Episode 26 Transcript

Banoo Behboodi: Welcome to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. I'm Banoo Behboodi and my guest today is Jessica Noble, who is the head of strategy and managing partner at Magnetic Experiences. She's also an author, a speaker, and an expert on customer experience. Jessica, welcome to the podcast, I'm extremely excited.

Jessica Noble: Oh thank you, I'm excited to be here too. It's been a while since we've had a chance to catch up.

Banoo Behboodi: I know. Before we dive in, can you please tell our listeners a little bit about yourself? What led you to this passion for customer experience and a little bit about what Magnetic Experiences does for its clients?

Jessica Noble: Yeah, so I actually started out my career in a role that was very much customer experience before that was a discipline that was recognized, and so I didn't really know that's what I was doing at the time. Fast forward about 15 years, I had a boss who said “We need to start thinking about customer experience, do you wanna be that person?” I'm thinking, I like a challenge. Sure. So I dove into the deep end and really, what has kept me passionate about it is the fact that we live it every day. I'm a customer every day, and so I can see when it goes well, I can feel when it goes poorly. And understanding all of the mechanics for how you can design for that and recover when it doesn't go that way is what has kept me passionate about it.

Banoo Behboodi: That's really interesting. Actually, when you say that, it's interesting how once you become customer experience, focus-centric, every interaction you have as a client, you are thinking, I wanna reach out and provide them feedback. This was great or it wasn't, and I actually do my best to do that if I can. So I totally resonate.

Jessica Noble: A hundred percent. And then in terms of Magnetic Experiences, we focus on helping companies from the operational perspective, first and foremost, focused on improving the customer and the employee experience by making operational improvements to reduce customer effort and improve employee productivity.

Banoo Behboodi: Fantastic. And I know we'll dive into some of the tools and methodologies that you apply to your clients further in this discussion, but the topic we're going to dig into today is very timely. And I'm sure many of our listeners are dealing with this as well as our listeners are professional services-centric, but all the businesses are dealing with a highly inflationary environment that we're all going through, the recessionary environment that we're all dealing with. And I'd be interested in diving in further and getting your expertise on inflationary markets and how do you deal in an inflationary market and maintain your margins while delivering the superior customer experience that we all want to do.

Jessica Noble: Yeah, it can be so painful for companies when inflation hits and a lot of times the default reflex is to raise prices. And that may be the right strategy or part of a good strategy, but just kind of starting with the basics inflation makes it so that our buying power is less. I can buy less with the same dollar. And so as prices go up and the buying power goes down, it's how do we protect our margins in addition to raising prices and or in lieu of. And I just wanna mention, on this Salesforce earnings call recently, their co-CEOs were talking about this very topic and what Amy Weaver said, I thought was really spot on. She was saying how when there's an inflationary market, you're gonna see buying behaviors change. So if we think about our customers or our clients, they stretch out their sales cycles, which means it takes longer for them to buy, and they have additional layers for deal approval. And so a lot of times that means we're spending more for a longer sales cycle, managing through multiple approval layers and deal compression. So the size of the deals is also shrinking. So they painted or she painted such a clear picture of inflation. It's kind of tackling, it's stretching out how long it takes to sell and it's also making the deals smaller. And so you need to address that time and cost to close the deal and the fact that it's gonna be smaller because all of that has just already eroded your margins before you've even gotten to delivering your product or service.

So there are two terms that I don't know if everyone will have heard of, I had seen them thrown around for a while before I engaged with the words and tried to figure out, okay, what are we saying here? One is called skimpflation, so like when you skimp on things and then shrinkflation. We're gonna focus on skimpflation because that's for services companies. Shrinkflation is related to products. So if a candy bar used to be, I don't know, a three-ounce candy bar, I have no idea what a three-ounce candy bar is, and it was a dollar, now it's two ounces for a dollar. That's what you call shrinkflation. Skimpflation is the same thing on services. So a lot of times, we'll see, when we think about hotels, airlines, cruises, and they stop doing the little extras, they stop their turndown service. They stop serving meals, for cruises, I don't know that they've done this, I doubt it, but they stop putting the little towel animal on your bed. I mean, they're very Instagramable. But it's when companies do that because they're trying to reduce the cost to serve, which isn't inherently in and of itself a bad thing, it can be the absolute best thing. And so that's what skimpflation is.

