Join us in an engaging conversation with Jeff Russakow - Chief Customer Officer - Yahoo to discuss emermging channels of Voice of the Customer
Welcome to Voice of the Customer Radio. Glad to have everyone here today. This is Chad McDaniel, your show host, and we've got a very, very special guest joining us here today and quite excited. I'll get into Jeff Russakow's introduction in a minute from Yahoo. And Jeff, you're just a tremendous speaker and I'm still reeling from the conversation you and I had about a week ago and everything that we're looking to talk with here today. But before we get to introductions, thank you for joining us today. We do have a large crowd gathering and I want to provide some important instructions to get the most out of today's show, so please listen carefully. For those that have called in, these are live listeners who've called in on the 323 number. We are expecting full capacity today, so please, if you are not able to get in on the telephone lines, you can listen to the show today via the computer blogtalkradio/execsintheknow. For those that are on the phone, telephone callers on the 323, you are able to ask questions live on the show today. All you have to do is press 1 on your telephone keypad that will alert me that we have a caller with a question and we'll definitely see if we can include you into the show. We've also found that with our live callers on air, it's better if they're connected to a landline versus a telephone or excuse me a cell phone where we can hear everyone better. The other option to be listening to the show today are those that have dialed in through the internet on their computer. They've not called in on the telephone number but they're listening to the live broadcast via their computers. Just a reminder that make sure you have your speakers on so you can hear us today. Also for our computer listeners, if you have a live question you'd like to ask on air and you have a Skype account, you can connect live to the show via your Skype account and you'll see that on the dashboard of your computer screen.
So for those that do not have Skype on their computer but listening, you can use the chat function provided on the dashboard to engage and I'll be reaching out to all of our chat questions and people out there. So I strongly encourage to get the most out of today for both our telephone callers and people listening through the internet to engage the show with questions either chat, live or on the air, and we'll get the most out of the show. A couple of other tidbits before we move on, I'd like to welcome everyone to be an active and regular follower of our show. We do conduct biweekly shows at two, two times per month, so that's about 24 shows in a year. Our guests, like Jeff, represent some of the leading corporate enterprise brands in both business to consumer and business to business. Real content, real conversations, and real learning. To become a follower of our radio show and stay top of the exciting guests we always seem to have, simply go to the URL www.blogtalkradio.com/execsintheknow, click the button follow and again you'll be automatically __3:56__ of our active schedule. One other thing I want to say to our listeners, if you like today's show, you do have the ability to share this broadcast with your Twitter and Facebook followers, simply go to the show URL and with a click of a button you can instantly share today's broadcast with your social networks if you like that. The show is being recorded, it can be listened and shared 24/7. Just go to the show archives post show today. It will be automatically downloaded. You can listen to the recording and some of our also previous guests. One other thing I wanted to say basically for our next show on the schedule, we've done a little bit of a change. Instead of two weeks, we're actually going to be meeting next Friday, this is Friday, April 1st, 12 o' clock on Voice of the Customer Radio.
We're going to be having Toby Richards, who is the general manager of online support with Microsoft. And then following, the next show will be on the 15th of April, we've got Marilyn Otto who is the Vice President of Customer Experience from Pitney Bowes who will be wearing the B2B side of the equation. So, please stay in tune with all of our upcoming schedules. Today's sponsor of the show for Voice of the Customer Radio is the Customer Response Summit II which is May 10th and 11th in Hollywood, Florida. If you go to the show URL, you'll see there's an immediate click to that event. This is a great opportunity for our wide engagement. It's a two-day peer-to-peer executive forum where we're really gathering an engagement of customers' response strategies, and a lot of the emerging strategies, Jeff, that you and I are going to be talking about today also. So please, it's something to consider. I hope you can join us. It's a great opportunity and it's coming up right around the corner down in Hollywood, Florida. If you like to become a sponsor of Voice of the Customer Radio, feel free to just email me, email@example.com or call me directly and you can hear multiple brand impressions you can receive by being a sponsor of our show, but with all of that, without further ado, Jeff, you are with us now, right?
