Unified Communications, Benefits & Challenges

By: Alon Cohen EVP/CTO Phone.com

Generally speaking UC is not a very well defined term. The term has lingered for many years; it morphed over the years as telecom technologies that can be unified evolved and became more conducive to unification.

I was recently asked by WatchIT.com to discuss different aspects of UC in order to make it simpler for companies that think about updating or replacing their communication systems, do so. If you have free 30 minutes enjoy the following video.

Practical Guide To Building A Small Business Customer Support Organization

By: Alon Cohen EVP/CTO Phone.com

I was asked by ERANYC, a startup incubator in NY, where I mentor entrepreneurs from time to time, to give a presentation about how to build a customer support organization.

At Phone.com where I currently work, our team has done a tremendous job at that, and we recently won the New York NYER “Best Customer Service Award”.

After going through the process of building a support organization three times and after giving it some thought in order to give my ERANYC talk, I was able to put together this “practical guide to building a small business customer support organization”.

This short guide was inspired by Jeremy Watkins and Jenny Dempsey our customer support leaders at Phone.com who worked very hard along with the rest of the company, to win the above NYER prestigious award.

In 1989 I co-founded VocalTec and after a while, we were about 3-4 people doing everything that had to be done in the company from coding to customer support.

Years later co-founding 2005 I co-founded www.Bitwine.com an e-commerce website for human intellect. At least this was our starting point in case you check the site now. And more recently around 2007 being the first hired employee at www.Phone.com, I had to do customer support, which I still do from time to time with great pride, and so I was an integral part of the process of creating the award-winning phone.com support organization.

In short, this is my third round going through that support formation process.

A mature support organization is complicated and expensive with a whole bunch of procedures and tools. However, that complexity is not created in a day and there are many simple ways to start an effective and simple support team with almost no cost.

This blog article will provide you with few guidelines that can help you, a small business owner, to jump-start your support organization and grow it as the company grows. It is not that complicated. First:

1) Define Your Support Goal

Not every organization need to have customer support here are some examples.

• Zappos (will “Make Every Customer Happy”)
• Phone.com (are striving to be “Awesome”)
• Google (Free product. Enough said!)

To maybe better understand the goal www.Phone.com goal to be “Awesome” here is how Jenny & Jeremy, the Phone.com lead people, define it:

“Awesome embodies much more than just happiness - it embodies a genuine, honest, friendly and real approach to customer service. We want our customers to feel empowered and appreciated by our service. We want our CSRs (Customer Support Representatives) to have every resource available to resolve problems while being able to let their unique qualities shine. We’ll do whatever it takes to help the customer - even if it means spending extra time/money/resources to do so.”

Heaving a clear goal is important as it defines the effort and budget you will spend or willing to spend on your customer support efforts.

2) Define Your Support Technical Parameters

Based on the type of service you provide and even the support your competition provides you will need to define your own support parameters. This will help you decide on the tools you will use and the number of people you will need. Here are some samples for customer support technical parameters:

• Response time (1 Minute or 3 days, Weekday only, or 24x7)
• Modalities (Web, E-mail, Phone.....)
• Synchronous (i.e. Phone, Chat)
• Asynchronous (i.e. E-mail and Voice mail)
• Sourcing (In-house, Outsourced, Offshore)

Customers appreciate it when they can communicate with your support agents in the best way that fits them, so try offering E-mail, Phone (Toll-Free), Chat, Twitter, Facebook, and even SMS.

3) Select Your Ticket System.

A ticket system will help you keep records of your communication with the customer and the thread of that communication. It will help you know when a problem was resolved or it can remind you to get back to a customer who might be waiting for an answer.

There are a bunch of ticket systems out there some of which are expensive and some are free. Here are a few examples.

• Gmail (Free – keeps your communication thread in one place)
• Zoho (Very low cost)
• Kayako (Very economic hosted and non-hosted versions)
• Salesforce (Very Expensive)

4) Build Backend Agent Tools

An agent can be as good as the tools you provide him/her with. In the same way that a blind person has a hard time navigating without a cane, an agent with no tools is just as blind. As a minimum the agent Backend Tools have to provide the ability to perform the following:

• Refunds
• Account Cancelations
• Check Log files
• Password Recovery
• Password Reset
• Account Search
• Package tracking
• Customer Authentication (Is the caller really is who he says he is?)

5) Best Practices

You will need to define some work methods and best practices that agents will be able to follow and convey to new agents.

