Podcast #20

Own the financial aspect,
not just the relational
aspect

Andreas Knoefel
Founder and CEO of CS-tuners

 

About this podcast

Today we interview Andreas Knoefel, the Founder and CEO of CS-Tuners.

Andreas sees the customer support world through the lens of customer success, which is a larger scope than customer service.

 

Explore the power of AI and NLP
for your customers and agents

Interview Transcript

Welcome to the Future of Customer Service Podcast. I’m Andrea Palten from Inbenta and I will be interviewing customer support and service professionals to see what is currently working well, what issues they’re trying to overcome, and the future success of customer service.

Andrea Palten
Hello today, we have Andreas Knoefel with us. He’s a customer success expert. He’s a CEO. He’s a thought leader. He is a strategic consultant and author. Thank you so much for being here. Andreas, can you tell us a little bit more about what you do and what your current business is?

Andreas Knoefel
Sure. It’s a pleasure to be here and share about my passion for customer success. I call myself an aficionado and to me, customer success is really about maintaining and expanding the revenue from existing customers. What are all the things you have to do to make your customers happy and successful so that whatever solution, whatever service you’ll provide is becoming more like an addiction that they want more of instead of a visit to the dentist? So, in that background, I found that CSTuners, a customer success management consulting company to help companies, executives, as well as practitioners in various departments that touch the customers to achieve that goal. 

Out of my math background, from an education perspective, I’m also a data hound. I love to collect data and we’ll get to later on with the AI angle of our conversation, I have run an annual benchmark survey based on the best practices framework that I invented. It’s called the customer success performance index and it extracts what are the behaviors that the best in class leaders differentiate from whoever is just doing stuff and is not achieving the same outstanding business results as these leaders still. So, the next results will be published in a few weeks, but that is very exciting to me because that means it’s not just my opinion. I have several hundred successful leaders behind me that backed my opinions with their successes as well.

Andrea Palten
Oh, that’s great. Where can we get that benchmark report?

Andreas Knoefel
So, you’ll go to cstuners.com. There is in the blog last year’s results already available as well as other blog posts on specific topic areas and you can also participate in the ongoing benchmark data collection for free, and you get immediately a report that compares your performance and your results against this pool of other leaders in the business so that you see where you stand and also provide you with a couple of recommendations of the areas you should look into to move if you’re not yet in that upper quadrant of excellence and leaders how to get there.

Andrea Palten
Oh, that’s perfect and great timing too since you’re launching the new one in a couple of weeks.

Andreas Knoefel
Yes, exactly.

Andrea Palten
Andreas, most of our listeners are practitioners. We do have entrepreneurs listening as well. We do have a lot of folks like vice presidents and directors. At what point do those types of people reach out to someone like you?

Andreas Knoefel
Unfortunately, I have to say not enough, 

Andrea Palten
And too late, too late, and not enough.

Andreas Knoefel
Yes. Exactly. They’re mostly reaching out when they are in crisis mode and not trusting the crisis mode with one customer, but everyone’s hair is on fire. They were caught up in just trying to serve customers and business is either scaling or failing. I mean, with the COVID crisis, we had a lot of retraction and shrinkage and suddenly they’re like, I need help. I need someone to come from the outside, assess what is going on, help me get out of this conundrum that I’m stuck in, and move into a better place. So, that is usually the trigger, a high-paid point of failing business expectations internally to their board of directors to their CEOs that triggers them to see my help.

Andrea Palten
Okay. That makes sense. So, when you go and help them tell me a little bit about the customer success performance that you teach, because one of the things that were interesting when we were talking about you coming on, I mentioned customer service and you said, no, it’s customer success. I really like that because that’s what it’s all about. It’s not just to answer some calls, but actually, be successful. So how do you teach? I know we don’t have that much time, so I’ll need you to really condense, but how do you teach customer success to teams that maybe aren’t getting it?

Andreas Knoefel
There are multiple steps to this. First of all, when you look into customer service or even customer success in an org chart, you believe that’s what this team is responsible for. So, first of all, customer success is a corporate-wide attitude. Everyone who ever touches anything with the customer is responsible for that customer’s success. That means it’s the services team, it’s the support team, it’s sales, it’s marketing, it’s your account management. If you have a renewals team, anyone who is in product who implements a feature that doesn’t necessarily crash your business process, but is just unusable is responsible for that customer’s success. That is the first thing that people need to understand. Not, this is something, a responsibility that I can toss over the fence to someone else. 

In order to avoid too many cooks in the kitchen, customer success devises the strategy across all the functions inside the company, how to get that cohesive behavior, that conscience, and be the one central function that is always aware of what is going on with my customer. It could be any type of department that is dealing with a customer. It could be engineering because there was a bug in the software code that is causing some trouble and pain. Customer success needs to know about this so that nobody goes out and says, hey, it’s time for renewal. How are you doing? This is not a good time to talk about new business when the existing functions are failing. That’s obviously a very simplified condensed example but that has what you need to have. Otherwise, you’re just putting more band-aids into the braking landscape and ultimately this band will break and you’re not successful as a business anymore because your customers are abandoning you. 