Absolute. Jeff, I am just so pleased to have you today. In fact, we had John Bellinger on your team. He was one of our speakers at the Customer Response Summit I this past November in Scottsdale and he just did an incredible job with the audience there and we were so pleased to have John there. As I said earlier, I'm still reeling from the conversation we had last week when you started to share some of the demographic thing, kind of your mandate and footprint and responsibility and how you're engaging customers through a variety of channels. I just was sitting back like holy smokes. And then looking more, Jeff, to your background, obviously, well accomplished and very, very impressive. So Jeff, I personally want to thank you very much for joining us here today and making some time out of your crazy schedule and being with our listeners today.
Absolutely. Thanks for having me.
And what I'd like to do Jeff before I have you get started is I'll just do a quick background of you for the guest out there and one thing I do want to say before I do that folks, we are pretty much reaching our max capacity of live callers for the show. If you happen to get a -- if you hear a busy signal or all lines are no longer available, you can dial into the computer and there is an unlimited mount of listeners to the computer at blogtalkradio.com/execsintheknow. So Jeff, we do have a full house gathering to hear you today. But with that, Jeff Russakow is the Executive Vice President of Customer Advocacy for Yahoo and in this role, Jeff, I know you've got global responsibility for all of Yahoo's customer support functions which include customer care, small business, advertiser operations, search network quality, and probably a few others maybe I haven't included in there. But Jeff, you're organization really drives the initiative to continually enhance the customer, consumer, advertiser, and publisher experience, and I think you're going to walk us to sum up the complexities of daily life for yourself but great footprint there. For our listeners, before Jeff joined Yahoo, he served an executive management role at Symantec including leadership roles for global enterprise support services, global services, product management, solutions engineering, and corporate strategy. And he played a number of key roles in customer support satisfaction in increasing record levels. Prior to that, Jeff, you were Vice President of worldwide sales operations and customer support at Adobe Systems. And prior to that, operations -- field operations, SAP America and McKinsey and Company. So, Jeff, you just are a very accomplished executive and it doesn't surprise me that you sit in the chair you do today and thank you for joining us.
Thanks for having me.
Well. Jeff, we want to embark on a journey -- really, the intent of Voice of the Customer Radio is to give our audience and listeners, which are typically executive, peer-to-peer, an opportunity to really talk about some of the early __9:28__ journeys, what's working, what's not working. As I've said before, Jeff, in our conversation before the show was that when you think of customers smarter, wanting to engage in their channel of choice, when you look at their traditional channels such as the voice or email chat, they can be difficult enough for organizations to say how do we engage that customer do it the same as we do it right, but when you start to think of the emerging channels, the new channels such as social Web 2.0, mobile video, you can just take that equation in tenfold the complexity and the daunting task that that is having for what I call the corporate America. And one of the things that our community is very active in and does the wide and live events and other stuff Jeff is do we, as corporate America, do we put our head in the sand or do we stand up and say, "Okay, it's here. This is how we're going to tackle it. This is how we're going to address it and be very proactive in that journey." And I know specifically, or maybe what we should do for the listeners is let them get a little bit of background to your mandate and footprint and some of the metrics there, and then we can talk about some of the engagement channels.
