that related to the contact center or the support that you provide. You should know 26:20it based on data you get from feedback and surveys that you send. Absolutely. But again, 26:26even that is a kind of a form of contact, like the customer is engaging with you if they're going to give you that survey. But the challenge is if they don't engage with you at all.26:33You know, it's the unknown. That's kind of the challenge sometimes in support. You know, 26:40you have this, you know, he thought, I want to make life easier for customers. They shouldn't have to support me. But then if they're not contacting you, are they happy? Are they not 26:48happy? It's an age old problem in customer service and customer support. Well, I mean, if you're a 26:54manufacturer that sells it through retail and you are really dependent upon your customer,27:03is buying from a retailer, not from you, there's a gap there. So how do you do this? Will you engage with the retailer to talk about the products that they're 27:13selling in the end? Ultimately, you'll find ways to get information about that customer, 27:19but most customers, if they're direct to consumer or you're in the B2B world, you're selling directly to them. And if you're the actual retailer,27:28Who is, I mean, there's no reason why you can't get the feedback that you want. You have to find a different way to get it. If you're not dealing directly, you know, 27:35when you deal with a distribution system, oftentimes the distributor, by the way, your sales will give you an indication. You can have focus groups with typical customers, regardless 27:46of whether you're direct selling to them or not. I mean, this is what companies do. I think to not do something like that, to not find out what your customers think about you and assume, you know,27:58is a mistake. You can be seeing growth going up and up and up and up, but what if the growth is 28:03you're gaining 20%, but you're really gaining 40%, you're just losing 20 % of your existing 28:11customers. You need to look at all the numbers and not just the top line. Absolutely. And the 28:17good news is when you get that data now with AI, you can analyze it in a much more fruitful 28:22manner for your business. You can really get the insights that help you make the right decisions. for your customers or your business. And if you use chat GPT, by the way, you can get all kinds 28:31of incredibly clever graphs and visuals, which once again, I'm geeking out over it. 28:39Absolutely. It enables you to look at data in so many different ways. You touched on in the report, 28:45like 81 % of customers preferred personalized experiences. What are some of the innovative ways 28:51that you've seen that companies are successfully implementing personalization at scale?28:57Yeah. So that word at scale means you're not personalizing individually, which I call micro 29:03personalization or micro data that you get on a customer. And that would be, for example, 29:09the customer that walks into a hotel and as soon as they pull up the reservation, the person behind 29:15the front desk says, welcome back. I see you were here three months ago. By the way, you gave us a 29:20really nice review. Would you like that same room? You know, that's micro. Okay. That's not at scale.29:27But by the way, your system allows you to do that at scale for every customer, given the opportunity to do so. Let's talk about something much broader than that. You 29:36may remember there was something called, well, it's personalization, personas, 29:43and typical companies had several different personas of customers. This is just simply 29:49a way of describing a type of customer that fits into, let's call it a bucket.29:55And maybe a company has four or five different types of customers or personas. And you can look 30:01at these buckets of customers and you can treat them a certain way, market to them a certain way, 30:07respond to them, reach out to them, interact with them, however, and they're going to be a little bit different. And that's why you personalize to the buckets. Now, what's cool 30:17about this is that you're sending information to people or treating them a certain way.30:24based on what they've been buying from you. I'm going to go really generic on you. Nike is one of my favorite companies to talk about. They've got a great 30:32loyalty program and they know when you join the loyalty program, they take a look at the kind of shoes that you buy. Do you buy shoes to run in? Do you buy shoes to play golf in? 30:43There's all kinds of different shoes. And if you're buying golf shoes, they're going to send you information on golf shoes. They're going to talk to you and provide good content around golf.30:53They're not going to send you information about tennis shoes for the tennis court 30:59or running shoes. They know what you want. And so as a result, you feel they know me, 31:05they personalized the experience. And when I contact them, they kind of have a good idea of who I am and what I've been buying. And by the way, this is the beautiful thing 31:15about AI today. AI supporting the contact center representative allows information...31:23to come through that contact center employee's brain and come out their mouth in an empathetic, 31:29sympathetic, customized way to that customer. So they don't, they get to focus on the EQ, 31:36not just answering questions and that emotional experience the customer gets feels like these 31:41people know me, they talk to me the way I like to