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What is the Frank And Oak secret for adapting to changing customer preferences?

Robert Zirk: Picture this: you've just downloaded an app. It's sleek. it's user-friendly. And when you have a question, you can't find the answer to, you enter a chat and get a prompt, friendly response. It'd come as no surprise if you learned this app was the product of a Fortune 500 giant, backed by a big budget, an entire team of developers, and months, if not years, of ongoing development and testing.

But what if this app was the product of a small start-up with fewer resources, fueled only by code, coffee and a vision?

It's not far-fetched. Some start-ups have figured out ways to deliver a customer experience that's on par with the standard of their much larger competitors. And that's important, because according to a Dimension Research survey, 58% of customers expect even better customer service from small businesses.

And that same survey indicates that they're living up to those expectations.

Smaller companies outperform larger companies with ratings more than twice as high in categories like response speed, the time it takes to resolve inquiries, and enjoying the interaction with staff.

All things considered, start-ups and smaller companies need to do more with less, while achieving standards set by big brands. And as for industry giants, there's an opportunity for them to apply the same level of agility and innovation that we see in smaller companies.

So today on Questions for now, we'll ask: How can start-ups achieve the same world-class customer experience as a Fortune 500 company?

Welcome to Questions for now, a podcast from TELUS International where we ask today's big questions in digital customer experience. I'm Robert Zirk.

Before we get into the process, let's first establish what we mean by "world-class customer experience."

According to Brian Hannon, global head of customer experience innovation at TELUS International, the companies who excel at customer experience have a deep understanding of how their customers are engaging with their business.

Brian Hannon: The really world-class ones are the ones that consider the different steps the customer needs to work through and to try and make those steps as seamless and simple and as effective as possible, and to make the person, if possible, have a really positive emotional outcome from engaging with the organization as well.

Robert Zirk: An omnichannel customer experience strategy is a key component of this, providing customers with the opportunity to interact however, whenever and wherever they want, all while creating a more consistent, low effort digital customer experience.

Omnichannel experiences aren't a nice to have. They're an expectation - for three quarters of consumers, according to Salesforce. Likewise, a report from market research firm Aberdeen Group notes companies that have strong omnichannel strategies retain 89% of their customers. But among companies with weak omni-channel strategies, that retention rate plummets to 33%.

For an omnichannel strategy to work, you need to ensure that your customer preferences and needs can follow from one channel to the next. That connectivity of channels will also give you valuable data and insights into your customers. Insights that are imperative to maintain a competitive edge in today's competitive landscape, according to Alroy Almeida. He's a director at Velocity, one of Canada's leading start-up incubators, and he also co-founded his own start-up, serving as its CEO for nearly a decade.

Alroy Almeida: The way to stand out is to get more focused. It's to get more segmented and provide a highly catered experience to a smaller group of people. And that's actually really easy to do digitally because as soon as you find out something about a customer, you can make minor tweaks to the product in order to have it cater to different groups of people.

Robert Zirk: Think of a software as a service company that takes a close look at their customers, what their needs are, and how those differ. A company might go as far as spinning off different product offerings tailored to these different types of customers.

The groundwork you set with segmentation will also help with personalization, which 43% of consumers surveyed by TELUS International indicated they want to see more of in their customer experiences. Personalization means using data and insights to tailor interactions to meet your customer's needs.

But for any of these tactics to succeed, you can't forget your customers are humans. You need to be human and you need to bring humanity to one-to-one interactions.

Alroy Almeida: It wouldn't be crazy for your accountant to know your name and you to know theirs, or a hotel or an airline to treat you differently based on the amount of business you've given them in the past. That's harder to do. It's harder to build that level of trust digitally. But the best brands find ways to make that happen and find ways to show who they are - not just their faces but their values as well.

Robert Zirk: And personalization can mean different things in different industries. Brian says it's important to consider how the customer's interests vary based on the type of business they interact with, using the examples of an internet service provider and a hotel.

Brian Hannon: Both may have digital experiences to engage with the organization, but one may be only engaged with when there's an issue with billing or the extremely rare situation of, perhaps, broadband going down. So it's a negative perception related to the experience, which only arises in those negative circumstances. Whereas a hotel experience, everything from the minute you walk through the door is part of that experience and everything that you're going through for the period of time, whether it's 16 hours, 24 hours, in that location is dependent on a really coherent plan of how to make your life easier.