Empower your agents to help bit provides guidelines and safeguards. For instance, Zappos gives each agent $100/Day to make customers happy. Here are some other ideas:

• Enable few trusted agents to open free accounts (no to all)
• Enable few agents to offer discounts
• Enable agents to provide refunds within limits:
• Not every agent can make a refund.
• A refund cannot be larger than what the customer originally paid.
• A refund must be done to the same card it was originally paid with.

6) Make your Company DNA Conducive to Support

If you believe (like I do) that customer support is imperative for your company’s success you need to make that part of the company’s DNA. You need to make sure the company culture supports that notion. In the first startup that I co-founded half of the company was convinced that customers are evil. By the time I tried to change that it was a steep hill to climb. So:

• Make EXCELLENT support, part of the company DNA and culture.
• If possible give every developer some customer facing support duties. You will get better code.
• Make sure everyone knows that the customers pay their salaries. Not you, not the investors, 
its the customers that pay every employee’s bills.
• Hire agents with personalities that derive satisfaction from helping other people.

7) QA the support

After you set up your support organization you will need to monitor the support levels and make adjustments.

• Read every support e-mail. It is not such a big task when you are small.
• Eliminate (or block) negative words like (Unfortunately… We are sorry but… No we can not....)

Remember that when an agent must answer with a negative word it is probably because the product is missing a key feature. Learn from the above, and improve your product.

8) Monitor Key Metrics

Send a questioner to the customer after each closed ticket, with one question, in order to learn about your Net Promoter Score (NPS). This question is along the lines of

“What is the likelihood that you will recommend our service to others?

http://en.wikipedia.org/wiki/Net_Promoter

Monitor other service level key indicators like: “How many calls were answered under 1Minute” see sample list below:


 

9) Training

Being a customer support agent could be frustrating for many people. You must keep training new agents
since there are always new features
and there is usually a high agent turnover rate in that profession. Make sure agents know how to use the tools and remember, a frustrated agent will have a hard time providing a good level of customer support.

10) Special Treats

If you show your customer that they are important by offering all kind of special treats they will respond in kind (see letter below). Here are some options to help you make your customers feel special:

• Customize your support to each user. Use their name.
• Try to avoid ready-made answers.
• Visit customers.
• Learn how they use the system and add features to your wish list.
• Discover customer pain points and work to fix them.
• Send customers handwritten thank you notes.

To summarize, we all like to get better customer support wherever we go. We help that happen by educating other business about customer support. We find that we improve ourselves by educating others. To get more ideas and updates on how we do things at Phone.com read the following:

• Check our Phone.com Support Leaders’ blog http://CommunicateBetterBlog.com 
• Check out Jenny singing her own “Customer Service Blues” song talking about the hardship of being in the front line http://www.youtube.com/watch?v=_o-Ex5EpYno 

If you need something else to think about here is a take-home question:

Which support function should have a faster response time?

• Sales agents
• or Support agents

Let us know what you think.

Thanks
Alon Cohen,
EVP/CTO Phone.com

Can Watson actually replace customer service agents?

By: Alon Cohen EVP/CTO Phone.com

I was asked to opine about the above question "Can Watson (the Supper Computer from Jeopardy) actually replace customer service agents?".

I have no doubt that computers will replace humans in many jobs in the time to come. I have seen the airline industry move from 5 person crew: a Radio Operator, Navigator, Flight engineer, and two Pilots, to a 4 person crew as radio became simpler to operate, then to a 3 person crew as GPS and INS (Inertial Navigation System) became simpler, and currently only a two pilots crew when computers replaced the Flight Engineer.

Interestingly a pilot I flew once with, inside the cockpit of a Boing 767, told me that soon there will be only one pilot and a dog. When I asked the obvious “why the dog?” the pilot said, “well, in order to bite the pilot if he tries to touch anything”.

However, I think the future is not that grime for the Flight Engineers and humans in general specifically if you notice the fact that Scotty the flight engineer is still there in Star Trek.

Anyway if you like to read more about Watson, Speech Recognition and my take on using Watson for customer support check out my article in SpeechTechMag:

Can Watson actually replace customer service agents?

Watson, IBM’s cognitive computing system capable of answering questions posed in natural language, has been helping professionals in the clinical medicine and financial services fields diagnose ailments and recommend products that save companies time, money and resources. Now, Big Blue would have Watson put on a new suit: customer service agent.