be talked to. They understand everything and 31:47that's what the differences between today and yesterday's way of doing business. By the way,31:52There's still personas out there. It's just, we're really able to, you know, break it down even to more categories than we have in the past. I love that the, you know, 32:02the concept of the micro personalization and the persona personalization, all of us mixing the two. As we look to the future customer experience, what emerging trends do you believe businesses should 32:11be preparing for right now to stay ahead of the curve? Well, let's just go back to what we started with at the very beginning of our conversation. Customers are smarter than ever before.32:21So recognize that, and here's where it gets a little scary. Do we want to invest in this new 32:28technology because is it expensive? Do we want to take a chance? Well, you don't need to be the 32:33earliest adopter, but you need to take a look at what's going on, not just in your industry, 32:38but outside of your industry. Because somebody outside your industry may be adopting a new technology, new technique, new way of doing business that will 100 % work for you.32:49Just none of your competitors have figured that out yet. Okay. So I can't tell you exactly what's coming down the pipe for all industries are out there, 32:58but I want them to consider this. And in that book, I'll be back. We have the six, these questions that we ask, like why would someone do business for me? I call it the six 33:07steps to creating the I'll be back customer. And we want to know why do they do business with us? 33:13Why did they do business with the competitor? What is the competitor doing that we could be doing? And now this next question is really important. Number four is, 33:21what is it outside of our industry or not what is it, who the companies, what companies outside of 33:27our industry do we love doing business with and why? Okay. And everything counts. And 33:34then the follow -up question of that, which is number five is, if there's what they're doing, 33:39is there anything they're doing that could work for us? Because now we're looking at... We're not looking at just our industry and just the category that we're in. We're looking at 33:48everything else. And it's amazing what we can come up with that, you know, we might be in the retail, 33:55you know, music business. You can see my guitars in the background, but I'm talking and I'm doing business with an automotive network. I don't know, man, 34:04that is a great idea. We should incorporate that into the music store. Anyway, I kind of digress on that, but that's what I want people to be looking at is what...34:13companies outside of the industry are doing things that you love, the follow -up question of that is, 34:20and what of those things can we use for us? If you want to know the sixth question by the book, 34:26no, I'm just kidding. The sixth question is, is if you implement what you've studied between 34:32your competition and other companies outside of your industry, if you started to implement this, you go back to the very first question. Now, why would customers want to buy from us?34:43I love that example. And also AI, absolutely an emerging trend. But the one thing I kind of say to 34:50businesses, it's not AI for AI's sake. Think about the business problem you're choosing to deploy 34:55that technology for. Really focus on that. And also to your point, also aligned with that, think 35:02about the art of the possible with AI. Look to see how other people are using the creative way. And 35:07that then kind of generates ideas for you and your business. And it's come down in price. I mean,35:13Even the smallest companies can afford what big companies could spend millions of dollars 35:19on 10 years ago. Today, it's hundreds of dollars. It's amazing. You still need to have some savvy, 35:25but if you want a basic AI type of solution, you can get great AI solutions for very, 35:31very low money. Even the smallest of businesses can. Absolutely. It's available to everyone at 35:36this stage, which is the great thing and one of the key benefits of generative AI.35:42Shep, we want to thank you for joining us today. Like you, as always, have brought us some really good insights into the industry and the trends 35:49and what's happening. It's always great to chat with you. So really appreciate your time. Well, thank you so much. Great to be back and can't wait for the next time.English
I want you all to come away from the next 10 minutes with a single counterintuitive idea: trade deals aren't really about trade—not in any conventional sense. They're not about tariffs, they're not about quotas, they're not about GDP growth, and they're not even really about jobs. That's how we tend to talk about it—job loss and job gain—and that's what's in the news, and that's what's at the DNC, but that's not what they're really about. Not really.
We'll get to that, but for now, I want to start at the very beginning. The modern era of free trade, as we think of it today, started in about 1944, when all the great lights of liberal economics got together in a little place called Bretton Woods, New Hampshire. At the time, the world was in a pretty dark place. Everyone there remembered World War I, they had lived through the Depression, World War II was still raging across the Atlantic, and at the top of everyone's mind was world peace: how do we create an economy that fosters and necessitates world peace?