Absolutely. Yeah. Why don't I pick up with a few words just around Yahoo's numbers just to get the folks on the audience some sense of how to calibrate in, and then I'd be very happy to start talking about some of the new channels and social media that you mentioned. And so with Yahoo, it's very interesting, especially as someone who came from, as I did, hardware and software consumer and enterprise, you get into internet and the numbers are staggeringly large in terms of audience and staggeringly small in terms of economics. So, Yahoo has about 630 million consumers, so that's pretty high volume, and we get about 400 million online self-help type of cases a year and we do about 40 million contact center cases per year. So I am sure that there are a lot of folks that are in the audience that probably handled those kinds of numbers for some of the larger fortunate 500s but it's definitely very high volume. The other half of the challenge in internet is the economics are very thin, so I'm used to from hardware world or even from the networking world, I pay the cable company 90 bucks a month probably, so probably giving about $1000 a year for DSL, cable, phone, movies, things like that, and even when I buy an iPhone or an HP device, I'm used to paying a few 100 bucks for the device and there are some support with that. The internet, 6-7 billion dollars of revenue, 600 and something million customers, it's about $10 per consumer per year, so you're making less than a dollar a month, and so part of the challenge is how do you handle the volume, but in internet economics where you really need to get down to pennies and so does a couple of things. First, the usual leverage that always matter, first, group cost reduction, just don't have the problem in the first place, have such high quality of your products that the customer just has no need to call in.
Really driving economic to zero-type of things, self-help types of capabilities, pushing content, become even more important than ever because essentially you need to have escalation rates that are extremely low, extremely low compared to even traditional support models just to be able to handle the volume through any medium even if it's a low cost medium such as email or social or chat. So that's part of the challenge that I think I found with internet. I think the reason why that example might be interesting to us all, not just those of us that are online, is that as we see hardware and software prices essentially going close to zero, the $1500 laptop has become the $150 tablet and the $75 softwares become the free or near free ringtone app, we're basically heading to a world where a lot of the hardware and the software margins are becoming quite low and so internet is maybe a good example of where the economics are going for support and how we have to adapt. So I'll stop there for a moment but if you're ready, go ahead with the social media.
That is just absolutely daunting, right? Again, I think about you said what 630 million users and 40 million contact center on an annual basis and even in the world that you play in, in regards to some of those challenges are just amazing. Jeff, when did you - tell us when you joined Yahoo and kind of when you started, where were you guys at? What was the mandate in kind of where you're at now then we'll get into some of the actual channels of engagement.
Absolutely. So, I joined Yahoo just about two years ago -- two years ago last month and I was brought in as part of the turnaround team for Yahoo. So we brought in new leadership, a new CEO Carol Bartz a little over two years ago, and as part of that she actually created customer advocacy. The company did not have a function focused exclusively on the customer experience and when you've got 600 and something million consumers as well as also hundreds of thousands of advertising and publisher customers, it seemed to her that maybe we ought to have someone focused on that which clearly, I think, everyone on-the-call would agree. I think it would be fair to say that in the internet industry, the level of quality or support that we're used to seeing even in other sectors has really been lacking. I think historically, people have come to view internet as maybe a little bit of a second class citizen channel and we never really held internet with the same standards as we would television or radio or at the mall in terms of the quality or the availability of support or the resolution made or the satisfaction or the modality, and so that's what I've found when I came in. Because of the economics, the vast majority of support was handled by email so there was virtually no phone or chat even just because the economics are difficult. And so, the resolution rate was extremely low. As we all know, if you have an email dialogue with a customer, it's not a two-way conversation and so your ability to really understand the customer's question and resolve it on the spot which could be very easy in some type of a dialogue is very hard when you're playing ping pong through email. So the resolution rate, did we solve the customer's problem at all? Was about 50/50, not first contact resolution ever. First contact resolution was about 40% and that's just dismal. I know magic 8 ball is with better track record than that.
