A Transaction Isn't an Exchange of Goods

Phillip: [00:00:14] Welcome to Future Commerce. I'm Phillip.

Brian: [00:01:31] I'm Brian. And we've got a great show ahead.

Phillip: [00:01:34] I disagree with you. I'm starting there.

Brian: [00:01:36] You're going to start by disagreeing with me that we have a great show ahead?

Phillip: [00:01:39] We have a great show and we really do. I was going to just come out of the gate swinging and tell you how much I disagree with. So I've decided that I don't agree with the thing that we've been saying

Brian: [00:01:49] You're done with with all of our previous thoughts. All the previous thoughts are done.

Phillip: [00:01:56] No, someone said one time and this is stuck with me, and it was in a developer context. You know, I'm an engineer and early part of my career was writing code and running engineering teams. And they said that if you look back on code, you wrote six months ago and you cringe really hard, like, that's great. That's how it's supposed to be. It's a sign of growth. If we go back and listen to the early podcasts that we made,  they're something back?

Brian: [00:02:29] Don't go back.

Phillip: [00:02:29] Don't listen to episode one.

Brian: [00:02:31] Don't listen to episode one.

Phillip: [00:02:33] It took us a good 150 episodes to catch a to catch... {laughter}

Brian: [00:02:38] {laughter} In 50 episodes, you're going to be like, "It took us a good two hundred and fifty episodes."

Phillip: [00:02:43] This is so true. So I think it's a sign of growth. Of course, the rest of the world would tell you you're never allowed to change your mind, and if you do, you're canceled. But that's a whole other show for a whole other time.

Brian: [00:02:54] Wow. Wow. We're going there.

Phillip: [00:02:57] No, I'm not going there. I'm saying it's a show for another time. That's an after dark. We'll do it after dark about cancel culture at some point.

Brian: [00:03:03] Some day.

Phillip: [00:03:04] No, probably not. So, OK. Definitely. It couldn't. It couldn't possibly be a sponsored episode. Here's what I'm trying to say. We have an awesome interview later on, Romain Lapeyre, who's CEO of Gorgias, is going to be on the show. And the way that podcasts work or can work is that you sort of you can record them out of order, so we can tease what we said ahead of time. There's something that happened that we started talking about 18 months ago or so. It was something that you had brought up, and I was like, "Yeah, yeah, that sounds really good. I sort of agree with that," and I feel like I've finally come around to disagreeing with it, and I want to have that conversation.

Brian: [00:03:39] Let's do it right now because...

Phillip: [00:03:40] Well, OK, what is? Yeah, we didn't get to it in the show.

Brian: [00:03:43] I already know what the thing is. We just didn't get to it in the show.

Phillip: [00:03:47] Set it up for the listeners.

Brian: [00:03:49] So obviously in the conversation ahead, we're talking about customer support and customer experience, and something that we've talked about on the show and Phillip has apparently mindlessly agreed to in the past...

Phillip: [00:04:02] No, not mindlessly. I was playing on my phone and I wasn't really listening, so I accidentally agreed with Brian. But then I finally listened and I was like, I don't agree anymore.

Brian: [00:04:11] I mean, how many times does that happen, though?

Phillip: [00:04:13] It's like half of my waking moments.

Brian: [00:04:16] Consciously, something that Phillip consciously agreed with me on mark those words, {laughter} it was that customer relationship superseded brands. And I think this is a really, really interesting conversation because actually I am really curious why you think that brand supersedes customer relationship or whatever it is that you're about to say because I would love to explore this idea further. This is interesting. This is actually interesting. Let's go.

Phillip: [00:04:49] Yeah. So just really, I want to make sure people are listening because they're probably listening at 2X, right? Because that's how people consume content is just shove it down your gullet as fast as you humanly can.

Brian: [00:05:01] I don't blame you for listening to us 2X, but I can't do it for stuff that I really enjoy. I don't blame our audience for listening to us 2X.

Phillip: [00:05:09] The real ones, the real ones, Brian, listen at half x. They're listening to... They're savoring us.

Brian: [00:05:14] Well, I... That's just, I couldn't do that.

Phillip: [00:05:20] I just want to repeat it for those who are listening at double speed, that the notion here and, it's something that I implicitly and explicitly agreed to in the past, is that brand is superseded by relationship with your customer.

Brian: [00:05:36] Should you say it's slower? Slowly... Slow it down...

Phillip: [00:05:40] I said it's as slow as I possibly can, and I'm going to disagree and I'll do so in the form of a parable.

Brian: [00:05:50] {laughter} Let's go.

