We’ve spoken before on the show about the importance of Customer Experience in driving growth, with guests like Wharton’s Peter Fader, Gainsight’s Nick Mehta and Bain & Company’s Stu Berman. But today’s guest says you need to think beyond the customer. If you really want to accelerate growth, you need to focus on the employee experience.
Tiffani Bova is the global growth evangelist at Salesforce. She’s also the author of the Wall Street Journal bestselling book GROWTH IQ: Get Smarter About the Choices that Will Make or Break Your Business. Tiffani has been named to the latest Thinkers50’s list of the world’s top management thinkers and is a welcomed guest on Bloomberg, CNN, Cheddar, MSNBC, and Yahoo Finance, among others. In our conversation, we talk about whether your Growth IQ is something you’re born with or something you build, the ten paths to growth, and how Software-as-a-Service has changed what it takes to thrive in Sales.
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How Employee Experience and Customer Experience Drive Corporate Growth with Salesforce’s Tiffani Bova
We’ve spoken before on the show about the importance of customer experience in driving growth with guests like Wharton’s Peter Fader, Gainsight’s Nick Mehta, and Bain & Company’s Stu Berman. This episode’s guest said, “You need to think beyond the customer. If you want to accelerate growth, you need to focus on the employee experience.” Tiffani Bova is the Global Growth Evangelist at Salesforce. She’s also the Author of the Wall Street Journal bestselling book, Growth IQ: Get Smarter About the Choices that Will Make or Break Your Business.
She has been named to the Thinkers50 List of The World’s Top Management Thinkers and is a welcomed guest on Bloomberg, CNN, Cheddar, MSNBC, and Yahoo Finance among others. In our conversation, we talk about whether your growth IQ is something you’re born with or something you build, the ten paths to growth, and how software as a service has changed what it takes to thrive in sales.
Tiffani, welcome to the show. I’m happy to have you.
Thank you for having me.
You’re a global growth evangelist. What is that, and what do you do all day?
I am an external evangelist who is sharing thought leadership and trends in the market on behalf of Salesforce but also to help advise our existing customers and the broader shareholder community on what trends we think are going to be impacting their business in the future, as it relates to things like growth and innovation.
You wrote a book on growth IQ. Is your growth IQ something that you’re born with or that you can develop?
To me, growth is a thinking game. It’s about out-thinking your competition, especially if you’re a small business, you’re never going to be able to outspend a large enterprise or a global Fortune 500 company. You’re never going to have as many salespeople, as deep of pockets, or as robust of an innovation pipeline. How do you win if you’re in one category against a large organization?
That’s where that thinking mentality comes into play. It’s, “What are the things you can do better than the competition?” To me, it is about understanding the context of the market you’re competing in, making decisions about where and how you think you have the ability to win in the market, and doubling down there, but never-ending at that point. It’s this constant loop of evaluation and making sure you’re staying in front of things.
The book found ten paths to growth and I don’t think there’s any more than that. You may go, “What about this?” I loosely could probably tie it to one of the growth paths. I’m fairly confident, but if not, then it’s disruptive, and I’d love to know from you. If it’s one of those ten, those were modernized views on growth strategies that have been around for 100 years. Now, we have mobile social cloud, big data, and lots of changes in the way in which customers buy. We sell subscription models and all of that, which is very different than it was many years ago. There were subscription pockets, but not as prevalent as it is now. It’s a way to reframe how you go about looking for top-line revenue. That was the goal.
In terms of, “Born with it and developed it,” it sounds like you come out maybe more on the “Develop It” side with these ten paths being things that can be learned.
The “Born with it” is, are you born curious and willing to learn new things? Do you have a growth or fixed mindset? If you have a fixed mindset and you’re like, “This is the way I do it. It’s the way I’m always going to do it. Regardless of what someone may tell me, I’m committed,” that isn’t necessarily growth IQ. It is about giving yourself a little space every single day to try things that might be uncomfortable and disruptive to the way you do things. It’s super important if you want to remain relevant and continue growing in light of everything we now have in front of us.
It almost seems like you need a growth mindset if you want your company to enjoy rapid growth.There is never one single path towards growth. - @Tiffani_Bova Click To Tweet
The book, Mindset, by Carol Dweck is a great place to start. She digs into growth and a fixed mindset. It wasn’t the intention. I was meeting with clients and I said, “I’ve been here for a few years, but prior to being at Salesforce, I was a Research Fellow at Gartner for a decade helping companies transform the way they sell. Fifteen years before that, I was a practitioning sales marketing and service leader early in this thing we call As A Service business. I was a low-cost beta client and constant contact beta client. I’ve been doing cloud-based selling and recurring revenue model selling.
