The True Surprise Factor Behind Retention and Growth

Transcript

[00:00:10] Steve MacDonald: Welcome everyone to the Contact Center Perspectives Podcast. I’m Steve MacDonald, your host, and today I guarantee we have a fascinating conversation with Katalin Fritz. Now, Katalin, you are not only the Chief Customer Officer but also the Chief People Officer. You oversee, you’re the Managing Director, I believe, of the Portugal Center.

[00:00:31] Steve MacDonald: We’re going to talk today about the true surprise factor behind retention and growth, and we all know that to grow as businesses we have to take care of our customer base. We know how fragile that can be, and in fact a study that came out about a year and a half ago said there were $3.7 trillion in play because of poor CX, because of the way we are not handling our customers across the board.

[00:01:00] Steve MacDonald: So this is a very big, very important conversation. I love it. We had a fascinating discussion before we started about your background, and you have a really interesting mix. You studied linguistics, went on to get an MBA in economics, you’ve been in marketing, you oversee as Chief People Officer and Chief Customer Officer. You have a very broad background. You are now the proud mom of a new golden doodle.

[00:01:29] Katalin Fritz: Thank you for mentioning it.

[00:01:31] Steve MacDonald: Before we get started, I’d love you to explain a little more about your background, and then we’ll dive right in.

[00:01:38] Katalin Fritz: Thank you so much for the opportunity. Without aiming to overwhelm, I think it is important, when someone wants to know me better, to note that, as you just mentioned, I did not start in the business field. My initial studies were in literature, comparative literature, and linguistics, specifically mathematical linguistics. As I entered professional life after graduation, I came closer to business processes—how companies work, how teams work, how people functions operate. All of this built up brick by brick, connecting my academic knowledge with everything in business, and I truly enjoy it.

[00:02:30] Katalin Fritz: This motivated me to see and discover more. As you mentioned, I began my MBA studies while working. I had an amazing mentor in my first workplace, a female mentor—my former lead manager. I really looked up to her as a leader and role model.

[00:02:56] Katalin Fritz: I appreciated her guidance and interactive support in these studies because, both financially and time-wise, she fully supported this development. I was accepted into the Berlin campus of ESCP.

[00:03:18] Katalin Fritz: Instead of bringing all the new learnings back to the company, I decided, in agreement with her, to move to Berlin to discover more of the world and see how economic studies and student life are approached differently. Back in those times in Budapest, I took the chance.

[00:03:44] Katalin Fritz: From there everything came naturally. I started at Axel Springer in Berlin as a practicum in the marketing department, still linked to my former publishing-house radio experience in Budapest. Then I moved to London as a product development manager, mainly building new products and finding audiences in various locations, including Hungary, where I am originally from.

[00:04:26] Katalin Fritz: My first real leadership role came when the company promoted me to lead the first shared service center in Bratislava, Slovakia, so I moved back to the Central and Eastern European region. This was followed by other relocations, mainly in business development and operational roles. I learned a lot. Later, at the Avis Budget Group and its Budapest service center, I had to build strong end-to-end businesses with reliable processes. Learning how to approach talent management was also very important, with many lessons on my end.

[00:05:16] Katalin Fritz: Each company I worked for, and still work with, is very international. Creativity was an interesting mix during very exciting times. I was always full of energy and motivation to do something new.

[00:05:30] Katalin Fritz: I wasn’t a job hopper changing companies; rather, I was in discovery mode, changing roles to add to my portfolio. My guiding motivation has always been, and still is, to enrich this portfolio so I can look with broader lenses at topics, situations, business problems, people problems, innovation, and how to innovate on behalf of customers. A bigger milestone came after building the shared service center of Avis Budget Group—truly exciting times with amazing people and complex transformations—when I moved back to Berlin to work for Amazon, which was a real perspective change.

[00:06:30] Katalin Fritz: Moving to the other side of the table, customer service quality management evaluates how we fulfil customer needs, how we satisfy customers, and how to improve that experience end-to-end. The work is very data-driven and very customer-obsessed.

[00:07:00] Katalin Fritz: Needless to say, everyone knows Amazon for its amazing culture and infrastructure, both technological and people-focused. Wherever you go, you learn at every meeting because fantastic people are everywhere.

[00:07:19] Katalin Fritz: That journey brought me to Marley Spoon in 2016. I started as Global Head of Customer Communications. Fabian Siegel, the founder and former CEO, reached out to me. With my team, we built everything from scratch—frontline, insights management, outbound functions—at high speed.

