The Future of Customer Experience with Blake Morgan

Welcome to Brainfluence, where author and international keynote speaker Roger Dooley has weekly conversations with thought leaders and world class experts. Every episode shows you how to improve your business with advice based on science or data.

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Now, here’s Roger.

Roger Dooley:               Welcome to Brainfluence. I’m Roger Dooley. Today’s guest is one of the leading thinkers on the topic of customer experience. Blake Morgan is a keynote speaker, customer experience futurist, and the author of the upcoming book, The Customer of the Future: 10 Guiding Principles for Winning Tomorrow’s Business as well as the existing title, More Is More: How the Best Companies Go Farther and Work Harder to Create Knock-Your-Socks-Off Customer Experiences.

She’s worked with brands like Comcast, Accenture, Adobe, Verizon, and more. Blake guest lectures at Columbia University and is adjunct faculty at Rutgers. She contributes to Forbes, the Harvard Business Review and Hemispheres magazine, and she’s the host of the Modern Customer Podcast. Welcome to the show, Blake.

Blake Morgan:              Hi Roger. Thank you for having me on your podcast. I’m excited to talk through some of these ideas for your big global audience.

Roger Dooley:               Awesome. Well, Blake, it’s really great to have you on the show. How long have you been thinking about customer experience?

Blake Morgan:              Oh gosh. Since I came out of the womb I was thinking about it.

Roger Dooley:               Wow! Okay. You’ve got to back it up with some evidence.

Blake Morgan:              Yeah, I mean it’s a tried and true in a way. Well, since you have a… As far back as the time I had a wallet and I could purchase things, I was a customer, but really about 12 years ago I started focusing on customer management and I had my own podcast even 10 years ago on the topic and since that time working for a conference, production company and then a digital media company, I’ve worked as a practitioner in customer service, actually for Intel, the chip maker and have since focused 100% on thought leadership with my own Forbes column on customer experience, my own podcast called the Modern Customer. And I also am hired to do keynote speeches all over the world. And it’s truly the air I breathe every single day is customer experience.

But as I said, all of us listening to this podcast, we are all customers. We have customer experiences every single day. So your audience, everyone is an expert in customer experience because they know what it feels like to be a customer.

Roger Dooley:               Right. Well, I wonder, does this make a going through life more difficult Blake? I’ve often thought that like a master sommelier must really almost be cursed because most people can taste a decent 10 or $15 wine and say, “Yeah, that’s pretty good.” But when you’re really, you’re able to tease out all the nuances of a wine, you might not be satisfied with that. And I’m wondering if you run into customer experiences that would be great for say the average person, because of your constant thinking about this topic, you end up saying, “Oh well, this could be a bit better. Man, they missed that.” What would you think? True or false?

Blake Morgan:              Well, that’s a great point, Roger. Like you, my brain is always on running in the background, thinking of an experience like for example when I’m on an airplane; thinking about not just supply chain logistics but the stuff happening, the operations and the communication waterfalls that the staff get for that airplane, that airline. So it’s kind of interesting to be frank going through the world, having all of this extensive knowledge and experience and research and then just personally having transactions. And I do like to ask questions that I’m sure like contact center agents find really strange.

I don’t do this often, but sometimes I’ll ask them like, “What are you looking at? What type of software are you using?” Or for example, when you need to change a ticket with an airline. And you walk up to the front desk. It’s always interesting to me what you see because what you often see is that employees are like prisoners in jail cells. They often don’t have what they need to best serve the customer. So it is a little bit sad that you see that employees that want to offer better customer experiences, they simply can’t. Like when you do need a change in airline ticket, often the agent that’s trying to help you, they’re calling a call center themselves. They don’t have the power to necessarily help you all the time.

So yeah, I do think it’s provided some insights having this sommelier knowledge, customer experience knowledge out in the world. But sometimes you almost wish you didn’t know because you’re right. It’s like you know how dysfunctional some of these companies are because you can see everything that’s happening very clearly.

Roger Dooley:               Well, I think that airline agent is a great example too because unfortunately what they can do is often limited by the constraints of their software or their management structure. But they are the ones that take the brunt of customer complaints and it’s really important to… I see somebody berating the customer service person and sometimes maybe that person is rude, but often they’re trying to do the best they can. It’s just that the system isn’t letting them do what the customer wants and it translates into hostility toward the individual, which is unfortunate. And I really give some of these folks, especially the airline people, credit for maintaining their cool in situations where I would’ve snapped after five minutes.