I ran the largest web hosting company in the US in 2000 and 2004. We were 3 or 4 times the size of Rackspace. We almost bought them. I’ve been in this subscription game for a while, but I would often hear from clients when I was at Gartner, “In the quarter, we’re finding it harder to grow. Should I hire more salespeople, spend more marketing dollars or cut costs?” This cutting costs for growth is a short-term strategy and not a good one. If you’re small, strapped, and you have to, I get it. If you have the ability to not do that, I would advise you not to do it. When I would hear those three things, in my mind, “There have to be more ways.”
Can we go through the ten paths?
What I tried to do was aligned to paths or growth strategies that were already in the market, but needed a fresh lens because of what we now have available to us. First path was customer experience, which should be fairly self-explanatory. Second, customer-based penetration, selling more to the existing base that you have and not ignoring them. Third, market acceleration, accelerating into the market that you are currently in. Next was product expansion. Next was customer and product diversification.
If you’re paying attention, that is the Ansoff Matrix. Those four after-customer experiences were the matrix modernized with a new twist on what we have available to us. The next was optimized sales. The next was churned, which was an homage to the subscription business. Path 8 was partnerships, 9 was a co-op petition, working with companies that you may feel compete with you in some way, and the 10th path was unconventional strategies, which was doing well by doing good and purpose over profit. I work at Salesforce. If you know anything about us, that should be no surprise that trying to better the world also helps companies have a greater growth opportunity.
How do you use these growth paths? Is it something that if you’re working with a startup or an organization that’s trying to expand into subscriptions and they’re looking at this, did they start at 1 and go through 10? Or is it, “Look at these 10 as a painter’s pallet and choose a couple to use. Don’t use all 64 crayons in the crayon box because then you have a mess, use some restraint?” How do you think about using these different tools when you’re trying to drive growth when you’re thinking, “Do I hire more people? Do I throw money at it? Do I throw people at it, or do I try to out-think my competition?”
It’s the latter. It does not start at path 1 and it’s a sequential order through 10. That was the a-ha for the book. The a-ha for the book is not the ten paths. You should not be surprised by the ten I outlined. The a-ha was number one, you start with the context. What is your business? Who are your customers? What are you selling? Why do you win or lose? What is your culture? Ask yourself those hard questions so you can understand what is your starting point. It’s like, “I want to do the Ironman Triathlon on the big island of Hawaii.” I am not just going to show up for the Ironman and compete. I would probably die.
You have to start going like, “I have to swim, run, and bike ride. I cannot do it all at one time. I have to train in one. I might be strong in one and not strong in the other. I have to get to a place where I could do three well.” Think about it in that same way. Once you understand the context, the next trick is understanding which growth paths you should do. The one thing about growth is there’s never one thing. It’s never one growth path. You will always want to have a customer experience for obvious reasons. You will always want to have customer base penetration, taking care of the customers you have. If you’re in the subscription business, you’re always going to want to pay attention to churn.
Those three for me would be foundational for someone in a subscription business. If that’s the bottom layer, that’s the foundation of your house, don’t then try to put the roof on it. You need to get those working and working well for you, and then figure out, “Based on the context, which one should I add next?” It’s different for everybody. In the book, each path has three stories. There are 30 stories in the book, 2 positive use cases of the path, and then 1 cautionary tale of the path. You can see how, when, and why companies that you recognize small brands, big brands, different industries, what they were doing at a point in time. The next thing and the finding that got me most excited was the sequence.
Context is 1st, the combination of growth path is 2nd, and 3rd is the sequence. The order in which you deploy those paths has a meaningful and measurable impact on their success. For example, if Netflix had started with streaming, would it have been successful? It’s one of the stories in the book. My gut would say, “Of course not, because number one, we didn’t have high-speed internet in our homes. Blockbuster had trained us that the VHS and DVD was the way we were going to watch movies.”
They disrupted it the way we got our hands on that content. We didn’t have to drive anymore and it removed that friction. They didn’t start where the technology was not ready. Would they have been able to hang on or would they have burned through all their cash? The order in which they did it started with mail order, go from DVD, and high-speed started to show up or roll that out. When they left the US and went internationally, they went where there was already very strong connectivity in the homes. They immediately jumped to streaming, versus starting with DVDs.