Banoo Behboodi: Yeah. So I have a question for you before you keep going. So it's interesting. I guess what you'll dive into further is what do you cut, right? I mean, the critical element in this is what is it that was extra but was not really perceived as value add for the client? So I joked about how I love the animal towel shapes on my bed when I go on a cruise, but in the end, could I live without it? And if it wasn't there, would I even notice? Probably not. So yeah, I'm sure you're gonna dive into that a little bit more for us.

Jessica Noble: Yeah, so this is the perfect time to dive into the customer feedback that you've been receiving. And that could be via surveys, although there are so many other ways. It can be customer advisory boards, focus groups, and hopefully you already have a lot of information from them on what they value and what they value most. Meaning what do they value and will pay for. So using the towel animals on a cruise, we love it, we enjoy it, it's Instagrammable, would we pay more for that service? Probably not. I'm not going to get into the other layers of, but maybe it's good advertising because it's Instagrammable and so you have that free marketing. So I'm not gonna get into that layer, but when you listen to what customers have been telling you, what is it that makes your brand something that they wanna engage with? Is it prices, is it cleanliness, is it speediness? Is it subject matter expertise? And really focusing on that piece.

Banoo Behboodi: Right. And now going and targeting this really to the professional services organization. So service for fee-type businesses who are, for the most part, our audience for this podcast. I know I was reading one of your LinkedIn posts around skimpflation and the concept of PAIR and how you can use that as a tool to combat and help and make sure that you're driving value while maintaining your margins. So can you speak to that a little bit more for us please?

Jessica Noble: Yeah, absolutely. I got the idea for PAIR back from Lean six Sigma who has an acronym for downtime and it's kind of all the different ways that waste can be hiding in your business. And waste is just margins leaking out the door due to inefficiencies. One of the biggest ones that we see in service businesses, and this applies to professional services, is underutilizing talent. So we may be utilizing all of someone's time, but maybe they have more valuable skills that we're not tapping into. So there are a lot of those types of things to look at. What pair, P-A-I-R, not the fruit, PAIR back, is really just, I like to have ways to remember things so I can keep them top of mind. One is to prioritize what customers and team members truly value. So if we think about the employee experience side, a lot of times we throw in all these benefits, but do team members even care? For some team members, based on demographic, spending money on bean bags and ping pong tables may be an absolute waste of time and money. Whereas for another demographic, that might be a perk that really resonates.

The second letter in PAIR is A for automating routine mundane time-consuming tasks. And this is where targeted automation is so important because it does a couple of things. One, it improves employee productivity. We're not draining all of our team member’s time on things that could be done by a system. And oftentimes what we see is when we remove those tasks from people's plate, their employee satisfaction goes up because who wants to fill out the expense report in Excel that then you have to email someone to do a manual approval and then it's like 13 steps of back and forth when a system it could have been much simpler. Same for on the client side, a lot of times that contract process is so slow and arduous. Or client onboarding, not only is that a lot of times slow, but balls get dropped, it's not efficient and it's oftentimes not a good experience because it's clumsy and it's not well orchestrated. So you have not only dropped the ball, but maybe you have two people following up when it only needs to be one. It takes too long and your client doesn't love the experience, they don't feel like you're thrilled to have them as a client, so automating some of that.

The I is incentivizing productivity, efficiency and or quality improvements. I had a client once who, if anyone on their team came up with a recommendation to improve quality that was implemented, they got X percent of whatever was saved. And they would tell me some of the things that their frontline team members came up with that were brilliant. And no one that was even one role removed would've thought to do it because they weren't doing it every day, but the person who's in it, they have all sorts of ideas. And so incentivizing those types of improvements that either reduce cost or help us to do more with this same amount of effort or less. And sometimes these ideas are utilizing automation or systems you already have in ways that you weren't using. Which I'm sure you guys actually see with clients where they're not using all the capabilities.

Then lastly there R is recognizing people with appreciation and gratitude. And this one's an easy one to forget. A lot of times clients are tightening their belts, they're not spending money on swag, maybe not giving out as many spot bonuses, whatever that is. But if you are still sincerely, which is key, acknowledging the effort people are putting in, appreciating that, and showing gratitude, that goes a long way when people know that we're in a time of tightening our belt as opposed to just inflating the pockets of those up top and then tightening for everyone else on the bottom. But when it's sincere, that's a huge way to get more passion, attention and productivity from team members.