Blake Morgan:              Yeah, I mean everybody at the airport, everyone has ever been to an airport has seen someone like crying or screaming and yeah, it’s those agents. Some of them just look so and seem so burnout because of the customer anger that they have to face every single day. And yes, you’re right. The software, this inhibits them from even making a change for customer that they’re not able to do it because of certain structures in place that leave them powerless, which is a shame.

Roger Dooley:               Sometimes it’s just a factor like the weather that they can’t change. Like customer expects them to work miracles, but I give them credit those who managed to stay calm and pleasant under those difficult circumstances. We’re both contributors at Forbes and you just published a list of 100 customer-centric companies. How did you come up with that list?

Blake Morgan:              Yeah, so me and my team are looking at companies that continually top customer service best practices lists that are recognized by companies like JD power. And so we’re looking at across the board, all of these customer service lists and identifying who is doing the best work. I also, personally, I told you live and breathe this stuff every single day. And so I’m also looking at companies that are doing innovative marketing that know customer experience. Because what I’m focusing on, there’s not a ton of content or organizations that focus specifically on experience. There’s a lot on service, but not experience, which can include so much more like marketing, sales, supply chain, product innovation, the feedback loop.

You’re not going to see a ton of content on that. First, Temkin has done a good job with his Temkin’s list, but again, not a ton of content. So what I’m trying to do with everything I do with Forbes, with these lists I put out is generate more awareness for the discipline of customer experience, help define it as a category because when I started focusing on this topic, people still said that customer experience was owned by customer service and that made no sense to me because service is where you go when something is broken, but experience now that can be shaped by everybody from the CEO to the people building the products to the manufacturing process to HR.

There’s so much more that goes into experience. And so I’m helping to shape and build this discipline to bring more awareness about it, to get people thinking, “Well, what does this actually mean at my organization?” But yeah, that list got a lot of attention and that’s really always the goal with what I write is to get people thinking and talking. But people love these silly lists. I mean they do mean something, but the truth is if you are doing the right thing for your company, it shouldn’t matter if you’re on the list or not. Customers will talk about the experience and eventually you’ll get the recognition you deserve.

Roger Dooley:               Mm-hmm (affirmative) Well, I think one thing you highlight there are obviously companies that are striving to do a good job in actually succeeding today. Every company I think if you look at their mission statement, well almost every company, says they’re customer-centric or they’re trying to exceed customer expectations or customer comes first. But it seems like so few actually deliver on that. Why do you think that is?

Blake Morgan:              Yeah, I believe it has to do with priorities. And even at the very, very top of the company because if you think about CEOs, often companies who bring in a CEO, the CEO will be there for a few years. Their job is to help turn around the company as if one person can do that. The board is scrutinizing that CEO. You have to bring higher quarterly profits and all of these things are really what kill customer experience because if you look at some of the companies that focus on experience, that have gone through digital transformations, their stock has taken a hit for the first few quarters or even years, but then eventually they become extremely profitable in the long term like, Best Buy or Target or Sephora.

And so to me that’s the number one problem is the board is looking at the profits. The CEO cares about short term profits and to really invest in experience, you have to think longterm and companies that do this, they have one thing in common is customer experience focus companies have founder CEOs where the CEO was the founder of the company way back when, like Capital One is an example of like a 31 year old bank where they’ve continued to invest in customer experience in digital. Other companies include Netflix, Reed Hastings and so many software companies that are extremely customer focused, still have founder CEOs.

Because they don’t care about the board. They’re not worried about being misunderstood for long periods of time and so they make the tough calls like when Reed Hastings of Netflix move from a DVD model to streaming model because he saw the future on the horizon and his stock tanked. Wall Street went bananas after he made that call of moving away from the DVD model. But you see today Netflix is very competitive, thriving, growing, but it took a founder CEO to set them on that trajectory.

Roger Dooley:               You probably have to add a Jeff Bezos to that list too because they suffered through long periods of unprofitability to build the business that they have now. And I think you’re right. If they were a sort of traditional public company with a CEO who had maybe a five-year time horizon max, which is pretty generous, there’s no way they could have accomplished what they have.

