Ed Ariel talks about how the national customer service churn is 30-40%, but he keeps his churn between 2-3%. He goes on to explain how to retain your CSRs by metrics and transparency.
Nick Glimsdahl 0:00
My name is Nick Glimsdahl. And I want to welcome you to the press one predict podcast. I’m excited to introduce you to Ed Ariel ed is the former Global Head of service at easy cater, and the former head of customer experience at drizzly and now co founder of troop, and welcome to the press one predict podcast.
Ed Ariel 0:19
Thanks for having me, Nick, I’m excited to talk about customer service.
Nick Glimsdahl 0:22
So the new venture is troop and maybe you can take a minute to talk about what troop is and how people can find out more information.
Ed Ariel 0:31
Sure, myself and two people I’ve worked with in the past, we started up troop it’s a it’s an outsourced it’s an outsource company. But it’s differentiated in that we hire exclusively military spouses and veterans, and one of the co founders, she is a veteran, and she’s also a military spouse. And as she’s traveling around or being relocated every couple of years, it’s hard to retain a job. And it’s hard to get a job at some places, because some employers don’t want to hire you, if they know that you’re only gonna be there for a year or two. So we found this on this untapped resource of employees, they’re very, they’re overly dependable. They, our model is they get to keep the job as they continue to relocate. So it’s 100% remote workers. And the longer you keep an employee, if you keep an employee for three years, four years, they become experienced senior as opposed to bring in new people that you have to retrain. And then the other differentiator is myself and my two founders, we’ve we’ve worked in multiple call centers together manage multiple call centers, we’ve won multiple awards. And so we do free consulting, as part of this and bring our experience to help them improve their customer experience and help them optimize their business. And it’s been, it’s been a lot of fun. And people generally are very excited about hiring military spouses and veterans and helping them out that is so important.
Nick Glimsdahl 1:50
And I look forward to learning more as you’re continuing to grow the organization. And I’d be happy to share it at any channel possible to get the word out because having high quality help, and then having it being remote is important. But the thing that I heard at the very end was not only do you provide the service for the people and the employees, but the people that hire you, you help them drive efficiencies, or focus on customer experience, whatever that their needs are with your expertise of you and your partners, you go into organizations and continue to focus on customer service and customer experience.
Ed Ariel 2:27
Exactly the clients that we work the most the best with are the ones that really are looking to use their customer service agents as like a channel for improvement. We’re not just looking for people to just answer the phone and get the answer the question get the customer off as quick as they can. It’s like we train the employees to look for trends like why are the customers calling in? Can we automate why they’re calling in? Or can we fix whatever’s causing them to call and so they’re getting that level of feedback from the agents. And then from Yeah, the three of us were looking at the business at a higher level and saying, We’re big advocates of chat, Ai, those types of tools and saying, What does your customer really wants? Does your customer want to talk to a live person? Or do they just want to get their question answered as quickly as possible, and some people are still very dependent on the phones, but we’re willing to offer that advice and give the data behind it and how it makes the customers happier.
Nick Glimsdahl 3:15
Yeah, I actually heard you talk in Columbus, and you spoke about customer service representatives and retention. Why do organizations? Are they satisfied with very high customer retention?
Ed Ariel 3:28
Yeah, this is something we run into quite a bit. So organizations, there’s still a lot of organizations out there that look at customer service as a commodity, right? It’s not a specialized skill set. It’s not a profession, they don’t look at it as like, we’re gonna hire somebody that my customers, having a customer service person is just as important as having an engineer, a top engineer, because this is your voice to the customer. And again, you’re getting that feedback. So some organizations still don’t think that way. And especially a lot of the smaller organizations we’re dealing with, some of them have world class products, very well known brands that we’re dealing with, and they’ve never really focused on the customer service. And so what we say to them is we want to give you a level service to support that and it’s not a commodity. Part of what we’re doing is we are saying this there are people out there that want to be customer service professionals and they want to do this for their career and they may want to advance sometimes they don’t want to advance sometimes you’re like I just want to be give the best service I can. And there’s a very big difference between the organizations that believe that philosophy and targets specific type of people and retrain and motivate them and then again, the organizations that are like 15 to 18% turnover is great. That’s normal for customer service, right? with true we have much much lower turnover. But even at drizzly and easy cater, we were way below the industry average.
