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Allbirds Co-Founder Dishes on Direct Customer Relationships

The direct-to-consumer (D2C) model for manufacturers grew rapidly in 2018, with brands like Quip, Dollar Shave Club, and Warby Parker providing easy ways for consumers to purchase online and manage a close relationship with the brands they use.

With the D2C market becoming saturated, products and customer experiences must be exceptional to stand out and succeed. Especially for footwear, where it may seem impossible to win in an industry with corporate giants like Nike and Adidas.

Nevertheless, the U.S. shoe company Allbirds proved naysayers wrong with an eco-friendly and innovative D2C brand now valued at over $1 billion. We recently spoke to Joey Zwillinger, co-founder of Allbirds, to get some insight on what it takes to be one of the most innovative hypergrowth shoe brands and D2C sellers in the market.

Dylan Haviland: How did the company start?

Joey Zwillinger: Allbirds was founded out of a desire to make better things in a better way. My co-founder Tim was playing professional soccer in his native New Zealand, when he came up with the idea to make a simple, comfortable shoe out of wool. Our wives were college dormmates and remain great friends, and after years of Tim thinking about and working on this idea on his own, they suggested we chat.

I come from a renewable materials and engineering background, so together we were able to create a product that wasn’t just well designed and incredibly comfortable, it was actually kinder to the planet. Tim and I are co-CEOs, sharing the role traditionally reserved for a single person; Tim focuses mostly on product and our creative design, and I lead the operations, technology, and material R&D to continue our focus on our sustainable design with novel solutions to historically high-polluting supply chains.

What does it take to be an ‘innovative’ brand in 2019?

JZ: The courage to be bold, and to know that even a small company can make a very big impact on an industry as large as shoes ($80 billion+ in the U.S. alone). Product innovation takes time, so companies need to invest early and often—our sugarcane-based foam has been in development for three years! Needless to say, we have a lot of products and materials in the pipeline for the future, and we are incredibly excited about the experiences we plan to create for our customers.

What makes Allbirds an innovative brand in the D2C footwear industry?

JZ: We think of innovation in two ways. First is the way we interact with our customers, operating exclusively in a direct-to-consumer model with our entire business listening to feedback from consumers and improving our business as a result.

The second and most important aspect of innovation is related to our product. Especially in the footwear industry, innovation has historically meant adding new features, whereas at Allbirds, we try to distill products to their simplest form. This reductive design philosophy, coupled with novel (and sustainable) materials create a differentiated experience that our customers love.

Why do you think companies are increasingly moving toward a D2C model? 

JZ: We can’t speak for the whole industry, but at Allbirds, our customers recognize that instead of paying a retailer to sell our products for us, we put that money right into the quality of every pair of shoes—this means that for a very reasonable price, customers can enjoy the amazing, premium materials that we use to make our products. We also believe that the feedback loop between us and our customers is critical, and the improvements we make to our product as a result resonate with our customers. For example, we’ve made over 35 changes to our original Wool Runner since it initially launched in 2016, almost all based on the concerns and experiences of our customers.

How is Allbirds able to compete in the tough footwear market?

JZ: Tim and I started Allbirds to create a stylish alternative that didn’t have the flashy logos and uncomfortable synthetics of other shoe brands. The response to our products has been beyond anything we could’ve ever imagined, and it shows that there’s a real appetite for simple, comfortable, and sustainable footwear.

Customers are increasingly looking for brands that can relate to their values. How does your brand mission resonate with customers on a personal level?

JZ: As a B Corp, our dedication to sustainability is written into our company charter. Regardless of customer demand, we see environmental conservation as non-negotiable and we prioritize it in each part of our business.

And while consumers are paying more attention to the provenance of what they’re buying, sustainability doesn’t necessarily drive purchase decisions. First and foremost, our customers buy our shoes because they look and feel great. We’re proving that customers don’t have to sacrifice on price or design in order to buy green products.

What steps do you take to ensure that customers will continue to come back to you?

JZ: The best way to make sure that customers return to your brand is to make great products. Though we believe it is critical to have top-notch customer support and social media teams so customers know where to go when they have a question, there’s no replacement for good design and execution.

What are the biggest challenges you see in the D2C space?

JZ: We don’t think that a direct-to-consumer model alone is sufficient to create a lasting brand. This is a wonderful way to sell products given the advances of technology, but without incredible product, the selling approach is not enough. And inventing really great, differentiated products is hard. It’s this challenge that we work on tirelessly every day.

A Unique Way to Engage Your Employees

Business person raising foam finger form cubicle

Recently I did a workshop for employees at Southern AgCredit, a financial services organization with a novel method for ensuring that its employees work together in cohesive, highly productive teams.

Joe Hayman, Southern AgCredit’s CEO, contracted with me to create and conduct a workshop to help his employees “feel more like owners” at the company. Southern AgCredit does mostly real-estate lending for rural customers, including full- and part-time farmers, ranchers, and recreational enthusiasts.

As a co-op, Southern AgCredit prides itself on being 100 percent owned by customers, and every year the vast majority of its net profits are distributed directly back to customers in the form of an annual dividend. Operating as a co-op also gives the firm’s employees a cohesive sense of real purpose, because success is based not just on making loans and liquidity available to customers, but doing so in a cost-efficient and productive manner, so that every year the customer dividend would be impactful. 