Blake Morgan:              Oh, absolutely. You know that’s the obvious one. And I actually went to Amazon last fall and interviewed them, talked to many executives and the PR people who work there. One woman, she actually works with Jeff Bezos herself, and she told me, you should read this book by Brad Stone called… Oh my gosh. What’s the name of this book?

Roger Dooley:               Is it, The Everything Store or?

Blake Morgan:              Yes, thank you.

Roger Dooley:               Yeah. I’ve read a couple of books. Great job on that.

Blake Morgan:              The Everything Store, maybe you can put that in the show notes, but I started reading it. It’s a great book that shows the true slog of getting Amazon on its feet. So much sacrifice went into it and it truly was a struggling startup for so long. But it brings an interesting question into the limelight, which is a company today doesn’t even have to be profitable to be valuable. Like Netflix is the 38th most valuable brand on the planet, but there are a couple of billion dollars in debt. So it brings an interesting question about how we do valuation of companies, how we determine how valuable they are, what is actually important today.

Which it turns out these companies that have incredible sets of data are very valuable like Netflix, which has almost 150 million subscribers today. Extremely valuable also in debt.

Roger Dooley:               Mm-hmm (affirmative) How important, like do you see personalization as being in customer experience moving forward?

Blake Morgan:              I believe personalization is the future of customer experience, but it does bring some interesting challenges; personalization such as data privacy. But yes, you bring up an interesting point that in some areas of our lives we’re getting these incredibly tailored, individualized personal customer experiences like from companies such as Netflix or Spotify or Amazon where the software through AI and machine learning and data predicts what we would want, what is relevant for us. And so we’re getting these extremely personalized experiences in some areas of our lives. But then in other areas, companies have no idea who we are, what we’ve purchased in the past, what we want, what we might purchase in the future.

And even in situations like a health care environment. That’s very frustrating. When you go to the doctor, they don’t know who you are. They don’t know you often. Even when you have a baby today at a hospital, it’s not like in the old days when you have one doctor and most healthcare systems you’re working with like 10 doctors, you have no idea who will deliver your child, and this was a shock to me when I had my daughter that most companies today are just processing so many millions of customers. They haven’t quite started using AI and machine learning to help them plow through all of this data to create more individualized experiences.

At the same time, we’re at this crossroads with data because truly many customers are uncomfortable with personalization and the collection of data. In fact, I was recently on a panel with the CEO of Allstate, Tom Wilson and Stephen Messer of Collective[i] and on the panel at the Aspen big ideas Festival. Not Austin, that’s where you live, Roger. We brought up the fact that from the economist that 92% of consumers are uncomfortable with having data auto collected about themselves because they don’t think their data is safe.

And so we’re at this interesting inflection point where we are getting personalized experiences, but we’re also very nervous because consumers have been burned so many times with so many data breaches in the last few years. And even, Alexa or Google Home or Siri, people are nervous about having these programs in their home because it’s still not clear what Amazon is doing with all that data. And if you think about it, if Alexa’s operating system was hacked, people could hear all kinds of things. You wouldn’t want them to know about what’s your personal conversations with your family in your home.

And so it’s really a challenge today, but it’s also an opportunity because we do love that personalization because it makes our lives easier and better.

Roger Dooley:               Yeah, I think maybe, one good example on that I had recently was I am a regular Amazon customer for a long time and I get quite a few sales emails from them every day. But they’re all very relevant like half the time I open them because just the headline and just the subject line is enough to say, “Oh hey, that’s something that interests me.”

A few weeks ago I needed a one page high quality colored printout that I couldn’t do in my office. So I sent the file to office depot. It cost me 99 cents, picked it up, everything was great. And I started to get between two and four sales emails every day from office depot and this was based on this one 99 cent purchase, which obviously didn’t give them very much information about me and my interests. So it was basically like a constant onslaught of spam and after a week of deleting these things, I was getting kind of annoyed. And finally I just decided, “Okay, this is too much friction.” And I unsubscribed as most people would do.