As an executive who is rooted deeply in providing high-quality, consistent customer service and as a technologist who believes we humans someday will indeed interact with computers via the spoken word, I have to challenge Watson’s newest use case.

Based on what I read, IBM chose to incorporate existing speech-recognition technology (like the one used for Apple’s Siri) as a front end to Watson. This will require near-flawless speech recognition, a technological challenge that has been very elusive for many years now. 

Apple with Siri and Google, at least publicly so far, haven’t been able to provide a solid solution. 

The fact is,  speech recognition is still one of the most challenging technological hurdles to overcome, but there are a few possible workarounds. One is to use text input, which we know is kind of slow and annoying for users.

Watson, however, could someday become the ultimate customer service agent with the help of humans. First, by using people -- biological speech recognizers, if you like -- as listeners, who would type in customers’ initial questions and comments to Watson. These people would not talk. They would merely listen to the callers and type what they hear to Watson so it can talk back to the customers using text-to-speech technology, thus providing the illusion of natural-speech interaction with Watson. The listeners could be located anywhere in the world and reliably translate different languages.

Next, in addition to listeners, a company should have a person or a small group of experts training Watson to prepare the system for acting as a huge number of support agents handling customer issues at once. 

Training would involve product and technical information, even to the point of teaching new words or sounds related to the company’s products or services. 

Such training could potentially solve the wait-time problem and variations in expertise from agent to agent that every customer-support organization suffers from. 

Of course, using behind-the-scenes human listeners to complement Watson and investing in customized training to fine-tune its applicability to a specific company would mean expense in addition to the acquisition of the system.  On the other hand,  Watson will never ask for a sick day or have to take a vacation, an “always-on” capability that would go a long way toward achieving consistent and high-quality customer support.

Since human listeners might be needed in order for Watson to interact accurately with customers, I do not see this technology lowering the cost of customer service just yet. However, the quality of service might go up dramatically, increasing brand loyalty.

Customer service is truly an art form and, like many executives across the globe, I welcome any new solutions that will help make it better. I plan to keep my eye on Watson. But whenever a fully automated or human-assisted speech recognition solution is someday achieved, the track record of reality trailing rhetoric leads me to think it will be several more years before a Watson-based CMR solution replaces human agents in headphones.

Meantime, I really hope that the Google Glass technology that relies on speech recognition will set new and higher thresholds for speech recognition that will finally make Star Trek–level, speech-based person-to-machine interaction a commercial reality.

Thanks

Alon

The calm AFTER the storm

By: Alon Cohen EVP/CTO Phone.com

Many articles discuss the relationship between company culture and leadership, and its strong correlation to the success of those companies.

One aspect of company culture that I want to discuss here is the sense of urgency that a company might or might not have. Sense of urgency to finish projects ahead of time, to deliver faster and to be the first to market. Some might call it competitiveness. There are, however, different types of competitive organizations and competitiveness, almost like our own good and bad cholesterol. The first type exist in organizations like Microsoft where the competition is between different teams and between employees inside the company, as attested by some of my friends who used to work there and a few articles. That internal competition in many cases impedes teamwork. 

The second type is the good one. It is the type of competitiveness which is projected outside the company. It lets the company be competitive as a team against outside threats and it provides companies the push to succeed. One aspect of that competitive drive is the sense of urgency.

Sometimes, however, even a good sense of urgency is not sufficient. I have noticed that many times a company will work towards a goal and achieve it ahead of its competitors. Results may look good and everyone is happy to come to work. In fact the company is so happy and self-content that it becomes complacent. The company keep comparing itself to its old self and forgets that now the game has changed. At this point every competitor is scrambling to do the same and even better if they are analyzing the product, identify places that can be improved and fix them in their own upcoming product. 

If you extend that “calm after the [release] storm” period, you basically give your competition time to recuperate, and you make it easy for them to get back into the game. The longer you stay calm the more chance they have to close the gap and maybe even win the race to the next goal.

Minimizing that period of complacency is critical to the company’s future. The company needs to be happy with its achievement but only for a very short while. It must set new goals, and start racing towards its new goal. It must also set its latest achievement as the new baseline and set goals to beat that yet again.

It is mentally hard to race against yourself when you know the competition is still behind. It is almost as mentally challenging as the “Individual time trials” in the Tour De France, in which cyclists pedal solo and are timed against the clock instead of against another rider.