As part of my initial briefing from Joe, he sent me the results of two recent customer surveys—one involving new borrowers, and one “exit survey” of customers who had paid off their loans during the period. Both surveys showed amazing results. In fact, the numbers were astounding—higher on satisfaction than I had ever witnessed in any organization. For example, of the 217 new borrowers surveyed, in a question on customer satisfaction that used an A to E scale, 214 of them rated their satisfaction as an A, two were a B, one was a C, and no one chose D or E.

In the end, I was able to put together one of the most advanced workshops I’ve ever done on the nuances of creating genuine customer advocates, and focusing on several value-adds that can cement and strengthen a relationship with supportive customers—such as purpose-oriented content (with different content for hunters and farmers) and social-capital-based programs to motivate customers to build the business more effectively through their own efforts.

Rethinking employee incentives

One of the most interesting things I learned had to do with the unique way in which Southern AgCredit encourages its own employees to operate in cohesive, highly cooperative and engaged teams. While most of the company’s annual profit is distributed back to customers in a dividend each year, a portion is distributed to employees as an incentive bonus based on performance.

Unlike most companies, each employee’s bonus isn’t based on individual performance, but on the performance of their team. The bonus pool is established by overall company performance, divided up based on the performance of the team at each office, and then divided among the employees on the team in equal percentages regardless of their title or level of compensation. If, for instance, 40 percent is available for branch “A”, then each employee within the branch would be eligible for a 40 percent incentive.

Every office team works extremely hard to ensure that their office is absolutely as cost-efficient and productive as possible. They’re also careful only to bring on new employees who will make genuine contributions. 

Moreover, because the individual employees on a team aren’t competing with each other for a share of the team’s bonus pool, Southern AgCredit’s employees help each other.

What’s more impressive, even though annual production goals are not established at the employee or branch level, Southern AgCredit has grown from $500 million to over $1.1 billion in total assets since the incentive plan was implemented ten years ago. And the annual dividend to the customers is the highest of its peer group! The success of this company shows that no matter how big or small, a commitment to employees will reap benefits for customers and the bottom line.

What’s the State of Digital Transformation?

Abstract businessman in VR environment. This is entirely 3D generated image.

If there’s one constant in an enterprise transformation strategy, it’s disruption. Even the strategies themselves rarely remain unchanged from ideation to completion as new priorities, processes, expectations, and goals come into play. 
Case in point: Today’s digital transformation strategies have greatly evolved over just a few years, observes Brian Solis, principal analyst at Altimeter, a Prophet company, in a recent report, “The State of Digital Transformation.” More specifically, digital transformation is becoming an enterprisewide initiative; ownership is moving to the C-suite, and employee experience and organizational culture are rising in importance, among other trends. We caught up with Solis to discuss these developments and their impact on the customer experience. 

Proving ROI from digital transformation initiatives is still a top challenge, according to the report. But at the same time, companies are expanding the budgets for digital initiatives. Are leaders softening their ROI expectations or are they just kicking the can down the road? 

Brian Solis: The fact that CEOs are becoming more involved is a blessing in that digital transformation is getting the attention of the C-suite and the CEO understands that this [transformation] will affect the balance sheet. For example, not too long ago, the CEO of Unilever said something along the lines of, we want long-term investors because we’re trying to compete for the future. In other words, stakeholders have to accept costs. Transforming a business in some ways is like renovating a house—it just keeps going. It means that [ROI data] expectations have to change. 

At the same time, if you’re not going to deliver ROI results today, you at least need KPIs that show you’re on the right path. And so, we’re starting to see metrics get much more focused on business transformation and business opportunity. It’s not unlike what you’d see at startups as they’re growing. 

Speaking of investing in the future, the report also found that most transformation efforts are focused on modernizing customer touchpoints and infrastructure before focusing on the employee experience. Why is that? 

BS: In most cases, it’s easier to connect the dots between modernizing customer touchpoints and increasing efficiencies with immediate impacts to the bottom line. Which is why customer experience is at the top or close to the top of these initiatives. But our hypothesis is that employee experience is also going to have to become paramount because employees are consumers too and they have their own growing expectations. 

And unless the employee journey is modernized, companies will eventually fall apart due to the lack of employee engagement. In fact, we started to see last year—and definitely going into this year—a greater focus on employee experience. It’s still not at the point that it matches CX, but it is on the rise. 

Is the increased focus on employee experience mainly because of the labor shortage?

BS: No, I think it’s a lot of things. You have millennials, for instance. The idea that younger employees are different is overblown, but there’s some truth to the fact that they’re used to working with digital devices and it’s only going to continue with the centennials and so on.  

When employees are being asked to use dated applications and devices that literally conflict with how their brains are wired, it’s not an intuitive or productive experience. In fact, it’s counterproductive. Which is to say, companies have to consider whether their employees have what they need to be successful. 

There’s also AI and machine learning—technologies that demand new skill sets. Marketing, for example, is starting to have access to data it didn’t have before. When you bring in all these new datasets, you need the knowledge and the skills to ask different questions of the data, as well as translate and assign it to a journey. That introduces the need for people with the right skills and talent.

At the same time, I don’t think it’s widely regarded just how sweeping this transformation of recruiting, hiring, training, and retaining human talent will be. Companies are more focused on their immediate needs. 
What are you seeing in terms of how well companies are balancing their immediate needs with their long-term digital transformation plans? 