Phillip: [00:05:54] This past week Apple had its Fall event where they unveiled their, you know, their new devices, it's usually a MacBook event. And in that event, Brian, they brought back physical keys. They did away with the Touch Bar.

Brian: [00:06:14] Courage.

Phillip: [00:06:14] {laughter} They brought back MagSafe. They brought back physical ports, you know, like an SD card reader. They did all of that with pretty much no acknowledgment of the fact that, you know, they just kept saying over and over, it's like "Pros want physical keys that are tactile." It's like, they didn't say, "Hey, we finally listened to you." They didn't say, "Hey, you know, we made a mistake." You know, they just they're charting their path forward, and I believe that there are some customers I don't feel this way, but there are some customers of Apple who feel that this kind of thing, the fact that especially that it took six years to get back to this place, is sort of abusive with the customer. You know, you look at other things that Apple has done, you know, they don't include a charger in the box anymore, and they have proprietary ports. They continue to use lightning on the iPhone. They won't put USB-C on it, even though every other device in the ecosystem has USB-C. All of these little things. Now they're back to MagSafe, so you can't use any USB compliant, USB-C charger. You're kind of back to this thing of like Apple kind of has this their brand supersedes any sort of relationship that you have with the customer there. Far and away to the point that people happily pay more so that they're not a green text in the group chat. People happily pay more in buying a new device every year or two even though, you know, I think it is demonstrable and empirical that Pixel and the Google Pixel phone is not only better hardware, faster hardware with better battery life, with more cutting edge features that is always two to three years ahead of Apple. They will continue to choose what is, you know, effectively, and by the way, the camera is worse in every way. The Pixel has had a better camera for years and years and years. Samsung has a 48 megapixel camera with like mind blowing sensor and optics, incredible image retouching, incredible color depth. These are all things that are empirical, improvable, and Apple's brand supersedes it far and away. And so if at least in one occasion that your statement is untrue, then I would say by proof it's untrue by default, and it can be provably true in some cases and not always true. That's how I believe. I don't believe... I now don't believe that the... Changed my mind that relationship with your customer supersedes the power of your brand.

Brian: [00:08:55] Rebuttal. All right. First of all, that was not a parable. Second of all...

Phillip: [00:09:01] The parable... Sorry, thank you. The parable was the unveiling of this. Ok, fine. Whatever. Yes. It's an example.

Brian: [00:09:08] It was an example. Yes, exactly. Ok.

Phillip: [00:09:13] {laughter} There are two toads. One toad... No, I'm just kidding. There's a parable.

Brian: [00:09:18] I feel like I want to answer you in the form of a parable, but I'm not going to.

Phillip: [00:09:24] Knowing Brian Lange it would be an actual parable.

Brian: [00:09:27] Yeah. Oh, definitely. If I could formulate one in a matter of seconds, I would respond in the form of a parable.

Phillip: [00:09:35] Of, Oh, wait for your Insider's piece that's, you know, formed in the shower. It'll be fine.

Brian: [00:09:39] That's probably true. Actually, that's a really good idea. One of my Insiders piece is coming up here is going to be a parable. That's the next... Sorry. You brought that on yourself, Phillip. {laughter}

Phillip: [00:09:50] Subscribe and read it for yourself. FutureCommerce.fm/Subscribe. Don't miss that one.

Brian: [00:09:55] Ok, second, second thing, the actual rebuttal. The things that you just brought up, in my view, are actually not examples of brand superseding customer relationship because first of all, Apple did respond. And yeah, they were a little bit slow. But they responded because all the things you mentioned about Google and Samsung were actually feature stuffing. They were box checking saying, "Oh, we have a 48 megapixel camera. That is what makes our product better than everyone else's. That's responsive to the market." It's like, no, I don't need a 48 megapixel camera. I like. That's not why I use my camera. I'm not a professional photographer. These insanely large images and what Apple does and I am not an Apple customer, but I haven't ever been, and I've long sort of desired to be in the ecosystem simply because I think Apple actually really is good at customer relationship and building an ecosystem in a world where they have a white hot center of people that respond to what they're doing. They care.

Phillip: [00:11:20] It's a cult.

Brian: [00:11:21] It's a cult.

Phillip: [00:11:22] Remember we wrote an Insider's piece about a year and a half ago.

Brian: [00:11:27] That cult was formed, and trust me, I had friends growing up during Apple's dark years who were part of that cult and kept the brand alive because Apple responded to its customers and listened.

Phillip: [00:11:44] I think there's provably no longer the case, but ok. I was going to... You outed yourself, but I was going to wait for you to finish and then ask you what kind of phone you have.