Nick Glimsdahl 4:47
What is the industry average today?
Ed Ariel 4:51
pre COVID lifetime it fluctuates between 16 and 18% a month for turnover. Some organizations that I’ve talked with have 15 percent a month, some organizations 300% turnover a year. But if you hire the right people, keep them motivated, challenge them, you know, what we had at at easy cater and we’re close to this a troop to is two to 3% a month for your own employees. So just imagine like you’re keeping your best workers, you’re keeping them engaged, it’s a better experience for your customers, again, because you’re not bringing in new people, you’re saving a lot of resources on training, hiring all of those areas. And if you keep your best people, that’s only it builds on itself. So
Nick Glimsdahl 5:33
I can’t imagine the industry average being two to 5%, or two to 3%. Some people would give their left arm to bring it down to that. So it sounds like a great value proposition to you when you’re going into organizations to not only help them find the right outsourced organization like troop with reliable people who are service members or their spouses, but you also could help them potentially getting their churn down to even their current employees down to five, as low as even sometimes 10%. I’d be pretty, pretty compelling.
Ed Ariel 6:08
When we drizzly and easy cater, when we were working with outsourcers, we were able to drive the turnover employee turnover rate down with our outsource partners to that was about 7%. Below the industry average. Yeah. And it was by same thing, treating those challenging those employees, getting them invested in the product and the customers, and also creating some career pathing in the outsource channel, which is very unusual. When I bring that up to people, they’re thinking about, I bring in an outsourcer to handle my extra volume or to help me build the organization and then I’ll figure out later, but if you’re like this could be an actual channel for you. And you do 7% turnover, you’re paying for yourself, you’re not spending time training, recruiting all that. So it’s becomes like a revenue center for
Nick Glimsdahl 6:50
you. When people think of employee experience, or finding ways to benefit or excite or keep their employees or the customer service representatives. My guess is you don’t just throw a beer fridge in the corner have jeans on Friday and unlimited vacation to improve retention, what are maybe a few steps that outside of the ones you just mentioned, to improve the retention down to the level that you you were seeing.
Ed Ariel 7:16
So the first step is, you know, making sure you’re hiring the right employee, we do spend a lot of time at troop and previous positions is it kind of an extensive, more extensive than a normal screening process. And it’s not, we’re not really looking for customer service skills necessarily. We’re looking for people that have passion about something, you know, we’ll find somebody that says I use the example of like Ultimate Frisbee, like they’re like, Oh, I played Ultimate Frisbee in college, and I want a championship and I play in it at a league. And we’re like, let’s talk about that and see how they feel when they get passionate about something. And so you hire the right people. And then we set the expectations from day one of what we want. And we build like a culture and people questioned like building the culture when everybody’s working remotely. But if you’re setting expectations and culture is important to you and setting the goals, then people will understand what they’re getting into. So we will we say from day one, three main things. Now we have a much bigger culture formula. But we say you have to Don’t be a jerk, you have to be able to get along with your coworkers. No one wants to work with somebody that’s difficult to work with, make the customers life easier, and be a problem solver. And if you do those three things, these are the things that are going to this is what we expect from you to help us grow the company for you to be compensated, we do things exactly like you said, like we do, you know, everyday is casual and people were at home. But for the ones of us that go into the office, we do have a beer fridge, we do shorts, things like that. But you’re setting the expectations. And then we also from the very beginning when they work with us, we talk about compensation, we say we Our philosophy is that everybody starts at the same pay. If you hit these goals, we are going to give you a bigger than average raise, right? I’ll just use generic numbers. But suppose we budgeted a 5% raise every year for every employee, but we’ll say if you’re our top employees, we’ll give you 10%. And if you’re the second level employee, we’ll give you 7%. And if you’re hitting the average, you might get 3%. And if you’re just chugging along, and you’re not helping us improve the business and things like that, maybe you get no raise, because we want to make sure we’re retaining those best employees, but we tell them that right from the get go. So it really their first week, this is what we’re talking about. And people appreciate it. And usually, most all of them are like we’ve never had these types of conversations from the get go, it gets them involved and not to go too much into the process, give us ideas to improve the business. But we’ll actually say it’s gonna be hard for you to get ahead if you’re not helping us improve the business and improving the business can be giving suggestions to the customers on how to make their business better, or it can be what could we do better as troops to treat our employees better or get more business or it could be even pay. I used to do this at another company and it was a big morale booster. Let’s give it a shot. And we look at all those things. There’s like be a problem solver help us improve everything for the customers and for us. And again, if you’re hiring the right type of people, this is what motivates them. They like, I’m not just being told I need to take 60 calls a day or answer 100 chats. They want my opinion. And it’s worked very well. For us.
