Tag Archives: customer support

Technology and the Economic Divide

Yelp Eat24 customer-support representative Talia Jane recently wrote a heart-wrenching blog about the difficulties she faced in living on her meager salary. “So here I am, 25 years old, balancing all sorts of debt and trying to pave a life for myself that doesn’t involve crying in the bathtub every week,” she wrote. Her situation was so dire that, on one occasion, she could not even come up with the train fare to work.  She lived on the junk food that they provide at work.

Her message was addressed to Yelp CEO Jeremy Stoppelman.

What did the company do? It fired her on the spot. Yes, Jane made a mistake in posting this message on Medium rather than sending an email to Stoppleman. But her situation isn’t unique. She outlined the contours of a life that are familiar to many of the people working on the lowermost rungs of technology’s corporate ladder.

After a social media backlash, Stoppleman acknowledged that the cost of living in San Francisco is too high and tweeted that there needs to be lower-cost housing.

But the problem is more complex than San Francisco’s housing costs. The problem is the growing inequality and unfair treatment of workers. And technology is about to make this much worse and create a cauldron of unrest.

Silicon Valley is a microcosm of the problems that lie ahead. Sadly, some of its residents would rather brush away the poverty than face up to its ugly consequences. This was exemplified in a letter that Justin Keller, founder of Commando.io, wrote to San Francisco Mayor Ed Lee and Police Chief Greg Suhr.  He complained that the “homeless and riff-raff” who live in the city are wrecking his ability to have a good time.

The Valley’s moguls do not overtly treat as inconveniences to themselves the bitter life trajectories that lead to experiences such as Keller complained of; but they have largely been in denial about the effects of technology. Other than a recent essay by Paul Graham on income inequality, there is little discussion about its negative impacts.

The fact is that automation is already decimating the global manufacturing sector, transforming a reliable mass employer providing middle-class income into a much smaller employer of people possessing higher-level educations and skills.

The growth of the “Gig Economy”—ad hoc work—is shifting businesses toward the goal of part-time, on-demand employment, with aggressive avoidance of obligations for health insurance and longer-term benefits. And the tech industry has a winner-takes-all nature, which is why only a few giant digital companies compete with each other to dominate the global economy.

A substantial part of the value they capture is concentrated at the center and mostly benefits a few shareholders, executives and employees. With technology advances and convergence, we are in the middle of a gold rush that is widening inequality.

Already, in Silicon Valley, the Google bus has become a symbol of this inequity. These ultra-luxurious, Wi-Fi–connected buses take workers from the Mission district to the GooglePlex, in Mountain View. The Google Bus is not atypical; most major tech companies offer such transport now. But so divisive are they that in usually liberal San Francisco, activists scream angrily about the buses using city streets and bus stops, completely ignoring the fact that they also take dozens of cars off the roads.

Teslas, too, have become symbols of the obnoxious techno-elite—rather than being celebrated for being environmentally game-changing electric vehicles. In short, there’s very little logic to the emotionally charged discussions—which is the same as what we are seeing at the national level with the presidential primaries.

Intellectuals are trying to build frameworks to understand why the divide, which first opened up in the 1990s, continues to worsen.

Thomas Piketty explained in his book Capital in the Twenty-First Century that the economic inequality gap widens if the rate of return on invested capital is superior to the rate at which the whole economy grows. His proposed response is to redistribute income via progressive taxation.

A competing theory, by an MIT graduate student, holds that much of the wealth inequality can be attributed to real estate and scarcity. Silicon Valley has both: an explosion in wealth for investors and company founders, and a real-estate market constrained by limits on development.

We need to immediately address San Francisco’s housing crisis and raise wages for lower-skilled workers.

Both are possible; the region has enough land, and the industry has enough wealth. In the longer term, we will also need to develop safety nets, retrain workers and look into the concept of a universal basic income for everyone.

It is time to start a nationwide dialogue on how we can distribute the new prosperity that we are creating with advancing technologies.

Leveraging the Power of Data Insights

The vast majority of insurance companies lack the infrastructure to mobilize around a true prescriptive analytics capability, and small- and medium-sized insurers are especially at risk, in terms of leveraging data insights into a competitive advantage. Small- and medium-sized insurers are constrained by the following key resource categories:

    • Access and ability to manage experienced data scientists
    • Ability to acquire or develop data visualization, machine learning and artificial intelligence capability
    • Experience and staff to manage extensive and complex data partnerships
    • Access to modern core insurance systems and data and analytics technology to leverage product innovation insights and new customer interactions

Changing customer behaviors, non-traditional competition and internal operational constraints are putting many traditional insurance companies—especially the smaller ones—at risk from a retention and growth perspective. The marketplace drivers create several pain points or constraints for small and medium size insurers, such as can be seen in the following graphic:

Screen Shot 2016-02-15 at 2.53.12 PM
This is excerpted from a research report from Majesco. To read the full report, click here.

The One Thing Missing for Innovation

“Innovate or die,” the saying goes. But as companies try to sharpen their competitive edge with new product and service ideas, many don’t realize that their efforts are fundamentally misguided.

That’s because their innovation process is often missing one essential ingredient: their customers.

Companies establish innovation incubators and idea labs. They hold brainstorming sessions and ideation off-sites. They produce and analyze reams of market research.

But if you wander through any of these innovation-fostering instruments, you’d be hard-pressed to run into an actual customer. What you would see are lots of executives and employees discussing what they think customers need and what products or services will help them.

