How Do Ecommerce Brands Benefit From Implementing Digital Customer Service? With GQ Fu of LTVplus

Guillaume: Hello everyone. Guillaume Le Tual here, host of the Ecommerce Wizards Podcast where I feature leaders in e-commerce and business. Today’s guest is GQ Fu. He’s a co-founder of two companies, one is called LTVplus and the other is recoverpayments.com. Today we’ll be talking about how you turn your contact center which may be also called customer service center or support center into a profit center? Which is what we want, to make money there instead of just being a drain on your resources especially if it’s a purchased service at a fixed price and not some pay per hour customer service as you may have to in the service business. So turning your contact center to a profit centre is today’s topic. Before we get started we have two things, first, a shout out to Robert Rand JetRails who introduced us, otherwise this episode would not exist. So thank you Robert, and our sponsorship message:

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Alright, GQ, thank you for being here today.

GQ: Thanks so much for having me Guillaume. I’m really happy to be here.

Guillaume: So can you please tell us a little bit about yourself and your background as an entrepreneur in a few minutes?

GQ: Yeah, for sure. So my name is GQ and I’m one of the co-founders of LTVplus and Recover Payments. Now LTVplus is basically a customer service outsourcing company for e-commerce brands. We do this through omnichannel customer service outsourcing via email chat, phone support, or SMS, we cover all those channels. Recover payments, in short, it is a full payment recovery service and a platform. So for example, if you’re using recharge, we integrate with recharge, we pick out these full payments and we would have human experts help you perform those recoveries. So that’s essentially for those businesses and in terms of, you know, when we started that, I think it was with LTVplus, we did this about a few years ago. Funny enough, we didn’t think about e-commerce as the first industry that we would go after, we were actually coming more from a SAS background. And back then my co-founder David and I, talked about figuring out how we could create a remote outsourcing company for customer service. And we just thought about, hey, let’s just do this for SAS, and we listed it for SAS business. Then we got to lead to do live chat for an e-commerce store, I recall it was a betting company.

That’s how everything got started. We started off from live chat and then people started asking, can you also do other channels like email and all that? And that’s essentially how LTVplus got started. Then at some point about a year or so ago, people started asking us about, could you also help with full payment recovery? And so what started off as a service of LTVplus gradually evolved into Recover Payments today. We just built the service and the software because we realized we needed a CRM to better track the information of people coming in. We were using Google sheets before and not shy to share about that. But we built out a CRM to figure that out so that there’s transparency and visibility for both our clients and ourselves when it comes to the recovery tactics.

Guillaume: All right, thank you. So I hinted about that a little bit in the intro. So let’s say when you have a service business and you charge per hour, whatever the services is, a lawyer, an accountant or web designer, or an e-commerce agency like we are, when the customer contacts us, there’s a support ticket and there’s hourly billing, so we’re always happy to have contact from the customer. They’re on the support system and they know what hourly billing is, like, you call your accountant or lawyer, and you know this is going to be billed and this is normal. But when you’re selling something else, either a SAS subscription, or you’re selling an e-commerce product, when somebody’s contacting your team about a problem with their order, this is costing you money because it’s not a new order being placed. They may be wanting a return or whatever it is. It is quickly becoming a loss center if it’s not managed properly. So we want to know how to change that contact center, where customers contact your company, into a profit center. So how do you go about this GQ?

GQ: Sure. That’s an interesting example and we’ll cover that as we, I guess start from the beginning. I guess a good way to look at it would be how we would split this up into different sections. So the first part we talk about is the initial part where the visitor has not become a customer yet, or even like a repeat visitor who was a customer coming to shop. The first thing is, do you already have live chat activated on your site? You know, obviously, it’s 2022 and it’s quickly adopted by most brands, but not everyone is actively thinking about it. Because the first thing they think of is, when they trigger live chat it’s going to open up a can of worms, or it’s going to open up floodgates of customers contacting you saying like, where’s my order? So you think, that’s like another thing I don’t necessarily want to work with live chat.

Guillaume: Do I have the staff for it? Is the main question that merchants typically have.