Nick Glimsdahl 10:18
You had mentioned metrics aligned with bonuses. Can you talk a little bit about at a high level, what metrics you were aligning those bonuses with?
Ed Ariel 10:29
Yes, so the top two metrics that we use, and again, when we’re working with companies, some companies are very quantitative, and we will adapt to their system, but we try to do like for quality. So the main things we look at is there is a productivity measurement. But the main thing we’re looking at is like the quality. And what we do to judge quality is we’re looking at like a holistic view, we strongly encourage people to go get away from like the checklist, did you say the customer’s name twice? Did you mention the company name? Did you ask if there’s anything else I can help you with at the end? Because we’ve seen multiple examples where you can go through that checklist, and the customer is not satisfied, but you’ve checked everything. So what we do is we look at Did you resolve the customer’s issue? Did you do everything you could? Did you? Were you prepared to answer the next question based on your first answer? So like, it’s holistic, and that’s most of the quality. And that’s the number one thing we’re basing on, I would probably say, in most companies, it’s we do 60%, quality, 30% quantity, and 10% is, and this varies a lot, company to company is like the attendance right? Some companies or some companies are progressive, take as much time off as you want work when you want, there’s a lot of part timers, other companies, you get three days off. But what we recommend is we can staff, we’re very flexible on our staffing, but if you call us up that day, and say you can’t make it, we thank you for that. But it’s only 10% We just need more notice. So it’s really like the quantity because that’s what we’re focusing on, we’re focusing on pleasing the customer improving the experience, we have the same philosophy that we’ve talked about in the past, it’s like the customers generally do not want to talk with anybody, they just want their problem solved and to be done. So if the rep has done that, and one call or did their follow up, then they’re going to get their best. And again, if you’re at the top of the quality, we want to keep you and and we don’t look at things like traditional metrics. So the productivity does have some volume in it, we recommend, like doing like a minimum standard that somebody can hit over a week. So maybe it’s calls per hour, but look at that over a week. But we don’t want ever to rush a customer off the phone, we don’t want to. So we stopped using average handle time years ago, I think a lot of places have now. So when you you’ll get into I want to reduce my cost of service per transaction. The way to do that is it’s Russia customer off the phone way to do that is to figure out why they’re calling and most likely automate that process if you can, or create a database for the customers. So it’s a long winded answer of saying like we don’t use traditional metrics, and we really focus on that holistic quality approach.
Nick Glimsdahl 12:59
I think that’s great advice. Unfortunately, some organizations will have metrics for years, instead of saying somebody new comes in and says, hey, why do we have this metric? And I continue to ask that question, why and why is it important? How is it managed? How is it measured? How is this aligned with business outcomes, or how’s this focused on the customer, instead, they say, this is the way we’ve always done it. I’m always picturing every anybody that still has average handle time. And they gotta get off the phone by seven and a half minutes. At the seven minute mark, the shot clock starts going off on there is lit red and starts shooting down there. They got to talk fast and get them off the phone as quick as possible. So
Ed Ariel 13:36
it’s I’ve worked in places where that exact thing happens. Like, as soon as you hit five minutes, like workforce starts pinging you six minutes, somebody standing next to your desk. And yeah, it’s old school. But it’s a lot of In my opinion, it’s a lot of the bigger companies that still think that way. But I get excited, the bigger the company you are when you try to like break that mold for them. And you’ll see as they slowly get it right. But the smaller company is more open to those kinds of ideas.
Nick Glimsdahl 14:00
When I did hear you talk on that panel, you had mentioned that you had in I think it might have been an easy cater, or you had a buddy system. Can you talk about that?