Brian: [00:11:53] I have a Pixel because four for very different reasons than customer relationship. Let me tell you.

Phillip: [00:12:00] I've never had... How about this? The multibillion dollar resale market is a good example of the fact that you don't have a relationship with the brand, right? You are consuming a brand that is a symbol of something; affiliation community, a belief system, right? It's not necessarily, you know, it's not that Balenciaga makes the best sock like tennis shoes. It's the fact that you want to wear Balenciagas, and maybe, like maybe the best way to get those is on Poshmark, if that's your bag.

Brian: [00:12:37] I do agree with you that customer relationship does not always supersede brand. I absolutely agree with that. In fact, my view on this has been morphing to some degree as well. And that has to do with what a transaction really is.

Phillip: [00:12:52] I agree with that. This I agree with.

Brian: [00:12:54] What is a transaction?

Phillip: [00:12:57] Yes. It doesn't have to be an exchange of goods or even monetary, right?

Brian: [00:13:01] It doesn't. It's actually an exchange of influence. In fact, in my next Insider's piece, which is coming soon...

Phillip: [00:13:06] It's power. Power dynamics.

Brian: [00:13:07] It is power dynamics. But even more than that, it's identity exchange. It's identity exchange. This is where I'm headed. My viewpoint is shifting to this. When you purchase something, you are taking part of someone's identity on and you're giving them part of your identity because actually in many ways where your treasure is, that's where your heart is.

Phillip: [00:13:36] I've heard that before.

Brian: [00:13:38] And money is something that we invest a lot of our lives in. We invest the almost the majority of our lives earning and managing and stewarding. And so it's a big part of who we are. In fact, how we spend our money is a better indicator of our souls than looking through our eyes. Eyes might be the window to the soul. No. Your bank statement is a window into your soul.

Phillip: [00:14:12] It's a ledger of, you know, the transactions upon your soul. Well, I feel like old school Future Commerce vibes here where we're talking about, you know, the perils of capitalism. I'm loving this. I believe that there is a breaking point. There's a tipping point. For you to be competitive, again, talking about transactional in nature. For you to be competitive and for your brand, not your logo, not the mark that's at the top of the website and the top left.

Brian: [00:14:39] Right.

Phillip: [00:14:40] The sense of value that your collection of products bring or the ethos that you have behind the company or that intangible relationship that you have to the customer is formed in the early days by being able to deliver exponential value and perceived value. That far exceeds the amount of money that you put into the transaction. Whether you get that through, you received a cashmere sweater that you perceive to be of a greater value than what you paid for it. So you have this incredible product that you got for a little cheaper than maybe you would have gotten elsewhere, right? That's something like Italic does that really well. You're getting these, you know, seemingly high quality premium goods that are otherwise would be had from, you know, seen as luxury items or coming from luxury brands. But you can have the same sort of thing, functionally, for a little bit less money. You've delivered high value for lower costs. So the delta is I won as the customer. I received more than I put out. You can also do that through incredible customer service. Especially if you're a service agency and you're quite small. The way that you win is not by, you know, charging less and then perceiving they got more. It's by delivering exceptional service even if you're charging more. In many cases, the smaller you are the more you have to charge to sort of make ends meet so you you exceed based on service, so you're still delivering the same delta. It's the same like perceived value. It's your value perception of what you're getting in return is much greater. I don't know that that is always sustainable as a business. I think that the actual the sustaining of a business to have a sustainable business, you actually have to extract value from the customer over time to have a sustainable large enterprise that's growing, that has margin that's able to reinvest in its future of the business and to be able to like, transform itself over time...

Brian: [00:16:45] You're just talking about a fair exchange, though, really,

Phillip: [00:16:48] I'm not just talking about fair exchange. The perceived value will erode over time, always. You can no longer deliver insane value. The way to do that sustainably, not with human, like not one to one, not eyeball to eyeball, and not person to person or over a phone. The way to do that at scale, especially at internet scale, is to apply technology to it.

Brian: [00:17:08] Yeah, I don't think the technology is like something I'm saying isn't a part of this in any way. In fact, technology helps enable better connection and better service even than you would have been able to provide before because that enables you to address more customers in a better way. I think that the key here is a fairly balanced... It's a balance on the giving and receiving end, which is by nature, relational. So you're right, maybe the level of service goes down, maybe the price of the product drops. Like you're talking about scaling a business. But I think that it's shown that even luxury goods can scale, and luxury service can scale. So you're talking, I think what you're talking about is a business that's transforming from one type of business to another type of business.

