The Predictive Power of VOC: Navigating Beyond NPS

Intro VO  00:05

Welcome to revenue rehab, your one stop destination for collective solutions to the biggest challenges faced by marketing leaders today. Now head on over to the couch, make yourself comfortable and get ready to change the way you approach revenue. Leading your recovery is modern marketer, author, speaker and Chief Operating Officer at Tegrita Brandi Starr

Brandi Starr  00:34

Hello, hello hello and welcome to another episode of revenue rehab. I am your host Bandi Starr and we have another amazing episode for you today. I am joined by Li Hong Hycon li Hong is the co founder and CEO of they said a company that is disrupting the customer engagement space to drive business growth. With a background in user experience and b2b revenue growth. Lee Hong is transforming the way businesses interact with their customers by leveraging the power of Journey pulsing and advanced analytics. Fun fact, Lee Hong started, they said when her daughter was just three weeks old, demonstrating her passion and commitment to innovation in the industry. Lee Hong has been described as a force of nature, recognizing her unwavering determination and drive to transform the customer engagement space. Welcome to revenue rehab, your session begins now.

Lihong Hicken  01:35

Thanks. Thank you, Brandi for having me. I'm pretty happy to chat with the audience today. 

Brandi Starr  01:41

Awesome. I am excited to have you. And before we jump into our topic, I like to start us off with a little woosah moment that I call buzzword. banishment. So tell me what buzzword would you like to get rid of forever?

Lihong Hicken  01:58

Well, I think I think the word has to be synergy. It's funny, I didn't know what that what it means. And ever since I got to business school at Berkeley has that was everywhere. I've mentioned every hour a couple of times. So I was like, What is synergy mean is to overuse so I mean, I haven't seen it too much in real life now. But still, it's a funny word.

Brandi Starr  02:23

Yes, I would agree. It is one that is overused. And we just finished up our March Madness, buzzword management. And synergy was one of the words that was in there that people wanted to banish in the past. So this is definitely one that is hated by many. So I will make sure that we will not talk about any synergy during this conversation. Well, now that we've gotten that off our chest, tell me what brings you to revenue rehab today.

Lihong Hicken  02:59

Yeah, so we had a conversation about. So I was actually in the path of interviewing 50 companies, CEOs, CEOs, CIOs, you were one of the person I interviewed about customer retention and revenue growth, in that I actually have some, you know, maybe three major learnings but lots of realization. And we had a fun chat about growing revenue, improving our retention. And Brenda, you're like, Oh, sounds like you are expert. Why don't you come talk to my channel? Why not? Bring it? That's why I'm here.

Brandi Starr  03:38

Well, I love it. Yes. And that was such a fun conversation. And I am excited to continue to dive in some more as well. And I believe in setting intentions, it gives us focus, it gives us purpose and most important, it gives her audience an understanding of what they should take away from our conversation today. And so what is your best hopes for our talk? What would you like people to take away from the conversation?

Lihong Hicken  04:07

My best wishes for this conversation is that I have learned so much for talking to, you know, the CEO CEOs in the space, I learned so much about customer retention. I can't wait to share the knowledge with the industry. So I feel like it's only given it's only fair for me to give back to our community. So there's a lot of change in the last 18 months in the customer retention space. People are always constantly saying what's, what's going to happen? What's the future, you know, is ces important. How do we improve retention? So before I published my white paper, I wanted more people to learn about what I learned and benefit from the learning I did. So that's my biggest takeaway is sharing the knowledge in the community. Awesome.

Brandi Starr  04:57

Well, I want to start with what led us to this discussion. And, you know, in our conversation, I mentioned that I'm not a big fan of MPLS. And that, you know, we lean heavier on voice of customer, and that value as a signal of churn. And you know, you really echoed that. And so, I'd love to have you share with the audience as to why you believe that it is voice of customer and not NPS. That is the leading signal of churn. So I'd like to start there.