Even within a particular brand, you may have multiple different types of customers, so understanding what that customer is in the first instance and what may be important to them. Using the hotel analogy again, someone who is arriving into a hotel with kids, for example, requires a completely different experience to a business person.

Robert Zirk: Alroy cited a parallel in how the top two mobile operating systems, iOS and Android, have each embraced the needs of different customer segments.

Alroy Almeida: Both of them highly accessible, but Apple took that dial and turned it up to 11, right? Their whole ethos is "Let's make this as simple and as inviting as possible." They did that because they understood who they wanted to cater to, and Android actually did the same thing. And they said there's a large group of people that want more personalization, that want their operating system to be more relevant to them. And they built in all sorts of ways to and modify things on the Android side. So, as a customer, you've got multiple options and you can go to where the product best suits your needs.

Robert Zirk: And Brian cited how Amazon's focus on customer preferences led to innovations in e-commerce like...

Brian Hannon: The introduction of the Prime delivery in particular, and then one-click purchasing, at the time they were introduced, really changed the whole e-commerce landscape for such a range of goods that historically wouldn't have been bought online at all.

Robert Zirk: These are all great examples of how some of the biggest brands have made their mark on customer experience. But you don't have to be the size of Apple, Google or Amazon to provide a customer experience that's world-class. A start-up's smaller size, agility and focus on growth can provide opportunities to make the customer experience more personalized and customer- centric, as Alroy explains.

Alroy Almeida: Large businesses are trying to deliver a consistent customer experience to millions, hundreds of millions, of people. In the early days of a start-up, your customer base is a fraction of that, so you can really invest in building that human connection with more people. You can really focus on being more relevant to a smaller group of people. And this is something we coach our founders here at Velocity to do, to be obsessive about the customer, especially when they don't have a product in market yet.

Robert Zirk: Alroy notes that the number one reason start-ups fail is because the market doesn't want what they're offering. So by understanding your customer, along with their needs and preferences, not only can you avoid costly mistakes, but you can set the groundwork for a world-class customer experience.

Alroy Almeida: We tell our founders to talk to more people, talk to more people, talk to more people, because it's going to result in a higher quality of experience and it's gonna result in a higher quality of business, something that's more relevant. It also has longer term effects as well.

Robert Zirk: He shared an anecdote from the start-up he co-founded, Voltera, which makes rapid prototyping platforms for printed electronics.

Alroy Almeida: In my previous business, we positioned ourselves as the welcoming committee for a very inaccessible industry, and everybody that was new to the industry - which was our target customer - well, we were able to build a massive brand with them and a lot of trust because we took that value of accessibility and welcoming to that degree.

Robert Zirk: As Brian mentions, the most successful start-ups are the ones that find a way to solve problems for customers in ways that are better than the alternatives.

Brian Hannon: There'll be a certain consumer cohort that will adopt that particular technology or app or whatever it may be at the start that drives the scaling of the organization. And so it's not necessarily just a push from the organization, it's a pull from the consumer.

Robert Zirk: A pull that leads to more adaptation of their business, product or service to fit customer needs, using technology to find ways to simplify and streamline.

Brian Hannon: The tech stack that the start-up will have is likely to be fresher any business that was developed even in the last 10 years. So by having the freshest tech stack, they're gonna have a better technology and that creates the optimum digital experience from day one. And then it's about evolving through how can they scale it, how can they future proof it, how can they build them out to keep competitors at bay and how do they stay on top of solving the customer's problem rather than being replaced by someone else?

Robert Zirk: And while technology is a critical element of the modern customer experience, it's important that a human connection doesn't fall to the wayside relative to other business priorities. Nearly half of all respondents in a TELUS International survey said that if they could only get customer support in one way for the rest of their lives, they would choose to speak with a human on the phone.

That human element is always going to be necessary to a certain degree. And while Alroy recognizes the challenges growing start-ups face in delivering a high-quality customer experience, he emphasized that leveraging technology can help scale a human-centered approach.

Alroy Almeida: It does take a lot of time, and that's where using technology to help you to augment what you're doing can be so valuable. Like, human interaction is one of the least scalable things. Software, for most intents and purposes, is infinitely scalable. So while you might not be able to go meet with every single customer - video calling has obviously done a lot to help there, but you can use tools to record yourselves and not just send a generic email, but you're responding directly to them. You're showing your face, you're showing your personality .