And I think the expectation was, well, it is free - it's low economics, what can you do? The reality today is people are spending as much time on the internet as they do on television, and about three times what they spend on radio and print media. The consumers' expectations have become the same in terms of the support model, and they don't care if the stuff is free of cheap. They really don't see a difference between a free internet service and/or they paid $40 for scan at some place, they have the same expectation. And so the challenge has been how do you basically get up to resolution rates in the 90s and customer satisfaction levels that are sort of in the high 8s, low 9s that we all like to see on the standard economics. And so, as I mentioned before, that's a unique challenge with economics. So we set out to do several things. The first was, as I mentioned before, we just have to get the volumes down. If you can drive the volume of problems way down, first, that's good, no better satisfaction than no problem, no better cost avoidance than no phone call or email. But secondly, what we can do is if we continue to drop the volume, then we could take our remaining budget and start to double and triple up on each contact we were getting and start to move more volume to phone and chat and another media that we know are more expensive, but suddenly your resolution rate drops, essentially drops towards the 90 and you got more traditional numbers. So a lot of what we've been doing is actually improving the quality of the products and then also really improving the quality of the self-help if you can get the fluctuation rates up from about 90% which I think a lot of us used to seeing about -- 9 our of 10 cases resolved online before they hit the contact center. Even if we get that to 95%, you've just have your volume in the contact center because it's gone from 10% to 5% of the remaining, and as we have been doing that, we've been moving a lot of people over to better channels and so that's definitely included phone and chat, particularly a lot of chat. And then, we've also started to open up other new channels around the social media that we can talk about as well and give people more ways to basically get into Yahoo and ways they prefer to get into over only email. And the challenge is in that effect, you could see that the number is really going up very, very rapidly.
You know, it's -- and definitely, we're going to get into those new channels and there is a whole conversation of what you just stated. I want to remind all the listeners on right now, again, if you have called via the telephone line, you can press 1 on your handset to raise your hand to ask an on the air question for Jeff. For those that are listening via the internet right now, you can use the chat function and that chat function is available at the dashboard there. Our phones are winding up right up with questions, Jeff, so I'll definitely try to get to them. One of the things that we talked about also was in the economics and you eluded to a little bit earlier but how do you create service models that work? Internet is free and that whole kind of concept, but that is very unusual and different challenge and I'm just trying to think that I guess you got to get very creative and all this other stuff, but how do you - with that new complexity or different complexity, how do you maneuver in there in things you do, and you talked a lot about getting the volumes down and getting the self-help and the phone and chat, but do you have any other thoughts or ideas on there, how you guys really made the service models work based on some of the limitations?
Yup. There are several different threads in there, I'll just hit a couple and then I'm sure the as the callers jump in we'll get into a few more. There's a few different ways to go at this. So one is I just think that the fundamental support model that we're in needs to be recreated, so that's one theme I'll jump into and I will straight that just briefly. We've all gone up in a model where you support one application on one machine, one phone call at a time. You go to install whatever -- Adobe Photoshop, Microsoft Windows, Norton Antivirus, if you have a problem you call into a contact center and somebody helps you install that one thing. And that's where _20:47_in the world where you paid $1500, $2000 for a laptop, you paid $75 or a couple hundred bucks for the software. The service economics were there. If you take 20% of that for enterprise maintenance support, you take whatever the 30-dollar credit card for consumer's work. If I look at where that's moving my own family, I've got a wife, three beautiful daughters and there's five of us, a year or two ago, we had one Sony VAIO sitting on the kitchen table. Couple of years from now, if we each have a cell phone, a tablet, and a laptop, that's 15 machines, throw in a connected TV or two, home media server, something for the nanny, and of course the grandparents don't know what the heck, so they're going to have 5, 6, 7 machines, I'm going to have 30 machines in my little family ecosystem. And if something doesn't change, I'm going to be a _21:33_ in my own house plus the whole buying software is good for three machines at a time and all that. So that's not going to work. The second thing is they are all different operating systems, right? So everyone here in Silicon Valley certainly has got a rim BlackBerry, an Apple iPad and a Windows operating system laptop literally carrying around from room to room. And so the other thing we've all kind of lived on is there is no really no inoperability.