Seldom, however, do companies directly include customers in the innovation process, and that is a dangerous misstep.

The most brilliant customer insights—the ones that drive game-changing innovation—rarely come from focus group rooms or market research surveys. They come, instead, from observing customers in their natural habitat.

Nothing—not the most intense ideation session nor the most robust market research report—can compare with what you learn by simply going out “into the wild,” watching and listening to customers as they navigate through their day, as they use your products and services and as they (sometimes) bastardize those products and services to accommodate their needs.

Automobile manufacturer Chrysler owes its dominance in the consumer minivan market to this concept of customer observation (technically called “ethnographic research”). For more than 30 years, the company has been the U.S. minivan sales leader, a position fortified over the decades by a tradition of customer-centric innovation.

That approach was perhaps best exemplified by Chrysler’s 1996 introduction of the Dodge Caravan, the first U.S. minivan with two sliding doors. Previous models were equipped with only a passenger-side sliding door.

Whereas other auto manufacturers just asked customers if they’d like a second sliding door (and didn’t sense much interest), Chrysler sent a team into the wild to see with their own eyes what minivan owners struggled with but might never have thought to share in a focus group.

In a 2012 interview, Chris Theodore, one of the lead design engineers for the 1996 Caravan, recalled his team’s approach to the project:

“We really had a great time. We looked at customers. We visited customers. We videotaped customers at rest stops, truck stops and lumber yards. That’s where we came up with all the ideas. From cupholders to tissue holders to rollout seats to the fourth door, these were all things that we saw the customer needed but didn’t volunteer when asked.”

As Theodore and his team witnessed firsthand, when you observe customers in the wild, you discover things that even the best internal brainstorming sessions might not have revealed. But they also saw the inherent limitations in merely asking customers for their opinions, because people tend to have needs and frustrations that they would never think to vocalize to a market researcher.

A great example of that comes from OXO, maker of popular houseware products like Good Grips. As Alex Lee, president of OXO, recounted at a 2008 conference, when the company was considering reinventing the measuring cup, it went to consumers and asked them straight out: “What’s wrong with your measuring cup?”

In response, people mentioned things such as how measuring cups are often made of glass, so if they drop the cup, it breaks. They talked about how measuring cup handles get slippery when your hands are greasy, and how the cup itself can get hot depending on what’s poured into it.

And that was pretty much all people had to say.

Then the OXO team made a simple request of the consumers with whom they met: Show us how you measure with a measuring cup.

And they saw people go through a ritual with which we’re all accustomed. They pour something into the cup, then bend down to check the measurement markings. Then they pour a little more and bend down again. Over and over.

Yet no consumer mentioned this as a problem. It’s an aspect of the measuring cup user experience that was so ingrained in everyone’s psyche that no one thought to question it—except the team at OXO. By observing people actually using the product, they exposed inefficiencies in the customer experience that indicated the measuring cup was indeed ripe for reinvention.

That led to the launch of OXO’s now famous “angled measuring cup”—a cup that lets you read measurement markings by looking straight down, obviating the need to repeatedly fill, bend and check. The company sold millions of these cups in just the first couple of years they were on the market.

It’s worth noting that both OXO and Chrysler, when they sought to incorporate the customer perspective into their innovation efforts, did so by observing and questioning consumers of their product.

Both companies at the time relied heavily on distribution partners (houseware retailers and auto dealers)—entities that they might even have viewed as customers. Yet when it came time to look at the world from the customer’s perspective, while they may have engaged distributors in the exercise, it was never done to the exclusion of the end consumer.

This is a critical point for any company that works through sales intermediaries but wishes to foster customer-centric innovation. You can’t define “the customer” as simply the next person in the distribution chain. By doing so, you might very well miss out on important insights that are difficult to capture in any other way.

While lots of companies tend to exclude customers from their innovation efforts, the oversight is probably even more pronounced within the insurance industry. Many industry executives are puzzled at the idea of observing customers. After all, insurance—unlike cars or housewares—isn’t something people use every day.

Even though insurance may be a relatively low-interaction business, there are still plenty of opportunities to observe customers “using” the product. The key is to reject the traditional and very parochial view that customers only use an insurance product at claim time.

The insurance customer experience is shaped by many types of episodes and touch points: research and purchase, underwriting and issue, online and offline service, billing and payments, premium audits, loss control reviews and, of course, claims.

These are all examples of customers interacting with their insurance product, and as such, they afford meaningful opportunities to observe and learn.

If insurers ever do try to incorporate the customer view, it usually happens relative to product development. And while that’s commendable, true customer-centric innovation requires a broader view around when and where to solicit an external perspective.

That means spending time observing customers when, for example, they receive their initial policy package. Or watching when they try to interpret a premium billing notice and then pay it online. Or seeing what steps they go through to prepare for a premium audit. Or witnessing every stressor they’re saddled with when their business is interrupted or their home is flooded.

Great things happen when you break free from the four walls of your office, venture into the wild and immerse yourself in the customer experience. You see things from an entirely new vantage point. You gain insight into how to enhance your products and services. You spark ideas for satisfying not-yet-obvious customer needs.

There’s no single right way to cultivate innovation within a company. However, no matter what ideation approach you employ, the important thing is to make sure customers are included.

And not just included in a cursory way, with a few focus groups or research surveys. It’s about including their perspective in an immersive way, by observing customers in their natural habitat, as they interact with your products and services.

Once you do that, your company’s innovation engine will really start to fire on all cylinders.