Banoo Behboodi: I wanna ask you about this and I loved what you said about incentivizing and recognizing. By the way, PAIR is now in my mind after reading that post that you did, it's a great way to help us remember and it's a great direction, right? Because every aspect of PAIR allows for driving both customer experience but also employee experience, so I love it. But incentivization, you brought the great example of how employees would provide their recommendations and process improvement and they'd get a percentage. What are the best ways or programs to get that kind of feedback from clients? Because it can also go downhill from there, not clients I should say, but from employees. So if you're collecting feedback but not doing anything about it. So what do you find are the critical success factors in setting up a program like that where you get your people's feedback and then implement and incentivize?

Jessica Noble: I would say there are two different ways. One of them I would say is probably the best long-term solution, but then I'll kind of give the one that I would use if I was already in an inflationary market and I just wanna spin something up quickly. So one is you just announce to your company that you have this new program or form they can fill out for ideas that's going to be reviewed. And you can set up some sort of, you can call it a steering committee or a core team that reviews the ideas and then that core team figures out which area of the business should take that idea back and implement it. I've seen clients who have quality departments, who are the ones who review those suggestions. A lot of times it needs to be a cross-functional group though to evaluate whether they're viable, what the cost savings are, and then whether there is an investment required, whether that's an investment of resources or money.

A quick way to do it is to have people either apply or put their name into a hat, to be on kind of a small tiger team or focus group and then pair that with the hot topics that you're seeing in customer feedback. And if you don't have customer feedback, ask your frontline team members what are the top two or three things that drive our customers crazy that are so frustrating. And usually the frontline team members will know without a doubt and they probably would've fixed it if they could have, but it's either systemic, it's process related, or something like that. It might be data related, usually the bane of a lot of people's roles is data. Or one of the biggest pain points for customers is often where you have a transition point, where it's moving from one team to another, one system to another. It's where that integration, whether that's automatic or manual, is just not efficient and effective. Find out what those are and then feed them to your tiger team and say, okay, think tank, come up with some ideas for these and you could rotate. Maybe they stick together for three months and then you do a call for new folks to participate in the think tank coming up with ideas.

So that can be a quick way to pull something together, but the more you can broaden it out so that people that are doing the work are solving the problems, the better. Because there's nothing like when you're doing something, your creative mind is just, I could do this faster, I could do this better. One of my clients was shipping out very large monitors for a conference room and conferences and a lot of times they would crack in the shipping process. That's expensive. They had one of their frontline team members, he's like, if we put it in the box backwards and add one other piece of filling and I don't remember what the filling was, he's like, I think it'll solve it. And he explained why and whatnot sure enough, hasn't happened since.

Banoo Behboodi: Yeah, it's fascinating because in my previous company, to your point, our leadership started a competition for the development team. So it was software consulting for the development team every six months to get into teams and sort of come up with the next best thing for the product. And it was fantastic, the momentum it built energized the development team because it allowed them to think out of the box. Which that type of team usually wants to be able to do outside of the constraints of what the product roadmap says. And so the energy that it brought and the team building, I mean there were so many positive things about initiatives like that and they were planning on actually expanding it to then having a similar thing, but for the business people. People who are actually doing professional services. Okay, if you had a week to get into teams and come up with the best ideas of what do we do? And then there was always an award, I don't remember what it was, I think it was a dinner out or something with the team. But regardless, it wasn't the award that people were doing it for, it was the actual recognition, acceptance and their idea winning the prize. It was just fantastic.

Jessica Noble: And I think what that illustrates that so many people miss the mark on is customer experience, employee experience and operational excellence are all inextricably linked. And when you improve the employee experience, customers are going to more often than not feel it and vice versa. And so when you get into what I call a virtuous cycle of improving one and then it improves the other, when people are more excited to come to work, they serve clients better. When clients are calling in and saying thank you, as opposed to complaining, that makes an employee's day. And so you get in this virtuous cycle as compared to what I refer to as a vicious cycle where it's this downward spiral of one side not being happy so the other one's getting beat up all day long. And it may not be that they were unhappy with the person serving them, the process is frustrating, whatever it is. But you have humans on either side frustrated because they're not either having their needs met or they aren't part of the solution. And so looking for how do we improve the employee and or the customer experience in a way that improves productivity and reduces customer effort. And that is a key thing to focus on when you're trying to protect your margins and when your first goal isn't necessarily growth.