[00:07:58] Katalin Fritz: I would also highlight the framework in place to run a customer-led business. It reassures me to see a seat in the executive leadership group for a Chief Customer Officer paired with people insights, representing the core need to have the customer present in every decision and to ensure we have a team aligned and motivated to deliver on that promise. 

[00:08:45] Steve MacDonald: Well, you know what’s really fascinating? One of the things I’ve really been looking forward to about this conversation is that I previously interviewed a Chief People Officer who had a PhD, and his thesis connected the dots we all know to be true: if we have engaged employees, we have a much better chance of having engaged customers. If we have engaged customers, we have a much better chance of growth and revenue expansion.

[00:09:13] Steve MacDonald: We know that to be true, but he proved it, and I thought it was fascinating. So, the fact that you’re paired together as the Chief Customer Officer and the Chief Business Officer means you’re bringing the high-performance teams and the engagement that powers every business.

[00:09:30] Steve MacDonald: Amazon knows that. You’re doing that at Marley Spoon. So, it leads me to our first question, because there’s a part of it that sounds very familiar and understandable, and there’s a part that has an element of surprise. It’s about building loyalty through consistency and surprise.

[00:09:49] Steve MacDonald: So, we all know we have to be consistent with our brands. Our brands are a trust mark, and we can’t break that trust. We must be consistent in how we go to market and deliver. What do you mean by surprise and the balance of consistency and surprise? You put those two together, and you wanted to talk about them.

[00:10:07] Katalin Fritz: Yeah, look, very good and relevant question, especially in the case of Marley Spoon, because Marley Spoon is currently a meal kit and food-solution provider. Obviously, we constantly work on enriching this portfolio—our promise and offer to the customer—but our core product right now, both with our brand Marley Spoon and our brand Dinnerly, is to provide week-night cooking solutions for our customers in the form of a meal kit. These two brands serve different customer groups, yet they share the same foundation. Essentially, we offer our customers a subscription for weekly delivery, and customers can order in multiple configurations: they might order for two people twice per week, or for four people, depending on their circumstances, all supported by a continuously enriched range of products.

[00:11:12] Katalin Fritz: We already have products beyond the meal kit, like our Marketplace and other items customers can add. But, at its core—and to answer your question—everything revolves around the subscription. We must offer reliable delivery, a reliable cooking experience, a dependable box, and trustworthy customer service so that customers willingly spend their money with us every single week. We actively measure this willingness to repurchase. When we look at customer insights and guiding metrics, we strive to understand their motivation after receiving the box and after cooking the meal, because every touchpoint influences their decision to return the following week. Therefore, fulfilling this base promise is absolutely essential for us.

[00:12:22] Katalin Fritz: I need to add that, on an individual level, many factors can influence this experience, and some are outside our control—such as delivery-company capabilities or weather-related issues. Anything can happen in the world, and even if we deliver one hundred percent and customer service is top-notch, factors beyond us might still unfavorably affect the experience. Our intention, however, is to deliver on this base promise without fail. Whenever we try to surprise customers, personalize interactions, or leverage the knowledge we have about them, those efforts should enhance—rather than replace—the foundational promise.

[00:13:14] Katalin Fritz: The two things do not work in isolation. We might delight a customer with a new offer or personal touch, yet we might also discover they have no interest in that offer because, for example, they experienced two negative interactions in a row. Even if they did not file a complaint, the experience was not optimal—so why should they trust us?

[00:13:48] Katalin Fritz: So, I believe the two elements go hand in hand. It is crucial for us to learn about all of these factors at the right time and in the right form of data—whether anecdotal or a clear data signal—and to use that information for the customer’s benefit and, by extension, ours. Everything we do, especially in Customer Insights and data, is related to understanding who our customers are, what they are doing, why they are doing it, and when they are doing it. We build strong processes—even mechanisms—so that whatever we detect immediately triggers the next process step for the benefit of the customer experience.

[00:14:42] Steve MacDonald: You know, I want to get into and ask you about how you learn about the customer, because that’s so important. But before we leave the conversation about surprise, when we had our last conversation there were things that you talked about. Every company has to be consistent, absolutely, and we always know we have to add value and innovate. Yet you chose the word surprise, and that’s different from saying we have to add value or innovate. It might be in our product line, in our delivery, or in a number of different ways.

[00:15:11] Steve MacDonald: Surprise is a different entity in and of itself. Why did you say surprise? What is it about surprise? And then, is there consistency in how you deliver surprise? That’s another question too.

[00:15:26] Katalin Fritz: Maybe I will share an example of a surprise, because customers always—at least the first time they experience this from us—feel, “Ooh, this is a surprise.” We can call it innovation; the line is very thin. But let’s not use huge words like innovation, because I feel—and maybe this is the other reason I am using the word surprise—that lots of words nowadays are a bit overused: personalization, innovation, AI tagged onto sometimes simple solutions that are accessible.