That was the entire idea. They seized on the concept of economic interdependence. The idea was that if nation states were dependent on each other for their supply chains, then they couldn't go to war with each other. If Germany needed France for its coal and France needed Germany for its steel, they couldn't go to war. That was the idea behind what became, about four years later, the GATT, the General Agreement on Tariffs and Trade. This document created the world as we know it today. It created globalization, it created outsourcing, and it created the multinational corporation as we think of it. It's hard to imagine a world in which there weren't McDonald's restaurants everywhere or global corporations structured the way they are now. The GATT brought about a period of extraordinary disruption, convulsion, and prosperity. From about 1948, when the GATT was first signed, until the late 1970s, the global GDP grew by about seven percent per year—explosive growth. For a while, people thought that wouldn't end, that we had cracked the code.
Then it began to wane. In the late '70s and early '80s, a new generation of liberal economists got together for what was essentially a second Bretton Woods—the Uruguay Round, which lasted for eight years. The motivation was different. Instead of world peace and economic interdependence, they were driven by the idea of global efficiency: how do we continue to boost the global economy as it has been boosted for the last 30 years? By the 1980s, many tariffs and quotas were already fairly low, so they seized on the concept of non-tariff barriers.
Non-tariff barriers mean it doesn't matter how low a tariff is if, once a product gets inside a country, it has to compete on an uneven playing field. For example, if Jim Beam whiskey enters Japan with no tariff, but then has to compete on the shelf against a Japanese liquor that's subsidized by the Japanese government, there's no real free trade. So, the new focus was stripping away all those extra rules to make the world's economy as efficient as possible. This philosophy governed trade starting in the 1990s. In 1995, we replaced the GATT with the World Trade Organization. Around that time—both before and after—we saw the creation of enormously powerful trade agreements like NAFTA and CAFTA, along with literally thousands of bilateral investment treaties. All were governed by the same philosophy: reduce non-tariff barriers.
How do you get nation states to sign on to the idea that their domestic industrial policies, laws, and regulations need to align with this global sense of efficiency? This was a radical shift from what the classical economists like David Ricardo and Adam Smith meant by "trade." Suddenly, trade negotiations were about environmental laws, pharmaceutical data exclusivity, and issues that were never part of the original discussion about tariffs and quotas.
One major fight since the late '90s has been between Europeans and Americans. The Americans want to export genetically modified beef to Europe, and the Europeans, for cultural and social reasons, don't want GMO beef. So there's a conflict between local rule and national sovereignty versus global efficiency and uniform standards. That's a much more interesting discussion than simply whether trade is good or bad. It brings up questions about local preferences, sovereignty, and how environmental regulations or public health concerns can be overridden under certain circumstances.
Another example happened this year in the U.S. If you label your tuna "dolphin-free," you have to use methods that actually exclude dolphins. The Mexican government argued this discriminates against Mexican fishermen, who fish in dolphin-heavy waters with methods that don't exclude dolphins. The WTO agreed. So again, we're dealing with the tension between global efficiency and preserving laws not based on pure efficiency, such as protecting the environment or public health.
That brings us to today. You may have noticed the current conversation about trade is very confusing. We have both presidential candidates, who say they're in favor of free trade, yet they're against the Trans-Pacific Partnership. Organizations like the AARP, the Sierra Club, and Doctors Without Borders oppose elements of it. People say you're either for free trade or against it, for globalization or against it, and ask what kind of world you want to live in. But we're not really talking about trade. We're talking about rules—global rules and global standards—and as soon as you understand that, it starts to make much more sense.
I want to leave you with that idea: we created the world we live in now. Our forefathers got together at Bretton Woods and created this global economy, and we remade it in the late '80s and '90s with the WTO. The rules we pass and embrace are the rules that shape our world. So let's think about that when we talk about trade. Let's think about what rules we want to embrace and what purposes we want those rules to serve. Do we want global efficiency to be our paradigm, or do we want global prosperity for normal people—farmers, ranchers, and everyday citizens? The rules we pass are the rules of the game. When we talk about trade, we're talking about rules.
Thank you so much.
(Applause)
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