But I mean, I think the difference between those two situation… I actually get more emails from Amazon than that, but they tend to be pretty relevant. If I’m not interested I delete them. But often I do click through and at least see what’s inside the email if not even clicking through the website. It’s all personalization. But I think it’s brand trust too. I mean Amazon has never sent me an email saying, “Oh hey, we got hacked. So we’ve reset your password and we’re going to pay for your monitoring service for the next year.” They have a very high trust. They have not really demonstrated so far evil behavior, at least as far as their customers are concerned, where some of the other digital brands seem a little bit more questionable.

A few months back, we had John Padgett of Carnival, now formerly Disney on the show. And they, as you probably know, have these wearables that track you in their environments. There’s the Ocean Medallion for these ships and the Disney MagicBands and obviously this has great potential for creepiness knowing that a big brother is watching your every move as you go around. But I think it works because first of all, both of those brands are really trusted. They have not had issues with a brand trust being violated. This thing is happening within a relatively controlled environment. It’s not in your living room listening to you and as a result, it seems to be very well accepted by consumers. Obviously the MagicBand is a further along than the Ocean Medallion is, but both seem to be very well accepted by customers.

Blake Morgan:              Yeah, absolutely. I actually wrote about this in my new book, The Customer of the Future because it is a great example of IOT in practice today. There aren’t that many great examples, but what I love about that program that he created is it’s really adding value to the customer in real time because the cruise ship is really big. There are things that you want to know, you want to know what events are going on, where they are, what you’re eating that night for dinner, where your family is. And I think those are some of the services offered by that band is just simply helping customers move throughout the cruise, enhance their experience, help them to get more value out of their day.

And so I think something like this is pretty appealing and yes, the customers trust the brand that the brand won’t have a data hack, that the wrong person won’t get that data into their hands. And I think the best evidence… there hasn’t been any issues yet with it to my knowledge.

Roger Dooley:               So far so good.

Blake Morgan:              Yeah. So that clean slate is really important for future trust with those ship passengers.

Roger Dooley:               Mm-hmm (affirmative) Blake, a lot of our listeners are interested in neuro marketing and usually that means measuring consumer responses to ads and packaging. There’s an Australian company that’s using those same kinds of technologies to measure emotions in people as they look at different product photos. And that enables them to choose supposedly the best tee-shirt for them based on their emotional responses. Do you have any comments on that?

Blake Morgan:              Yeah. I think more retailers are playing with this idea of looking at the consumer’s emotions. I think Uniqlo is playing with it as well, but there is a privacy question there. I mean not every consumer wants you to be able to see inside their soul and so while I think it’s interesting, I think it’s really early and if we want to talk about advertising and creating compelling experiences, I think it’s always about understanding who your audience is and what they’re comfortable with, what they want, and not just throwing out new technology for sake of it being the next shiny new object.

It’s really about adding value to customer’s lives, figuring out what they actually want because who knows if every single customer really cares that you know if they like the tee-shirt or not. I think what’s more important is figuring out how they shop and how you can make their lives easier and better by making them do less work, by helping find more relevant products for them, products that they might not even know they need. For example, an insurance company that uses AI and machine learning to understand the data about their customers. For example, a customer might have children and those children grow up, they need car auto-insurance when they start driving at the age of 16 or maybe it’s hurricane season and you want to check in with your customers about their roofs. The insurance industry is extremely behind in using technology to personalize the customer experience.

So I think there’s still great opportunity, but yeah, these retailers, it’s kind of fun to think about and talk about today, but again, I think most retailers are just so behind and still their models just don’t longer work or you walk into a huge store, there’s like a thousand products. Most of them are not relevant for you. You don’t really know where the products are that you want and still it’s a very antiquated retail model that we’re seeing most retailers use today.

Roger Dooley:               I think the idea of to real-time emotion measurement might have some application, it might be creepy, but there’s a company called Affectiva that just got like 26 million in funding to put their technology in cars where they will be measuring apparently the emotions and such distraction levels of the driver. But they got their start in advertising evaluation, seeing how people react. And what’s happened in that industry is really interesting.