Lihong Hicken  05:35

That's a long story. So MPLS. I think I think a lot of people don't really like MPLS, I would say, you know, more than 90% of the CES leaders I talked to, they were like, well, NPS is a vanity metric. My board wants it right. So it's been here for awhile, I started in the b2c world. And then now it's newly adopted into b2b Well, it's actually proven that NPS has zero correlation with customer churn. I won't talk into the detail about this. There's a lot of data around it. If you are interested in knowing why NPS has zero correlation with NPS. I actually host a LinkedIn live debate couple months ago. If you search on LinkedIn, LinkedIn live debate, NPS is a vanity metric, it will tell you in detail why NPS has no correlation with churn. It's, but I can tell you what has correlation was true. The fact they responded to NPS has shown that if they respond to NPS doesn't matter if they respond positively or negatively, they're less likely to churn. So it's not the NPS score that has anything to do with turn signal is the engagement of the fact that customers are willing to take time to give you the feedback that shows that the indicators transit them.

Brandi Starr  07:06

Interesting. Yeah. And I mean, in general, I would say like, engagement with a brand is, you know, kind of a clear indicator that if a company is engaged, that they are, you know, interesting and interested in continuing that relationship. And so that lack of engagement can serve as an indicator there as well. And we'll have to make sure to get the link to that LinkedIn live so that we can link to it in the show notes as well. Because I do think that there are a lot of people that, you know, aren't fans of NPS, but can't completely articulate why they don't like it. And so that would be some good additional listening. They're awesome. And so I know, you said that you had three major learnings from your interviews. And so I'd love to hear like really focusing on voice of customer and those indicators of churn. I'd love to hear which of those learnings you know, what you learned and how they aligned to that?

Lihong Hicken  08:15

Yeah, totally. So the, it's funny, I, the first biggest learning I got from interviewing these 50 tech company CEOs and CEOs, is that when I ask them, How does your team know? If your customers about to track? Right? And 80% of the company say, Oh, we look at their product usage or login section, like product usage related metric 20% Don't do shit. Like they don't know, kind of guessing. You know, they want to hear from the, the CSM, or the people who are managing their accounts. When I asked them, Okay, so how does how does your team know if a customer's ready to buy more? Right upsell, cross sell question. And 100% of the companies that we talk to our customers in the form of customer reaching out to us, the MP QBRs quarterly business reviews, checking meetings or connection with the customers. So it's very interesting. So if you look at if you break down these two answers, so most people are trying to find whether or not a customer is going to churn by product usage related questions, which means they're looking at what customers do. Okay. But in terms of how do you know if a customer wants to buy more, they they said they talk to customers, which means they want to look at what customers say. Isn't that interesting?

Brandi Starr  09:52

Yeah. It's like, you know, intuitively, I almost feel like it would be the opposite. Sit by looking at what they're doing that you could predict what they may need and what they may want to buy. But the fact that no, I mean, I do, you know, especially in tech, like QBR, is are huge, and those different CSM touchpoints, of being able to learn what a company is doing in a technology, what they may want to be doing what's happening in the business. So it seems like that same approach really needs to be deployed on the retention side,

Lihong Hicken  10:33

I wouldn't, I wouldn't want to, I would actually want to challenge this. So the current status quo I found is not ideal in both situations. So using product uses related metric to either to detect churn or find upsell opportunities, I found that is 1.5 months, two months too late. Let me let me tell you why. So let's say you use the product that's make it up. I don't know, zoom, you know, we're using jungle 10 tool. They say you're using this product, and your product use this is normal. And then one day you have some technical glitch, a glitch you really hated or you, you reach out, they didn't resolve you. And but as a human being human beings don't like to change. So even though you're uncomfortable, you're going to continue using it. Right? I'm like the, I'm not gonna want to change the color using him. Until one day, the pain is so great. Or maybe I suddenly got dropped off, then I don't use it, I make the change. That's probably like a month later, I was like, Alright, finally I fed up, okay, it's broken, it's disconnected, I'm not going to take time to reconnect as fine. So that at first you feel like okay, that's great. And then maybe 15 days later, 30 days later, you're getting used to not using the product. And then the product usage report checker on the customer side. And then the CSM, maybe get a quality report saying hey, these a customer that doesn't use it. Okay, then a month later, I receive an email says, low usage. You know, what do you need help? Can we talk? You see, it's, it's a month and a half, two months late. So if you were to reach out to me two months before, when I was like, I really don't want to change selling healthy, I would have happily take the option to like, convince myself remind myself why I bought this thing in the first place. And keep using remember, I do not want to change. But after I have made the decision to change, take action to change and get used to the change. Now you're gonna come back and bring me back? Well, I don't want to change and get that back again.