You call Adobe for Adobe, you call Windows for Windows, you call Symantec for Norton, and never between shall meet, and we've all kind of avoided the inoperability issues and yet if you really look at what's going on, we're all basically sitting on three or four different operating systems, and what we want to be able to do is download or buy a piece of software and have it work interchangeability in all of them. So that's the second issue, and then third issue, as I've mentioned, is the economics are going too quite low, so for the $50 to $250 device, for the $0 to $5 kind of app, your service economics per device or application is just going away and we can see that almost all the retailers around the world including the US circuit city, etc., they've all gone bankrupt. Best Buy is in trouble. So, we're really moving to a different model, but I think that there are few things to think about. One is we're not going to have a family, so we're going to have 20, 30 devices or 15 devices instead of 1. And so if you add them all up, you get your few thousand dollars and you get your service economics back. So, I think we're going to move from supporting 1 app, 1 machine at a time to supporting a group, supporting a digital family, supporting a small business and really it's going to be more about the administration of all their devices and if you group it all together, you can get your service economics back. I mentioned the second thing is...I'm sorry.
No, go ahead, go ahead.
I'm just going to say I realized they kind of get along in that but it's kind of a new theme. Then the question becomes who's the natural support provider, is it each of vendors, the software and hardware vendors, or at some point do we start to disaggregate support from the product and stop bundling support with the product and start providing us utility where basically people just want to call into one phone number to support all of their devices and all of their applications at one number. And then question is what the support look like in that kind of a model. So I do think there's a way to support differently. I actually think there's a way to charge more for support. I mean I paid few hundred bucks a month for electricity. I pay, as I said, almost a hundred bucks a month for cable. I think people are used to paying a lot of money for service when they think of it as a utility. And so, maybe, as the product and software economics are going away, it's time to stop bundling support to that sinking model and basically bundle to support to the utility model and have people think about it that way instead. They'll pay more for it and would be happy for it. Sorry, that was a bit of a soap box, but I think it's the topic that I haven't really heard out there.
Well, it's some great future predictions and insight and feasibility when you talk about the digital family and how we're going to support that, and I guess I'll do a quick follow up question and I'm going to go to one of our live callers. If I were sitting in the chair, let's say I am a vice president or senior vice president of customer support for whatever brand, channel, vertical, whatever, and this is the way the future is going to be going and I've got to own the support channel or service support channel, are there certain things from your perspective that I should really start to embark or brace right now and be thinking or considering or as we're looking at our go forward service strategies on the customer -- back in support of all that?
Yeah. I think a couple of things, and I'll take a couple steps back. I'll start with some teams that we've all actually been on for a while, I just don't think we've actually won the battle yet. I think, there's probably not a single person online here that isn't familiar with the -- how do we move from being viewed as a call center and how do you basically shrink your cost and shrink your volumes to really moving up the value chain to proactive services and being more forward in the product lifecycle. But I just think, I'll start there. Those teams before we do anything new, are true only more so. In order to get volumes down, you really need to be way up into the product lifecycle. And so, the partnership with the product regularization needs to evolve from, even the weekly meeting where you talk about what bugs are saying to moving up into the testing cycle, testing not only for technical defects but also costumer experience defects to really drive those down to getting all the way up into the product concept, and once again, that's not a new concept. We've all been doing that for decades. It's just the imperative to do so is even more so. I think what's changed is as the economics have changed and services becoming a larger part of the total pie, 60% of revenues and software is service and 70% of revenue on hardware is service, where most of the revenue now, where a lot of the profit. And so I think our leverage is continuing to improve to really be able to change the nature of that conversation with the product teams about that. The second thing is the conversation with sales teams that service is not something to discount; it's not an after thought. It's really something that really needs to be pushed forward as a value proposition. I think the third thing is really selling services out in the channels.