Take for instance Microsoft. They released windows mobile in the early 2000 and as if they forgot they worked on it, they never followed through with it. Were they calm and complacent? Probably as usual. This gave Apple and later Google a chance to not only close the gap, but even win the market completely.

Apple on the other hand kept the pace up and kept the development and production pipelines warm as was proven by the rate at which they innovate and came out with new iXXX products, with new form factors and new software updates.

It is those companies and entrepreneurs who keep challenging themselves and keep outdoing themselves, that eventually collect the big rewards. Remember the old saying "the fact that you are not paranoid, does not mean there is no one chasing you".

What do you think?

Driving Forces Behind Startups

By: Alon Cohen  EVP/CTOat Phone.com

Not all VCs are created equal, however….

It turns out my gut feeling was probably correct. A newly released research by Shikhar Ghosh, a senior lecturer at Harvard Business School, shows that almost 75%-95% of VC backed startups fail. VCs would normally say that only 30% fail and the rest simply did not bring the expected results – big difference.

I founded few VC backed companies, and although my sample group is relatively small for any statistical relevance, I have been interacting with many other entrepreneurs over the years and kept hearing the same mantra, which is “VCs suck the life of companies”.

VCs typically (in spite whatever you think when you are funded or been told) work against the company instead of what seems logical to assume. The problem is they pull in different directions so the sum of all forces zeros out, in many cases they talk about extending runway on one hand and what they mean is for the founders to work for less, while they keep sending invoices for first class flights to board meetings (true story).

There is a whole ritual in the VC process, where initially VC and founders fall in love. Later if success is slow to come, they try to force changes. If success comes too fast, they get greedy and may block an exit, or even worse, try to take over bigger parts f the company by blocking next round depleting the company cash reserves only so they can offer a bailout bridge loan in bad terms for everyone but them. This triggers a whole company-VC hate cycle, where VCs try to replace the Founder/CEO and founders try to bring other VCs to reduce the power of exiting VCs, and the cycle repeats.

However, I think the problem lies at a deeper level than that. I recently raised my hand at an event to ask a panel of investors if they can envision a scenario where they invest with no preferences, I.e. everyone in the company, founders and investors alike, will have common shares. I did not have to wait a second; all of them, without any hesitation said NO, Never. They could not even envision something like that.

[As a side note: The preferred stock held by investors has more rights and privileges than the common stock issued to Founders. The most important rights that affect badly the founder up-side, is the right of the VC (preferred shareholders) to get paid before the common stock holders. If the company is acquired, the preferred stock holders will be paid first. Then, if any money is left over, the common stock stockholders will be paid in a prorated fashion, (i.e VCs get yet another dip).

As usually defined, the amount paid to the preferred stock holders is usually a multiple of the amount invested. For example, if Series A stock is sold to first-round investors for $1/share, the preference amount for that stock is sometimes a 4X multiple of the share purchase price.

Common stockholders should care about the preference, because that preference is "ahead" of the commons in any acquisition outcome. For example, let’s assume that the company raises $5m dollars by selling 5,000,000 shares of Series A preferred stock with a 4X multiple. That means that if the company is acquired for $20m (or less), the preferred stock holders get all of the proceeds and the common stock holders get nothing. In other words no upside to the Founders for exit of less than $20M even if they own 75% of the company]

Since in my past, I happened to be a co-founder of a company that was organized with common shares (and eventually went public at NASDAQ), I can tell you that the same love-hate cycle existed even when everyone had common shares, however the fact that parties had relatively equal “power” created a balancing force. It did two things, first it enabled the founders more maneuvering space to succeed in spite the investors greed, and second it protected the one common success factor everyone forget about, and that is the Founders’ upside.

Taking the upside from the Founder strips the company from its main driving force and converts the company from a potential success to a company with large chance to fail. I believe that this survey reflects that.

I believe investors should re-examine the assumption that they must have preferred shares, and start testing scenarios where everyone has common shares and where the founders are so motivated to make thing work that they increase the chances to succeed tenfold.

If VCs will see more success, they will become less greedy, interests will start to better align between Founders and VCs and with everyone pulling in the same direction chances are that more startups will succeed. The question is now which VC will be the first to create and lead that trend.

VCs often say that like horse track gamblers, they bet on the jockey not on the horse. If I to continue that analogy, I guess placing a nice juicy carrot in front of the jokey can dramatically improve the odds of winning the race.

What do you think?