Show Notes
Carl Lewis:
Welcome to The Connected Enterprise podcast. I’m Carl Lewis, your host from Vision33, and my guest is Nate Sanders, the co-founder of Artifact. Nate, welcome to the podcast. Please tell us about yourself, your background, and Artifact.
Nate Sanders:
Thanks for having me, Carl. I've been a software entrepreneur for most of my career. I spent the last 10 years in product management and design at some early-stage growth phase startups—companies like Degreed, BambooHR, and Plural. Then I founded Artifact. I’m passionate about human-centered design and the process/functions it requires to build great products. I’ve focused on those specific practices of building great products and helping others do so.
Artifact is based on my experiences as a product practitioner. We use predictive artificial intelligence capabilities to help organizations understand and enhance their customer experience by analyzing customer data. Then they can make better decisions around what customers need/want.
Carl Lewis:
I didn’t realize you’d been with BambooHR. My company represents that product because of a recent acquisition. It's a good fit for many of our customers, and we're excited about it.
Nate Sanders:
It's a great company.
Carl Lewis:
Nate, you mentioned customer experience. It's a relatively new way of describing a company's relationship with its customers, right?
Nate Sanders:
Exactly.
Carl Lewis:
What's underneath the customer experience umbrella?
Nate Sanders:
The phrase has been around, but its evolution over the last 3-4 years is interesting. Historically, we oversimplified how we think about it, and optimizing it became mostly about phone trees, chat logs, or customer support processes.
Enterprises are finally awakening to the customer experience being much more than that. It's the overall representation of a customer's perception of their entire experience with you—pre-purchase, how they discover you, how they research you, what was the perception of your brand from other customers, what it's like to buy a product from you, what it's like to use the product, be supported, and find success in the product after they've made a purchase.
It's more than just the touchpoint of customer support interacting with a customer. It's every touchpoint across the entire journey of interacting with your business.
That's an eye-opener for organizations. They say, "If we think about this deliberately, we can get a strategic advantage." Customer satisfaction is the easy one—you can drive toward distinguished customer satisfaction—but it’s also customer loyalty and brand advocacy. The Adobe CEO once said, “Retention is the new revenue.” I love that quote, and if you consider it from that perspective, having a differentiated part of the customer experience helps you keep and capture more customers.
Carl Lewis:
One interesting thing is the software-as-a-service (SaaS) industry. It’s opened the door to everything as a service. That’s a revenue play, and SaaS is all about retention and repeatability. Many more industries are looking at the retention issue.
Nate Sanders:
Yes.
Carl Lewis:
What interests me is that before, when we thought about getting customers’ feedback, it was, "As a company, how do we feel about what customers are saying about us?" It was mostly done through face-to-face interviews and salespeople talking to customers, or maybe we saw them at a conference or did a yearly email survey to get their perspectives.
This approach is all those things. Even our support desks are about, “Our customers have a problem.” So when we do something, it's always after the fact. The bad news has occurred, and we're trying to fix it. We're in this traditional break-fix model, and that's how the relationship of “Am I a happy customer or not?” was mostly defined. “When I need help, do I get it? When something's wrong, do they fix it?”
Nate Sanders:
Absolutely.
Carl Lewis:
What changes when we talk about customer experience?
Nate Sanders:
One thing is that the "It's broken, can you help me fix it?" paradigm is centralized around one department. Now, because of digital tools, we can serve customers more easily/scalably, etc., and every department cares more about the customer experience than before. I remember when the only departments that cared about retention were maybe product and finance. They were the only two creating and tracking metrics.
But now, every department thinks about retention and has tools that capture qualitative, experiential, etc. information from the customer to optimize their practices. There's a new sub-department of sales or revenue teams called pre-sales that’s getting popular. They look at how companies or potential customers will use the product during a free trial and do lead scoring to determine if that’s the right usage profile to tell them it’s a great customer. They’re getting early feedback to decide if something is really a sales-qualified lead they should pursue for a cross-sell upsell. Account executives in sales departments are recording their sales calls, and tools like Gong and Chorus are in every department.
They're getting new tools to capture customer experience data. I think we shifted to departments thinking in a nuanced way about their own processes in the early 2000s, and the natural evolution is, "If we all value the same things, how do we create a more deliberate strategy about how things feature together across the entire customer journey?" It's become much more workflow-oriented in the sense that every department has a workflow that’s focused on the customer experience. It’s, “How do we be more proactive and think deliberately about the customer experience as a strategy rather than optimizing each function's deliverables or specific initiatives?”
Carl Lewis:
The keywords, from my perspective, are proactive versus reactive all the time, and that at every stage of the customer's exposure to us, we're capturing information. Data is critical in this customer experience approach. What are some customer experience data sources that many companies probably don't know they have access to?
Nate Sanders:
A goldmine of information is being elicited from multiple departments and teams. And the most common data set in the customer experience is the call center or support tickets. But suppose you think about the customer journey in the buying-and-research process. There are entire verticals and businesses focused on building review-based data sets for the search-and-shop process of evaluating a service/product you can control, contribute to, boost, or not. There's information about what customers say about you.