BS: The longer-term plan is usually a 10-year plan for digital transformation and by short-term, I mean five years. We’re seeing a lot of scrambling when it comes to balancing [those plans]. However, these shorter-term investments are teaching companies what’s needed for a longer-term investment and giving them the experience and expertise to prioritize. 

For example, going back to our discussion about the need for new and developing skills, most people who are leading their company’s digital transformation are not experienced in digital transformation per se—they’re learning what’s needed as they go. And that’s why CIOs and IT professionals continue to be involved, because they understand the technology aspect best. 

But as these plans mature, we start to see cross-functional plans start to take shape because they’re touching more and more areas while silos are crumbling. Different teams that have their own priorities are being forced to come together.

This is also why both short- and long-term initiatives are overlapping as people try to work together.

You noted that many digital transformation strategies don’t include an adequate understanding of the customer. What’s an example of thorough customer research?

BS: Last year and the year before we had seen that most companies were digitally transforming in the name of CX. Meaning they were using CX as the banner to drive most of these investments. But when we asked if they had been studying a digital customer as an indicator of how to make those investments, only 35 percent of those companies said yes. So, they were making investments without necessarily understanding or having access to the data that would guide it. 

This year, we started to see that change. More and more companies are investing in a much more sophisticated data infrastructure to at least have the insights to guide the transformation. That includes studying touchpoints, behaviors, and journeys. There’s also a move toward data as a service. A lot of this is becoming part of the marketing regime where AI/machine learning systems are being built that are tracking all kinds of things across the customer journey and the customer experience. 

And marketers are feeding those data points into systems that are allowing them to better understand how to segment customers, how to make improvements, or introduce new opportunities for engagement. 

The other thing I’m seeing is the companies that get really good at using data start to build an infrastructure around real-time analytics. They’re not just using data to study what already happened, but to also predict demand and the evolution of the customer. What you’re seeing is organizations that are augmenting real-time analytics with predictive analytics. 

What other developments are you expecting to see next as digital transformation continues to mature? 

BS: It goes back to what I mentioned before: With new technologies comes a demand for people to run and apply these technologies, which is why I think we’ll see employee experience become much more important over the years to come.

8 Ways for CEOs to Rethink Employee Engagement

Smiling businesswoman listening during team meeting in office conference room

“CEOs need to connect with their employees.” This statement shouldn’t take any business leaders by surprise. In past decades, though, it was hardly a requirement. These days, leaders of Fortune 500 companies and startups alike are taking a different tack. Instead of remaining out of reach, more CEOs are making the effort to engage their employees—some are even humble. In fact, 78 percent of business leaders are focused on raising engagement and retention, according to Deloitte.

So, why is it essential for CEOs to be more engaged?

Studies show that when employees have confidence in their leaders, they are more likely to be engaged in their work and committed to the organization. However, many leaders haven’t done a good job of communicating with their employees. Only 13 percent of employees strongly agree that the leadership of their organization communicates effectively with the rest of the organization, reports Gallup. 

The notion that CEOs can lead from behind a desk is not only outdated, it’s bad for business. A smart CEO understands that employees can’t be taken for granted. A strong connection with employees is necessary to continue driving productivity and growth. So, how does a CEO connect with his or her employees? Our research uncovered eight ways top leaders succeed.

1. Question your assumptions

“You always want to question your own assumption about how you’re doing as a leader by soliciting feedback,” says Marcel Schwantes, a speaker, leadership coach, and consultant. “Ninety percent of the time there’s a large discrepancy between how well senior leaders think they’re perceived and what employees think.”

Soliciting feedback requires eating a lot of humble pie, Schwantes adds, but savvy leaders understand the value of doing so, which has contributed to a shift toward more humble leaders.

Microsoft’s recent turnaround success has been largely attributed to CEO Satya Nadella’s collaborative leadership style, for example. Similarly, Warby Parker Co-CEO Neil Blumenthal described entitlement as “the root of all evil in a company,” in a LinkedIn blog post.

2. Be social savvy

“A CEO’s leadership style must evolve to stay current…CEOs must find ways to leverage the power of social media as a means to bring their story to life and connect with customers, investors, and other audiences, including employees,” writes Kathy Bloomgarden, CEO of the communications firm Ruder Finn, in a report.

Savvy CEOs create buzz within their communities while connecting with followers. For example, T-Mobile CEO John Legere has amassed over 6 million followers on Twitter, where he tweets about the telco industry, shout-outs to his employees, and hanging out with celebrities.  

Research also shows that socially savvy CEOs are seen as strong leaders and communicators by their employees. Companies led by CEOs who use one or more social channels are more than twice as likely to be on the Fortune or Glassdoor 100 Best Places to Work lists, according to Ruder Finn.

3. Lead by example

Zlatko Vucetic, CEO of FocusVision, a research technology software company, says he reminds himself that his employees have lives outside of work. “I’m a strong believer that family comes first in the lives of my team,” Vucetic says. “I structure my working time and efforts so I am able to be home every night for dinner with my wife and daughters. And I expect my team to be able to use the same balance of commitment and time management to do the same.”

Vucetic also says he believes in an open-door policy where “any employee can provide me—or anyone on my management team—direct and honest feedback without being penalized because it’s ‘not their place.’”