Ed Ariel 14:11
Yeah. So you touched on this just a second ago, actually, when you said like somebody new comes to the organization. And they question something like Why have you done this? So we paired the buddy system with this, it’s becoming more popular this idea of psychological safety, but easy cater has been was doing that for years. So the goal is that this person has a resource that they can go to whenever they have a question, right? So they get out of training, they’re paired with a buddy and we pair that with this psychological safety where we’re giving them like I said, that message from the beginning, about salary and expectations and goals. But we’re also reinforcing that in different environments with different people during their whole training. And the goal of that of the buddy system and the psychological safety is that they will then be giving us our opinion, their opinions and their feedback when they have these fresh eyes from they’ll be comfortable enough. Because what the last thing you want to do is it takes them three to six months before they’re comfortable. Now they’re established in your patterns and your procedures, right? You want them to be questioning everything. And we used to have a we still do this, when we train, we actually build into the training, like a couple things that we know are inefficient. So for example, if we’re using a CRM system, and we’ll say go to this menu, ignore that second one. That’s an old procedure that doesn’t exist anymore. And that’s a test for them. Like we want them to say, why is it still there? So that’s what we’re like drilling this in their head. And we’ll be like, that’s where we want you to question this, that was a test Speak up, and it makes people like, pay more attention and be like, they really want my opinion, we hired a company in the Dominican once and we told them, same thing, we treated them exactly the same as our own employees, they were an outsource, and it took them probably like 90 days before they were like, Okay, you guys really need it, you really want my opinion, because I had been through so many call centers that were like, We have an open door policy, we want to want your feedback. And then when you get feedback, it’s just do your 60 calls a day. And again, it makes the employees more invested and makes them know that you’re you care about their opinion, you care about them
Nick Glimsdahl 16:14
from the beginning. And it gives them the ability to not go to their boss, but go to appear and say, Hey, I don’t get this, this doesn’t make sense. I have a grudge and where they might not feel comfortable to go to somebody like yourself, because you’re leading the call center, because they don’t want to feel stupid. Yeah.
Ed Ariel 16:33
Especially if they’ve asked the question before, because that’s one of the number one things that call centers thank people for so you can ask any question once. But if you ask it twice, what’s wrong with this person? So you give them another resource where they can be like, I think I know what it is. And hopefully they learn after that.
Nick Glimsdahl 16:46
But you mentioned at the very beginning a little bit about the difference between keeping an employee and losing them and try to find them and retrain them. But why is it important to accurately monetize the the retaining the people of your organization, because obviously, when it comes to customer service, they are the voice of the company.
Ed Ariel 17:06
Exactly. So they’re the ones that are talking with your customers, the more knowledgeable they are, first of all that relationship with the customer. So again, if a customer doesn’t, most customers don’t want to call in or chat, they’d like to have a solution they can figure out themselves. So have the product be intuitive enough from the get go. But if they need to call in, they want to be able to know that this person is like empathizing with them and understands the product. They’ve The last thing they want. Oh, hold on, let me ask them if you think we should be paying above average, how do you justify that you justify that by saying if our turnover is if instead of 15%? It’s 5%? How much money are we saving on trainers, how much training time on the recruiting cost? So at troop and drizzling and easy cater? That was one of the things we tracked, we were like, How much time does it take to train somebody the initial training the next thing? How much time does it take to recruit them, and then what is the cost of the people doing that. And then you can quickly realize that by reducing your turnover from 15 to five, you can pay a little more, and you’re still spending less than if you were paying $2 under what the industry average is just turning the people. And that’s the monetization part. That’s the part finance wants to hear about. But when you’re dealing with the operations part, you also have to tie in depending on what your business is. But generally your customers and your vendors if you increase your satisfaction in addition to that, and you can, if it’s if it’s like a product that’s being used over and over again, it’s a repeat orders customer they continue to order above the average is that attributed to that customer service, of course we say it is more if they order once a month, and they continue to order or they order more. It’s and same thing with your vendors, if your vendors are willing to offer more products to your customers, or if your vendors have like it’s just like overall if there’s the monetization, but then there’s also what is the value of the customer service and the vendor service in the whole product. When you look at the whole thing. Of course, you can easily track almost all businesses have a top 10 List of their top customers or whales or whatever you want to call them. And if you retain your top 100 or top 1000 that’s how you make your money. You try to take a number like you have your more senior reps on your you know, you’re not turning over. It’s more valuable. There’s a value there. You can debate what it is the finance team will probably underestimated and people like myself would be like that’s the most important
Nick Glimsdahl 19:29
thing. I think it’s a great way to look at it from a holistic perspective instead of just saying leadership C suite saying hey, you need to hire them at the same amount is everybody else because that’s what the industry standard is. And you’re arguing it and reverse engineering it to come out in your favor, but at the end, it’s coming out in the organization’s favor. So Exactly. It’s a great way to look at it. So I wrap up every podcast with two questions. So the first question is, what book or person has influenced you the most in the past year? And then the second question is if you could leave a note to all the customer service professionals, and everybody would hear it. What would it say?