Phillip: [00:18:04] But you have to, fundamentally, you have to transform over time as your business scales. I'll say this. It's that the closeness of the relationship and the directness of your relationship and maybe even the one to one ness of the relationship diminishes over time the larger that your business grows.

Brian: [00:18:22] If that's the business you want to be. I think there's only so many, there's only so many luxury stores out there, like there's only so many luxury brands out there. There's only so much room for so many luxury brands out there. If you want to get to a certain scale and luxury, maybe you can achieve that scale, but maybe there's a tipping point where you have to say, "We have to grow at a very sustainable pace," not at 10x 20x type pace, you know. So I think growth, if you're looking for explosive growth, maybe you're right, maybe that's the only way to achieve growth that makes your business blow up in a very short amount of time. But the world gets bigger every day and wealth creation happens and transfer of wealth happens.

Phillip: [00:19:14] And as Karl Marx said,  "The profiting off the laborers and..."

Brian: [00:19:21] That's not what I'm getting at. What I'm getting at is there's a way to grow sustainably and maintain value and one to one connection. You do not have to sacrifice those things to grow a business if you want to keep them.

Phillip: [00:19:33] And this is where I think it's like fundamentally this thing we're talking about. This thing. This conversation, I think, is actually quite new. It's quite a new paradigm being direct to consumer at scale. Having this like your end customer is this person that you have this like ideal, idealized relationship with. You know, Entenmann's and Coca-Cola would beg to differ. I've never talked to a bottler in my life. I've bought plenty of Coca-Cola, you know what I'm saying?

Brian: [00:20:05] But you've never returned to Coca-Cola either, have you?

Phillip: [00:20:07] Probably not. No. {laughter}

Brian: [00:20:08] No. You returned it to your face.

Phillip: [00:20:14] Yeah, this is a conversation for another day. What a great way to kick off this... I think it's a great way. I had the fun time in that conversation.

Brian: [00:20:24] I had a fun time, too.

Phillip: [00:20:24] I don't know that we got anywhere. If you have some thoughts, I want to hear what you have to say about this little preamble to our interview. I'd love you to drop us a line at Hello@FutureCommerce.fm. We have a very special guest here today, the CEO of Gorgias, Romain Lapeyre. Did I do it ok? Romain Lapeyre.

Romain: [00:25:09] It was fantastic.

Phillip: [00:25:11] No, it's terrible.

Romain: [00:25:12] Hey, everybody. Very nice to be here.

Phillip: [00:25:14] Oh, yeah, great. Yeah. That's going to go. That's I'm going to put that on the home page of FutureCommerce.fm, Romain says he's very impressed with us. Welcome to the show. We're so glad to have you.

Romain: [00:25:26] Yeah, I appreciate that. Thank you so much for having me. I'm excited for this conversation.

Phillip: [00:25:31] So much of the direct to consumer ecosystem depends on Gorgias these days. I would assume someone who's listening to the show already knows what it is, but for those who aren't familiar what is Gorgias? And tell us a little bit about yourself.

Romain: [00:25:46] Yeah, of course. So what is Gorgias? We build a customer service platform for eCommerce stores, mostly Shopify, but we have a bit of Magento and BigCommerce as well. We serve 10,000 merchants today. And so what we do is a few things. Number one is we help support teams, provide an exceptional customer experience. And so what I mean by exceptional is high quality and fast. Those are really the things that customers care about. And then we help customers self-serve, so find answers to their problems by themselves. And the last thing we do is we are trying to convert those support teams from just being reactive support to leaning more towards selling. So it's like you would find an associate in a store would find the right product for you. We try to reproduce that experience online through the support.

Brian: [00:26:42] And how do...

Phillip: [00:26:44] That's something... Sorry, Brian, I don't get the visual cue because you're not on video because your internet stinks. {laughter} I stepped on top of you. I just wanted to say that we've heard a lot about turning cost centers into profit centers. You know, areas of frontline specifically in CX. And that just that's something that we've been talking about for the better part of a year. And really, I think germane to what we've been talking about at Future Commerce, that is the future of commerce, [00:27:12] especially as you start to see support turn into an omni channel storefront. [00:27:16]

Brian: [00:27:16] I had similar thoughts, actually. And Ramain, I was very interested in how you came to this spot. What spurred you to invest in this and make this your life's work?