That’s what I mean by sequence, the order in which you do things. Those three things are what the Growth IQ framework is all about. The paths are just the means to the end, but if you don’t do the framework correctly, it doesn’t matter which path you choose. You’re probably going to be disappointed with your results.
I keep going back to this idea of, “Can IQ be learned?” When people don’t have growth mindsets, they have fixed mindsets, “I do this. I run the fax machine. That’s my job,” as opposed to, “I manage the communication channel. Yesterday it was a fax. Now it’s TikTok,” or whatever my communication channel is. This idea is that growth can be learned. This framework in the proper sequence is a road to get there. It starts with understanding the customer, and the customer experience and starting in the right place.
The next question I usually get is, “What’s the right place, path, or sequence?” Early in my consulting analyst days, I used to answer that question very quickly. I realized 3 or 4 years into my tenure being a research fellow at Gartner that I probably did a disservice. The answer should have been, “I don’t know. Let’s start with. What do your customers say? What do people who have left you say from a customer standpoint? When you win, why do you win? Why do you lose? What’s your culture?” Start to uncover the answer to those questions.
A lot of the time, unfortunately, a big majority of those questions are unanswered, they’re a guess, or the executive team doesn’t agree on the answer. Starting with context is so important because until you have buy-in and consistency across, “How do we even define customer experience?” Start there. What’s the metric? What’s better? Who’s responsible? Start at the basics. Until you have those things nailed, how can you ever expect to have a disruptive strategy introduced into your environment?
Having definitions and clarity around what you mean when you say, “Our ideal customer, goals, and metrics,” to get specific about what the priorities are is something that many organizations gloss over because it’s hard. It seems obvious, hard, and quite painful when you’re sitting around a room and everybody thinks they know who the customer is and each person shares that. You’re like, “That’s interesting. That’s good.” Let’s say, it’s all of those. It’s biggish-smallish.
It’s not personas. It’s not what I’m talking about. We have 64 personas. I’m going to give you an example. I was running sales marketing and customer service for a web hosting company, clearly recurring revenue. We had a double-digit churn problem. We saw it spike at the end of every month. If we’re sitting around the leadership table, it would be like, “It’s our products. They’re not stable. This is very early in what we now take for granted.” It’s from 2000 to 2004. Keep that in mind.
Was it product stability? We had five-nines uptime. That’s where our SLA was the big touting factor. Nobody even talks about that anymore. We’ve moved in a completely different direction, but it was SLA. Was it a product platform, call center agent, or billing problem? Everyone had their opinion. I said, “Let’s do this. I’m going to go and spend time on the call center floor.” That’s what I did. I came out of that and I went, “I know what the problem is.” Usually, what ended up happening was people were forced-canceled because their credit cards expired. They weren’t canceling. We were canceling them. This is long before we had. Back then the marketing technology stack was about a dozen. It’s now over 9,000.
It’s still a problem. Passive churn is amazing to me because that’s almost like free money. Understand if you’re losing customers because of a credit card or payment problem, 70% to 80% of the time, it’s not because the customer has bad credit or is trying to commit fraud. It’s because of some technical issue. Identifying that is, first of all, great news because that’s so much better than them saying, “No, we just don’t like your product.” You have a product, but you have to go fix that. It is interesting. What was the problem years ago, there is all of this new technology that’s available to resolve that and it’s still an issue.
That was the lesson. It was an internal system problem. I want you to think back to what you said that back then I would have to pull a report whose credit card was going to expire in 60 days and create a campaign. There weren’t all these tools. There wasn’t Salesforce, Pardot, ExactTarget, and all the other things. It was Excel spreadsheets. We loaded it up, then we said, “Here are the ones that are going to expire in 60 days. Let’s create an email and send it out to them. We don’t want your service to be interrupted. We need you to update your credit card.” We’d cut the churn in half there. That was one fix. All of that was manual back then.
There’s no excuse now. It’s easy. Pull a report. You have the note to the customer that is already pre-written, push it out 60 days in advance, do a reminder in 72, 48, or 24 hours. Maybe give them a week’s leeway or whatever you want to do without having to have humans do it. What an advantage. In the book, I talk about looking at churn in an offensive way versus playing wind back in a defensive way to now get them to call you and give you the updated credit card instead of getting ahead of it. That’s one example. That requires you to go, “I don’t know why I have high churn. What’s happening?” Dig into what it is.
