Why Humans Outshine AI in CX Leadership

Transcript

[00:00:00] Steve MacDonald: Welcome to the Contact Center Perspectives podcast. I’m Steve MacDonald, your host. Today, we’ve got a very special guest: Andreas Janssen. Now, Andreas, you are the founder and CEO of Blauband in Germany, an e-commerce company. You have an interesting background. Not only are you the CEO running the company, but you also come from the marketing industry.

You were actually the CFO of Gray Advertising in Germany. So, everything that we talk about here today is about the CX function. We’re talking about contact centers and customer support and how that could actually be a competitive advantage—a tremendous advantage for business. So, I like your CEO/CFO perspective background on it because that just means that critical thinking has been applied to everything we’re talking about here today.

But if you wouldn’t mind, maybe explain just a little bit more about your background before we get started.

[00:00:53] Andreas Janssen: Thank you so much, Steve, for having me on this podcast. Yeah, I founded my e-commerce company in 2013. It literally started in my basement. In Germany, we found companies in basements, not garages.

It has grown tremendously over the years. Today, we ship to 76 countries, mainly Europe, the Middle East, North Africa, Asia, and North America. We literally run the D2C online business for brand manufacturers as a kind of extended workbench.

[00:01:34] Steve MacDonald: Fantastic. I know that in a huge direct-to-consumer model, and you do that as marketplaces for a number of different companies, the customer support role within that is quite important. Before we get into the importance, though, I just wanted to give you a very unique and interesting perspective on AI, the role of the live agent, and how that interplay happens.

Basically, it’s about the power of the human brain and how you can’t completely replace pattern recognition in the way the human brain does with AI. Although there are lots of us, I’d love to talk about technology and AI. It’s going to take over everything. But what’s your perspective on the power of the human brain and why it’s so important in the customer service role?

[00:02:23] Andreas Janssen: First of all, our business is literally about data and processes. We deal with tons of data and not only analyze it but also transport it from A to B to other databases, et cetera. We need to get insights from these data like everyone else.

That’s maybe important to understand. So we deal a lot with algorithms. You can call them artificial intelligence. In the end, self-learning algorithms and knowledge analytic tools to get insights and optimize our business towards the customer, also the processes, and, in the end customer satisfaction.

What we found out and my personal take is on the role of artificial intelligence and the combination of the work. A split between, I would call it AI and the human brain is that the human brain from my point of view is not at least in the short term or midterm, not being replaced by artificial intelligence because it has strengths, which are from my point of view, not capable of being replaced by any AI, at least at the closer future, how I see it.

The human brain is how I perceive it; it is a pattern recognition machine. So maybe an example is a person you have never seen enters a room, and you get in a moment, in a glimpse of a moment, you get an impression about the mood of that person, what the intention, et cetera. In this glimpse of a moment, the impression you get is somehow so profound and so vast if you start thinking about it. If you do, then later, you will get to know this person better and better. Sometimes, you will have these moments where you say, ‘How could I, in this short moment, be so precise in my perception of that person and the intention of that person?

This is something that represents the strength of the human brain. The human brain can derive information and good insights, and this capability is out of a huge, vast amplitude. I don’t know how artificial intelligence will ever replace this.

So, I see artificial intelligence as a good tool to prepare for this. How do we use it? We use artificial intelligence to prepare data clouds or visualize data. But once we have a visual or many visuals of data, we look at it ourselves, and we start recognizing patterns, which, as I say, I’m convinced no artificial intelligence can do the same as we can in moments.

[00:05:17] Steve MacDonald: So what you’re talking about is that we humans have a collective history, and we have intuition, perceptions, hunches, and insights. We were just talking before this. If you think about that in a non-business context, like a mother’s intuition, how can AI ever replace it?

What you’re talking about here is all the collective experiences that we have as people in our industries. You can’t put that into AI. In fact, what goes into AI is all AI knows. So if it’s fed one certain direction, information, that’s all it’s going to know. That’s all it will be able to spit back to you.

However, AI has a tremendous way of giving us the data and the knowledge to make the right decisions. In the world of customer service, running your business, and interacting with your customers, that’s an empowerment tool for the live agent. They can make them better and better. But I think what you’re saying ultimately here is that AI, as it’s applied also in customer service, is never going to replace the live agent. Is that your proposition? 

[00:06:34] Andreas Janssen: I’m a hundred percent convinced; that’s my take. I think it is also not necessary to replace that part because it is already working really perfectly. That’s the big strength of the human brain; it’s this ability to recognize patterns out of an unformalized context to see with a glimpse. As I said, an important piece where it would take a machine ages to come there, and it’s not necessary because that is something which we can really do very well and very quickly.