Romain: [00:27:36] Yeah, so it's an iterative journey, so when I was out of college, I met my Co-Founder and at the time we started with a Chrome plugin to insert snippets of text in emails. And that's how we got to meet folks in support because they were the customers that were using the product the most. So we were biking around to the offices of our customers and literally like sat next to them, asked for feedback, looked at them working. And so that's how I got into that. And after that, we moved to San Francisco at the time and there was the first Unite, which is the Shopify developer conference. And so I was like, "Hey, I'm going to show up and see what's going on there," because we had like something like five or 10 merchants on Shopify. And yeah, I was really impressed by the nascent ecosystem at the time. I think it was 2016 or 2017, so the whole thing was just getting started. That's how we fell into the space. And I think on the converting support into a profit center, we're still at the very beginning of that. So I'm glad that we're talking about this on this podcast and evangelizing the cause. But I think what's really exciting is that, yeah, we got to meet with the support teams and now we want to give them some love and giving them some love means getting them closer in eCommerce store. And so that's why we try to do that.

Brian: [00:29:01] Yeah. And it's really interesting. So you started basically, it's sort of germane to eCommerce and direct to consumer and as you sort of got further and further with customer service, did you find that sort of the eCommerce first customer service required unique treatment as opposed to the traditional customer service tickets and in person the old way of doing it? Yeah.

Phillip: [00:29:40] The old school. The old way of doing it.

Brian: [00:29:42] So tell me about some of those unique challenges for digitally native brands.

Romain: [00:29:43] I can tell you about a bunch of our brands that are using Gorgias that I found really interesting. So there is Princess Polly out of Australia and I think the customers are something between 15 and 25 years old. So pretty young crowd. And so obviously, like it's yeah, you were talking about traditional support. So like phone is not the main channel there. It's mostly around messaging. And what I think is really interesting is that it's not just like, "Hey, can I do a return?" Or "Where's my package." There's a lot of consultative conversations around, like finding the right product. Another customer that's very similar is Ilia Beauty. The way they approach those conversations is not just like, yeah, like the traditional post-sales support, but what they want to do is to match the customers with the right shade. And so they trained the team and coach the team on helping customers find the right shade for them and all the tricks to identify what is going to be the right fit for a given customer. And so, yeah, what I think is very interesting is that one, they go with channels that are more like messaging and the bar is higher. The communication tone is completely different because it needs to be on brand. So it's sort of like short messages, emojis and they would speak to you like the brand would speak on Instagram, which I find really cool. And then they take the approach of, "Hey, I'm here to help you through your journey of finding the right shade of makeup for you.

Phillip: [00:31:20] What was the brand that you just mentioned that you said does it well?

Romain: [00:31:23] Ilia Beauty.

Phillip: [00:31:24] So one of those experiential things when you're making a purchase is gaining more information about a product. Certainly, if you're going to, in the case of beauty, you're putting something on your skin or in wellness, you know, you're ingesting something. You have to like, really trust the brand and a lot of the trust building that happens, especially online because you don't have a personal relationship. [00:31:45] Think about the way that we used to buy things in the old days like you wouldn't want to believe that a person that you saw face to face that you shook hands with or looked in the eye would lie to you and tell you that something works when it doesn't. And you would want to feel like you have a close relationship to gain some trust there that this product works and that it's for you and that if it doesn't work out that don't make it right. And a lot of trust building that's done online these days really comes back with guarantees, which means that if you're not satisfied, it's up to you to reach out to the brand to make it right. And that's sort of setting up a secondary touchpoint with a consumer that has to be stellar. And many times, we're empowered in customer support teams to be able to make the customer happy, but sometimes we have to live in like dozens of systems to make the customer happy and it becomes a point of friction for the employee. And I think what often is overlooked is the employee experience in delivering service and support. And so that's where I think that, I don't know if you're the first to say that we have a single view of the customer, but I think that it's never been more important than it is today. [00:32:56] I guess I'm doing all you're selling for you. Sorry. {laughter} It's never been more important than it is today because of the nature of your relationship with the customer isn't personal face to face, eye to eye, as maybe it used to be, as maybe it was. And so therefore, you know, the promises have to be loftier.