GQ: Exactly. And how do I start? How do I do that? So there are two parts to that. First of all, you know, if you’re working with the help desk, and most e-commerce help desks at this point can actually do this, how much of that can you automate to provide a self service setup? So in that sense, number one, you’re helping to provide information upfront through a sort of chatbot, I want to say like a full blown chatbot but like a self service chatbot where you can, for example, look up information and say, where’s my order? And they can pull that from their system and give you that information immediately without you having to connect with an agent or waiting for an agent to reply. So by doing that you would have already provided information really quick and number two, you would also reduce the workload from your customer service team. We’re going to get to the live chat shortly. So that automation in itself already creates an experience and it helps to reduce costs and time, ideally, because this is a very simple fix. Then on top of that, what happens to the complex inquiry? That naturally goes over to your human agents. But how does that then change?

Coming back to the point, how do you turn that into profit? So first of all, with the agents that you have on your live chat, for example, visitors that come through will always have questions. They will have thoughts, do I buy this or buy that? And when you’re proactively engaging them by getting their demographics, you create an opportunity to start a conversation with them. And when you start a conversation with them you’ll be able to find out, what are they really looking for? What possible issues do they have with the shopping experience or doubts that they have about the products that they want to buy? So that’s when your agent with that conversation is able to start giving or recommending products that actually fit what the customer or the visitor is really looking for or the potential customer is really looking for.

Then from there they can not just recommend what they’re actually looking for, they can possibly also upsell at some point with regards to whatever they’re purchasing. It could be like a complimentary add on that will help them get the best product experience. For example, off the top of my head let’s say you’re shopping for clothing, you bought a pair of jeans, maybe you know that typically most of your customers when they buy this X belt that goes with these jeans, they’re generally happier and you get really good feedback as it compliments well. So you suggest that. So basically, number one, you’ve recommended a suitable product, number two, you’ve also increased the order value as a result through chat.

Guillaume: Yeah. You suggest an additional product if they want a big Mac with that or something. So you can suggest additional products, which is cross selling, you could suggest a higher value product that can replace the current product, which is upselling. I guess this may vary from company to company, but how do you see this task being done? Is it done by a very knowledgeable product expert who can right away give advice and has deep product knowledge or can you sort of fill in a more junior agent that would just do a first level filtering of basic commendations?

GQ: That’s a great question. So I think the first step involves basic product knowledge, understanding how things work. I would say that this is possible for juniors only if they’re well trained, that’s one, and number two, that they’re really passionate about the brand. What that means, for example, if I’m running a sports supplements brand and I’m looking for customer service, anyone could technically do the job but you want someone who’s probably into fitness or into sports and knows what he’s talking about. Because they would already bring with them their own personal experience of taking supplements or an understanding of what works.

So when you have a customer service agent that is driven, that changes the way they think when they interact with customers, it’s not just someone reading off the script, they’ll be like, okay yeah, what’s your fitness routine like? What are you training for? What sports do you play or what sports do you do? So that in itself already gives a much better chance of an agent recommending the right products or understanding what’s there. But then on top of that base, the very important layer is obviously having the agent know, ideally, some level of insight out of the products that you have. Like, what are the key products and what would actually work well? Presenting that playbook or that cheat sheet, that would really help the agent a lot at the get-go. So to come back to your question, I think a junior that’s well trained and is passionate about the brand, can definitely deliver the results.

Guillaume: Yes, so the key idea here being, do cross sell, do upsell and have someone who is driven to suggest things and to try to truly help the customer and be caring. It’s surprising that in many places you go when you have, let’s say an appointment, they don’t necessarily suggest to you another appointment or to increase your sales game. The receptionist should have suggested an additional appointment if that is applicable. So you upsell right away just like that. A lot of people will say yes, instead of leaving it to the customer to wait and call back, that’s an additional effort on the customer. I believe the customer should only make one effort, if they reach out to you once you should take charge of the whole client experience from there. Reach out, automate, make sure that you suggest stuff all the way throughout the whole customer lifetime journey.

GQ: Another interesting thing to add on to that as well, you know, we talked about upsell but some merchants or business owners might not like me saying this, but sometimes it might even be better for an agent to sell cold, it’s just a concept of upsell. Let’s talk about down-sell, the whole point of this is that you want your customer service team to recommend the right products, whether it’s costing more or costing less. And the reason is simple, your ultimate goal is to ideally create evangelists with each interaction and with each purchase. You don’t want someone saying, I’m going to sell you this really expensive product but then it’s not actually what I want, it’s completely not what I expected. But when you know someone’s preference you’ll just recommend the right product. They will come back, they will talk about you to others and that’s worth much more than just trying to make that one time sale. At least that’s what we’ve seen with the merchants that we support.