I couldn’t get the fixes in the system. I told the executive team what the problem was and I couldn’t get them to turn the corner, so I made them all sit in the call center for two hours. I don’t think it was the end of their two hours. They were in my office, “We need to fix these five things right away.” I’m like, “Thank God. It’s only been a few months. I’ve been asking you to fix it.” Part of this is if your executives run the business from a spreadsheet, a report, or the confines of their four walls, then you’ve got to get them where those pain points are happening, which are those moments that matter on a customer service call, in a chat, or in the field with field service. It’s an undercover boss for those of you in the US. What happens when executives get too far away from what’s happening at the front lines?Cutting costs to growth is a short-term strategy, and it is not a good one. - @Tiffani_Bova Click To Tweet
We talk a lot about customer centricity on the show. This is such a perfect example of how you do it. You go to the call center and listen. You determine what are the drivers of churn by listening to what people say when they cancel and looking at what they do when they cancel. What are they doing right before they cancel? That’s excellent. It can be hard to move your organization to that culture, a curious culture, growth-minded culture, or customer-centric culture. You’ve spoken about pop-up teams as one tool for cultural change. Can you explain what that is? Maybe talk a little bit about how you create the right culture for growth.
That pop-up team example came out of the term that I coined a number of years ago called The Seller’s Dilemma. It was a play on Clayton Christensen’s The Innovator’s Dilemma. I have no problem like Carol Dweck on Mindset and fixed mindset. It’s the same with Seller’s Dilemma. Learn from the masters and further the conversation down the road.
The Seller’s Dilemma is, “How do I hit numbers now while at the same time transforming for the future?” As a sales leader, that is this opposable mind. There’s tension between the, “If I don’t hit my numbers, I won’t have a job. This is what I’m good at, hitting numbers. I’m not very good at deconstructing the processes that are happening, that maybe holding my team, my people, and other collaborative organizations from hitting their goals?”
This is the tension, this Seller’s Dilemma of, “Where do I spend my time?” You have to spend your time in both. There is no way to spend it at one or the other, but then it’s how much time. The pop-up team was a way by which you could test transformation-type of activities without disrupting the revenue generation apple cart. If you have a team of 50 sellers, grab 3, carve them out, put them to the side, and say, “We’re going to remove your productivity metrics. We’re going to let you use the tools the way you use them. Door openers, we’re going to learn from you and watching you in action,” and not giving them any constraints.
You may find that all of a sudden, they’re far freer to use the tools you’ve deployed without your restriction, this autonomy versus productivity. Unfortunately, during the pandemic selling organizations, the productivity metrics increased because it was out of sight and mind. They are like, “I don’t know what you’re doing. I’m going to increase the productivity metrics to know what you’re doing every minute of every day.”
Instead of saying, “I’m going to give you some autonomy,” learning from that pop-up team and then deploying it into the remainder of the organization. What it does is a couple of things. It helps you get the employees to participate in their destiny of designing what their day-to-day will look like. It goes a long way to get them to be committed, satisfied, and engaged. That’s one thing.
When you have a sales organization, you’re trying to change their behavior and make them customer-centric and more focused on long-term success rather than just, “I hit my quota.” You’re saying the first thing to do is give them some flexibility away from all of your productivity metrics and see what they’re doing when they’re effective and then adjust based on what you’re seeing.
Maybe they’re not using this tool at all, or they want to use that tool, but they have to log in twice. They’re toggling between two different applications. It’s wasting time. The average sellers spend 66% of their time on non-selling activities and 52% of them are going to miss the quota. We’ve had a ton of room for improvement. Those two numbers have remained flat even during this time that CRM has gotten so advanced.
Watching them allows you to see the stupid stuff you do and you force them to do it day in and out. You can either improve the process, eliminate steps, or transform the way they work day-to-day. That goes a long way to get them committed. The second thing that it does beyond getting them to participate is they now become champions in the remainder of the selling organization of using the tools because they know that they work.
Now, you’ve injected into these naysayers of, “I’m not going to use that technology because it’s going to displace my job. It’s in my gut. I don’t need to use tech. I’ve been super successful with that fixed mindset.” It’s a way to inject that. Third, and the most important is getting those sales ops, rev ops, IT, any of the metric’s team, and productivity teams to see what they have put out in action.
Like the example I gave at putting those executives into the call center, there is no way to fake that. I use undercover boss as an example, but if you’ve ever watched the show, how is it possible that an executive doesn’t know that’s what’s happening? It’s super possible because they’re 19 layers away from that and a large organization could be 100 layers.