Brandi Starr  12:58

So how do we how do you scale that? Or how do you operationalize that? I know those are two buzzwords that people often hate. But, you know, I do agree that yes, you want to get in at that point where the friction is happening before they've kind of mentally accepted that they need to do something different. But we're talking about, you know, software companies with 1000s, or at least hundreds of customers. So what do we do to be able to recognize those key moments? where someone is now at risk? Like, what data are we using? How do we do that? Like, because I do agree with the sentiment. But sometimes it's like, how does that practically show up? Yes.

Lihong Hicken  13:50

So you use, what you're saying is like, getting to know the customer at the right time what they need. It's, it's it works. That's why most companies say we know how people will buy more by talking to them. But a problem, like you said is how do you scale it, you can be a one on one talking to every customer, every contact, we all human, it's impossible. Right? Especially in 2023 2024 customers are wanting to do more with less, which means the number of rep to customer ratio has tripled since 10 years ago. So you can't talk to anyone, how do you operationalize it? So it's actually quite simple. If you look at this, we actually if you look at the first principle kind of rule, like if you are trying to grow your existing customer, let me ask you, are you in the business of selling to strangers or not? I wouldn't call them strangers. No, no. Because is this in customers? You have some relationship? Right? Yeah. So if If you want to sell more to this relationship you're keeping on, the key to sell more to them is by understanding more of their needs, their pain points, and then deliver more value to them at the right time. And when they are ready to buy more, you're right there. So, in China, Art of War, we have a, we have a saying, If you know yourself, and you know your enemy, you win 100% of time. So how do you scale the operation of knowing more about the customers? Right? So we actually revolutionize this, I'm not trying to plug in, they said here, but we were interviewing 400 leaders, and they tell us that the reason why they couldn't take actionable insights to take action to improve customer value is they don't have actionable insight. So we need quick insight from the customer that's timely and reliable. So the program we have is called a journey posting. So what is journey posting? Think about a relationship with you, not a stranger? So let's say it's this in customer, you understand this customer? Maybe it's enterprise customer, maybe it's SMB? What is the journey look like? What is the row? Are they a buyer or a latest normal product user, you design their journey. And each of the journey point, we ask one quick question that's related to row. So think about this right? QUESTION the right time, at the, for the right people. Then we use the insight to create a picture of what is customer's perception and annoyingness. And like, so the problem is, today, most companies only do survey questions once a year, like any year you're gonna do a survey questions, or like you do NPS question once a quarter, right? Why not do more? Right? If you can do more, and you know, these responses along the way, you actually have a lot of power, you know, a lot, because traditional surveys, you will know what this person say. But you wouldn't know what this person said the last three times. And you also wouldn't know what their boss say what their peers say, Well, who is that report, say? You can't really understand kind of the whole aisle rich of the customers.

Brandi Starr  17:35

Ah, okay, so by getting those, so I'll just give an example to make sure that I'm internalizing what you're saying. So, for example, in the journey of new customer, they've been on boarded, rather than waiting to NPS or till the end of the year, you might ask a question specific to onboarding. And then at, you know, their anniversary, they you may ask another, you know, questions specific to the fact that they've been with you for a year. And so what I'm hearing is, even when you can't have full conversations with your customers, it is getting those snapshots of how the relationship is going at those key moments. 