Andrea Palten
Yes. 

Andreas Knoefel
So, that is the first thing and then secondly is the understanding that customer success is responsible for customers. Before they sign any type of contract agreement they are prospects. Afterward, they are customers. Nobody wants to be handed from department A to department B to function C. They are governing the entire customer journey. Customer success is responsible for recouping the loss that you have by investing in all these resources in sales and marketing to gain a customer in the development of the product and turn it over time into profit by collecting more and more subscription revenue,  services revenue, training revenue, whatever money it is that you can get in exchange for the service, the value that you provide, and we cook that investment that you made and make a profit at the end of the day from each customer.

Andrea Palten
Yes, that’s so good. So, you mentioned a few things in the last couple of things that you said. You talked about COVID, you talked about resources. So, I want to kind of marry that together because that’s been a big problem for people. It’s during COVID last year, it’s continuing this year. Customer service departments are saying we don’t have enough resources. What is something that they can do with those organizations that don’t have enough resources for customer service? Do you have any advice for them until COVID is over?

Andreas Knoefel
Everybody is in that same boat. There is not an organization on that planet that has enough resources, even the businesses that are profiting from this. If you’re looking into Zoom without knowing any details about them, but I can assure you that they would love to have more people serving their customers because they are in explosive growth mode. Other people like some friends of mine who are in the travel and entertainment industry that imploded have this different issue that they’re trying to best to do something but cannot get ahead. For both problems, the answer is the same. It is continuous learning how to take lessons from the past. What worked for this scenario, what worked for that scenario, and automate this. Create new processes, create a new variance of processes, automate those, and put those into, I call them learning buckets where the customer success team, where the customer, where partners if they’re involved. 

If you’re not directly touching your customers all can gain that knowledge by going to this oracle and basically retrieving those nuggets of aha, if this and that happens, you should be doing B, not A like you thought you would be doing. That is helping in all these scenarios to help yourself, to help your partners, and to help your customers to be successful without investing in more and more resources. In fact, one of the repeat crisis situations that I find in companies that engage with me to help them is that during a period of growth, they were cloning, whatever they had and hired more people of the same. Now because of the scale of the organization, that model doesn’t scale itself anymore and with more and more people you’re hiring, you’re increasing more and more chaos and you’re becoming less and less effective. 

So, all you’re promoting is insanity and my job is to help people out of this depression and this high blood pressure into something that is a bit more organized. That can only happen if you’re not just repeating the same behaviors over and over, that you’re learning from them capturing that knowledge, and are making decisions based off the data that you have. That could be in a human fashion or it could be in an automated fashion for AI. 

Andrea Palten
Yes, yes and I do want to talk about AI, but before we get to AI I want to ask you because you have a math background and you’re huge into metrics and data. What is your recommendation for organizations? How should they measure the success of their customer service?

Andreas Knoefel
Ultimately it is about the profits that you’re making from a customer over their lifetime. That is the key measure. That is the measure if you’re a public company you as the CEO, the CFO, and the board of directors are held accountable by the shareholders. Are you making money with this or is this a nonprofit organization who provides a selfless service? And, for-profit organizations, it’s about turning a profit. So, that needs to be your number one measurement. What am I doing? How am I performing with all the investments I do in sales marketing during the acquisition of the customer, in helping them through their struggles to turn a profit from this customer. It’s not about how happy is the customer. That is a supporting metric but it’s not the end-all. People in business are not looking to make friends.

We have social media for that. I have my Instagram, my Facebook, my whatever account for that to have my social circle of friends. Business leaders are looking for business solutions to help them be more successful in their business and your responsibility in customer success is to help them do this in a profitable fashion. That also means that for some customers you have to be able to make the decision to walk away or to not support them anymore because like some personal relationships you have to break up because it isn’t really that much of a match. You have to also say, well, we’re happy to keep you as a customer but we will not continue to invest resources and resources and resources. 

Your customers either internally is not able to react to the recommendations that we give you or your expectations into what we are able to provide are so far off from the capabilities that we believe we should provide to a large customer base that you are becoming a one-off and it’s not profitable for us to maintain you with your specific needs anymore. That is also a very tough decision because you’re like I invested so much effort in this company. It’s like, yes, and now you want to throw more good money at a bad situation. So that is what unfortunately happens in many, many cases.

Andrea Palten
I’m glad that you brought that up. Well, you haven’t talked about that on this podcast yet. Alright. So, we were talking about resources earlier, limited resources and you had said different ways to be strategic with your current customer service professionals and teams and then you brought up AI so let’s talk about that. Since you are a thought leader in the customer success space, I’d love your opinion on what do you think is going to be the future of AI in the customer service space

Andreas Knoefel
Right now, one of the many problems that organizations overall companies, and then also customer success functions are struggling with is this tsunami of data coming at them. it says you need to measure this, and you need to have this telemetry and you need to have this data point and everything into this health score into this customer relationship score and into this stuff and into that stuff and so on and so forth. How should anyone be able to discern anything out of this? Maybe in Hollywood fiction, you can take a pill and discern what the stock market is doing or something like that, but it’s a similar type of problem. How do you find information in the data that you can make business decisions on? Does this customer need help? Does this customer need a specific service proposal? Is this customer at risk? Whatever it is.