Robert Zirk: Incorporating chatbots and self-service options into a holistic CX strategy to address human needs can help ensure agents have greater capacity to provide empathetic support and solve complex inquiries. A Salesforce survey of senior IT leaders reports that 84% believe generative AI will help their organization provide better service for their customers. Brian highlighted how these technologies can help provide better self-serve options for companies while improving resources.

Brian Hannon: Allowing the customer to self-manage their experience is obviously lower cost than not being self-managed. And so setting up to have the right access to information, the right access to tools that can help guide for information, whether that's positive chatbots that are functional and work effectively can be very positive as well.

But I think the judgment on what are the right technologies that will work for that company is an important one. So it's not just any chatbot, it's gotta be a chatbot that solves the problems effectively and that there's a safeguard against the chatbot not working as well.

Robert Zirk: And Alroy sees the potential for AI and chatbots to further scale human interaction.

Alroy Almeida: That's why I think so many businesses are also so excited about artificial intelligence and some of these chatbots that are coming out, because if a bot can pass the Turing test...

Robert Zirk: ...An assessment of whether a machine's language and behavior can convincingly pass for that of a human...

Alroy Almeida: ...you've now made human interaction, at least through that medium, also infinitely scalable. And that's why we're seeing so much activity there right now.

Robert Zirk: Brian highlighted the willingness of start-ups to innovate and take calculated risks.

And one emerging technology that WillowTree, a TELUS International company, is helping businesses implement is multimodal voice interactions with customers. He shared an example cited by WillowTree's President, Tobias Dengel:

Brian Hannon: Someone could use a voice message to actually order something such as a pizza. So you could quite quickly order your pizza in a matter of a couple of seconds, whereas it'll probably take a bit of time if that was to come back in an audio message. But instead, the proposition would be that you'd see a visualization within an app or on a screen of the order, which is just clicked with a confirm button to immediately close out the transaction. That can reduce a pizza ordering time from 40 seconds to eight seconds. So essentially reducing the time to do the transaction to 20% of the current time. And that's typically the mindset that we would see on an everyday basis within start-ups. They're just continuously making the transaction with the customer as simple as possible in the interest of the customer.

Robert Zirk: Mapping emerging technologies to the customer journey is only one part of the equation of delivering an exceptional customer experience. Trust and safety is another important factor to consider.

Brian Hannon: Working through then the journey that the customer has with the business then will highlight the points where there's gonna be the highest interaction need. And some of that can be resolved through a hundred percent digital means. And then in other instances, you're gonna have to have interactions with people.

Robert Zirk: Brian mentioned Airbnb as an example. It's a service that exists at the intersection of digital and human interaction. Just about everything a customer would need to do during the booking and pre-arrival phase is going to be done digitally, within the app, or via chat or email. But once the customer arrives at the place they've booked, the in-person experience now needs to work smoothly in tandem with the digital experience.

Brian Hannon: If you arrive at a building and you don't know how to get in and it's dark and it's 10:00 PM, that's a pretty urgent thing to resolve, right? Like you really need to be able to get access to someone quickly or the solution quickly. Even five minutes waiting around at that time is a bit nerve-racking in neighborhoods that you're not familiar with.

So really thinking about those interactions, thinking about what's gonna have the biggest impact on the customer, like an experience at that point where there's most emotion involved. If you solve that quickly, it really gets the customer to think very positively about the relationship with the brand. If it's not solved quickly, then the relationship with the brand will deteriorate quite quickly and it's really hard to win back that experience.

Robert Zirk: This underscores how important it is to continually iterate your processes, keeping up with advances in UX and UI, as well as changes in consumer behavior.

Brian Hannon: I think I saw recently like a pretty significant unicorn organization that had just gone back to the basics on reviewing their own blueprint of how the service operates to consider is this where they'd originally planned to be? And even though they're a multi-billion dollar company, now considering how do they get back to the basics again? So I don't think the process ever ends, nor does the technology that's involved in the digital experience.

Robert Zirk: Knowing your customer and mapping their customer journey means gaining insights that go beyond demographics, as Alroy notes.

Alroy Almeida: If you know where they shop, that's potential partners or distribution channels. If you know their favorite color or the fact that they own a dog, now you can cater your design and your messaging to better suit them.

Robert Zirk: And that extends to the way that customers interact with your business as well.

