Why Failing to Invest in Customer Support is Costing You Money – John Moses, Nest

John Moses is one of the true visionaries of Customer Experience. John heads up customer support at Nest Labs, the market leader in home automation, and he has some incredibly strong opinions about how companies should be treating their customers. He recently shared these opinions with me in a recent episode the Voxpro Studios podcast.                    

Check out the interview on iTunes, Soundcloud or Stitcher, or continue reading below for John’s thoughts on:

•  How joining Nest felt like being ‘let out of a cage’.
•  The ‘cost of non-support’: why failing to invest in CS may save you ten cents but will cost you a dollar.
•  Why he encourages his agents to rip up the script and have human conversations
•  Why Steve Jobs had the wrong attitude to Customer Support.
•  Which tech companies he believes have the best CX strategies and why.
•  What CX professionals need to be doing today to best serve the customers of tomorrow.

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Patrick: John, can you tell us a little bit about your career path to date?

John Moses: Well I didn’t start off as a customer service professional. I think you find that most people that are Customer Service (CS) executives have risen through the CS ranks. I started off as a strategy consultant. I was in management consulting for about fifteen years, looking at all aspects of businesses from Sales and Marketing, to Back-Office, HR, Finance, Health and Safety in industries like Healthcare and Financial Services. I learned a lot about business in that time generally solving problems that range across the board, and customer service was a part of that.

Then I had an opportunity to join one of my clients as VP of Customer Service and I asked myself am I a customer service guy now? Is that my identity? And to be honest at first I was reluctant, but then I thought I really wanted to take what I have learned in many years of consulting and see if I could apply it, build it and focus it in one function. So I made the leap and fell in love with it.

Patrick: Where was your first leap to?

John Moses: I became Vice President of Customer Service for a tech company called Palm which is a technical company that is well known for making the hand held – the PDAs (Personal Data Assistants) – and then moving into the smartphone. In fact they really invented the smartphone.

It was my first time really owning a function, owning a budget and the PNL. I’d always been telling everyone how to do it and never really being ultimately responsible and so I carried the bag pretty well.

Patrick: How was the transition?

John Moses: It was spectacular! I was very concerned about being bored to be frank. I had come from a world of working for one client or multiple clients at a time, changing industries, changing functions, working with different people around the world and thought I would be bored if I was in one spot. But I found that not to be the case. It was so rewarding to get to chase a problem from the very beginning all the way through to result, and having the patience and the time to move things from the back burner to the front burner when priorities shifted ,but never letting go of something that needed to be done. So you had this runway to actually see through a solution until it was delivering.

Patrick: Was it a big operation at that stage (2005)?

John Moses: At that time customer service at Palm was probably about 800 agents – customer service people think in terms of agents and the support staff was around 25.  This grew to over 1000 agents and about 75 staff while I was in charge.

BETTING BIG ON CHAT

Patrick: What were the channels that were available to you at that stage?

John Moses: The channels of support actually were phone and e-mail heavy. Chat was a new thing at that time believe it or not, and we bet big on it. We not only delivered and started chat for the first time, we actually brought it to our mobile devices.

We were probably the first to do what would be considered an Amazon Mayday– like play: we used our operating system which was owned by Palm (Web OS) and we put chat right into the applications so that a customer could have a challenge and immediately chat with us round the clock from the device using our software. It was less chat and more messaging at that time and customers loved it, and it drove our contact mix to 50% chat (including desktop chat and mobile chat) of all contacts which was obviously great from a cost perspective –  but more importantly customers wanted it and enjoyed it.

Patrick: That was an quite innovation at that stage, that’s going back 12 years?

John Moses: Absolutely, It’s amazing how things get credited to other brands that do things, but they’re really stealing a lot of times from smaller companies who have done things and seen it and then made it more visible at a grander scale.

Patrick: So you then moved on from Palm to HP. What was the difference in your role there? Was it very much a similar role and or were there very different elements to it?

John Moses: It was a very similar role. I would say arguably I had great success at Palm, and HP, in their acquisition of Palm, recognized that we were doing some things differently and were really innovating, if you will. So they were very eager to bring that into play in a company like HP that has been around for a long time and so we were quite protected.

HP did a lot of observation of what we were doing with our tools, technology, customers and policy, and so when I was brought in it was actually a bit of a reverse emigration if you will: I was asked to bring Palm practices to the larger acquiring company and I ended up not only leading mobile products that were Palm-originated and HP-originated but then took on PC’s and then took on printers.

So my role was almost exactly the same – driving customer strategy and leading the evolution of capability and technology – but on a much, much larger scale at HP. To put in perspective in terms of numbers of agents we had 14,000 at HP. So it was a much bigger stage to do similar efforts and I was actually welcomed to do that at HP which was very, very, appreciated by me, that they were open to that kind of change.