4. Spend your time wisely

How leaders spend their time influences their ability to lead. Sealing yourself off inside an office makes you seem aloof and detached from your employees, but monitoring your staff gives the impression that you’re a micromanager. Ideally, leaders should aim for something in the middle, according to a study by Nitin Nohria, dean of Harvard Business School, and Michael Porter, a professor at Harvard Business School. 

Conducted from 2006 to 2018, the study examined how CEOs of companies with an average annual revenue of $13.1 billion spend their time. The study found that more than half (53 percent) of a CEO’s work was done outside of headquarters, “visiting company locations, meeting external constituencies, commuting, traveling, and at home.”

More specifically, the CEOs spent their time in the following manner:

  • 61 percent of the CEOs’ time at work was dedicated to face-to-face meetings.
  • 15 percent was dedicated to phone or reading activities and replying to written correspondence.
  • 24 percent was spent on electronic communications.

The majority of CEO time is spent on face-to-face interactions, which the study’s authors note, “is the best way for CEOs to exercise influence, learn what’s really going on, and delegate to move forward the multiple agendas that must be advanced.”

5. Don’t be an island

As leaders take on more responsibilities, many feel pressured to “act like a boss,” losing touch with their ability to be empathetic and connect with their fellow employees, notes Rod Brace, an executive coach and former chief learning officer for a major health system. “An emotionally intelligent CEO will resist the temptation of falling victim to these pressures,” Brace says. Instead, the CEO will strive to connect with team members at all levels of the organization. 

“Effective CEOs act as if they have no authority and seek to build relationships before they tackle the challenges of operations,” he says. Brace also advises leaders to speak directly with their employees as opposed to hiding behind hierarchical processes. 

6. Listen actively

It’s not enough for leaders to listen to employees who drop by their office—they must seek out opportunities to connect with employees, says Dan Goldstein, president and owner of Page1Solutions, a digital marketing firm.

“All leaders should take the time to actively listen to their staff,” Goldstein says. That includes spending time with employees in team-building events and informal gatherings. Goldstein recommends identifying staff who seem to have their ears to the ground and gather information from them. “Most important, as a leader, you must look for opportunities to improve both business processes and morale,” Goldstein says, “even when the staff doesn’t realize there are opportunities for improvement.”

7. Talk with people—not at them

At staffing agency Worldwide101, the onboarding process includes a session on how to speak up. “We encourage our team to over-communicate and we make a big deal of staying in touch through various means to build trust,” says CEO Sandra Lewis. “This is especially important as a fully remote company where we don’t see each other at the office to gauge the mood of the day.”

Managers, in particular, receive training on how to listen. “If there is one tip I would give about employee engagement and motivation,” Lewis says, “it would be to train and inspire your managers to always be curious, which translates into keen listening skills.” At team meetings, managers often ask open-ended questions such as, “What can I do to help?” in an effort to empower team members to engage in conversations that are solution driven. In result, “employees feel heard, engaged, and understood, and retention is high,” Lewis says.

8. Share your vision

It’s essential for CEOs to lead with transparency and honesty, according to Antonio Wedral, CEO of NOVOS, a digital marketing agency. Making your employees “feel that they’re a part of something more than a job is essential,” Wedral says. To do so, Wedral says he shares  with his staff “the story of the business,” including its five-year plan, why the business exists, and what the employees’ roles are in the story. And on a daily basis, he shares good and bad moments with staff.

And while employee perks are appreciated, they mean even more when they’re personal. “For example, we know someone travels on a very long and expensive train to work, so we offer to pay 30 to 50 percent of their monthly travel costs,” Wedral says. While personalized perks can be difficult to scale, the point is to make employees feel that their needs are understood. 

Engaged leaders aren’t made overnight

The key takeaway is that there isn’t a fast and easy way to become an engaged leader. “There’s no magic pill,” Schwantes says. “This isn’t a one-off program, it’s a shift in mindset. And it can take months or longer before getting it right.” With that in mind, leaders who approach these changes as a collaborative—rather than solo—effort are already off to a good start.

Harvard University Makes the Grade on Financial Wellness

Professors old leather briefcase standing on a table in the audience near the pile of books

It’s difficult to provide an excellent customer experience when an employee is worried about whether he or she can afford a financial shock, such as an unexpected home repair or a medical emergency. For many customer-facing employees, one unexpected expense can quickly snowball into a larger problem: repossession, eviction, or other life-altering situations. 

The financial well-being of a company’s employees has a significant effect on their performance, the customer experience, and ultimately the company’s bottom line. Simply raising wages isn’t always an option, though, which is why employers are turning to other ways of helping employees stay financially solvent. 

Harvard improves EX with credit resources 
Harvard University is one such organization that has drawn a connection between financial wellness and the employee experience. And while financial wellness programs are not new, the scope, objectives, and efficacy of the programs vary. Kerry Beirne, director of human resources for campus services at Harvard University (which includes dining, housing, buildings & facilities, and other services), says she was looking for a program that in addition to “just providing information, produced concrete results quickly.” 

In 2015, Beirne learned about Working Credit, a nonprofit organization that helps employees build strong credit scores and reduce expenses that were inflated by poor credit or no credit. The program starts with a 45-minute workshop in which employees learn about how the credit system works, how a credit score is generated, what pushes the score up or down, how credit affects their daily finances, and how to build credit. 