Alroy Almeida: We encourage founders to try to find out everything. And you can't just do that by bombarding them with surveys all the time.

Alroy Almeida: You need to spend time with them. You need to go to conferences and trade shows and be immersed in their world. And these

are really good ways of building a sort of empathy and a deeper understanding with your ideal customer.

Robert Zirk: But Alroy cautions that it's impossible for start-ups to be everything to everyone. As they gain insight on customer preferences, they need to figure out where the opportunities to scale have their limitations.

Alroy Almeida: It comes down to segmentation, segmentation, segmentation. This is something we coach our founders on here at Velocity so much because if 80% of your revenue is coming from 20% of your customers, don't waste your resources on businesses that aren't gonna go anywhere.

Alroy Almeida: It's often so hard for founders to acknowledge that lesson because they're like, "Somebody's giving me money. Of course I need to focus there." But it doesn't lead to good unit economics, which ultimately doesn't lead to a scalable organization. And more often than not, you end up just burning all of your money trying to be everything to everyone, like we were talking about earlier, instead of delivering a highly catered experience, a highly relevant experience, to a smaller group of people.

Robert Zirk: Brian and Alroy mentioned focus groups, Google Trends, and revenue intelligence platforms as potential tactics to gain a deeper understanding of your core customer base. But one of the very best tactics, one that Alroy did with his own start-up, and has since seen top founders do at Velocity, is...

Alroy Almeida: Put a whole bunch of elbow grease into the problem. Prior to our launch, we looked at every single competitor in our space, whether direct or indirect, and we analyzed every comment, every tweet, every blog that somebody, some potential customer said about this business. And we were able to dissect all of the things that they looked upon favorably, everything that they looked upon unfavorably. We probably knew more about what their customers thought about their products than they did. And we were able to use that to craft our messaging, to craft our strategy in a way to directly address the concerns that potential customers have.

Robert Zirk: So while sometimes getting customer perspectives can be as easy as sending out a survey, the most pertinent insights might already be out there, waiting for you to be proactive and find them.

Alroy Almeida: When you layer in these sorts of activities with the segmentation work that you've done, when you layer in Net Promoter Score, for example, with segmentation, now you're matching those insights with particular segments, which is extremely powerful in giving you the ability to know where to focus and know where to deliver the highest quality of customer experience.

Robert Zirk: And when it comes to building a customer-centric culture within start-ups...

Alroy Almeida: It starts with the founders, and this is where start-ups have an advantage over larger businesses 'cause there are just fewer levels between everybody at the company. But the energy and the focus that founders bring to the organization becomes just how things are, right? If they are customer obsessed, that will grow through the rest of the organization.

Robert Zirk: When customer experience is prioritized throughout the organization, it provides opportunities for your team to actively contribute to the iterative cycle.

Alroy Almeida: Something that we used to do is we would make customer feedback, both positive and negative from sales and customer support, a big part of our company town halls because that allowed everybody to get a pulse on what customers were saying, how they were feeling, what we needed to do to better support them, to better cater to their needs.

Robert Zirk: And Alroy encourages founders to build connections between your entire team and your customers, ensuring that customer focus doesn't exist only in a sales and marketing silo.

Alroy Almeida: When you put the engineering staff in front of a potential customer, it builds so much empathy and it builds so much understanding of what the needs and desires of the customers actually are. It is so much more effective at generating focus within the organization and that customer obsessive culture than mandating it from on high.

Robert Zirk: One advantage established brands have over start-ups is customer loyalty, backed by a history of positive interactions. If you're a start-up without a track record, how do you begin to cultivate your own brand loyalty?

Brian acknowledges that it's an uphill battle to build that level of affinity, but that the first leg of the journey involves ensuring the stability and consistency of interactions.

Going back to the Airbnb example, this could mean trying to keep interactions in-app as much as possible and ensuring that hosts and company employees communicate with consistent messaging and tone. This brings us back to the importance of empathy and humanity in your customer experience.

Brian Hannon: With all sorts of experiences we all have with any sort of a brand, it's how do you deal with a challenge when things go wrong? While a chatbot or an automated tool may be really good at getting content that someone can self-serve with, sometimes there's a quite complex interaction of multiple different things that a human may be needed to help someone guide through the experience and even to deal with quite emotional situations. And so making sure that people can get access to the right type of an interaction at the right time is really important as well.