[00:15:56] Katalin Fritz: So, surprise to me is an example in our world that, as mentioned, we are very data-driven. We collect a lot of data. One of these data points—an algorithmic development—is the real-time risk assessment of whether the customer is prone to churn, based on various attributes that we use in that algorithm.

[00:16:21] Katalin Fritz: I know other companies also build this kind of algorithm and try to utilize it, but you always have the choice to use things in a complex, non-personal way, or to say there are many options for how we can interact with customers, surprise them, learn from them and engage them—options that sometimes have no additional cost or very low cost but are truly innovative in the sense that they are unexpected, others are not doing them, or they are not usual, not even in our personal experience as customers with other companies.

[00:17:03] Katalin Fritz: This is how we came to that idea: what if, whenever we see these signals from customers—in this case I refer to the customer communication and insights team—we use the opportunity to learn, not letting them go or waiting until a percentage of those customers just leave us and then we try to win them back? Anyway, the vast majority of customers never complain, so we have limitations whenever we try to learn through complaints exclusively or other data exclusively.

[00:17:38] Katalin Fritz: What we tried out, and very successfully by the way, was that we first just utilized a few people; later on it developed into a very sizable team of outbound experts. By the way, in other companies they might be called agents or representatives—we call them experts because they really are—and this is also a very good example to demonstrate why, within customer communication, the most experienced frontline team members, classic agents as mentioned in other companies, support us in this process. They know very well how to talk to these customers. We prioritized here, for this trial, the high lifetime value or very loyal customer group, because we already know them better.

[00:18:26] Katalin Fritz: So we also know how to talk to them, and we gave it a try: what if we approach this group of customers as if our senior experts were their account managers, reaching them with very personalized, proactive calls and just sharing with them, “Hey, we detected”—not talking, obviously, about algorithms or data assessment—“we just saw that recently you might have experienced some issues, and we are very curious to learn about your experiences, both the good and the bad. How can we support you to ensure that this experience with us, also in the future, will be as good as at the very beginning, and how can we create for you all those opportunities that might not be obvious to grab at the very moment?”

[00:19:17] Katalin Fritz: What was really remarkable in this journey, also for us, was how much customers were surprised, how much they felt—and still feel—that they are really valued, that their voice matters, that we are interested, and that they proactively shared many things that were totally unknown to us.

[00:19:42] Katalin Fritz: I think the other beauty, just to propose low cost on all of this, is that we rarely need to use any voucher to engage them. They are really happy to share and engage, and they feel that they are sitting at the table helping us to shape the product so that we can be Marley Spoon together, which I think is a good mutual perspective change.

[00:20:09] Katalin Fritz: What was even more beautiful, and helped a lot to size up the team and scale it, was that those customers with whom we interacted, very measurably after the touch point—so, after the meeting or the call—already in their first 13 weeks of further purchases after the call, almost doubled their spend with us, regardless of whether they were skipping a certain week in a box or just adding more to their basket.

[00:20:43] Katalin Fritz: So I think they really made it tangible that they valued this touch point, not just said it, and I think this kind of surprise is what really matters mutually—both for the business and for the customer, and for the experts who are involved.

[00:20:58] Steve MacDonald: So, based on what you were just talking about here, this surprise is a proactive call, and so it takes manpower to do. I’m sure you’ve had conversations internally about how we can scale a proactive program like this.

[00:21:14] Steve MacDonald: As we get bigger, it would get harder and harder to do. What I love is that you tied it, and you’re tracking that, to ROI for the business too. That helps, I am sure, in these conversations internally about whether we continue this kind of program and how we can afford to do this kind of program.

[00:21:34] Steve MacDonald: And in our previous conversation you alluded to the fact that we don’t ever want to be too big to proactively call and have conversations with our customers, because not only is it ROI but, as you said a minute ago, you learn so much from that conversation as well. 

[00:21:50] Katalin Fritz: Yeah, and to be honest, whomever I’m talking to in my peer group in the industry, it is a constant challenge, and it has not been a new challenge for many, many years, particularly in customer service or in a customer service insights team.

[00:22:08] Katalin Fritz: Proving the value is also a very typical CXO/CCO challenge: how to demonstrate that our function is relevant, how to engage the leadership, especially the upper levels. How do we bring this value back to the company without sounding too vague or overwhelming? We cannot just say, “Maybe one day in the future,” present a beautiful framework, and then leave people asking, “But then what?”