At the end of the presentation, attendees could sign up for individual financial counseling sessions. The counselor reviews the employee’s credit score and goals, and helps the employee create a personalized Credit Action Plan. The counselor then reviews the latest credit report and score with the employee every six months for 18 months and offers personalized advice. For example, if an employee had been paying inflated insurance premiums due to poor credit, once the employee reaches a threshold score, the counselor may advise the employee to negotiate a lower premium. 

Having the opportunity to meet with a financial expert who can guide employees through the process of improving their credit score was an essential part of the program’s success, says Susan Simon, senior human resources consultant at Harvard University. “It’s not as if you hear something once and then forget about it. Working one-on-one with a counselor is incredibly valuable.”  

The first time the program, Make Credit Work For You, was introduced to campus services employees, was in 2015. Of the 125 people who attended the workshop, 77 percent signed up for the counseling sessions. Results included a 39 percent increase in the number of employees with prime FICO scores (> 660). The number of employees with at least $1,000 available on credit cards also increased by 45 percent.

Recently, the university offered Working Credit’s program a second time, and “employees who had already participated, actually stood up and said the program helped them purchase homes and refinance their car,” Beirne says. “We didn’t expect people to share that, but it’s evidence this program works.”

In addition to partnering with Working Credit, the university has invited experts to share information about mortgages, retirement savings, and other topics that their employees may find useful. Speaking with employees and paying attention to their needs is key to understanding what employers can do to help, Simon says.

The impetus to introduce a financial wellness program like Working Credit’s, “didn’t come from a survey, but from conversations with some of our employees about their struggles as working mothers, difficulties getting to work, and other challenges,” Simon says. 

Financial wellness pays off for employee engagement
Financial stress, which is sometimes due to a lack of financial literacy, affects people across industries at home and at their jobs. According to a study conducted by the Society for Human Resource Management (SHRM), 83 percent of HR professionals reported that personal financial challenges had a large impact or some impact on overall employee performance. On a similar note, almost half of employees who are worried about their financial health are less productive at work and spend at least three hours each week dealing with personal financial issues, according to a PwC report. 

The impact of employee financial wellness on productivity and quality of work is obvious. Employers are taking notice. Last year, nearly 50 percent of employers offered financial advice in some form, according to SHRM, and that percentage is expected to continue to grow. 

There’s a growing awareness of the connection between employee financial wellness and the customer experience. Wise employers understand that their job is to enable employees to be successful at their jobs, which includes helping employees be financially healthy. Creating an atmosphere that encourages financial well-being allows employees to perform to their full ability, which naturally benefits the business as well. 

Preparing Tomorrow’s CX Workforce

A look back—and ahead—at trends driving customer experiences of the future.
Smiling female customer representative wearing headphones working in office

2018 was marked by a historically tight labor market that had employers scrambling to find enough qualified workers to maintain growth. While it’s difficult to predict how much longer this trend will continue, other questions emerge: Which industries are likely to remain understaffed? How has the labor shortage impacted existing jobs and future positions? What does this mean for customers? A look back at hiring and retention practices yields some clues.

Empty seats

Back in September, the U.S. national unemployment rate fell to 3.7 percent—the lowest rate since 1969. Low unemployment rates created an incredibly hot labor market, with many people seeking better, higher-paying roles. In July, the national quit rate reached a 17-year high.

Low unemployment and a high turnover rate are generally considered positive economic indicators, but they can also have a negative effect on customer service, customer satisfaction, and ultimately, economic growth. Consider customer support and service, where low-wage skilled workers are in high demand.

Employment of customer service representatives is projected to grow 10 percent from 2014 to 2024, according to the Bureau of Labor Statistics. Much of this growth is driven by an expansion of what it means to provide customer support to meet higher customer expectations.

More representatives are being called upon to solve complex problems, be both creative and analytical thinkers, and support a number of different communication channels. Simple tasks are increasingly being automated, leaving humans for the harder issues. But given that traditional contact center jobs are highly micromanaged with few opportunities for growth, attracting talented candidates is already challenging. What’s more, new hires typically have less experience and less job-specific training, which makes it even more difficult to deliver strong service.

A labor shortage at emergency contact centers, for example, has significant consequences. In Little Rock, AR, the 911 communications center struggles to keep up with the call volume. In 2018, 66 percent of 911 calls were answered in 10 seconds or less, which is far below the 90 percent standard set by the National Emergency Number Association (NENA), reports USA Today. Retaining operators has been difficult. The emergency center hired 21 more operators, but the same number soon quit.

“In any environment where you have increasing competition for workers, a worker is going to have more choices,” Christopher Carver, operations director of 911 centers for NENA, told USA Today. “People want to work in places they like. 911 centers can be challenging places to work.” Additionally, many 911 centers are underfunded and lack the proper resources for effective training.

Other industries face similar obstacles. Job openings in the construction industry are at an 18-year high, according to the Bureau of Labor Statistics. A continuing lack of skilled labor, though, could make development projects more expensive and time-consuming, weakening the economy. “Workforce shortages that make construction projects more costly and slower to build run the risk of undermining broader economic growth,” according to a report from the Associated General Contractors of America.