So how do you get the retail or how do you get the channel partner, how do you get the online player to really do a much better job of promoting service and support at the point of sale? Because as we all know, point of pain is a lousy time to sell service. It's extortion. You're having a problem with your machine. Somebody says give me your credit card, but it's a lot easier to sell services and at a higher premium at the point of sales. So how do we kind of change that mentality? So those are I think sort of the age-old adages, only more so. I think -- what's the new thinking about what you need to worry about today. A couple things, the way costumers want to be supported has changed and that's kind of a little bit what we were alluding to earlier. I'm getting older but I remember we used to see all these studies that people over 40 still want to be on the phone and people under 40 prefer to go online for self-help. I think that's true, although I'm not at the age of 40, it's somewhere, but there's another segment yet, so if I look at generation Y, you never need to worry about somebody in generation Y telling you if they have problem. They will tell you when they're unhappy. They'll probably twit it to 450,000 people, so it's a different mode, but you'll definitely know when a generation Y member actually is unhappy with your service. So that's one set of issues and that's around the social media and we'll talk about that.
Yeah. We'll definitely say that's the whole topic I definitely want to get into and some good suggestions are, not to cut you up, one other thing and...
Yeah, because one of the things that I would go back which is there's this next generation kind of the kids born after 1995 or so. I call them silent gen because they don't talk at all. They're just kind of heads down, just kind of texting away and they have a phone there. And for them, this is not technology at all, it's utility. If it doesn't work, they just won't use it or they'll move on to the next product. They'll never call in to support, they will never go self--service, it's not worth it. They just move on to something else because they have a choice. And so in that case, they won't contact you. You have to figure out proactively that they have a problem and reach out to them. It's like, "Hey, you seem to be trying to do this text thing. Are you trying to do some kind of a smiley face in you IM or whatever it might be? Can I help you with that?" Because if you can't detect that they're having a problem and push it at them; they're not going to, they're not going to want to figure it out and so I think we have a set of challenges around improving our reactive inbound channels, but we also have to think about having more proactive and listener-type of technologies and push technologies because increasingly for these people, they only think of something that they actually should have to get support for. It's something that comes out of the wall. TV comes out the wall, water comes out the wall, internet comes out the wall. It's utility, it's just supposed to work like dial tone. There's no concept that they need help. You just, you pick up the phone and the dial tone isn't there. You just walk over another phone and pick that one up. You don't think about it.
Very interesting. Well, let's -- I'm going to go to some of our live callers, and again, those that have dialed in via the telephone, if you'd like to ask a question on air, press 1 on your handset there, your telephone set and we'll get you in. The way I'll identify when I bring you into the show, I'll identify the area code and the first prefix and then you can say your name and your question and with that, we're going to go caller 503472. Are you there?
Good morning. Could you please introduce your name and question?
Sure, my name is Mark. I'm in Oregon. And Jeff, one of the questions that I found in my own experiences has been as new devices come on the market, you mentioned your family has a bazillion different devices, mine is in a similar mode. But the thing that I find out as a parent and trying to be the MIS in my family as I'm sure you are in yours, is that the biggest challenge is as my kids shift devices, the application that they're using aren't shifting. So if they go from a notebook to a Netpad and then into the phone and now they're into the tablets and the tablets are shifting and changing, they're looking at 3D things, how do you stay up with the fact that it's not just a matter of the format and the size requirements are continually moving, but there's underlying capabilities that are being expected and when you start thinking about that cost a lot of money to maintain and to stay current; how does that play out in your economic model?
Yup. I assumed you're talking about expensive and how to stay current as a support organization from a support readiness point of view?
Yeah. All I'm saying is why doesn't it work? Why can't I do this? Why can't I see this? What is that not showing up?
Yeah. I agree. Today, I think there's not a great answer. I mean I tell you the best we can do, but I definitely think the computing landscape is going through a nasty period here, but where it's getting worse rather than better. I mean over time, I do think that with endpoint virtualization and other things, we'll start to see people running the same app across a lot of different devices and no less, and I do think we need to push our product teams to do that so that at some point we will get better. Right now, I think, once again, if I go to the tried and chooses a few things, at Yahoo, we have very bulked up training and support readiness teams because part of it is just how do you once again -- in my case, I'm just trying to reduce the total volume and then taking the savings or surplus off of that to bulk up the readiness team just to be able to handle that kind of firepower. And I know that's not a great answer for everybody, but at Yahoo, we have this issue on spades. We do about 500 product launches a year and a lot of them are microdot or double dot releases but on the Daily Today, two or three new things are rolling. And so part of what I've just tried to do is have a way higher than normal budget for support readiness and angle a lot that way. I think the second thing is, from a content and you need _34:02_ zero, it's very hard to get all your service agents trained up that quickly and so your best second line of defense is to really make sure you day zero content and your content around each of these devices, is well documented. A lot of times, you really need product and product management to be heavily engaged in order to be able to really do a good job of that, and you end up having a much higher volume of knowledge articles because of all the variance by operating system and device. And so, you end up having just a larger editorial.