Lihong Hicken  18:22

That's why it's, in fact, it's more frequent and less than that, so we are sending 12 to 16 poses a year. So depending on who you are, and where your journey is, the frequency and the questions sent to you will be different. So, like it also these questions are curated to find risk and growth opportunities. So question will be like, did the sales team oversold you? Are you considered competitors? You know, how easy is to justify the pricing? Are you going to be live, you know, the main champion, managing account or a champion leaving the company. So some people describe it as like, these are the questions as value very valuable to the business but uncomfortable to ask face to face. Okay. And then you can say, ask to our target audience. So I have a for example, one of our customers said, our sales team will be working very hard and sell to the VP level. And then a VP level will pass on this account to the director level to get on boarded and get going. And then the director will pass on to the manager and the users to use the product. Now our CSM customer success manager is working with managers. So if you send an NPS or like a pop up survey in your product, you're going to send to the manager or user levels. You have zero visibility or what this VP and what this director said because, you know, you guys are not in the product. Yeah, but if you think about these VP and director, they don't have to Time to check in with you 30 minutes every month or every quarter, they can't they buy so many vendors, right? There's not not possible. But me as a buyer, I do want to make sure what I bought, provides value to my team. So I don't have 30 minutes for you. But I will give you five seconds per month. And so this five second question to see like how our relationship is going? And also by not responding it, you will also know something's wrong with that relationship. Hmm. Yeah,

Brandi Starr  20:35

cuz no answer is an answer to a certain degree. Exactly. Okay. And so what I'm hearing is the thought process here is to be able to really scale what you're doing in voice of customer because I know a lot of times like voice, the customer initiatives are, you know, more lengthy interviews that are happening at certain intervals, you know, to glean those insights. And so it is it is stretching that and even automating that in a bit so that you are able to touch more people more frequently to gain more insights. That's

Lihong Hicken  21:16

right. One of the thing people might challenge me is like, Okay, well, customers don't reproduce, respond to the surveys, the survey fatigue, right. So most companies will have the problem where people don't respond to them. Our problem is offset. We have too much responses that we actually had to filter and prioritize which one we want the team to take action on. Let me tell you why this is so many people ask, okay, why do you guys have more responses than us? The industry average for NPs is a 1% to 4%. When l'enfant surveys even worse, part of the reason that we get a lot of responses one is just one question is quick. It's personalized for that person. Right time, right? And then the third thing is closing the loop. I don't know if you see this article that McKinsey half, I can share the screen with you if you

Brandi Starr  22:17

want. But no, just tell me about it.

Lihong Hicken  22:20

Okay, so McKinsey, Riley's article said, the survey fatigue means like, a lack of motivation to participate in surveys. And a common belief that surveys fatigue is driven by the number and the length of service deployed, like too many surveys too long, that's hanging out to me Miss, what we found is the number one driver of survey fatigue was the perception that your organization will not act on the result. Okay, so, which is like if me as a customer take time to give you feedback? If and if I know my my feedback is going to a place where genes dies? Why should I? Why should I give you feedback, right. But if I know every time I give feedback, I hear from you, maybe you won't be able to take action on every single one of it. But you acknowledge it, you hear from me, you you take action on some of my things, and try to improve on our complaints. This is great, I'll continue to give you feedback. But if you don't like most MPs, or like normal surveys, you gotta serve, you got a big project to week stop, do the surveys, the data is analyzed, get to the exact to talk about this. But the customer site loop is never closed. Maybe the extremely high, unhappy customers with high social inference like a lot of fans in linking, maybe those will be hurt. But most of us, we won't get hurt.

Brandi Starr  24:06

And so what does good look like when you've got the data? So let's assume whether it's using a platform like they said or capturing data in some other form. Let's say that we have these touchpoints we have customers responding. Yep. What does good look like in terms of how brands can close that loop? Like how is the data used in a way to impact the customer?