Retail is also feeling the pinch. In a survey, 29 percent of human resources and compensation professionals, representing a total of 2 million retail employees, told consulting firm Korn Ferry that they’ve seen an increase in employee turnover since the beginning of 2018, especially among part-time hourly store employees (an 81 percent turnover rate compared to 76 percent in 2017). “While high consumer confidence and a strong economy mean year-over-year sales are predicted to grow, low unemployment means there just won’t be enough workers to fill retail positions,” said Craig Rowley, Korn Ferry senior partner of retail and consumer, in a statement.

Even though retailers began hiring seasonal workers earlier this year—some as early as the summer—in addition to raising pay and offering perks like profit-sharing and paid time off, many struggled to find enough people to staff their stores and warehouses.

Understaffed stores and frequent job switching erode the quality of customer service. And if customer service deteriorates enough, so will customer satisfaction, warns the American Customer Satisfaction Index (ACSI). “This often causes consumers to hold on to their wallets more tightly, slowing down the pace of economic growth—something we saw in the late 90s, early 2000s, and as recently as 2016,” wrote Forrest V. Morgenson III, director of research at ACSI, in a Retail Dive column. “Given the current data, that looks likely to happen again…an economic slowdown for retailers during their most profitable months of the year could be disastrous.”

Taking action for long-term labor success

Employers are deploying a wide range of strategies to combat the labor shortage. The most obvious approach is to increase wages. In January 2018, Walmart announced it was increasing its entry-level wage from $9 to $11. A few months later, Amazon raised its minimum wage to $15 an hour; Target raised its minimum wage to $12 in 2018 with plans to increase it to $15 by 2020. Walmart also unveiled a new scheduling system that’s designed to make employees’ schedules more predictable and flexible. Other retailers have offered signing bonuses, employee discounts, and more.

Increasing wages and creating more flexible scheduling are just some of the steps businesses have taken to attack the problem. Companies also need to take the long view in building a workforce for the future, says Brad Bell, an associate professor of human resource studies and director of human capital development at the School of Industrial and Labor Relations at Cornell University.

“Whenever we see labor markets get tight like this, companies use a number of short-term solutions like higher wages to compete for very limited labor and talent supply,” Bell says. “But it’s not just about the amount—it’s also the quality of the labor supply that matters. And companies are taking a harder look at what skills their employees will need in the near future.”

The shortage of immediate hires makes it even more apparent that businesses need workers who can adapt to technological changes in the workplace. According to Gartner, 70 percent of employees have not mastered the skills they need for their jobs today, and 80 percent lack the skills needed for both their current role and their future career. The research firm also notes that more jobs are being redesigned for closer human-machine collaboration to boost productivity and improve the customer experience.

Future-proofing the company

Leaders are addressing some of these challenges with an increased focus on human capabilities. Recognizing that emerging technologies like artificial intelligence and machine learning need humans as guides and to fill in the gaps, companies are investing in education and training to help employees enhance their problem-solving skills, cognitive abilities, and even social intelligence. Toyota, AT&T, and General Electric are just some of the major corporations that are offering their employees opportunities to upgrade their skills through partnerships with universities, online courses, and other resources.  

Employers are investing in their employees’ education for other reasons as well. “We’re seeing employers, especially those that are targeting millennials, offer tuition reimbursement and loan repayment programs,” Bell says. “Similarly, some companies that want to retain employees with high school-age kids are offering college coaching.”

Organizations are also upgrading their methods for matching the right talent with the right opportunities, Bell adds. Companies today have reams of data about job candidates and employees, which enable “greater precision” in how they recruit, train, and manage employees.

“From the moment a candidate submits a resume, automation and data analytics are influencing the decisions HR managers make and it’s only growing,” Bell says. It’s also becoming the norm for companies to predict what’s needed to upskill and cross-train employees at a highly individualized level while minimizing expenses.  

A strong economy and low unemployment rate bear clear advantages for employees who feel confident that they can find a better job. However, it also shines a light on the consequences of understaffed organizations. Jobs that were already difficult to fill have been exacerbated. Contact centers can’t support callers fast enough and construction projects take longer to complete, among many other consequences.

Forward-looking companies understand that a widening skills gap also indicates that they need to consider the quality and quantity of workers’ output if they’re to remain competitive. All of which is to say that helping employees be engaged and successful will be the true marker of a future-proof company. 

Live Chat Makes Its Mark in B2B

Close up of woman using mobile phone in city centre car park

In today’s omnichannel environment, a company’s customer service must be available whenever and wherever the customer wants. In the B2B space, where the transactions are costlier, the products are essential for operations, and service needs to be quickly available, the right channel is essential. According to the State of the Connected Customer report by Salesforce, around 80 percent of B2B consumers expect real-time interactions with companies.

But when it comes to innovative and digitally active companies, automotive service equipment manufacturers may not come to mind. Hunter Engineering, a leading manufacturer of alignment equipment, tire changes, and inspection units, is changing that.

Boasting a force of around 1,000 representatives, it has one of the largest automotive services and sales teams in the U.S. But it needed new tools and capabilities to best reach its valued customers. Hunter Engineering’s website redesign spurred its foray into live chat, to the benefit of both the company and its customers.

Why live chat now?

In 2017 Hunter Engineering made it a priority to reinvent its web presence to match the needs of customers who wanted personalization and on-the-go customer service while retaining the same standards of customer care it was known for.