You’ll be way away, but they’re making decisions from a report amongst the people who don’t agree on what a good customer experience is, what your top customers are, or what is driving churn. They’re making decisions through their own lens and it doesn’t play itself out as expected in the individual contributor layer. That is the key to the kingdom. If we can help executives see the realities at those moments that matter between an employee and a customer, specifically, if you’re in recurring revenue business, it is much cheaper for you to upsell and cross-sell to existing, then go find new.
They’re more willing to forgive you and try new products and services. You’ve already done the hard work of convincing them to buy from you the first time. It’s a shame if you ignore them. There’s a ton of new research out that during this time, customers are willing to consider another provider. That is a shame on us because the only time people consider other providers is when they’re being ignored by another one.
Also, when there’s a big time of change. In these last few years, a lot of people have been forced to reconsider their habits. If you can’t get in the car and go to the store, you have to figure out a new way to buy your groceries. If you can’t go into the office, you need to figure out a new way to communicate with your colleagues and customers. You’re forced to reconsider and you say, “Are these the best tools? Do I need new tools?”
You have an opportunity to take off your blinders and reconsider. That’s where you see what loyalty there is and which customers say, “I’m going to continue to trust the vendor I’ve been working with because they’ve never led me astray and they’ve taken care of me,” versus, “Now’s a good time for me to reconsider my habits.”
When you are a provider in a recurring revenue business, and you choose not to make innovation investments, for example, you don’t have an app. I’m picking on that because it’s super easy. It sends a couple of signals. One of which is you don’t care enough about your current customers to continue to innovate and deliver to them as these habits and behaviors change what they want from someone like you.
You don’t care enough to make the investment. That’s 1, or 2, you’re not even aware. That goes back to, “I don’t know that my customers are even upset. We don’t have an app because I’m not asking them. We’re not looking. We’re not paying attention. We’ve lost our line of sight.” It’s important that you also don’t follow every whim of the customer because that’s also not a good idea. It isn’t, “Customer is always right,” and you have to chase all the mice, the ideas that they put in front of you.
If you’re not looking at all the ideas that are put in front of you, you’re not going to find those that will potentially have the greatest impact when you hear those the most. I’m going to give an example from the book, McDonald’s. Customers have been wanting an all-day breakfast for decades. McDonald’s ignored it. It’s not that they didn’t hear it. They hit a growth stall. A new CEO came in and went, “I have a great idea. Let’s serve all-day breakfast.” It’s like, “Great idea.”
He couldn’t just on Friday go, “We’re going to do all day breakfast,” then on Monday, flip the switch. It wouldn’t have worked because not everybody knows this. I didn’t know this. You can’t cook burgers and eggs at the same temperature. You couldn’t cook them on the same grill. You couldn’t do all-day breakfast until you added another grill. Let’s go back to the sequence. If you’re going to do all-day breakfast, you have to reconfigure the kitchen. The sequence mattered, then it was, “I want an app. I want touchless ordering.” Thankfully, a lot of those things have been deployed pre-pandemic.
When the pandemic showed up, they were ready for, “I don’t have to have people coming into my establishment.” Those that weren’t making investments pre-pandemic got flat-footed with not having the ability to service or sell remotely. Restaurants didn’t have menus online. They weren’t connected to Uber Eats or GrubHub. They had no ability to get groceries in the hands of their customer because they didn’t have any way for someone to order groceries or for you to get them to their house.
That goes back to the behaviors that were starting to shift. It was a little early. Think Netflix, “That’s okay. Let me find an interim step. Maybe I partner with someone to deliver for me until it starts to pick up then I can start having my own vans within a mile radius of my store.” I’m making that up, but you get the idea. If you weren’t paying attention, even subscription, “Do I do it on a subscription service?”
Walmart didn’t have a subscription. Prime had a subscription. Walmart was a couple of years behind them and wanted to get things in place. We’re already doing grocery pickup and grocery delivery before anybody. Deep pocket is hard for a small mom-and-pop grocery store to compete. If you can out-think them and say, “I’m going to do it in a mile of my house and get loyalty,” Even when the Walmarts, Amazons, and Targets of the world are delivering, Ralphs or whatever grocery store you use, I already have an answer and I will have established a connection with my customers that is hard to disrupt.Help executives see the realities of moments between employees and customers. It is much cheaper to upsell and cross-sell to existing than to find new ones. - @Tiffani_Bova Click To Tweet
It’s almost like the out thinking goes without listening. It wasn’t a surprise probably to anybody at McDonald’s from the person on the grill, all the way to the CEO, that there was a movement. There were a lot of people that believed in this idea, but it doesn’t happen if you don’t sequence it. Make sure you understand what they want, experiment, and reconfigure the kitchens. COVID accelerated this direct-to-consumer connection. On the B2B and B2C sides, there was this move to reach out directly to the end user and be able to reach them, which has accelerated a lot of subscription businesses.