Guillaume: Yeah. I’ve seen this from GoDaddy, they had a huge list of domain names in there. Their agent called us and at the end of the call they had reduced our bill by like 25%, which was a lot of money. It was impressive. I was like, they paid an agent to call me to reduce my bill by 25%! Yeah, it made an effect and that’s why I’m talking about it today. So yeah, that pays off for sure. I do agree with that general philosophy of always guiding the customer well with integrity to buy the right product. Also talking about business, of course, this is back to the business model, make sure the profit margin at each level of the business makes sense as you scale up. You should make more profit and not less. Sometimes there’s too much volume discount given on the extra fancy stuff otherwise the price tag becomes too big such that if you just look at the margin you might as well just sell the medium package instead of the large package because that’s way too much. But as a business fundamental, always double-check the business model.

GQ: And to add on to that part, we’ve talked about the live chat part, one of the other reasons why I bought up live chat is because it’s a pretty good channel to convert customers. Because you’re able to act there and then depending on how the interaction goes and how well trained your team is, that’s a really good way to convert customers. So that in that sense it contributes to the profit center idea. Now, on top of that, you’ve just mentioned the scalability piece. When you have, especially Black Friday and Cyber Monday, and we all know that during holiday seasons there are random spikes in traffic, what do you do with your team? Do you just hire more people and put them there and then take on more overhead costs with the customer service team? What options are there? So always look at your tech and see how much of that you can actually automate without affecting your customer experience too much. Because sometimes it just gets annoying when you have everything automated, like, I just really need to talk to someone right now because it’s urgent, then you have to go through 10 levels.

Guillaume: Before you can press zero to talk to someone. Yes.

GQ: Yeah, exactly. And it’s also why the IVR systems are really annoying sometimes.

Guillaume: If you’re stuck in a maze and then you wait 30 minutes just to talk with someone and you end up talking to the wrong person, and then again you wait another 20-30 minutes to talk to the right person, that can be a horrible customer experience. But the AI chats are getting much better now, you can just have a basic validation question, like, are you an existing customer or you are a new customer? Are you calling about a new order or an order that is not yet received? Do you want to return a product? You could just quickly filter in a few ways like this and then you offer to talk with someone. Because, for sure, any inquiry sort of fits into one of those, if they’re an existing customer, and so on.

GQ: One of the interesting things with chatbots is that if you were to build like a fully original chatbot that’s catered to your brand, it’s usually hard for merchants because it depends on two things. One, the volume of conversations for the model to work well, number two, is the cost of it. So most brands would consider working with more basic chatbots and on top of that is not even that sort of automation, the so called AI implementation. We’re also talking about automating your workflows, because the faster your agents can work on the back-end, the faster that they can go through tickets and also ideally in a more personalized state. So one thing that we talked about on the topic of basically turning your contact center into a profit center, how do you increase the lifetime value? How do you personalize the experience for each customer?

So it’s not just like, I’m going to write an email or an SMS or whatever, from scratch, rather, you start working with the different workflows that help you tag your tickets appropriately. It’s just like sequencing other actions that will take place when you respond to a ticket, or when you receive tickets through a certain channel, etc., so that you really reduce the amount of manual labor that your agents have to go through. And also give them the option to personalize these responses a lot quicker because the workflow automation has already generated the right kind of general response that they customize without them having to think.

So in that sense, that gradually spills over to the fact that your team can be, I wouldn’t say lean and mean, but you have a lean customer service team that can support the customers that are coming through even with the influx and traffic depending on the season. And so that helps to weather those aspects.

Guillaume: Well, unless your company is a really huge brand, I would tend to keep it simple and just have a validation question sort of direct to the consumer quickly, like three clicks or something and then you’re talking with someone, the right person, right away. So I would generally not recommend a huge investment in live chat unless you have an insane volume, a very large company and so on which then can be totally, in a business sense, justifiable. Keep it simple, like three validations and talk to someone. And I do see AI bots in maybe like 10 years from now replacing humans more. Except if you have a super specialized question that must be answered by a certified engineer or a certified gemologist, if you’re selling jewelry. So yeah, it will get there for sure.