Lihong Hicken  24:35

Right, I think there's three different level of the goodness typically the short term like winning a month you see that you find some customers may be unlucky enough to catch them before they make the change the part of us it doesn't show but they are already annoyed with you, you say those accounts. Okay. So a typical example is if you If you guys use a tool called clickup, their productivity tool, they actually have a post program like we do. And they are saying the savings to customers per day. From this, obviously, they have a lot of customers. So every year they're saving save 700, something almost 700 customers a year. That's huge. Right? So that's layer number one. Layer number two is usually come in two or three months after you start a program. You seeing upsell, cross sell deals being close from these signals. And the reason why is you might be able to ask some upsell, cross sell questions and about 1% of them, you just need to ask, because they don't know that you have this service, you capture them, this is shallow kind of things. But the deeper we're about another 15%, more of upsell cross sell will come from the customer who will respond to you negatively, they actually are more likely to buy more from you. Because if they complain, and you heard them, you resolve their problem. And they will like you build the trust in this. Remember that the absolute CASA is not because you're being aggressive as a salesperson is because you deliver more value is because you earn a trust through delivering value, then you're like, Okay, what else can you do for me? Right? So that is a second year, usually two or three months after you can see more upsell, cross sell opportunity. Close. So we have an example where a customer usertesting.com. They, they, they they got a response from a customer. The EU was like, I don't know this person, why did they give me a two star rating? Right? Like, how well do you know how to use user testing? It turned out that the his the champion who you who was account holder already left the company, this person is brand new. So the account manager doesn't know this new user assist until the responses from the SEC come back. Okay, so So if you've looked at this in the last two years, 30% of American change jobs. So you constantly hear people saying, oh, you know, I have a champion left company, now I lost a power user, I have a newbie that I don't know is this, they didn't go through normal onboarding. And if they're paying is there and treat it for a long time, it's going to churn. But because we discover that, that he reached out teach the person how to do it, they were like, Oh, this is great. I, then they get a trust, then they actually refer to the design team to use user testing. So you turn F 100k about a child account to a 200k upsell opportunities. So that's pretty good, right? Okay. So it doesn't take that much effort. The third tier of the what good look like in terms of understanding customer is the most powerful. So, most company today, even your larger company, are constantly trying to find product market fit, are constantly trying to add value to their customers. But most customers today are very have very limited resources. So what decision to make, and most companies don't know what to do. And my team the argument, I wouldn't say companies say we need to be data driven. But the data value differently, the highest quality data should come from your customers. And so one of our customers had a use the data to find out that SMBs receive the least value from them, but they're sucking up 90% of the company's resources in support. So what do we do as a team, they actually pivot to a new product line that not only improve the retention and what have a cheap copycat competitor, they also get 300% new revenue growth the second year. So that is good look like is using customer data to find new growth lever for your company.

Brandi Starr  29:28

Okay, and so my last question is a more tactical question in how is it best because I know in some cases like thinking about traditional Voice of Customer programs, or even NPS scores like when people are collecting them, there is a challenge internally of how do you disseminate that information in a meaningful way so that different people know what to do with it. So for example, you talked about places where the day As an indicator of product market fit, there's certain things that I'm hearing should probably, you know, be in front of the product team. So that as they're developing the roadmap, there's certain things that, you know, I feel like marketing needs to know, in terms of how they're messaging, you need the AE or CSMs. To know so that they can address, you know, customers directly in whether it's opportunities or risk of churn. Like, there's a lot of ways that you have shared that this data can be used. How are you seeing companies put the mechanisms in place to effectively get this to people so that everybody has their marching orders and knows what to do when they see you know, so if I'm in a CSM, and I see this, how do I know what I'm supposed to do with that, and I'm, you know, I'm dumbing it all the way down, because obviously, you know, someone good at their job is going to have some understanding of what to do. But I know when it comes to all the data that we collect, many organizations have challenges with how they get that data in the hands of people in a meaningful way. And so I'd love to hear any insights that you have, you know, at a more tactical level of, you know, if we're sucking at this now, and we start collecting data, what do I need to be thinking about? How do I need to be, you know, communicating internally, so that we can see all of the benefits that you have described? Totally.