Every retailer has said, “We need a subscription. We need an app that directly talks to the customer.” Every manufacturer is doing the same thing. We’re trying to build subscriptions around refrigerators, heavy equipment, and equipment in operating rooms. It’s amazing how innovative, creative, and curious companies have got in the last years.
Don’t just do a subscription because you’re looking for predictability in your revenue and forecast, which is what subscription gets you. How long did CNN+ last? Not even 90 days, just about 5 minutes. It’s not that it wasn’t good or bad. People are fatigued over streaming, possible. We see numbers changing on Netflix and other things. It could just be fatigue or there was no real additional value. Everyone has an opinion on why that didn’t happen. There’s a ton of opportunity in IoT for the subscription. Manufacturing and equipment are literally like a new home building like, “I’m going to put sensors under the sink.” You’re going to pay, as part of your homeowner association, $0.99 a month or whatever it is.
If there’s a drip, the system is going to know it. It will send out an alert. A plumber is going to show up before you even knew that there was a drip or a leak. There are use cases everywhere. The job to be done has remained constant and always does. If you’re not familiar with Jobs To Be Done, also Clayton Christensen, go do a little investigation.
The Job To Be Done is, “I want to invite you for dinner.” It was 100 or 200 years ago. I’m going to send you smoke signals, “Come over to my shack and we’re going to have dinner. I’m inviting you for dinner. I send you a Slack message. I send you a text message. I send you a WhatsApp message. I send you a TikTok DM.” The job was inviting you to dinner. The solution by which I invited you is what has changed. The Jobs To Be Done have never changed. It’s the solution. I want to be entertained. I used to go and watch a mime show with little puppets many years ago to now it’s getting entertained with TikTok. The job to be done is entertainment.
Ultimately, if you can wrap your mind around, “What is the job to be done I’m trying to accomplish?” people want frictionless service like the drip under their sink. They don’t want it to become a big mess, but they don’t want to pay for it if they see the value in doing it. Subscription from a CFO perspective is the golden goose. That’s the way we can do predictable revenue.
Also, in times when people are cutting back on spend, there’s a potential of inflation, recession, gas prices are crazy and all of this, what’s the first thing that goes? Recurring revenue charges, whether it be your movie, music, or gym subscription, whatever it is, tend to be the things that go first. You’ve got to find a way that you continue to drive value for those prices that you’re charging.
There is so much to unpack there, this idea of Jobs To Be Done and what is your promise? The promise is, “I’m going to help you get that job done.” That in exchange for subscription revenue, “I’m going to help you manage your sales team in exchange for paying me on an ongoing basis. I’m going to help you get the most enjoyment out of your free time,” which is an important job to be done. That’s where subscriptions do well.
I’m glad you called out those CFOs who love the subscription revenue, who cart before horse tail wagging dog, say to their product teams and sales teams, “Go out and get us some subscription revenue because it allows us to manage our cashflow better and we get a better valuation in the public markets.” Your point is unless you’re not solving a problem and handling one of those timeless jobs to be done in an ever-improving way, you’re not going to be able to justify recurring revenue.
It’s tempting to say, “My customers trust me. They’re paying me every month. I’m not going to invest any more in the product because they’re just paying me. I don’t have to see new and improved because they’re already subscribing.” How do you get your teams to continue to innovate in an environment where the money comes in every month?
Years ago, I was working with a drill manufacturer. They wanted to add an IoT device to the drill and they were selling it through a retailer. They didn’t have D2C. It was through a channel. It was B2B2C. I said, “Great.” It was the product manager of this particular drill manufacturer who was going to launch this drill. I said, “What about an app?” They’re like, “Why would we have an app?” I’m like, “Why would you put IoT on there?” “We need to know how people are using the drills.” I go, “Great, but wouldn’t it be great if the person using the drill knew about it? For example, a construction worker, you’ve been drilling for 90 minutes nonstop. If you look on your app, it buzzes you and the drill buzzes you.”
“It gives you three wrist exercises, carpal tunnel, workman’s comp, and all these things. Let’s make sure the health and wellness of people using our products and services are okay. That’s a fun way to stay connected. You’ve been using this particular drill bit because we can tell it needs to be replaced. How about, every 90 days, because you’re a heavy user, we’re going to send you a drill bit and then you can send us back the old one? We’ll take care of the recycling for about $4.99, $3.99, or $1.99 a month. Pick a number.” I saw him looking at me like, “We make drills.”