From my point of view, we need AI to take away from us all the other work that we are not so good at, which is blocking our time to work in the areas where we are really strong. So those highly repetitive, low-end work calculations that a machine can do within millions of seconds, whereas it takes us like half an hour; this part can be taken away, creating a template for an answer to any client; this can be done by AI. But having a notion of whether this is a difficult plan, Should we maybe give the client a call? This is something a machine cannot do. When I started my business, I did all my phone calls myself and started with products for kids.

My clients were mothers. Mothers are very protective of their kids, so they’re challenging clients. You cannot just send stupid answers to these mothers if, for example, they have some anxiety about protecting their kids.

In relation to our products, you need to answer these anxieties in a different way. It’s not a rational answer. You need to calm them down or give them comfort. So, when I have them on the phone, I could tell you after a fraction of a second is this mother is anxious at the moment, and does she fear about the safety of her kid, or is she just bored, or does she have technical questions?

And then within a short moment, I could then decide which way to choose to satisfy the client’s needs. I cannot think of any AI machine which can reproduce this capability. So, my problem was sending out the right answers afterward. This can be taken and done by any AI, so I would have loved to have an AI tool to make all this work so I could take on more calls because this is something you cannot replace. That’s the thing. So, I think that AI will not take away or replace our agents. Never. The AI will help our agents focus on what they are best at. 

[00:09:28] Steve MacDonald: Before we started recording here, we had a call, and we had a very interesting part of that conversation, which was the deprivation stud. As we get into how AI and, human live agents are a part of the customer service function, we had a very important and interesting conversation about how important that customer service function is overall to your business.

I asked you this question, Andreas: If I took customer support away from your business, what would happen? You said three things. You said that in two to three days, we’d be in very serious trouble.

You said we’d be blocked from all of our major marketplaces and wiped out within 30 days. This illustrates how important the CX function is to your business and how important it is to all the industries that use customer service. There is a perception in the industry that it’s a necessary evil. Of course, we’re going to have customers, and they’re going to have questions, but it’s a big cost center. This is your CFO perspective, which I want to ask you about. It’s not just a cost center. It’s a value center. It’s a driver of business, as you mentioned when you were handling the fears and concerns of those mothers.

That wasn’t just anybody who could do this; it was a necessary evil. Satisfying your customers is an important part of your business’s engine. What is your recommendation to everyone who’s listening here in terms of thinking of customer service support not as a cost center but as a value center for your business and how important it is?

[00:11:16] Andreas Janssen: If I think back to the time when I had the pure CFO hat on, of course, it is no production; it is no sale. So, we would consider it a cost center. That’s a difficult perspective on it. I think the problem starts if you put customer support into one pot or look at it as one thing.

I think the right approach is to analyze the different parts and to distinguish the different parts that customer support has. Customer support has constant contact with your clients, so it is one of the best sources I have to get information about my clients because they have the clients on the phone. As I told you, they are all human brains, so they have the ability to get insight into the mood and the perception of your clients towards your product and your services.

The only question is, how do I get this information so I don’t have to interview my whole customer team daily? The question is more, how do I derive this information from my customer support? I have to start organizing not only the answering part of the customer support but also the information and data that I get from them.

For example, once a week, we have a call with our customer agents, and we have them report the most important. So we tell them, if you close your eyes and think about the last week, what comes into your head immediately and tell us what it is. Normally, these are things that just happen and then, therefore, are very present, or there are things that are really important. We get this information and then you get value because if you can process this data and derive valuable information, which then helps you perfectionize or optimize your products or your services.

But if you put everything into one pot and then make maybe one KPI, a minute per call or so, then this does not reflect the total function or the total possible value of your customer support. 

[00:13:38] Steve MacDonald: I love that word, a possible value, and tapping into that. You talked on that last call about how you had stopped whole shipments that had come out of warehouses and things that had, because of the feedback that we were getting through the agents with the customers, avoiding problems, not only accelerating revenue cycles and things like that.

But if you could, I’d love to have you give a rating on the importance of the customer service function. On a scale of one to 10, how important is customer service to the overall support and growth of your company? One, customer service is not important to the support and growth of my company at all. 10, it’s vital to the overall support and growth of my company. Where would you put it on that scale and why?

[00:14:27] Andreas Janssen: It’s a little difficult to answer because it depends very much on the situation you’re in. Customer support, at least in our business, can be just a necessity. Without it, you cannot run the business model. That’s what I told you. We would be out of the business if we didn’t have one.