Lihong Hicken  31:31

So that's, it's, it's actually pretty easy for comp. Customers, like product engineering teams that not directly interact with the customers but of you, you want to build a customer first culture, right? The easiest way is to put the data in front of team. And then what I'm often seeing is like, if you use Slack, or teens, get these customers, what customers say, you know, into those channels, where people can see what's going on. And I've seen, like, for example, Amazon, or some other companies, Zoom CEO, SA, he actually every Monday, we'll read customer sentiment to the team out loud, pick a few and read it. And from the from the the big thing, so I think clickup also do that they have a channel where everyone can go in and look at what customers say. So those are the ones that you want that you want your company to have a mindset of, of the customer, their set survey and what they're saying. The second year is what about a customer, the team member who are in the front line and who needs to react to the customer needs employment. One thing I would say same principle is we usually set up a playbook meaning like if customer respond this used to do this, and we will only want to have this already automated and you just respond, wait for the customer to get back to you after our automation send out or wait customer to book meetings with you. That's easy. But if you don't have that, that's okay. Keep in mind that some people are afraid of customer feedback, they think it's toxic is noise that will kill the company. So I wanted to bring this out. Yeah, it's oftentimes the funders, like some funder will say, if you ask the customer what they want, they will say they want a faster horse. Right? Obviously, you and I care about customer feedback and stuff. But I do think for the people who fear about customer feedback, and following blindly and fear about lead, destroy your company. My advice is that listen to the customers, pains and needs, not solutions. Right? If you can't do something, a customer say I want this interface to be pink, that's a solution. But was there okay, why do you need this? What problem are you solving. And then you can't solve every problem for every customers. And honestly, customers are not expecting you to solve every problem, but at least acknowledge it and solve son, as you see that improve your company. So that's kind of my advice on that I would say, you know, in terms of taking action with a customer is better from the executive level to design, what you want your team to do. And also is a team effort. Retention is a team effort. And people rarely see people trying because they don't like their CSA or their people. It's product, it's pricing, it's the service, or all the components that make up to that. So it's kind of a go to market, product market fit that affect the whole company. So that's why it's like it's important for another department that might not directly involve in return. Shouldn't you see that? Because their action and they polity well impacts? Would another customer stay with you long time?

Brandi Starr  35:08

Awesome. Well, talking about our challenges is just the first step and nothing changes, if nothing changes. And so in traditional therapy, the therapist gives the client some homework, but here at revenue rehab, we like to flip that on its head and ask you to give us some homework. And so you know, I really believe in making sure that, you know, we have clear next steps. And so for those people who are listening and recognizing that they are not really capturing voice of customer, or tapping into the predictive power of that data, where would you suggest they start? What's that one thing that they can do to move in the right direction?

Lihong Hicken  35:51

Well, first, you identify, Okay, the insights, what insight would you want to get? Is it getting from a stranger or a long term relationship? And and think about what you would wish, you know, from the customers? And then maybe the easiest thing is swap out your NPS questions, or add a few questions that, you know, that's something that you wanted to know, maybe a little bit uncomfortable to ask customer face to face, but you don't want to know it, write them down, and then ask them either on the next call with them, or in the NPS survey to kind of replace NPS and going out more often. That's I would say the easiest way to do it, I basically had chat trying to teach you how to hack.

Brandi Starr  36:42

Well, I appreciate it. I have really enjoyed our discussion. But that's our time for today. But before we go, tell our audience, how they can connect with you. And we talked a little bit about what they said does, but definitely give the shameless plug for anyone who is listening. And you know, what you've talked about the product has resonated with them, so that they fully understand what it is.

Lihong Hicken  37:07

Great, thank you for the opportunity. So they said you can find us on they said the I O the website. And what we do is we have a patent pending customer perceived value metric, and customer perceived value journey posting way to find insights that proactively detect risks and grow signal along your customer journey. Basically, what we're doing is we help your companies improve, and our net revenue retention by 5% and discover 20% More upsell, cross sell pipelines, while reducing your team's manual work. So that's what we do. If you're interested, check out our website. Also, if you just want to know kind of open mind about what is the latest and newest way in, in solving the existing customer revenue space, follow me on LinkedIn, I publish a lot of untraditional thoughts about how to do this.

Brandi Starr  38:08

Awesome. Well, we will make sure to link both to your LinkedIn and to they said so wherever you are listening or watching this podcast, check the show notes and those links will be there. Well, Lee Hyung I really, really appreciate you joining me. I have enjoyed the discussion. I've learned some things which is my favorite part of hosting revenue rehab is I am continuing to learn from my guests.

Lihong Hicken  38:35

The pressure is mine as well as keeping in touch. Thank you so much.

Brandi Starr  38:39

Definitely I can't believe we are at the end. I hope you enjoyed my conversation with Lee Hyung. Until next time

Outro VO  38:50

you've been listening to revenue rehab with your host Bandi Starr. Your session is now over but the learning has just begun. join our mailing list and catch up on all our shows at revenue rehab dot live. We're also on Twitter and Instagram at revenue rehab. This concludes this week's session. We'll see you next week.