When facial coding was invented probably 40 years ago or something by Paul Ekman, it required slow motion video and expert viewers to analyze these sort of facial micro-expressions. But now it is being transferred into technology that can be done pretty much automatically by computer using relatively straightforward camera setups. Like even a phone camera or computer, laptop camera. So I could visualize something looking over a customer service reps shoulder at a customer saying and feeding into an earpiece, “Customer didn’t like your last response. Customers getting angry, customers confused. Please explain.” That sort of thing. But at the same time that could be kind of weird if you were a customer knew what was going on.

Blake Morgan:              Yeah, that’s interesting. On one hand you have these companies that are so focused on innovation, but on the other hand it’s like when I think about what you’re saying in conjunction with some of these companies that just still make customer’s lives so hectic, even the auto adding of emails like you mentioned at… Was an office? Was a company?

Roger Dooley:               It happened to be office depot, but it’s happened elsewhere too.

Blake Morgan:              But yeah, it’s so rapid. Like even when I travel and I stay at a hotel, drives me nuts when they auto add my email to their list and then they’ve got like 10 hotel brands and so all of a sudden I’m getting emails from like 10 different hotel brands. And it makes you angry because you feel like, “Well, I didn’t allow you to do that.” And so, yeah, I think in some ways we have all this innovation happening, but in most companies we’re still so behind in how we treat the customer experience. And we’re often building experiences for customers that we personally would never want to have.

Because like there are people who are actually opting customers in to these email lists and spamming them and trying to sell them products they don’t want, even though they personally would never want that experience themselves.

Roger Dooley:               True. And yeah, you really wonder when most direct marketers go to great pains to careful about opting people in and all kinds of, there’s boxes to check and such, somehow it seems to happen without that process in so many cases. But just to shift gears Blake, what’s your take on the retail apocalypse? We’ve seen malls closing, stores closing. Is there a future for shopping malls or big box stores or is that going to be very, very different do you think?

Blake Morgan:              Yeah, I do think there’s a future for big box stores and shopping malls, but it’s not what we’ve known in the past. I think these are now spaces where people can congregate for experiences that they wouldn’t be able to get at home. Whether that’s an interesting concert or a gym experience, like SoulCycle. I’m a big fan of Orangetheory, which I do in a retail space near my home, but we’re not going to have the same traditional brick and mortar that we knew of the past. I think it’s just too convenient and wonderful to be able to sort through the millions of products online and find something that’s relevant with a click of a button.

But I do think there’s definitely an opportunity for retailers with service. So styling services, tailoring services, any service with personalization. You’re going to buy a wedding gown, you’re not going to do that online or let’s say you need to get a bunch of suits for a job, you’re going to get those suits probably not online. I mean, at least today, the services offered for most retailers online, just still you’re never going to get the accuracy that you can get from going to an actual store, being able to touch the items.

But now with free returns and free shipping, I mean I personally, my shopping behaviors change incredibly. I mean when I was a kid in Orange County, like going to the mall, that’s what we did. Like every day. My mom’s friend would take us, we’d go to Red Robin, eats some hamburgers and shakes and we’d walk around the mall and that was our day. That’s where we spend our time. But now going to the mall is a huge schlep. I mean, who has time or wants to sit in traffic? And so the beauty of shopping online, I personally, for my job, I’m on stages a lot and I need dresses and my ability to dress myself well is part of my job.

So I have ordered many, many things online which I returned some of, but I wouldn’t be able to do that without this new mode of online shopping, free returns and how retailers have just simply made it so easy for us to buy online. I think these malls, again, they will be experienced centers, there will be more concept stores like Nordstrom where you can’t buy anything from the Nordstrom concept store, but you can get your clothes tailored, you can get a manicure, you can have a latte or a cocktail and perhaps get some personal styling. I think people will still turn out for that.

Roger Dooley:               Yeah, that’s a really fascinating concept. I’m going to love to see how that plays out. What about subscription boxes? I know you’ve said that they’re in growth mode. Why do people like them and are they sort of destined to top out at some point?

Blake Morgan:              I think subscription boxes are very interesting for people. I think most people, at least, I live in San Francisco Bay area, people are very busy. They love this aspect of not having to do any work. A lot of my friends and neighbors get even produce delivered. I mean there’s so many subscription boxes today. I personally don’t really get some of these like makeups subscription things that have become extremely successful because… I won’t say I’m a control freak, but I don’t like waste. And I like what I like.