Romain: [00:33:13] Yeah, I a hundred percent agree with what you just said, and I think they are a few stats that are actually interesting here. So there's about 25 percent of your customers that are going to interact with your support team. And so that means you better get that right because they don't have a good experience then and they're not likely to buy again. And then if you take your top 10 percent customers, most of them, 80 percent of them are going to reach out to your support team. So like you said, they are definitely the face of the brand and it's all about giving them a good experience. So on that topic, there's a super interesting book that's called The Effortless Experience that was a study on 100,000 customers. And so what they tried to figure out is like, what is the type of experience that customers should get when they reach out to the supports of the brand? And so they studied the Marriott like experience where it's like you go beyond the customer's expectation and you wow them. And what they found is that, yes, it helps, but it's just marginal. And so we're trying to optimize for when you interact with your customers, is loyalty right? And so what that means is are these customers going to buy again from the brand? And so what the study found is that if you want to maximize loyalty, it's all about not screwing up. So what not screwing up means is respond fast, respond well, stay on brand, try to help the customer and then get on to the next customer and help them. And so, like you say, [00:34:48] it's all about providing this good customer experience and to provide this good customer experience you want your team to be as efficient as possible. So that's really the focus we have on Gorgias is to try to empower the agents so that we can empower the brands to provide this great customer experience and get repeat customers. [00:35:06] And what I think is particularly interesting right now is that we're seeing that it costs like $10, $15 to acquire a first customer. And so it's really a shame when you lose this first customer because they buy something. It's not what they want. They try through support. They want to return. You don't manage to convert this returning to an exchange and then you get a repeat customer from that. So I think the name of the game is changing from a "Let's go get those one time customers at the most affordable price," to "Let's go build these relationships that are going to last," and support is definitely one of the ways to accomplish that.

Brian: [00:35:45] That's really interesting.

Phillip: [00:35:47] Brian's going to say something here, I want to hear him say it. I feel like I've come to a point now, and I don't want to do this on this interview with you, Romain, I really feel bad. I feel like I fundamentally disagree with where Brian's going to take this conversation. And I want to talk about that at some point. But Brian, I want you to go there. I want you to go there.

Brian: [00:36:06] I was going to ask next if that means, so I think it's really interesting the post-purchase. But what about the pre-purchase experience?

Phillip: [00:36:14] Oh no, I agree with this. Sorry, I thought you were going to go into customer connection supersedes brand.

Brian: [00:36:19] We can get into that too, because I mean, I would love to go into that. {laughter} Maybe let's do that next. I was just curious, like, I think that you're absolutely right that in the post-purchase getting customer service right is what sort of solidifies loyalty. It's what you know, if someone does need to interact with customer service post-purchase, you know, getting that right, if you don't get it right, it's going to have a huge effect on your brand. But what I think is really interesting is now I think we're starting to see some and you mentioned this earlier, some amount of interaction with customer service pre-purchase. And so I was curious about what your customers have experienced with the pre-purchase interaction and how that's affecting transactions. Is it slowing transactions down? Is it speeding it up? Does it even matter? Talk to us a little bit about that sort of now I think pre-purchase interaction and how it's affecting conversion.

Romain: [00:37:23] Yeah. So the first thing I want to say is that the podcast is Future Commerce. We are definitely talking about the future. It's probably the top 10 percent of brands that are doing that, but it's not a trend that's a generalized yet in the DTC space. So, yeah, looking forward to seeing more of that, but we are just in the early days there. So in terms of the impact that it has. So first, let's talk about what those brands do. So if Brian, for example, you were to be hired as an associate by a Marine Layer who has a bunch of stores here in San Francisco, which is where I live, you would be trained on like obviously all the products that the brand has. And then you would be trained on figuring out like, what are the needs of the customers? What are the types of objections that they can have when you match them with a given product and how to deal with those objections? And so I think the issue that is happening right now in the space is that they trained store associates pretty well, but supporters are just like, "Ok, my response rate is good and then I'll be happy." And so if you want to go to the world of pre-purchased, then you need to first change a little bit of your mindset to be more focused on how much money are those people generating for my business? And then the second thing is you need to go do all the right training to be in that position. So objection busting being one of the elements of that. So now let's talk about the impact that it has on the website. So again, like it's 10 percent of the stores. So we don't have like super meaningful data, so it can give you examples. We have a store that sells outdoor gear. And what they've managed to do is to increase the conversion by 30 points when there is a conversation with somebody on the website.

Phillip: [00:39:21] Before the purchase?

Romain: [00:39:23] Before the purchase.

Phillip: [00:39:24] Brian is that shopper.

Brian: [00:39:26] I 100 percent am. I probably have been interacting with one of those 10 percent brands. {laughter}

Phillip: [00:39:34] You're the statistical thirty point move. It's Brian alone by himself buying outdoor gear this last year.