G2 is a great example of that. It built a high-integrity, high-fidelity way to capture how customers feel about different variables of your service/product. If you move forward in the customer journey, there are purchase experience aspects like, “What sales objections are being brought up in sales calls? What are the feature requests? What do they cite as missing from that process that come up naturally in the conversation that's being recorded?” There's a company in Utah I absolutely love called Closed. They do ‘closed lost’ or ‘closed won’ interviews for you via asynchronous surveys and other interview mechanisms. It helps you figure out why you won a deal. What did they love about it? What drove them toward that decision?
If you lost a deal, same questions. That’s a huge goldmine for every department to consider how to enhance the product or their processes. If we keep moving up the customer journey, there are chat logs, which are now ubiquitous—and not always as customer support interactions. They could be proactive customer messaging, like, “I have a new feature; I want to tell you about it in-app.” And you use in-app messaging tools. Those chat logs aren’t always about broken customer experiences or bug problem fixes anymore.
They could be, “How do you feel about this new feature we just launched?” Or if I see them use a feature, I can trigger a message asking, "What was that like for you? How did it go?" Then, if you move up farther, you get to things product teams are responsible for, like customer research. They're more frequently recording customer interviews they have from a primary research perspective, which captures preferences and workflows and how they think about the different aspects of your business and space. That's being captured and centralized in new ways. And then, of course, satisfaction channels. That's just VOC.
Then you have behavioral channels that match every department of how people interact with your website, with your different apps, products, and services.
That’s how modern enterprises should think about customer experience data—consider every aspect of every touchpoint of the customer journey. It’s overwhelming to think about, but it's achievable.
Carl Lewis:
You didn't mention monitoring social media for what customers are saying. That's possible to do and quantify, right?
Nate Sanders:
Absolutely. That's a great one.
Carl Lewis:
And you mentioned pre-sales—like recording the conversations with customers and then scouring that for objections/questions/things that would be helpful in training. Like, "These were the top five objections last week. We didn't handle them well because we didn't have the answers, but if we talk about them beforehand, we can do better next time."
That's getting way out in front of it before we lose it—or at least before we lose the next one, right?
Nate Sanders:
Exactly.
Carl Lewis:
Is there an example of a company discovering something based on this intelligence and modifying a process/procedure that helped?
Nate Sanders:
Definitely. We get to interface with many leaders who’ve had successful customer experiences every week. That's my favorite part of my job—talking with folks and getting their thoughts about how this is evolving. One specific example is a company called Pura. They make a connected scent diffuser, like a smart-home Glade plugin. About a year ago, they were using our system and noticed a spike in complaints about how their diffusers wouldn’t connect to wi-fi, but they didn’t see those complaints come in from observability data or through logs on the development side.
They diagnosed based on who’s complaining and asking, “What are the unique aspects/patterns among the people complaining, and what do we know about them from the customer data side?” They noticed anyone with X number of diffusers had a connectivity issue. They diagnosed it incredibly fast without written tests or observability data. We're seeing that a lot—teams diagnosing problems and knowing about issues faster than ever, then fixing them before they’re large issues with significant monetary impacts.
A non-customer example is a customer experience leader at Hilti, the tool company. They’re bringing this data in and centralizing it, building data lakes around the customer experience about how they interact across retail, digital, and even—like Sunbelt—looking at purchase histories they can get from other service providers. They're localizing how they think about their customer experience in different places/regions because they're a global company. How they talk about their tools, how they market them, how people use them, or how they get supported needs to change based on locality.
If it's a workflow support, some are based on chat versus email. In-app versus onsite interactions that are proactively engaging customers. I’m fascinated that they're doing everything they can from a customer experience standpoint across every touchpoint in the customer journey to localize, so they can enhance the customer experience from that perspective. Using the data allows people to be more agile and solve problems more efficiently. They’re also more personal and agile around what customers need based on locality, preference, product skewer portfolio, etc. That’s the future.
Carl Lewis:
Interesting. It seems like one concept here is to take data—and it’s in multiple places and processes—and, to steal your phrase—create a data lake. If a company wants to do that, what are the top things they need to do to get started? What should they think about on the path?
Nate Sanders:
You alluded to this when you mentioned the difference between reactive and proactive. We talked with folks about this, and it came up a lot during a dinner I had recently with about a dozen customer experience and product leaders. A similar question was, “How do we add sophistication to our customer experience initiatives?” One, diagnose your organization’s current sophistication—and do it without comparing yourself to another organization. You are where you are, and that’s fine. If you're more reactive, you need tools and processes to become more proactive.
You may be implementing and tracking adoption and usability data or product metrics that are shared across teams or aligned to specific departments. And if you feel like you're always putting out fires, that’s okay. It’s okay to feel like you're constantly catching up and reacting to every customer interaction and every problem in every department. The next step is adding sophistication with a focus on automation and scalability.
