Last month at the Shoptalk event in Las Vegas, Max Levchin, co-founder of PayPal and now founder and CEO of Affirm took to the stage and unveiled his “Three Inevitable Trends That Are Changing the World” to the audience of eCommerce professionals. Levchin’s 20 minute talk has stayed with me ever since because it elegantly frames much of what I’m hearing from Modria customers.
Trend #1: Beneficence. After the financial crisis of 2008-2009, citizen confidence in institutions reached its nadir. Politicians were seen as inept and bankers were the poster children for an unjust system. Looking ahead, Levchin argues, the companies that do well by doing good – which I interpreted to be being true advocates on behalf of their customers – will be the ones most likely to succeed.
At a very basic level, beneficence in eCommerce can be found in the pre-sale experience by offering an excellent finding tool, best pricing, price matching and sufficient inventory. Beneficence can also be found during the “post-sale experience” – timely shipping, excellent packaging, offering easy access to customer service and timely responses. Perhaps the most challenging part of a great post-sale journey is when something goes wrong. Our Modria Live Webinar guest Matt Dixon, co-author of the #1 best selling business book The Effortless Experience stated: “The truest test of loyalty is when something goes wrong.” How a company reacts to a bad transaction can be the difference between keeping a customer for life and losing them forever. And it happens quickly. Our customers tell us about the challenges about balancing authenticity, personalization and scale. No easy task. They also tell us that Modria allows them to scale AND keep it human.
Trend #2: Software eating old software. Levchin made reference to Marc Andreesen’s now famous assertion (now the veritable Gospel in Technopolis) that “software is eating the world.” He flashed a picture of a telephone pole in Delhi, India that looked like it belonged in a scene from the 1980s cult classic film, Brazil.
He said that companies that built out their infrastructure in the late ‘90s and early ‘00s are now bursting at the seams and confronting enormous challenges with scale sitting on top of shaky infrastructure. We hear this a LOT from our customers. The reality is, in the late ‘90s and early ‘00s, SaaS was not a Thing. There were no alternatives out there in terms of building out infrastructure. Companies had no choices. They built from scratch. Planned big projects. Launched them. Scaled back on scope. And used wire and bubble gum to build on top of those scaled back implementations.
Now, so many eCommerce companies we’re talking to are contemplating the proverbial Make vs. Buy decision and coming out on the side of buy. In the spirit of July 4th you might say they want independence from the onus of under-performing software, particularly when it’s for non-core processes.
The good news for these companies is that today, SaaS is increasingly embraced as the standard that allows eCommerce companies to focus on what they do best: sell their products and services. A multitude of internet infrastructure companies offer everything from search to logistics to issue resolution. Equally compelling, these new SaaS eCommerce infrastructure companies are helping online marketplaces, e-tailers and payment providers capture more margin whether they are growing dramatically or beginning to see their sales growth plateau.
More than ever and increasingly so going forward, we see SaaS software eating old, home-grown software.
Trend #3: Fractal knowledge. Fractal knowledge is about specializing in niche markets – digging deeper and deeper into the data to find even greater opportunity. He thinks of it as that way to form a new model of how the world works and seeing opportunities that others might not.
When I contemplate fractal knowledge I look at it differently. Instead of seeing it as a means of creating new customer segments as Levchin suggests, I think of how our customer support customers can dive deeper into their contacts data to derive greater efficiencies. Rather than look at traditional metrics such as handle time, cost per contact, CSAT, NPS, et al. I think of how new metrics or a deeper dive on existing ones can be illuminating.
For example, one of our customers learned that problem transaction contacts take 30% more time to resolve that other types of contacts – and that’s before they take into account protection payments. Using fractal knowledge, customer support centers can and should parse their data in increasingly deeper ways. By doing so, they will derive insights they never thought possible.
Modria embraces Max Levchin’s three unstoppable trends that are changing the world. If you see any other unstoppable trends that will change the world, we’d love to hear from you.