THE CHALLENGE OF SCALING FROM 800 TO 14,000 CUSTOMER SUPPORT AGENTS

Patrick: ..and it says a lot about what you had done at Palm that they just wanted that replicated.  And we might come back to in a little while, but a lot of people listening to this interview would be interested in how you actually take something that you did in Palm with a hundred or a thousand agents and scale that to 14,000 at HP – that’s a real challenge. So from HP you joined Nest nearly two years ago, tell us about Nest and your current role.

John Moses: Actually I think it would be best if I just address your question about scaling right off, because what was different about HP was the challenge of aligning so many people in so many regions and places. A company like HP doesn’t necessarily have one person in control, one decision maker who can enact a new approach or a new strategy. There are many, many matrixed groups within a company like that, so you have to align regions, you have to align product groups, you have to align different functional aspects and channels.

There are many routes to market when you are selling PC’s and so you have to get all the people on board and everybody has their perspective, so the great difference in a place like HP versus a place like Palm is just the number of people that have to agree before you really can proceed. So the main challenge is just the internal muscle that has to be applied and the patience to get everybody on board with the story and the plan. And so when I came to Nest what I found was I was reversing back in to a Palm–like environment – a very similar-sized company where it is very, very fast to decide and go, and a much greater willingness to experiment, to just say, “let’s just try it and we will adapt” versus “let’s prove it and get it all worked out before we scale it”.

Patrick: Does that mean when you were at HP, was a certain percentage of the time you should be spending innovating and experimenting, dedicated to people-managing and trying to get things over the line?

John Moses: Unfortunately – and HP is no different than any big company – there is a lot of energy that has to be placed into what would be considered stakeholder  management and change management – that is just a bi-product of being big. And so I would say unfortunately that’s what holds big companies back and generates the criticism of big companies not always doing the right thing or feeling like they are out of touch with customers and what they need. It is just a bi-product of just being big and it is no one person’s fault, it’s just the way it is, and it is a challenge.

BEING LET OUT OF THE CAGE, CREATIVELY

Patrick: And do you feel to a certain extent that this was holding you back, and when you got to Nest you were able to let loose again?

John Moses: It was like being taken out of a cage.

Patrick: So how did you approach it, you’re out of a cage now, what else?

John Moses: You go for it! I was very much appreciative of coming into a smaller company where the founders (Tony Fadell and Matt Rogers) said “we brought you in here because you know how to do this, we don’t know what to do, tell us, let’s go do it and you can just decide and go”.  It is a culture that is about challenging the status quo, I would say Nest is at war with the status quo: we watch to challenge what people have been trained to believe about their homes and the products that are on their walls – like a thermostat or a smoke detector – and say it doesn’t have to be that way; it has been that way for decades and we are saying no, there is a new way to think about your home and the products that should be taking care of you, rather than you taking care of them.

The whole culture is around challenging the way things are and so immediately by just walking in the door,  you get the right to say “I want to do this differently”  and the response is “that’s interesting, how can we help you?” rather than “Oh, I don’t know about that, that sounds risky” or “no one does it that way, tell me how Dell does it or how does Microsoft do it”.  So you start with this open-mindedness, a posture of support to do something crazy or revolutionary rather than immediately facing the resistance.

WHY STEVE JOBS WAS WRONG ABOUT CUSTOMER SUPPORT

Patrick: So Nest is doing something different from what we traditionally see is as what we could do with our homes, does that mean that you have to take a very different approach to your customer strategy and your customer support? Because surely a lot of your customers are used to things being one way, while you are doing things a different way, so does that mean there are different challenges to face when you are dealing with your customer base?

John Moses: Yes, I think that there is a lot of perception about what tech support is and why customers call, and there is this consternation or regret that people need help. So Steve Jobs for example – and this is probably hearsay I don’t know if he said it, its not first–hand – but my understanding is that his belief was that every contact that came in, even at Apple, was a signal of his failure, of their inability to make a product that was perfect, that didn’t need support – and I think that’s a fallacy.

I think we’ve introduced customers to beautiful products, and those products have given people more choices, more options to configure and to use them in a way that fits their desires, their goals, their lifestyle. But everybody is different, everybody’s home is different, everybody’s family is different and they are going to approach these things in different ways. And they need help with things that are not a signal that the product is bad or broken – quite frankly Nest products are probably the finest quality hardware products that you will come across: they don’t fail, they don’t not work. They might not work but it is because they are in the environment that they are in and the problem is the wifi, it’s the connectivity, its the HVAC equipment.