You wouldn't go straight to a data lake or something with that level of investment or sophistication. You need to think, “Do we have macros on the customer support side that allow us to respond more easily, scalably, and truthfully based on what we know is true about the product? Do we have documentation regarding product limitations or capabilities the sales team knows and the product team's aligned with? Do we have a shared understanding of what's happening?”
I would think more about process scalability and automating some of the low-hanging fruit so you can say, "We can go from 1 to 10, and we're comfortable doing so." The final evolution is a predictive proactive stage where you have a shared data layer across each of your customer departments, and every single team has their data pumped into this shared data layer.
You're then seeing and reporting off the same data and benefiting from the shared characteristics of what happens in that. That's the first thing: Decide your current sophistication and identify where you are in the journey. The next thing is data hygienics. Get aligned across teams regarding how you think about schema. Don't just think departmentally about how to store your customer data. Support might think about this in Zendesk, sales might think about it in Salesforce, and product might think about their usage data and the metadata they collect/use/put in an event payload.
You need a shared understanding across teams. What's valuable to track and understand about the customer? It might mean having hard conversations with multiple teams to get alignment—no matter how long it takes.
Carl, you've worked in the ERP space and have an enormous amount of experience there. The interesting thing is that many of these systems look a lot like ERP systems, even though they don't have the umbrella capability ERP has. They all have characteristics of “Should we have the financial subscription data inside of this system, so we can understand which products they're paying for and how long they paid for them or if there's a billing gap?”
Anyway, those integration points and that conversation about the shared data layer leads to great scalability capabilities where you can say, "Great, we can level this up. We can start to invest in X, Y, or Z." Those are my thoughts—do you have thoughts from your ERP experience, Carl?
Carl Lewis:
I had a thought about alerts. A lot of ERP systems have alert capabilities. But people almost always think of them as alerts that something has happened—past-tense alerts. Because alerts aren’t typically out of the box, they're created per need, often as a database query. But with skill and forethought, they can be proactive. They can warn you that something will happen. It’s something people already have that they could take advantage of in a new way. You can re-imagine what you have and use it better, disseminate it, distribute it, be open about what you have that you know nobody else has. That would be an illumination for many companies.
Last question—and I get asked this a lot about any new trend. How does focusing on customer experience help a business retain customers and be competitive? Because that's what they ultimately care about.
They say, "I want to be better than the next guy. I want to be the company of choice. When we look at customer retention at the end of the year, I want it to be 95%-plus." How does this customer experience model we're trying to create make that happen?
Nate Sanders:
Part of the answer dovetails nicely with your thought about alerts and the forethought that goes into that. With things like alerts, you have this “fall before you walk” perspective. You can write manual queries to say, "If it exceeds this threshold, please tell us." There’s growing sophistication around automatic event detection. Trend detection, anomaly detection, etc. are important to Artifact—and many other companies—because there’s increased demand of "I don't want to be reactive anymore. We have to get out in front of what matters to our customers so we can continue to keep up with the scale we have."
One of the fastest-growing eCommerce brands in the world is Solo Brands. It started with the Solo Stove, a smokeless stainless steel fire pit, and saw an absurd amount of growth in three years. The director of data initiatives and engineering expressed this very same sentiment. He said, "We’re ready to move past the fact that we could be reactive when we were scaling to the fact that to keep this entrenched success we have and continue to succeed and grow, we have to move to being proactive." That aspect is one of the most differentiated and hard-to-replicate aspects of a brand.
That's how you set yourself apart and compete with customer experience. You evolve and use that reactive evolution in those stages of your journey to keep customers happy and retain them, then get to where you're thinking about market potential, adjacent markets, market domination, or whatever tagline Tech Crunch wants to use this week.
There's a stage where you have to add sophistication to how you think about the customer experience that becomes incredibly hard to replicate, differentiate, and compete against. It comes down to an ability to predict and be proactive about what customers want and need—like taking care of a problem that’s trending up before it becomes a spike or a seasonal problem. The faster you know about it and can solve it dramatically affects your costs.
If you’re looking for new opportunities, the fact that you can detect customers’ wants/needs as early as possible in the customer journey, and act on them faster, makes you incredibly differentiated. You'll get to market faster, build products more accurately, etc. It’s a ‘measure twice, cut once’ capability on your product management and development capabilities. You'll compete in a way that makes the customer think you're always ahead. Brands are doing it through personalization and analyzing data uniquely, and it’s making them incredibly ahead of what matters to customers. It's so hard to replicate, but if you have it ingrained into your DNA and you add practices around it, I don't know how other businesses could keep up.
Carl Lewis:
I agree. Nate, this has been interesting and illuminating, so thank you for joining us and adding to our knowledge about the customer experience. Many people are thinking about it, and more information is always helpful!
Nate Sanders:
Thank you so much for having me on. It was a blast chatting with you.
Carl Lewis:
You're welcome—and best of luck to Artifact and all the work you’re doing. For everyone else, till we meet again, stay connected.