Romain: [00:39:41] Same as me. I'm a big buyer of outdoor stuff. And so the things they are able to do is one, lift conversion because Brian might have some objections on like, Hey, is this going to be the right thing for this for this winter?" And then the other thing is the average order value. So typically, it's a little bit like those widgets that you buy something and then at the checkout, you're like, "Hey, we noticed you bought a bike. Do you want to helmet with it?" So we can have the same type of approach here that you are making recommendations for the customer. Like what are the additional items that work for them? And it's super interesting for me because I used to work in a hardware store, and we would have like compensation on if you sell this thing on top, you make one dollar. And so the incentive structure was like very granular. And so we're not there yet for those conversations. But I think we need to have some convergence between the retail associate experience and the people on the chat who are here to [00:40:45] help convert so that down the line... [00:40:48]

Brian: [00:40:48] Let's merge these conversations Phillip that you were just talking about early because I think what Romain said here, I think is really interesting. There's this morphing role, you know, and the brands that are most out in ahead of this are understanding this already. A morphing role of a customer support agent. You talked about the Princess Polly example earlier, where they're using the language and the mode of communication that the customers are used to for that channel. And so it sounds to me like the role of a customer support agent is morphing into something else. A brand ambassador. Someone that has to be on brand, someone that has to represent the brand well as they interact with the customer. And yes, we have talked about customer connection superseding brand, which I love to hear Phillip's objections about because I definitely want to make a case that I think that connection...

Phillip: [00:41:49] It took me 18 months to form the new opinion. I've been on your train for while.

Brian: [00:41:55] I haven't heard the morph, yet. This is live working out.

Phillip: [00:41:58] With so many morphs happening, right? Did you buy a Morph suit for Halloween?

Brian: [00:42:03] There's an evolution happening.

Phillip: [00:42:08] {laughter} There is. I agree. I also think that there's an entrenchment in the way that we do things and sort of our habits, our defaults, if you will. And I feel like if there's enough friction and I know that we've talked about, you know, good friction, we've talked about frictionless experiences. I'm a big believer in having good friction, right? There's bad friction and good friction. I believe that. But if there's enough friction and the brand is sufficiently large to where there is an alternative, right? I can go buy it at a multi-brand retailer. I can go to an Amazon.com, I can go to a physical retail store where it's going to be much more experiential. If there's enough friction for me to have questions answered, I might be placated just to wait to make sure, to ensure that I'll have the quantifiable known good experience, which could be in person. And I think that's a thing that I'm sort of wrestling with, especially as we start looking at data of store re openings across the US in 2021 is, you know, there really is a big rush in return back to in-store, as you know, [00:43:22] as our Nine by Nine report certainly set out to prove. [00:43:23]

Brian: [00:43:24] So to that note, though, I feel like there's still a point to be made here about the changing role of the customer support agent because whether it's in-store or online or maybe that same rep is covering both, it feels like there needs to be more investment in these brand ambassadors. What are you seeing, Romain, as far as how brands are changing their view of what these people can be?

Romain: [00:43:58] Yeah, I think same story here. We're definitely into the future, and not all brands are thinking about that. But the ones that do are the ones that think about how to get engaged on social. So I'll give you a few examples. So let's say I'm a store making $10 million and probably spending something like two million a year on, let's say, Facebook, Google. And so I'm running a bunch of ads and these ads get comments, obviously. And so you spend sometimes like thousands of dollars on a given ad per day. And so obviously you want to make sure that you deal with those comments as fast as possible because if there is a comment that's negative or an objection that's raised and you don't address it, then you're in trouble and you just don't want to say something like, "Oh, go check FAQ and get more information on that." You want to be on brand, you want to provide the right information, and you want to know the product really well. And so right now, what happens at some brands is that you have the support team and then you have the marketing team. The marketing team is responsible for the posts that they make on Instagram, TikTok, and so forth. The responses that they have there. But the challenge is that if you become a really big brand, it's not like you have this big one too many post. It's more like they are like plenty of posts everywhere with lots of comments. And so it's hard to keep track of what's happening there. And so [00:45:24] what those brands end up doing is training some folks on the support team to say, "Hey, this is the type of conversations we want to have with our customers. This is the type of tone we want to use." And then you see these conversations happening a little bit everywhere on Instagram, Facebook, and so forth, where the support team is here having the type of conversations that the brand can have at scale. And I think this is really powerful specifically for the businesses that have a community, I'm thinking about like supplements or like products that you can be really passionate about, is that then you have the customers to give out your product all the time and you want to have your support team be like brand ambassadors everywhere and talking about the products. You want to send the product to your support team. You want them to love it, so that they can then like when they speak out in the community, tell all the good stuff about your product. [00:46:10]