But I wouldn’t say that in all situations of my company, customer support has always been a growth driver or a 10 as a value-added to my total business. When we see, for example, heavy growth, customer support fulfills its basic function. I cannot concentrate on how my customer support can drive more growth because I already have so much growth.

Then, it’s more of an optimization challenge. I need to optimize my customer support so that it fulfills its function, but I don’t need more growth. If I have a more competitive situation where other products come into my area and try to challenge my offering, then I need this differentiation aspect of my customer support.

So, I would have a call every day with my customer support and ask them questions. Why is this client happy with us and this client not? What do they love? What do they need? What do they see? Then all of a sudden, you would have a 10 in terms of your rating. It depends very much on the situation you’re in.

[00:15:55] Steve MacDonald: There’s a great book that came out decades ago called Blue Ocean Strategy. It discusses how most typical companies operate in a red ocean, an ocean that is red from the battle of competition. Then, what you’re trying to do is move into a bluer ocean where you’re defining your market differently.

You’re supporting your market differently, so you’ve gained a competitive advantage. Then you’re moving to a bluer ocean, and most companies don’t have the luxury of just being in growth mode all the time. Most companies are in a heavy competitive environment. What you just articulated there is that this is a big competitive advantage, that knowledge and that insight. If you could unpack that just a little bit more as customer service in a competitive marketplace, how can it be a competitive advantage for your company? 

[00:16:58] Andreas Janssen: The most important thing is to satisfy your customers or give them the idea that you’re with them and fulfilling their needs.

As I just said, if you’re very small like I was in the beginning, I had them all on my ear. So I didn’t need some kind of organized customer support, but when you’re growing, that stops. Now, as the CEO of my company, I have different teams that don’t oversee the whole thing. Then I need this ear, which I had before to the customer, and this is my customer support. That’s literally it. We are an internet business model, so I don’t have other ears than my customer support. That’s as simple as it is. So, the more the happiness of the customer becomes important as the differentiator towards my competition, the more important my customer support gets. That’s as easy as it is. So, if my product is standardized or I even have other boundaries against my competition, I might not really need this type of product. That’s maybe the reason why. If I call my telephone company, I’m hanging on the phone and waiting desperately for someone to pick me up, and sometimes it takes me about half an hour until I get someone or I hang up. So I asked myself, how can they run a business doing that?

For me, it wouldn’t be possible. I think for those guys, customer support is purely a cost center because they have other boundaries that protect their products and their customer relations. Obviously, if I could run away, I would. After every call runs away with our products, the customer has a choice if they’ll buy or not. I would want them to buy again, but I don’t have a contract that can run away to anyone else.

So, I need to make them come again. This is either a strong product, but the more comparable my product gets, the more I need other links to a customer. This is customer support. This is my relationship to the customer. The more comparable it gets, the more important the customer support becomes. That’s very easy. It’s easy to understand on a conceptual level but difficult to realize then. 

[00:19:23] Steve MacDonald: I think what you’ve just articulated is most companies don’t have the benefits of these other boundaries or monopolies in their marketplace; it’s very competitive. What I’m taking away from this is your recommendation is to make customer service not only something that sparks the learning and the insights of what’s going on so I can make better decisions, but a second major advantage is to create a competitive advantage through customer service that will differentiate you and that will keep others coming back. 

In fact, we had a gentleman on the podcast who said that as their CSAT scores and customer satisfaction scores go up, they see their shopper frequency going up. As their shopper frequency goes up, their revenue growth goes up. It is a major competitive advantage that is tied to actual revenue growth for the company.

I think that’s a major takeaway; cost centers are the polar opposite of a cost center. So, I love that. If you could, what is your recommendation for others who are leaders, business leaders, or CX leaders in the industry? If there was one thing that you wanted them to take away from our entire conversation here today, what would you want to leave them with?

[00:20:44] Andreas Janssen: I would say once your customer support is established, start looking into it because you will find many things that can drive value in your business model. So, I would recommend not stopping once the basic work is done. It’s running. It’s good. Then start looking into it. 

[00:21:04] Steve MacDonald: I love that. It’s like an onion. You keep peeling back the layers. Don’t stop at the basic function; keep looking for ways to drive value. If there were folks here who had additional questions for you, would it be appropriate to give them a link to your LinkedIn profile?

[00:21:22] Andreas Janssen: Yeah, you can do it, of course. 

[00:21:24] Steve MacDonald: Fantastic. Andreas, thank you so much for coming on to the podcast today. I love the CEO, founder, and CFO perspective on the value you can derive from customer service. I just appreciate all the insights that you gave us today. 

[00:21:39] Andreas Janssen: It was a great pleasure for me. Thanks a lot.