Leading the digitalization effort, Hunter’s Marketing Development Manager Madeline Triplett knew the first issue to overcome was its traditional foundation. Workers in the field are experts in the space and highly technical, some with decades of experience. But that expertise didn’t translate online immediately. The company didn’t have a proper avenue for customers viewing the website to immediately access customer service. The company prided itself on first- or next-day service for its B2B customers, so it wanted a customer service update that stayed true to its customer-centric philosophy.

“We realized that a vast majority of our customers were going to Hunter.com before they picked up the phone to call a salesman or call a service rep,” says Triplett. “So digital assets quickly became important for us to meet the need of where people are going first and foremost to get their information.”

In a webinar with Comm100, who partnered with Hunter to implement live chat, Triplett said the website redesign started with installing best practices like mobile optimized content and contact forms. While leads increased, productivity remained flat. Hunter Engineering saw live chat as the next logical step toward better personalization and quick service, allowing B2B customers to seamlessly connect with live associates while visiting the manufacturer’s website. The goal was to provide the same personalized touch a customer would get with an associate on the phone.

Hunter’s experience follows a trend in the B2B sector. According to Salesforce, 65 percent of B2B buyers may switch brands if the relationship does not feel personalized enough. 

How live chat wins

Hunter Engineering’s live chat tool is configured to ask people to log in and identify their Zip Code. This way associates can learn who and where their customers are and deal with them more personally, including connecting them to their local sales rep if needed.

Following its implementation in 2018, live chat has already reshaped how customers and associates interact with Hunter Engineering. Triplett says the team focused on two areas that made it a successful digital redesign:

1. Hard questions, easy transfer. Hunter Engineering provides two layers of defense with its chat that are essential to the success of its interactions. First, it deploys expert customer service associates to take live questions. Chat associates can manage conversations themselves or pass them along to another associate if needed. Second, technical experts are on hand for more challenging issues. The concerned customer is handed off to this team seamlessly to ensure none of the progress is lost.

To keep a smooth interaction, a transcript is immediately emailed to an associate or technical expert when one portion of the chat is finished. The conversation history gives the associate or expert the necessary information to handle the request without having to ask the customer to repeat themselves. The recording ensures the customer loses nothing in translation while the associate can feel like they were on board from the start. This saves time, prevents friction, and ensures a more seamless conversation.  

The configuration also allows associates to drop in and out of each other’s conversations for a handoff or joint effort. The transcript helps encourage a support system where associates can join each other when in need and know exactly where to take over. 

2. Reduced sales cycle time. The introduction of live chat technology has also noticeably shortened Hunter Engineering’s typical sales cycle. Being a producer of extremely technical and essential car service devices, its products are a capital expenditure for B2B customers. These high costs create an environment that leads to more scrutiny during the buying process and extra time due to thorough research.

Yet compared to leads from contact forms or paid advertising, Hunter Engineering saw that the sales cycle for live chat was significantly shorter. The average sales cycle normally took a few months, Triplett said during the Comm100 webinar. Since live chat was introduced, several leads closed in days or weeks. Furthermore, more than 60 percent of Hunter’s live chat interactions involved sales leads.

This is credited to the immediacy and intimacy/personalization of the chat platform, which eliminates the wait time usually associated with a contact queue. As a result, potential buyers get the answers they want quickly and efficiently. This has helped the live chat team become as valued as traditional sales lead avenues.  

An unexpected win

Hunter Engineering’s live chat feature also came to the rescue when it expanded to television brand awareness and advertising. During the webinar, Triplett announced that in 2018 the company partnered with the Velocity channel to produce a Hunter-themed episode on its show Motorhead Garage. After the episode aired, there were no tangible metrics to measure its success, apart from some word-of-mouth comments. Measuring website activity and live chat transcripts, however, she found that that live chat traffic shot up by 70 percent while the episode aired.

The example revealed that live chat platforms can open a new door for personalization and communication. Live chats during a TV show or real-time events can show that there are actual people behind the company.

“The way Hunter does [live chat] is very personal,” says Triplett. “There is never a doubt that you are talking to us.” There are no intrusive messages such as, “You’ve been transferred” that could make customers feel as if they are being tossed around needlessly without a person behind the interaction.

Don’t rush with technology ahead of customer experience

For all the new digital features that Hunter Engineering has introduced to its website, the company is walking before it runs. Despite the hype surrounding automated chatbot technology, the company is currently in the education phase of its chatbot journey. The company prides itself on hand-to-hand service, and as such, Triplett says the company wants to be sure that when the company does implement chatbots, the transition is as seamless as possible.

The Past And FUTURE of CX MEET

When Hunter Engineering was founded in 1946, the automobile was constantly being reinvented, and buyers rapidly moved on to the next best thing. The same now goes for the channels customers use. Adapting to channels that customers expect and providing personalization is a necessity. Hunter’s transition to live chat is a case of a traditional company intertwining its decades of experience with the future of customer service. 

Fintech’s Next Obstacle: Mastering the Customer Experience

Online banking businessman using smartphone with credit card Fintech and Blockchain concept

Financial technology (fintech) companies are on a tear. In 2017, fintech firms raised $16.6 billion in financing—an amount considerably higher than the $3.8 billion raised just four years prior. 