Robert Zirk: When it comes to making sure you're delivering exceptional customer experiences across channels and really using CX as a way to differentiate your business, it's important to consider goals and measurement. A Forrester survey highlights that NPS and CSAT are the most common CX metrics.

Brian Hannon: CSAT or customer satisfaction is a rating of a specific transaction between one and five to gauge how satisfied customers are in general with a service or a transaction.

Net Promoter Score is more of a longer term view. It considers the likelihood of someone to recommend the product or service to a friend or family member, and that then gives a view like, typically a person will only recommend something if they trust it, believe it's reliable and believe it's worthwhile recommending.

And so that has a bit of an economic value to it as well because it likely refers to future self-marketing if it's successful.

Robert Zirk: Alroy noted that companies with a strong NPS effectively accelerate their growth by leveraging the relationships of their customers.

Alroy Almeida: The question for NPS of "Would you recommend this to a friend?" is so powerful because it sets such a high bar for what somebody would be willing to do to promote your brand, right? You're playing off of their reputation and the trust that they have with their community.

The only way to set that bar even higher would be to tweak the question to say, "Would you spontaneously go out of your way to recommend this to someone?" And it's highly valuable for companies and especially start-ups to ask for recommendations and to check in on their Net Promoter Score because there have been studies that prove that companies with high Net Promoter Scores are highly correlated with companies with high growth rates, and that's so important as you're starting a business.

Robert Zirk: And Brian pointed out that, given the competitive economic climate of the past couple of years, CSAT and NPS are now commonly tracked by various companies at the C-suite level.

Brian Hannon: I know of a number of organizations who are using these to manage the bonuses of the C-level teams, as well as DSAT, which is dissatisfaction, as a measure - the opposite of CSAT, the customer satisfaction. And so, if there are negative impacts on those particular KPIs, we are seeing a lot more engagement from the CEO to say "What's happening today that caused that particular impact on the experience?"

Robert Zirk: I asked Alroy, as someone who has been on both sides of the start-up spectrum, for one piece of advice he'd give to budding entrepreneurs.

Alroy Almeida: Build fans for your business, fans for you, people that will support you. It's such a lonely road to start a business and having that supporter base goes a long way in helping your company be successful, whether through introductions, recommendations or just those insights that you need in order to make sure that you're on the right path.

Because not everybody's willing to take a flyer on a business they haven't heard about before, so you need to be able to show "Yeah, we've got people using our product, people using our service, and they are in love with it, and they're in love with it because it provides them value, but they're also in love with it because there's a strong affinity between them and us because of the relationship and the experience that we've provided."

Robert Zirk: And according to Brian, the very best companies - whether they're start-ups, mature companies, or somewhere in between - learn from one another and their differences in approach.

Brian Hannon: Those companies that are most curious about what's going on with their competitors, other industries, their customers, their potential customers, and are better at receiving that information in and adapting to that environment through a methodical way are gonna be more successful in the future.

It's a hyperdynamic world we live in now, from a business perspective, and it's really important to stay on top of where customers are going and spending their money. And so every business, I think, is looking at that more clearly. With the help of organizations like WillowTree and TELUS International, we've seen dramatic changes in mature and early stage companies that have helped them improve their engagement with their customers, their growth model with customers, their revenue generation with customers. And we continue to see that as being the way it'll be for the future in multiple different ways.

Robert Zirk: Thank you so much to Alroy Almeida and Brian Hannon for joining me and sharing their insights today. And thank you for listening to Questions for now, a TELUS International podcast. For more, be sure to follow on your podcast player of choice. And until next time, that's all... for now.

On this episode, we discuss how start-ups can deliver exceptional customer experience with limited resources — and how businesses of all sizes can use these tactics to thrive in a competitive environment.

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Since publishing this episode, we've rebranded to TELUS Digital.

On this episode, we discuss how start-ups can deliver exceptional customer experience (CX) with limited resources — and how businesses of all sizes can use these tactics to thrive in a competitive environment.

To succeed in the marketplace, start-ups need to provide CX that's seamless, simple and positive. Join us as we discuss how the most successful businesses leverage technology to prioritize empathy and humanity in interactions, all while gaining a deeper understanding of their customers.

Listen for the actionable insights of Alroy Almeida, director of deep tech at Velocity, one of Canada's leading start-up incubators, and Brian Hannon, chief growth officer at TELUS Digital.

How can start-ups achieve the same world-class customer experience as a Fortune 500 company?

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