Or just the users just don’t understand how it can work for them because we’ve loaded these things with functionality, and I would say that services greatest challenges for the future is the feature adoption thing. This is an educational challenge; its how do I help people by first adopting a product with a killer feature or the feature that motivated them to buy it, get them to love it, but then get them to open their mind to be educated and to learn about the other 10 or 20 or 30 things they could do with that product. I think when you give someone a smartphone today, most customers are doing 3 things, 5 things, 6 things with it – but it can do 50, and opening people’s eyes and helping them on a journey to learning, to embracing, to trying, to exploit what that product can do is the challenge. That’s the posture that support should be taking: we’re not here to necessarily fix broken things, we’re here to help people exploit and explore what they bought. We want them to feel good about the value proposition from their context, what they want out of it, what they’re goals are.

TEACHING CUSTOMERS HOW TO FISH

Patrick: What that comes down to is conversations with positive outcomes between your agent and your customer. Is the agent the person who you see as the one who is going to be educating or may be drawing them out and helping that product do a bit more for them?

John Moses: I think it’s a multi-pronged solution and customers would be the first to probably raise their hand. I think there’s a misperception that customers are lazy, that customers call because they don’t want to do the groundwork, to read the manual or do the homework on the web. I think that’s a false belief. I think most customers would love to self-serve. They actually get great satisfaction out of proving to themselves that they can stumble across a problem or find an answer, they get a great feeling of satisfaction by being able to do it themselves.

I think you need to build their confidence, you need to point the way, you need to show them how to feed themselves, teach them to fish, if you will. And so a lot of Nest interactions we are going to help them with one thing but at the end of every call I insist that we send them an email with a knowledge article that says: here is what we showed you how to do and by the way, it was there, you could have done it by yourself; and by the way here’s something else that we talked about you might be interested in, let me send you this video, let me send you this article, let me point you to this feature. We are educating them so that the next time their first reaction should be:  before I call, before I have to chat, let me try myself.  What we are doing is basically make them feel greater self-sufficiency and that’s something that customers are very proud of.

WHY YOU NEED TO SET CUSTOMER SUPPORT AGENTS FREE

Patrick: What do you think are the qualities inherent in a really great customer support agent?

John Moses: Wow, to be honest I think we’ve all made this harder than it has to be. In terms of delivering great experiences and getting higher satisfaction we have made it harder because we haven’t always enabled an agent to be successful, we haven’t put them in a position to be free, to do what they need to do, and to build a personal connection, we have really kept them on rails, bounded on what they can say and do. I have a much looser approach. These are all human beings and this a human equation: you got one agent on one side and you got a customer on other and what I’m trying to build and manufacture every day is an experience that happens between those two people.

There is no pre-cut way of doing that. There are certainly fundamentals, but we want that customer to feel like that agent listened, that they actually built a personal connection, that there might even have been some level of humour in the dialogue. We always say to our agents that we’ve just been invited as a guest in someone’s home and that’s how we should operate. You certainly should be respectful, but you are there to have a personal connection, just like if you were at a party or you’ve walked into someone’s home and said: “hello my name is..”.  It’s a first name basis and it is a respectful thing, but it’s getting to know each other.  I think we’ve all made this too hard, it’s just letting two people talk, listen, understand each other and evolve to obviously address the issue at play but to then go beyond that. Find out what the customer is really trying to do, how we can learn from their experience and do more for them or make our products better the next time.

WHY CUSTOMERS LOVE SOCIAL SUPPORT

Patrick: So that’s about conversations, just two people talking, but what about the role of social support and chat?

John Moses: Customers, by and large, would much prefer to have a dialogue in a chat or social media where they are controlling the time frame. When you are on a phone call you are 100% locked into that call and you have to have their undivided attention – but we are all living in an age where we are multitasking and I think social media messaging can be a really useful part of that. Customers can ask a question, they can look at their computer or phone and do something else and then they can come back to the answer they just got. So they’re getting what they need but it is not preventing them to continuing to live their life in that moment.

But it doesn’t have to be any less formal, even though it’s in writing.  We want to bring a warmth and humanness to the dialogue where its clear we are not robots, where customers don’t feel like it’s scripted, where they have this sense that we’re being personal and human. We call it ‘Nestiness’.

CUSTOMER EXPERIENCE IS THE NEW MARKETING

Patrick: You have worked in a number of roles, not just in customer support but beyond. What have you learned about yourself and your own approach to your profession and career and your own development over the course of all these years?

John Moses: So I made this switch to service and what I found is that the customer service function is the most ripe function for change in a business, regardless of which industry. Let’s be honest, I don’t think service is the most sexy or attractive function to go to and you don’t always attract the greatest talents – your graduates from Stanford or Harvard don’t often set out to be a customer service guy or girl. But it’s a shame in a way, because the function is obviously becoming more and more strategic and critical to any business’s success as companies compete in this age. Customers have more information available, they have more choice available and these experiences do play a very big role.