So I've largely gone at it with just bulking up support readiness and content management and to your zero self-help kind of stuff to be honest with you, and to some degree crowd sourcing, but to be honest with you, crowd sourcing may not be that up-to-date on every variant my device. You can't really expect that the fill in the whole matrix of content that you need. So, I don't have a great answer. I know that the right long-term answer is. The right long term answer is if we have endpoint virtualization and you have this obstruction ware in every device between the operating system and the app so that a single instance of an app can run across a lot more devices, it's going to simplify the world for the consumer and then ultimately for support.
Great question, Mark. Thank you and thank you for that response. I'm going to go to one more caller here quick and we also definitely want to get a component of the social emerging channel for call center costumer support. Caller 714538, welcome. Can you hear us?
Yes I can hear you. This is Ed from Orange County California. Hello and how are you?
I grew up in Orange County.
My question for you is that - and I think you may get to this later on, so correct me if that's the case, but where I think we struggle with is in the emerging social media and, the Twitter, the Facebook, and the generation Y that's out there using net for support. In the traditional costumer service world, we all know how to monitor and how much a phone call cost and how much escalations cost and that kind of thing. But in the emerging world of social media, it gets tough to say well what's a twit worth and why those three people sitting over there twitting on a computer all day, and to sort of justify that from a CFO standpoint and PNL standpoint, to me, that I think is very difficult for us to do and wondering if you had experience with that?
Yeah. We definitely have a lot of experience with that just because were in the internet space and the joke I made earlier about people twitting to 450,000 followers when they've had a bad support experiences is not just a joke, that is something that happens. Couple of things, there's no question. Well, there's a couple different ways to go at it. I agree that the volume of cases coming in through this different channels today, if I just look at them in the straight economics of it. You get a handful of twits versus you've got 10,000,000 contacts center inbound. It is very hard on a pure financial argument from a cost basis to justify building out the infrastructure for some of this additional stuff. On the other hand, I think if you start to use broader arguments which is from a brand safety point of view, from the revenue impact point of view, to your CFO if these channels are amplifying. These costumers are going to go out to these channels and they're going to _37:38_ and when they do, you're going to get 450,000 people or 2,000 people hearing about it. So, think about this from a revenue impact point of view. Don't think if this is a support cost structure issue. Think of this as a costumer net promoter or loyalty issue and think about the impact on the revenue line. So that's how I've usually won those arguments, which is don't think about my few hundred million dollar support budget, think about the 6 billion dollar revenue line and justify, try and justify expenditures that way. It's not an easy sell, but you can't win on a cost argument. You have to go to a revenue and a loyalty argument for those kind of investments. Second thing I'll say, and I think we've all found that is, we recognize as a generation of people out there that prefer to communicate through the social media and were kind of moving to it because of their preference or preferred channel.
At the same time, it blows not only our economics, but it blows our operation infrastructure. When you have people coming in through self--help or support model, context and a model; you can triage, you can channel, you can divide labor, you can optimize, you can record. With these other models, most of the things are broken and it becomes very difficult to handle and expensive. I think a couple of things there, one thing that we've tried to do is to put some automation in place to pick up. What we first did is we would have listener channels out there, when people are out there and some other channel. It's amazing how often people just put something out there in Facebook about Yahoo and expect we'd somehow pick it up. We first charge this by point those in to humans just having a dive on in quickly before they kind of got bigger. But then the next step is really to then you have automation in place to pick up those listener agent outputs and then try and try them into some type of more automated inbound so we can have it looked a little bit more like a phone or a chat inbound, kind of a model and put some efficiency around it and also put it through a knowledge-based type of approach like we would any other channel. So I think from an efficiency point of view, that's the best we've been able to come up with. So I don't know if I fully handled your question. Is that where you are going to go with it?