The financial landscape is so competitive that even disruptive technologies are at risk of being disrupted themselves, notes Chris Condon, SVP of Americas Business Development at TTEC. “The barriers to entry in terms of establishing a consumer financial relationship are much lower than just a few years ago,” Condon says. “In fact, even relatively new technologies, like peer-to-peer payment systems, are facing pressure.”

However, piling on more functionality and features isn’t enough to win. Companies also need a strong customer experience strategy to prove that they understand their customers’ challenges and expectations. Here are seven customer experience trends that are shaping the financial services landscape.

1. Integrated (customer-centric) digital financial experiences 

Like other industries, financial services is enamored with the latest technologies, including artificial intelligence (AI), augmented reality (AR), and blockchain. But whereas businesses have largely taken a siloed approach to each new technology, customers expect seamless experiences across channels and devices. 

Banks have an opportunity to combine the latest technologies in new, customer-centric ways to provide better services. Some firms, such as USAA, are already taking this approach. “It will be less about a website or a mobile app as a destination and more about being where our members are and integrating with the technology around them, such as IoT and virtual assistants,” Melissa Ehresman, USAA’s AVP of bank digital experiences, told the tech blog Tearsheet. Expect more financial firms to look for opportunities to deliver individualized services at scale.

2. Tech firms continue to court banks with added features, functionalities  

Facebook found itself in the news recently following a report from the Wall Street Journal that the social media giant is urging banks to offer information, such as checking account balances and credit card transactions, on its messaging platform, Messenger.

While Facebook clarified that the financial data would be used for customer service, such as to communicate with the bank through a chatbot, and not for advertising, it’s an example of how eager tech firms are to collaborate with banks. 

For Facebook, the ability to let users communicate with their banks (and extend the amount of time they spend on Facebook) carries obvious benefits. It’s not clear though how many banks have jumped at the offer. Facebook’s discussions with financial firms follow its admission that information about 87 million users was improperly obtained by another organization. But this brings up the next trend. 

3. A race for banking relationships

Financial startups Venmo (now owned by PayPal) and Acorns recently unveiled separate debit cards with compelling features. The Venmo debit card lets owners split purchases with friends and can be enabled/disabled from the Venmo app. Acorns’ debit card automatically rounds up the amount of a purchase and deposits the extra cents in an investment account.

The debit cards are the result of partnerships that Venmo and Acorns have struck with banks, giving the digital-first firms a foothold in physical branches. 

Banks must think critically about the partnerships they form, but they can’t take too long as non-banking firms gain more access to banking relationships. Amazon is already making small-business loans and competing against prepaid card issuers, reports American Banker. And Walmart reportedly selected Capital One as its new primary credit card partner to gain broader banking capabilities. This is another reminder that banks can’t take their customers for granted and should be looking for opportunities to create more value before their competitors do. 

4. Digging deeper into financial services AI

Although AI is already deeply embedded in financial services, there are still opportunities for organizations to use AI to gain a competitive advantage. For instance, the majority of AI initiatives at banks are focused on conversational interfaces and virtual assistants, followed by process optimization and fraud detection, according to a study by Medici Research. “While a relatively fewer number of banks are looking at AI in compliance and trading functions,” according to the report, “there is no shortage of opportunities to be explored in these spaces.”

5. Voice-enabled banking virtual assistants

Today, voice-enabled virtual assistants like Alexa and Google Home are mostly used for basic tasks, such as checking the weather or answering simple questions. However, consumers are beginning to use their virtual assistants services, such as banking. 
More than one out of  five (21 percent) of people who own a voice-activated virtual assistant are using it to shop, pay bills, bank online, or send money, according to a recent survey conducted by Mastercard and Mercator.

What’s more, a survey by Bain & Co. found that respondents ranked Amazon and PayPal nearly as high as banks in levels of customer trust. And more than 25 percent said they would consider using “voice-controlled assistants for their everyday banking.” Given that Amazon dominates the voice-enabled speaker market, it’s crucial that banks develop a presence in this market with superior customer experiences. As virtual assistants usher in new banking habits and ways to interact, banks should focus on developing Alexa skills based on the functionalities customers want.

6. Emotional intelligence matters

It can be tempting to automate and digitize as many banking interactions as possible, but research shows this is the wrong approach. 

For routine transactions, consumers prefer digital channels, but they give higher Net Promoter Scores to companies that allow customers to speak with a representative to resolve a problem, reports Bain & Co. In fact, 83 percent of consumers prefer dealing with a person versus a digital channel to resolve customer services issues, according to an Accenture study.

Emotional intelligence, in other words, plays an important role in the customer experience. Banks can earn greater loyalty by making routine interactions convenient and frictionless, and providing a high-touch service experience during stressful situations. 

7.  Brand trust and transparency
A survey by Label Insight on transparency ROI revealed that 78 percent of consumers are more likely to trust brands that they consider transparent. What makes a brand transparent can be a matter of opinion, but as the aforementioned Bain & Co. survey shows, perceptions are important. As more competitors like Amazon enter the financial services space with strong reputations and an established customer base, even large banks will have to reexamine their own brand equity. 

The competition for customer loyalty in financial services won’t be decided on technology alone. Customers are looking for options, control, and transparency in their banking relationships. The question is whether a conventional bank, a new financial services player, or a combination of both will find the right balance of technology and the human touch. 

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