They say customer service is the new marketing because people don’t necessarily listen to what a brand says about itself, rather they listen to what other customers are saying. The service function is becoming more and more strategic and critical and so I think it is the place where the most talented graduates and professionals should be going because they can play a very big role. I would say service is the largest room in the house for improvement in a company and so from my standpoint it’s a playground in which you can make changes and try things, experiment and watch and see progress before your very eyes, in a way you might not see in other functions.

CUSTOMER EXPERIENCE: THE GOOD, THE BAD, AND THE UGLY.

Patrick: You talked a lot about customer support, it’s ever increasing function, and how to do it right, are there any other companies that you admire for how they approach customers support?

John Moses: Yeah, very good question and before I answer that question about the admirable I would want to make a point on how unadmirable I think most companies have been or are around customer service. I think it’s a shame that many companies don’t value it – or at least they talk the game but they don’t walk the talk, in terms of really being able to say this is an investment, it’s not a cost. It’s so easy in a company to look at your costs and your revenues and to make tradeoffs and sacrifices, to cut corners to make the quarter.

The pressures that come on most service functions is tremendous in terms of cost management and I think they make short-sighted decisions, creating what I call ‘the cost of non-support’. You have companies working very hard to not do support – they are trying to save 10 cents but they are losing a dollar. They are trying to say no to customers and deflecting calls instead of just opening the floodgates, taking it in and then learning exactly why you have to do support in the first place.

This ‘cost of non-support’ happens when you didn’t help the customer, the customer didn’t get their problems solved, they probably might have return the product and they probably told ten people about the bad experience they had. That’s where you have lost the dollar while saving the 10 cents and I just think it’s short-sited and it’s a shame. A lot of companies should be embarrassed on the experience they are actually delivering. I think by and large that’s the norm. But I think it’s changing, the pendulum is swinging and a lot of companies are figuring it out that this that’s a losing proposition for their brand in the long run and their sales.

There are also a lot of companies doing it right. Apple does a wonderful job of delivering a great experience, a wonderful multi-pronged approach which is really good technical support on the phone combined with stores where customers who can’t get their problem solved on the phone can walk-in and meet someone face to face.

I think Amazon certainly is an oft-cited example of a company who has invested a ton in support. They don’t do it always in an assisted fashion – they’re pushing people to do self-help, they’ve got tremendous answers and e-service and they do a great job of showing how to do the service in a way that doesn’t require lots of assisted support but really giving the answers to customers on an unassisted fashion. I would say they are the one company that has probably taken some of their best talent and analytical minds and put them into the customer support function.

THE FUTURE OF IoT AND CUSTOMER SUPPORT

Patrick: So final question, in ten years’ time where do you think the internet of thing (IOT) and also customer support is going to be, how different it going to be?

John Moses: As consumers, we are begging for these capabilities that are evolving and customers are going to chase and want all of this stuff that allows them to live a more connected, informed, and controlled life.  For example, I was on vacation a week ago and while I’m on vacation I can see the coming and going of people that are doing work on my home. I know every car that came into my driveway and I know everybody that walks in to a certain room because I’ve got Nest cameras and video footage I can go back and watch. I think customers are going to want this kind of control, like the ability to turn the lights on and off, and the ability to turn the heat-up when you are not at home.

These things are going to be very attractive to people but they also present two big challenges: one is the sense of privacy and vulnerability; who can see this stuff, and could it get hacked. So there’s this huge anxiety that comes with it but I don’t think customers will forgo it because of that – it’s going to be up to brands and support departments to help and reassure people that it can be done in a safe and private way over which they have full control.

The second challenge is all the choices and all the decisions.  While these products are getting incredibly powerful there are more and more features and more interplay between how these products work together and the choices I make about what I can do with them. I call this the ‘Configuration Challenge’. I’ll give you an example from Nest: I can have my cameras set to be off when I’m in the house and when I leave, my phone and the system’s geo-fencing function know to turn the cameras back on. These choices get increasingly complicated because I’ve to decide which family members are allowed to have control of these settings, who can see the cameras, who can change the parameters of the solution, who can change the temperature in my home and to what extent. These are things that people want, they want these specific choices, but I think it is going to overwhelm them because it’s going to give them probably more choices than they want. They’ll experience challenges and issues, and they’ll call us and ask why is happening, this is broken; it’s is not broken, it’s just a toggle switch that they had on or off that they didn’t know they could change. So this brings us full circle to the earlier conversation that the dilemma in the future isn’t broken things, it’s education about customers’ options.

Patrick: John, absolute pleasure to speak to you and we got some fantastic insights there, thank you very much for joining us.

John Moses: You’re welcome.