That’s the a fixed mindset.
It couldn’t see the forest through the trees because it was just more about product development and about them versus, “How do I create this connection?” Ultimately, they made some changes. It was not exclusively my idea. I was saying, “Let’s play this out of where you could use it and build a subscription model for heavy users.” It’s not for me. I have a drill. I pick it up once a year. For the heavy user, that is your primary persona. It’s great you sold one. It sits in a shed.
You don’t want to give up those, but you want that person who uses it all the time, after work talking about and he goes, “I love this new drill. It does all these things for me.” Everybody else is going to, “What does your drill do? My drill doesn’t do that.” That comes back to re-imagining what you’re selling and where in-house subscriptions can create a tighter connection. If it’s not just about profitability, that it is about that experience, then you’ve got a shot at making it work.
It’s where the market’s going slowly, but it’s making its way there. COVID has helped the manufacturers realize that having an IoT relationship with an app that helps the product user is a great way to build loyalty, engagement, as well as gathering that data on the backend. One more question and then I’m hoping that you have time for a speed round. We’ve talked a lot about how you get customers to love your brand and build ongoing relationships with customers and customer-centricity. I’ve heard you say, “The fastest way to get customers to love your brand is to get employees to love their job.” How do you do that?
There’s a big period after that statement. This is something that I completely missed in Growth IQ, full transparency. I didn’t talk about the employee at all. I might’ve mentioned both, but it is in the next book. I’m three-quarters of the way through it. It’s due in about a couple months. I’m in the last home stretch of getting it done. Let’s go back to the example about the call center, the churn, not understanding it was the credit card. Those customer service agents were taking those calls all day.
We did not give them the capability of updating the credit card information on the call center floor, because this was a long time ago. There was a lot about security and giving credit card information to everybody there. It was a different time. We didn’t have all the things in place we have now. Part of it was that the process did not allow them to do that. That was a lot of frustration on the call center floor. We all know that if you have angry, upset customers calling your call center all the time, your call center agents are not that happy.
When your call center engines are not that happy, then they’re not that great with your customer. There is nothing new in the statement of what I said. What is new is understanding that when you have high EX or employee experience, it creates a lift in your customer experience, in your NPS scores, reduces churn rate, CSAT scores, and all those metrics you’re doing. There had never been research that showed the correlation between those two to an actual growth rate.
Years ago, we went on this journey. We spent the last years through research projects and found that brands that were good on both EX and CX had a 1.8X faster growth rate than those that were not. For $1 billion brand, it was a $40 million impact. That research is called The Experience Equation with Forbes Insight and Salesforce. It led us down another path to say, “That was the US only. Let’s go global. Let’s do this more deeply and find out where the disconnect is between the C-Suite and the employee.” We did a global study about 3,000 employees and 600 C-Suite. We did it in partnership with Edelman.
We also did primary research across a retailer on improvement to employee experience where they found, focusing on giving them the tools they need, helping them be more productive, having them have the information they needed when they were servicing a customer, they increased revenue per employee for the store associate by 50%. We knew that employee experience was the missing link between delivering greater CX and growth.
Lo and behold, the pandemic hits, The Great Resignation is in front of us and everyone’s like, “Why is everyone leaving?” The timing couldn’t have been more perfect and we’re like, “We can tell you why they’re leaving.” Employees haven’t been happy. They’re not engaged. They’re not satisfied. When it’s a market of, “I need a job,” they put up with it and with everything that’s happened, I don’t call it The Great Resignation anymore.Don’t just do a subscription because you’re looking for predictability in your revenue and forecast. - @Tiffani_Bova Click To Tweet
I call it The Great Reflection that people were reflecting on, “What am I doing? Why am I doing it? Where am I doing it?” They left to say, “I’m going to go somewhere else where I feel more aligned, valued, and listened to that they do things on my behalf. I want a better employee experience.” It’s been fantastic to see that the employee conversation has risen to the level of being mentioned on hundreds of earnings calls in the last two quarters, which was never mentioned before that. You’d talk about talent and the difficulty in finding talent, but it was not about keeping talent.
It’s the same thing. It’s retention. Customer retention, a lot of the same things, onboarding experiences, tracking engagement, continuing to evolve what they’re getting so that they continue to grow and what’s the job to be done of a job? “It helps me pay my rent, but it also gives me a sense of meaning and contribution of my own abilities. If the job doesn’t allow me to do that, if I have a chance to look elsewhere, I’m going to look elsewhere.”