So, AI, on the one hand, I love it because in many cases you can throw a lot of data at it and your artificial intelligence in the background in itself makes already that decision so to speak, what is relevant? How much should I factor this nugget of information versus all these other nuggets of information to make that decision, to achieve this outcome? And the outcome should always be for the best amount possible to keep, renew and expand the customer. So, like I said, with learning you need to collect information, analyze it, and then make decisions on how you can come up with different types of scenarios which the practitioners don’t have the time for it because their hair is on fire. Their leaders don’t have time for it because their team’s hair is on fire and they’re running around for the fire extinguisher themselves. So, having AI as a capability to provide that real intelligence into those processes, that is where the future ultimately has to lie. 

Andrea Palten
Yes. I talked to one of our customers. They implemented their Inbenta solution. It was a chatbot, right when COVID hit. So, last year around February, March, and they didn’t know COVID was going to happen. It was just by accident. It happened at the same time and they were so happy that they did that because they’re seeing that 90% of their increased questions that they’ve been getting on the website are now handled by the bot. If they didn’t have a bot, they would have not been able to answer questions. They said it would have probably been like five-hour hold times for questions. So, it’s been wild, and this is really the time especially if you do have a leaner team to implement it and they’re getting smarter and smarter and it is less work, but it’s still work like you said. You still want to read the data. You still want to see what’s happening, what the chat’s all about if you do have a chatbot.

Andreas Knoefel
Yeah, and the other advantage is when you do this through my services and analysis, everything, it’s a one-time event. If you’re a really good leader or you have an animal retreat where you get people together or some brainstorming happening, or maybe even on a quarterly basis if you’re really exceptional, but the AI is continuously learning and improving. It’s continuously asking itself, am I still achieving the same results based out of the data that I collected? Is there another truth? Is there another sub-cluster that I can make a different decision upon to get to something instead of going after these larger sets? So, (a) as a mathematician and (b) as a practitioner I’m fascinated about AI not because it’s cool, but because it is a vitamin, so to speak that we all need in the business to inject ourselves with, to be healthier, better performing in our business functions.

Andrea Palten
Yes. It’s a vitamin. I like that. That’d be our new tagline. Take your vitamins.

Andreas Knoefel
Yes, exactly.

Andrea Palten
Andreas, I have one last question for you, and I want you to speak directly to customer service leaders. My question for you is what is the number one piece of advice that you have for customer service departments?

Andreas Knoefel
You need to be financially relevant. That means you need to own the customer renewal, the financial aspect, not just the relational aspect. A very good mentor of mine told me once in order to be always secure in the company, even in a crisis, you have to touch money or touch someone who touches money. If you’re in customer service and you are helping people to have a better experience for their little troubles, you’re too far removed from that value chain. So, you need to step up as the leader and say, I own this. You need to understand the financials. You need to provide those financials and you need to be able to make decisions to improve those financials. That is my number one advice and that is why the customer success performance index is not just the survey of what people are doing

To come up with a very cheesy example when you’re driving on roads, statistically 50% of the people on the road drive below average. That is just the nature of the average. So, if you do a survey that is just asking what you’re doing, you’re not correlating what I am doing with how I’m performing as a business, how I’m performing as a business leader, how I’m making my customer successful. That is the distinguishing key criteria between the customer success performance index and other types of surveys that are trying to discern what is happening amongst the business professionals. That is why I encourage business leaders to go and search for customer success performance index, or you go to cstuners.com and take the benchmark and see what it is all about. It takes you eight to 10 minutes. It’s about 35 questions, some of them business-related, some of them in the various aspects that I believe are relevant for customer success, and see where your core financial performance is in correlation to other business leaders. If you want to wait a couple of weeks so that you have COVID relevant information that is fine, but I would put this definitely on every business leader’s bucket list for 2021.

Andrea Palten
Amazing. I love it and I’m going to put the link to your website, in the show notes for everybody, that’s looking for it. Alright, Andreas I really appreciate your time and your knowledge. Thank you so much for being here.

Andreas Knoefel
You’re so welcome. Thank you again for having me and allowing me to share my perspective of customer success and how every business leader and practitioner can help their customer base be more successful.

Andrea Palten
Awesome. Have a good one.

Andreas Knoefel
You too. Bye-bye.

Thanks so much for tuning in. This podcast was brought to you by Inbenta. Inbenta symbolic AI implements natural language processing that requires no training data with Inbenta’s extensive lexicon and patented algorithms. Check out this robust customer interaction platform for your AI needs, from chatbots to search to knowledge centers and messenger platforms. Just go to our website to request a demo at inbenta.com. That’s I-N-B-E-N-T-A.com and if you liked what you heard today, please be sure to subscribe to this podcast and leave us a review. Thank you.