Ed Ariel 20:08
Okay, actually just I just finished up a book when I was at EZ cater recreated a group that was lived in operations. And it was called a test kitchen. And it really worked on a cross department projects that everybody thought there was a project there, but who owns it is like a three month project. And so we created this experimental group. And sometimes it proved that we should be doing things differently. Sometimes it proved we were right to ignore things. So I’ve often been thinking about, like, how could you expand this idea of experimenting inside a customer service organization. And so I read a book, it’s got a long title, but it’s called experimentation works. And it’s by I hope, I said his name is Stefan, Tom Kay, Tonka. And it’s really it’s pretty detailed book. But it talks about, like how to do these experimentation. And he talks about how to do it in all kinds of different groups. But the operations part is like, how do you get everybody to think about what is a way to test something, right, and you don’t want your customer service reps that’s been there for six months to be doing like control groups and these theories and hypotheses, but they get people to think about why do we do things? And is there a better way to do it? And how could we test this? Anyway, it’s a great book, like I said, it’s very detailed, but it’s not a tough read. And we’ve tried to summarize it and present it to all the troop employees. And the other question was, Oh, yeah, what I would say to the customer service professionals out there, I can tell you, like we said, we have a lot of these conversations and with truth, we talk with a lot of companies. And we have to be careful of their philosophy. Because some people still do have this. It’s a commodity. But the message we give over and over again, is like there are customer service professionals out there that they like when you say you don’t need to if you love what you’re doing, you don’t work a day in your life. There are people that that’s what they love doing. They love helping customers solve their problems. They love unique situations, they don’t want repeat tasks, they want to be able to help solve it. Don’t think about customer service as this commodity. If you think about it as their professional that would be have a vested interest in your business and make your customers happy and ultimately make you more money.
Nick Glimsdahl 22:06
Great book and great insight on what you should lead to customer service professionals. And what’s the best way for people to connect with you? Is it on LinkedIn or maybe the the truth website,
Ed Ariel 22:17
LinkedIn is the best so at Ariel, ar I do a lot of people have that last name, I’m pretty easy to find. If you people want to go to troop it’s actually a troop command with a hyphen between troop and command troop command comm gives you an overview of our company philosophy background on the founders, some of the military informations in there. If you want to send me a text or call, I can give my phone number I’m pretty open. People are surprised when I answer my phone, but I actually do but they can send me a text to 508654 to 818 and or all my informations on LinkedIn to my cell number by email. So I’m a very available and I love. Obviously people have questions or interested in truth, love to have those conversations. But I also like when I was in Columbus, when we met before I went to a couple of companies and just sat down and talked about their customer experience, philosophy and different ways of doing things. So I love to have those types of conversations.
Nick Glimsdahl 23:09
That is great information. Ed, thank you so much for joining me on the podcast. I learned a bunch of information. I’m sure people will probably listen to this podcast more than one. Look. I’m looking forward to learn about troop. So if anybody’s interested, please go to troop command with the dash in the middle and help this guy out. Thanks. Yeah.
Ed Ariel 23:26
All right. Thank you, Nick.
The Press 1 For Nick podcast is both educational and engaging, and each episode offers listeners a dynamic blend of insightful stories, best practices, and invaluable lessons.
Nick’s guests – each with a unique wealth of knowledge – include leaders from a variety of backgrounds and industries. Some of his guests include:
- Customer service & customer experience leaders
- A hostage negotiator
- Award-winning authors
- Home Depot’s Senior Director of Customer Care
- Former VP of Disney’s Magic Kingdom
- Lyft’s Head of Partner and Customer Engagement
- Deputy Chief Veteran Experience Officer from the U.S. Department of Veteran Affairs
On every episode Nick asks his guest two questions:
- What book or person has influenced you the most in the past year?
- If you could leave a note to all the Customer Service and CX professionals, what would it say?
You can find all the podcast guests’ answers under their episodes below.
If all you want is the guests’ book recommendations, you can go here.