Phillip: [00:46:11] This is such an interesting time because I think that all of these things can be true, all at the same time. There's no single source. There's no single truth here, right? I think anyone making any speculation as to the future of commerce can be right to some degree, because the future of commerce is, [00:46:28] I believe that we're all consuming more and we're all participating in commerce more because commerce touches everything. And in fact, as you see more communities around commerce, too, that's another example of how commerce connects people that even our physical, our relationships, our emotional attachments to other people have commerce at the center of them, [00:46:52] and so I think that all of these things can be true at one time. I'm curious, as you're thinking about the future of your platform and the team that you've built and the technology that you built, how is that going to change in the next three to five years? Is there a crystal ball you can look into and give us a little bit of a glimpse as to the kinds of things you're going to have to solve for in the future? How much NFT support are you guys going to have? You know, Shopify is launching an NFT store for some brand or some sports team every week now. There's no shortage of of New Horizons, I think, out there that you're going to have to contend with, right?

Romain: [00:47:37] Yeah. So I think there are a few trends that we should talk about. So the first one is during the pandemic, we saw lots of stores that had to go online for the first time because they were simply closed, and they had to figure something out. And so in the US it was mostly people opening up Shopify stores, so we're grateful for that ecosystem. What's really interesting as well to notice is that in Southeast Asia, specifically in Vietnam, like what people would do is that they would start selling on WhatsApp. And so they would say, "Hey, let's get back through our code or this is my link and then go chat with the business." And then the conversations would happen. And you talked about building the trust. So obviously, that's a store that you already know where the trust is built through the conversation and figuring out what is the right product. So all of these to say that I think the pandemic has accelerated the need to have those relationships with brands that were mostly happening offline to go online. And so the big challenge for the merchant, I think, is you have all of these post sales requests that you're getting from your customers. Your customers no longer want to call you. They no longer want to spend a lot of time on email figuring things out. Like they want to super fast responses on messaging or they prefer to self-serve. And so [00:48:54] what we are focusing on in the next three five years and what a crystal ball is telling us, hopefully it's right... We'll find out. It's that we need to automate all of the repetitive questions. All of the "Where's my package?" "How do I do a return?" And either automate or self-serve and find a way for customers to self-serve, so that the resources that the merchants are putting today, like five, 10 percent of their revenue on people that talk to their customers, can be transferred to conversations with customers that are more about presale, that are more about how to use the product. So essentially that adds more value. So that's the whole focus we have at Gorgias is let's automate. Let's focus on self-serve so that we can transfer all of the human time towards those valuable conversations. [00:49:49]

Brian: [00:49:49] Interesting. To get back to something we started the whole conversation with. Actually, I didn't get into, as we look at self-serve, as we look at the role of a customer support agent is are we able to start drawing straight lines between customer support and revenue growth?

Romain: [00:50:10] For sure. So again, I have a few examples for, for example, for a couple of accounts on Gorgias. One of them is a brand called Decathlon. They sell outdoor sportswear stuff. You'd love them, Brian. And I think what's interesting about them is that they track the revenue that is generated by their team. So they have a weekly report on, "Hey, this is how much we've contributed." And then the Head of Support, his name is Doug, goes to the Director of eCommerce and says, "Hey, look at what I accomplished this month? This is the impact we have on the bottom line. We've managed to increase our AOV by this much." So it's not only just people talking, it's actually happening in reality, it's happening in the dashboards that they track. Of course, it's a minority of stores right now, but that's definitely where the market is going.

Brian: [00:51:04] Very cool.

Phillip: [00:51:06] I think minority of stores is where trends are formed, right? And customer expectation, inflation, as we've talked about in years past, is, you know, there's a trend line that's up and to the right. Customers demand more over time. And I think the better experiences you have elsewhere, you begin to expect and impose that expectation upon every other customer experience and online technology enabled experience that you have. And if that future comes through, you'll remember that you heard about it here first on Future Commerce. So I'm so glad to have you, and so, so glad to be partnered with you all. Where can people find out more about Gorgias?

Romain: [00:51:45] So we said it's valuable to engage with the brand and have a conversation with them. So we have a Facebook community where you can check it out. It's called Gorgias Community. Otherwise if you go to Gorgias.com you could have a conversation with our team. There's a chat bubble at the bottom right. So yeah, I would encourage you to chat with us.

Phillip: [00:52:04] And I'd love to get credit for a marketing qualified lead or maybe even a sales qualified lead. So use our link on FutureCommerce.fm, and we value the partnership over these many months. And hey as you're listening, the future of commerce is what you make of it. And Future Commerce can help you shape that future, and we do that with partners that I believe are shaping the future of how eCommerce is being built and serviced here today. And we thank Gorgias for that. Thank you so much for listening to Future Commerce.

Romain: [00:52:34] It's good.

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