What you’re saying around how to improve employee experience is first to prioritize it. It is something that’s simple. Give people the tools they need and listen to their observations. You don’t have to take all of their observations like with customers, but have a way of listening to something that Laura Sawka, also of Salesforce, once told me when I was working on my first book, The Membership Economy. She said, “When you get feedback, it’s not the violins. It’s the whole orchestra. You want to listen to all the different parts of the organization, your customers, employees, lost customers, prospects, and your people who went elsewhere. When you hear all of that, that’s when you can make beautiful music.”
Since we’ve been talking about churns and subscriptions, think about The Great Resignation for a moment. What you don’t want to have to happen is the next Great Resignation is with your customers.
You want it to be a great reflection down on this relationship, not a great reflection to look for something better.
It’s the same amount of effort that was put towards customer and employee experience. If your employees are leaving, you don’t want your customers to go next. There’s a lot to be said and that’s the foundation for the next book. Growth is a thinking game. How do you apply it going forward in your business?
Let’s do a speed round. The first subscription you ever had?
Probably at the gym.
The path to growth that you enjoy talking about the most?
Unconventional Strategies now, the business is the greatest platform for change.
It’s the highest level thing. The subscription that you have recommended to someone else recently?
I don’t know, because I haven’t added any subscriptions in the last few years. I probably tried to minimize them only because I realized, “When I was home, I had too many.” I can’t think of one that I’ve recommended of late.
What do you do when you’re on an airplane? Do you work, enjoy, entertain yourself, or sleep?
I work. It’s my best writing time.
An employee culture that you have especially enjoyed being a part of.
Thank you so much for being here. I hope you’ll come back when your book comes out. We’d love to have you back.
Hopefully, in the first quarter of 2023.
I have many nuggets. You are a pro. Thank you.
Thank you for having me.
That was Tiffani Bova, global growth evangelist at Salesforce. She’s also the author of the Wall Street Journal bestselling book, Growth IQ: Get Smarter About the Choices that Will Make or Break Your Business. For more about Tiffani, go to TiffaniBova.com. For more about the show, go to Robbie Kellman Baxter. If you like the show, please go to Apple Podcast. Mention this episode if you especially enjoyed it. Reviews are how readers find our show, and we appreciate each one. Thanks for your support. Thanks for reading.
- Subscription Stories Episode with Peter Fader
- Subscription Stories Episode with Nick Mehta
- Subscription Stories Episode with Stu Berman
- Tiffani Bova, Global Growth and Innovation Evangelist at Salesforce
- Growth IQ: Get Smarter About the Choices that Will Make or Break Your Business
- Buy Mindset on Amazon
- Buy The Innovator’s Dilemma on Amazon
- Yahoo Finance
- Uber Eats
- Jobs To Be Done
- The Experience Equation
- Laura Sawka
- The Membership Economy
About Tiffani Bova
Tiffani Bova is the global growth evangelist at Salesforce and the author of the Wall Street Journal bestselling book GROWTH IQ: Get Smarter About the Choices that Will Make or Break Your Business. Bova has been named to the latest Thinkers50’s list of the world’s top management thinkers and is a welcomed guest on Bloomberg, BNN, Cheddar, MSNBC, and Yahoo Finance, among others.
As host of What’s Next! with Tiffani Bova, an iTunes’ all-time business and management bestseller and a top sales podcast according to Top Sales Magazine, Bova has interviewed guests including Arianna Huffington, Chester Elton, Dan Pink, Ginger Hardage, Bonin Bough, Mark Victor Hansen, Seth Godin and Tom Peters.
Having delivered over 500 keynote presentations on sales transformation and business model innovation to over 400,000 people on six continents, Bova is highly sought-after keynote speaker. Prior to working with Salesforce she was a sales, marketing and customer service executive for startups as well as Fortune 500 companies where she was recognized as being one of the first to develop a robust go to market model for cloud based solutions, and indirect channel strategies to accommodate changes in buying behavior. She left the corporate world and joined Gartner becoming a Distinguished Analyst and Research Fellow where she won the Thought Leadership award and earned accolades from the best leaders in the technology world for her cutting-edge analysis and her skill at architecting bold new strategies for sales and growth.
Bova’s time on the front lines of sales, marketing and innovation, combined with her insightful candor, has resulted in a unique perspective that continues to inspire businesses and individuals to get smarter about the choices they make, think forward and increase their Growth IQ.
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