So for me, this random assortment of products in a box sent to me every month, like a fitness box or something with like… I’m very picky, I don’t like that. But let me tell you, when I was pregnant and I didn’t want to buy a bunch of maternity clothes a few years ago, having the ability to do Le Tote subscription to maternity clothes was amazing. Where I had some choice over what I ordered every month and what I wanted to buy, I just would keep, and they charged me for, and it’s really more sustainable too because the clothes are dry cleaned, but it’s less waste because I’m sharing those clothes with other women who are also pregnant.

Roger Dooley:               Mm-hmm (affirmative) That’s an industry where it really makes sense. I think even though they’re not new, but I mean as you say, I’m sure some of these clothes, the time period where you can wear them is very, very limited and it would be a shame just to throw them out or they end up in secondhand shop where they may or may not really get sold.

Blake Morgan:              Also like dollar shave club. If you’re going to have subscription service, it better be for something that people need all the time and a lot of. Like razors in the past to get a razor you had to go to like a Walgreen’s and I understand the razors were locked up and you have to go get somebody to help you. It’s like a huge pain. And with Dollar Shave Club, the founders decided, “Well this is terrible. Like who wants to have to go through all that?” And so they created this wildly successful brand that sold to Unilever for $1 billion. But razors are something that people need every single day. So I think subscription boxes, some of them are here to stay. Some are just kind of gimmicks. You’ve got to make sure they actually offer value to people and there’s a real business reason to have your subscription box.

Roger Dooley:               Yeah, I may be wrong, but I have a feeling that an economic downturn of some kind could really do a job on many, many of these companies because I don’t have any subscription boxes, although I saw one for all these travel accessories and like you, I travel a lot to speak domestically and internationally and so I’m always looking for little travel hacks, cool little things that to make my life simpler. That’d be kind of cool, but I can just imagine that if times got tough, I understand that there would be waste. Like I would get things that I probably wouldn’t use. I’d end up giving them away to somebody else, but when times are good, but that seems tolerable.

But I can imagine a lot of people if suddenly times weren’t so good saying, “Okay, well this is something that’s kind of fun, but it isn’t essential. And if I need clothes, if I need whatever happens to be in the box, I’ll go out and pick out exactly what I want and only that.” So we’ll see how that plays out. It’ll be fun to find out.

To wrap up here, why don’t you get out your futurist crystal ball. We’ve already talked about some things about the future of customer experience, but is there anything that you think is important that we haven’t covered?

Blake Morgan:              I think we actually need to return to the past when we think about the future. I think we need to return to this notion of being a human being, of culture because we’re so focused on technology when we think about innovation and customer experience and employee experience, but we have to really look back and just think about culture. So how do we communicate at work? How do we treat people? Because while technology is important, any company can have great technology, but the attitude is really the missing link. And I think in the future companies that return to this notion of humanity, of treating people well, of thinking, “Well, how does it feel like to be an employee that works here?” “How does it feel like to be a customer?” And then of course the technology is in service to this customer and employee experience mindset, but the technology is not the goal or the North Star.

The North Star is having the culture and attitude for growth, for innovation and then the technology helps you on the way.

Roger Dooley:               Great. Well that’s a good way to wrap up. Let me remind our listeners that today’s guest is Blake Morgan, author of More Is More and the upcoming book, Customer of the Future.

Blake, how can people find you and your ideas?

Blake Morgan:              People can find me at my website, which is blakemichellemorgan.com, and thank you so much for having me your show today.

Roger Dooley:               Well, it’s been delightful, Blake. We will link to that site, to your books and to any other resources we spoke about on the show notes page at rogerdooley.com/podcast, and we’ll have a text version of our conversation there as well.

Blake, thanks for being on the show. It’s been a lot of fun.

Blake Morgan:  Thank you so much, Roger.

Thank you for tuning into this episode of Brainfluence. To find more episodes like this one, and to access all of Roger’s online writing and resources, the best starting point is RogerDooley.com.

And remember, Roger’s new book Friction is now available at Amazon, Barnes and Noble, and book sellers everywhere. Bestselling author Dan Pink calls it, “An important read,” and Wharton Professor Dr. Joana Berger said, “You’ll understand Friction’s power and how to harness it.”

For more information or for links to Amazon and other sellers, go to rogerdooley.com/friction.