[00:22:38] Katalin Fritz: These are the things we can do: start small, test an idea, and measure everything—from a company perspective and a financial perspective—which could be retention, customer LTV, or all of these together.

[00:22:57] Katalin Fritz: Another benefit, in our case, is that it becomes much easier to justify what we mean when we say we want to move customer service from a cost center to a revenue center. We have had multiple use cases where this simple yet powerful learning has provided strong support.

[00:23:20] Steve MacDonald: What you just said is so important, because even today many C-suite executives still see the contact center as a cost center. It is one of the biggest overhead costs in the business, yet we know it is a revenue center. We have more conversations with the customer than anyone else, and we can help support every single department in the company.

[00:23:45] Steve MacDonald: Going back to your Amazon experience, they are the most customer-obsessed company in the world, and they are known for that. There is not a company alive that says, “We are not customer-obsessed, we are not customer-driven,” but actions speak louder than words.

[00:24:00] Steve MacDonald: Are you truly acting like that? One of the first things that makes a company genuinely customer-obsessed is giving the contact center leadership a seat at the table, because if they do not have a seat at the table, the voice of the customer is not heard.

[00:24:21] Katalin Fritz: Yes, but it is also true that a company can genuinely be customer-obsessed. The job title Chief Customer Officer does not mean that the CCO is the only person representing the customer. The role is to create the framework and the enablement so that everyone, across leadership and the entire company, can act on behalf of the customers.

[00:24:55] Katalin Fritz: What I mean is that, through this framework (which shows how we measure the customer experience at each and every touchpoint), we analyze both the qualitative and the quantitative aspects, with an initial focus on qualitative insights. We then connect those insights to the financials and revenue aspirations of the company. We also look at how we provide this data to various business functions, how we democratize it, and how we enable people, both within and outside the customer service team, to act rather than simply read. With that confidence, they know what to do and can easily prioritize the right actions for the customers.

[00:26:00] Katalin Fritz: This is where the power lies, moving from words, positions, and fancy frameworks to real, innovative capability and genuine customer obsession. I want to work on all these opportunities, both as an individual and in teams, based on a shared playbook and a shared agenda, and we must create an environment where people have access to all of this at any time.

[00:26:34] Katalin Fritz: We must create an infrastructure and, to a certain extent, mechanisms to work with it and understand the impact of each development. It is not enough to hand out data and run with it; we must continuously see the impact on the customers’ lives and behavior. This kind of ecosystem is what truly builds customer obsession over time.

[00:27:00] Steve MacDonald: We have covered a lot, Katalin. I would like your advice for the audience. If there is one main thing you want us to remember, knowing that our human brains can hold only two or three ideas at a time, what would you like us to take away from this conversation?

[00:27:20] Katalin Fritz: Yes, we have talked a lot about loyalty, and I have shared how the company functions and why loyalty and returning customers are so important to us.

[00:27:32] Katalin Fritz: We also touched on the surprise element. My key message is that reliability, empathy, and the courage to listen, combined with enabling our coworkers to act and create surprises, are absolutely crucial, not only in our business but increasingly in every business.

[00:28:06] Katalin Fritz: We often focus almost exclusively on AI and forget the human aspect. I believe that the future of CX and effective CX depends on creating trust, not only with customers but also within the company among all the people building together, so that the business can scale. AI, data, and processes help us shape and refine this framework, constantly adding more capabilities. Over time, with the support of AI, the more we do, the smarter we become.

[00:29:03] Katalin Fritz: Real innovation and genuine customer trust, whether in B2C or B2B, still come from human choices. We make those choices every day through countless interactions, reactions, and impressions that influence us in each moment.

[00:29:35] Katalin Fritz: It is important to remember that customer journeys are no longer as linear as we assumed over the last 10 to 15 years. We used to group customers into one segment or another and predict the journey they would follow, then build experiences accordingly.

[00:30:09] Katalin Fritz: Such predictable journeys happen less and less in real life. How can we adapt to that and constantly learn from each other, while scaling and maintaining trust? For me, the role of the CCO offers the main opportunity to develop and help people throughout the company approach that work.

[00:30:37] Steve MacDonald: Our brands are trust marks, both externally with our customers and internally with our people. What kind of environment and culture are we promising, and what opportunities are we promising for the people who work with us? We know that our high-performance teams are what make our company, and I love this. Thank you.

[00:30:56] Steve MacDonald: I wish we had more time, but the mission of this podcast is to bring different perspectives and insights from leaders all over the world. If we can do that and all learn from it, the result will be like the saying, “A rising tide lifts all boats.” Thank you. You did an amazing job contributing to that rising tide today.

[00:31:19] Katalin Fritz: It was truly a pleasure meeting you.