Banoo Behboodi: There was another post of yours that I read and you had focused on minimizing waste and the money leaks that are coming out. And we talked about PAIR, yes, prioritization, automation are all ways that you can drive down costs. Where in an inflation you're trying to drive your margin, maybe reduce price, whatever your reaction is to keep your client experience consistent. How do waste management and identifying areas where you're having money leaks, how do you do that best and most efficiently and take action to make that goal?

Jessica Noble: Yeah, I think really again it is about asking your frontline team and listening to your customers because it's your inefficient processes that are oftentimes where people are spending an excessive amount of time either trying to remedy situations caused by it or prevent it from affecting more customers. So look for where you have manual tasks that used to be automated, and systems that aren't integrated. I know when I kind of moved into the type of consulting, I worked in the Microsoft partner space for a long time is you'd have a lot of ERP, the financial systems and you'd have CRM, the more sales side of supporting the sales cycle, et cetera, and they weren't integrated. And that right there is a big loss, and so you have master data splintered around. You have duplicate data, and you have dirty data, so that's one. Where you have multiple people overlapping in a process and it's not clear who owns which piece, that's another type of waste.

There's a quote and I can't remember who said it, but he said the most dangerous type of waste is the waste that you don't recognize. I believe he's talking about leaders because they're like ah, we're not wasteful. You are wasteful. Where there is money being made, there is waste. It is a given. It's tapping into the biggest pieces of waste. And a lot of times those run parallel to or close to really sacred or original things that you've been doing for a long time and nobody has revisited it to say is this still serving us? Is it still benefiting us? And so again, frontline team members and customers look at what they are saying, and where are they wasting their time? Where are customers frustrated because of the amount of effort it takes them to get things done and walk it a step or two back or seven wise back. There's a rule of thumb about why is this happening, ask why, and then do that seven times and you'll get to the root of something. If you fix that, you will eliminate so much waste.

Banoo Behboodi: Yeah, and it's interesting because you brought up the point that all of this is like a continuous circle if you have it. In that, identifying the root cause and addressing it will also drive employee satisfaction inherently.

Jessica Noble: It will also better improved the client experience, so it's all related. It's not reduced waste it's going to drive better margins, reduce waste because it's just going to ensure a healthier business. Not only from a margin perspective, but inherently from a client and employee satisfaction perspective, so I love that. The concept of shrinkflation and skimpflation, increasing your price might be the right thing to do. It might be part of the right thing. The key is looking at, again, we said at the beginning is what do customers and employees value? Protect those things, enhance those things, but then you can still contract what you're spending to serve by focusing on the things that are either inefficient, ineffective or not valued.

Banoo Behboodi: We still have a lot to cover so we're going to pause here and wrap up the rest of the conversation in part two. But before we go, I always like to ask a more personal question to get to know you better and allow our listeners to get to know you better. So can you tell us about a mentor or a specific advice that has been instrumental in your career?

Jessica Noble: Oh gosh, I've had so many people who have invested in me and my career, but one of them would have been a boss I worked with for probably about seven or eight years. And he really coached me on how to get my foot in the door in terms of being able to take on more and more responsibility and to have more influence. And his rule of thumb was really “Think big.” So think of the macro solution because that's how my mind works; big-picture thinkers, strategic, but start small and show the value. And that is the best way that I have learned to get entrusted with the next time I say I can solve X is then asking for more resources to make a larger impact. And for me that's been the easiest way to get a seat at the table and to get more influence, is to go and just solve the “Oh” thing, solve a bigger thing. And it's great to be able to share I've got a big-picture solution, but in the meantime, while you guys are thinking about it, I'm gonna knock down these little things. And that's been the best advice.

Banoo Behboodi: Thanks Jess for sharing that. It's been amazing to have this conversation, looking forward to the next session. Thanks again for all the great insights and look forward to the next conversation.

Jessica Noble: My pleasure. Thank you.