GQ: I think that we’re also getting into the acclimatization phase, if you will, people are getting used to working with bots more. Because, again, it’s quite annoying when you have to go through like 10 or 20 validation questions. Sometimes they’re asking this, they’re asking that.

Guillaume: Yeah, not too many.

GQ: And sometimes the responses are not exactly what you’re looking for as well, then you just ultimately go straight to a chat agent. So I think there’s that need to get people used to chatbots. I think that’s already been going on obviously for quite a few years and that will, as you say, change in the coming 5-10 years, or it might even be quicker than that. Then you will see a rate solution where chatbots really work well for the L one, L two kind of inquiries, and then gradually, if it’s something super complex you just go straight to an agent. That kind of saves the agent a lot of time and depending on the volume and the cost of setting up such a bot, that would obviously help reduce your costs for a contact center dramatically.

Guillaume: Yeah, so for sure to reduce the cost from a cost center to a profit center it’s not a million ways you have to either generate additional sales through all the ways that people contact you or you have to reduce costs by using a lot of automation. So you’ve two paths, so a chatbot can help with a little bit of self help FAQs that are knowledge based thus reducing work volume on call centers. You also need agents that will proactively suggest and truly care about the customer and in helping them out.

GQ: And I think one final piece of the puzzle would be, you know, the world has changed dramatically after COVID. Now COVID is kind of like the stick and you know, whatever that’s happening in the world, we leave it at that but everyone’s working remotely. It’s also changed the idea that you no longer have to hire someone that’s like right next to you. Of course, that’s the vision of the company, that doesn’t change. But for example, start thinking about where you could hire people in the world because then that kind of also changes the way that your budget will be spent on customer service, for example. You could hire a lot of great people across the world, you don’t have to hire someone within the same country unless it’s really needed. That’s one.

Then number two, perhaps also consider on the topic of influxes, like sudden peaks, you’d want to partner up with probably an outsourcing partner. So that way you’re able to have agents on call, sort of like, you know that this season is coming but you only need, say, additional 10 agents for those two, three months. You can work with an outsourcing partner to take care of that for you. And typically, outsourcing partners will already have them trained, you know, they’ll work with you to figure out like, what’s the training program like? What do they need to know? And they can also offer you their best practices from other merchants that they support, not the trade secrets but what the best practices are. So basically like an ally or like a strategic partner that will help you improve your customer service during that period in general.

Then the next season comes again, you work with them again and once it’s over you just basically disconnect at that point and come back again. So that gives you that flexibility. When you outsource you also reduce your costs a lot, because you no longer have to think about the training time, you no longer have to go through the whole recruitment process. You work with someone that’s actively specialized in that.

Guillaume: And the last question, sort of a shotgun question, is there anything else you’d like to cover about this topic?

GQ: I think with customer service don’t think of it as money that you have to spend, like, to address certain concerns and all that. Think of it as an investment into the longevity of your customers. It’s a very good channel. I’ll use the term channel but they’re obviously multi-channels but it is a very great channel for you to establish great relationships with their customers and also form a much better bond that allows you to have that exchange and create a much more personalized experience that allows customers to better connect with your brand and people like that.

Guillaume: Yeah, it’s true. Keep in mind that they’re still ambassadors of your brand and that customer experience does include all those little annoying things about follow-ups and status updates or even a product return which is not cool, because I haven’t got any product backup I’ve to send money back. Especially for a small merchant, they don’t make it at all because the owner is still very involved. But it’s part of the whole experience as the customer can come back later. I’m not gonna name names but there’s a large store in Canada that anytime you try to return stuff, they treat everybody like a thief for trying to screw them up or something. But then you have another experience with a store like Costco or Walmart, that’s not an issue, almost no question asked. Costco is like, thank you, here’s your money. Bye and have a great day. I understand why from a business point of view also, because Costco has in their contract that it is the merchant that takes all the hits anyway. So they’re not too hard on it. They’re just going to have a super easy experience. But keeping in mind also that customer experience is the whole package, including every contact point.

GQ: Exactly, 100%.

Guillaume: All right. So GQ, if people want to get in touch with you, what’s the best way?

GQ: You can find me on LinkedIn, just look for GQ LTVplus, and I pretty much will show up. I think that there’s only one GQ at LTVplus so far.

Guillaume: All right. Thank you for being here today.

GQ: Thanks a lot, Guillaume. You take care.