Massive discontinuities and resultant chaos like the dot com bubble or the global financial crisis have always led to the creation and/or scale of phenomenal companies.
Over the years, I have invested across consumer and enterprise companies. To the extent possible, I approach an investment from a standpoint of a customer and get excited if I see a solution that addresses a real pain point and exceeds expectations. Across the spectrum, I continue to be surprised by unpleasant experiences when trying to get answers to my queries – whether it’s by getting the run around from one IVR option to another, sending an email/message that never gets a response, not being able to speak with an individual when there is a somewhat complex question or worse, having the system simply hang up on me with a frustrating “good-bye”.
Just in the past month, I have had multiple instances that drove me to want to switch vendors, were it not for somewhat high switching costs or longer-term contracts that I was stuck in. Let me provide some deeper context by diving a bit into these situations:
Episode #1: I had an existing relationship with a well-known bank where a refinance process took almost six months to complete (while that might have been the case with a new bank, the reality was that this was an institution with whom I had an existing mortgages and bank accounts). In other words, they had deep data on my financials as well as longevity as a customer, none of which seemed to have mattered during the grueling and frustrating refinancing process.
Episode #2: Another was an internet provider with whom I was upgrading to a higher bandwidth service, thanks to the new remote work/education environment. The company basically had me bring back my existing router to the store before I could be issued a new one (thereby causing me to disconnect internet at home for the replacement to occur). And again, this was a company with whom I had been a customer for over a decade.
In both cases, it was a perfect opportunity for the respective service provider to not only address my needs, but to delight me as a long-term customer. That customer-centric approach would not only have put a smile on my face but would have resulted in potentially having me as a highly lucrative customer for life. Instead, the incumbents not only wasted that opportunity, but actually annoyed me to a point where I am very likely switching to their competition.
The point of the above anecdotes is a simple one – customer service is paramount and making the right customer-centric decision at the right time can make or break the financial and reputational outcome for a company – whether a startup or an incumbent. The overall customer service industry is more than $300B annually. It’s not surprising, therefore, that companies large and small are leveraging technology to grab a slice of that juicy pie. Robotic Process Automation (RPA) is one of the initial steps in that context, but as a category, the RPA market is in the low single digit billions today. Customer service is a component of the overall “enterprise automation” category, and we are just scratching the surface when it comes to true enterprise automation.
The concept that the customer is king or queen has never been more true. Perhaps the biggest change is the fact that the customer now has an expectation that technology will deliver the needed response when, where, and how the customer wants it – over voice, email, text, Instagram, snapchat, facebook or even Tik-Tok. Yes, Tik-Tok. There are now Chief Tik Tok Officers! There is a difference in terms of how my mother wants her queries addressed, my wife or I do and definitely as compared to my teenage children. My mom wants to speak with a human, but my teenagers wants to avoid human contact as much as possible and let Alexa, Siri, Cortana or one of their friends answer the queries instead. Enterprises have to adapt, and do so quickly as the pace of technology almost always exceeds the pace of enterprise innovation.
Covid has created massive tailwinds across both consumer and enterprise domains. While the consumer side of things might be more obvious with the surge in e-commerce, digital payments and the like, there are multiple transitions taking place on the enterprise front as well that are worth highlighting. These transitions create opportunities for new innovations, and for new startups to be created.
Recently, I had the chance to be on a panel organized by Ushur, a startup that is a leading AI-enabled customer engagement automation platform focused on the BFSI vertical. In plain English, Ushur leverages AI to make multi-channel interactions between customers and Insurance companies automated, resolving customer queries, automating processes and leading to ultimate goal of customer delight.
The panel conversation was about the arc of innovation in enterprise automation, what RPA means and where we are in the overall evolution of process automation within the enterprise. The conversation happened on the back of the UIPath IPO so, of course, there was conversation about the hype around RPA as a category and also about a potential valuation bubble in the market. The discussion made me think of several key components of the entire RPA movement but specifically from the standpoint of the customer-facing front office, how far we have come and more importantly, how much further we still have to go for enterprises to truly become customer-centric.
– RPA today is still focused on very simple repetitive tasks but there is a transition happening towards truly intelligent enterprise automation with complex tasks that are tapping into disparate data repositories
– RPA is primarily designed for desktop-centric implementations while next-generation automation will be cloud-centric or cloud-native
– There is the transition from “data” to “insights” and real actionable intelligence (I call it the transition from “what” to the “so what”).
– Transition from structured (tables, databases) to semi-structured and unstructured data (emails, texts, voice/Natural Language)
– One way (in-bound) to full-duplex information flow (true omnichannel communication over text, voice, email etc.)
– Vertical specific approaches (financial, insurance, health, manufacturing, etc.) rather than a “one size fits all” horizontal approach
– Movement from the mid of back-office (administrative, financial roles) to the front office and customer-facing applications.
In my humble opinion, no aspect of an intelligent enterprise is more crucial than one that automates the customer’s journey – from acquisition to resolution/delight to long-term retention. There are a couple of frameworks and metaphors that I always mention to entrepreneurs that I meet and definitely ones I invest in:
– LTV/CAC Upside surprise – here is a novel concept. Wouldn’t it be great if my service provider was always looking out for my interest and informed me if I was paying too much and not taking advantage of a better bundle or promotion. I understand that part of a company’s business model is based on the concept of “breakage” or to have a customer enable “auto pay” and simply forget about having a subscription in the future. But to gain my trust, I would be converted into an ambassador for a company for life that simply indicated to me that I was paying for a service that I wasn’t using (paying for an international roaming plan during a year of no travel, for example). Or that there was a better promotion that would save me money. There are companies in the US that have been launched to provide that service for consumers, but it is something that service providers ought to consider doing on their own. Bottom line: Think about the customer’s Life-Time Value, rather than short-term gain.
– The concept of a TRUSTED CONCIERGE: This is related to the above point around retaining a customer for life. Enterprises need to be thinking of being their customers’ “trusted concierge”. Both words in that phrase are important. Customer relationship is built on the idea of Trust…in that, the provider will deliver the product or service that meets or exceeds the customer’s expectation. The word “concierge” implies being there for the customer as a knowledgeable guide as to when the need arises. It’s a virtuous cycle from being a concierge to delivering customer delight which, in turn, leads to customer retention. In an industry like Insurance which was the audience for the panel discussion, trust is paramount. The customers are trusting the companies quite literally with their “life and property”, and to make sure that they and their families are taken care of in the event of a loss.
Bottom line: Ray Kurzweil’s comment that “the pace of change itself is accelerating” is more appropriate today than it was a few years ago. The pandemic has accelerated both the mindset and behavior of the consumer as well as the adoption of technology far beyond what was predicted during the pre-Covid days. Enterprises have also embraced digital transformation, in part because of their customers’ pull as well as the realization that they need to be more nimble and responsive, especially during massive inflection points like the one driven by Covid. As a result, customer engagement, customer service, and customer delight have become front and center (some might argue that they have always been). To be able to deliver that delight, enterprises have to adopt technologies that engage with customers on their terms, their timelines, and their channels of communication. That will require both fronts ends, customer-facing technologies (voice, video, chat, text, etc.) as well as data-centric technologies that allow enterprises to stitch together customer data from different silos (transactional, behavioral, PII, etc) to pro-actively and pre-emptively address the customers’ needs. Massive discontinuities and resultant chaos like the dot com bubble or the global financial crisis have always led to the creation and/or scale of phenomenal companies. The 2020/21 Covid years will be no exception. Ten years from now, the technology world will be talking about the covid-beneficiaries, and there will be many of them who will be at the forefront of “the intelligent enterprise”.