Yeah. No, I especially like the revenue loyalty line of reasoning, because it gets difficult when you try to quantify it in terms of what people are used to see. It gets tough to do because it's all out there in vapor world when you're trying to justify but I understand...
The only thing I try to do is -- yeah, the only thing I try to do -- I'm sorry, go ahead.
No. For the loyalty revenue standpoint and I think just from a branding standpoint, I think it becomes a stronger argument.
It is, and then the other thing is that centers tip for winning arguments, we'll see a post there. It's going sound dirty. It's a lot easier to prove a lower bound or an inequality than an equality. A lot of times, we all get pulled into the game of okay, we'll come up with the business case and so we puck them up with some numbers which is an inevitably based on some assumption like well even 1% of customers use you even 10% less that equals this. And then of course those numbers are assumptions, there's no way to prove any of those assumptions and so everyone will text the numbers, "Well I don't think that's 10, I think that's 5. I don't think that's 20, I think that's 15." So what I usually try to do is actually put up a chart and say "Look, I don't know what the numbers are but if it's even 1/10 of 1% of our costumer-based, it's whatever, 50 million bucks. If it's 2/10 of the customer-based, it's 100 million bucks," and I just kind of put a chart like that together and say, "Dear CFO, I think it's 5% of our customer-based." But let's just say for fun it's even only one, let's just see it we buy one. I still prove my case 10 times over. So rather just putting up a number and trying to prove my number is right, I put up a range of numbers and basically show that almost no matter how small of set of numbers you want to assume to your finance person and skeptic, the lower bound still wins my case and that's proven to be a lot more effective in winning arguments to CFOs because then it's not about whether you're right, you let them pick the number. Because usually with these things and I already said my case with Yahoo, I've got very big numbers, you multiply even the smallest assumption by 630 million people, whatever it is, is going to be a number that's going to justify the million or 2 million dollars it takes to invest in some piece of technology kind of thing because -- and then you get out of the game if you really have a good case, so that's kind of a tip that's work really well for me.
Ed, terrific question, I've got to interrupt, and great answer. Thank you so much, Ed. Really appreciate that. And just to add to Ed's comment there for everybody is that when we did the Customer Response Summit the live event this last November, there were two big things that came out of it, Jeff, was number one, how to get executive commitment. We had a real deep dive into that, and importance of that, that it was also talking about with the emerging channels such as social which we're going to get to next. Marketing operation sales traditionally has worked in silos and these emerging channels is really forcing that conversation to change and redirect and those silos no longer exist or can't exist to be effective. We also have a lot about the B-to-C versus the B-to-B and the onslaught that's going to hit the B-to-B side of the equation for emerging channels such as social where consumer has -- B-to-C consumer -- has experienced that for a number of -- more recently and you live that life too, Jeff, so you know what I'm speaking about, but the whole B-to-B world is going to open up real soon if not already. So, the forum -- the peer-to-peer forum that it's coming May 10th and 11th down in Hollywood is a peer-to-peer forum and we're going spend two days deep diving into how to solve some of these problems. So, with that let's -- Jeff, I want you put your hat on our community, Execs In The Know, Voice of the Customer Radio basically is 40,000 executives that have a mandate or an interest in the costumer implementation strategies. They own something to do with that customer channel. So I'm going to ask you to put on that kind of hat and when we start to think of this emerging channel social, it is a huge wildcard for everybody right now.
And I like it that this tell us a little bit about how Yahoo got started, if I just landed on your lap, but I mean how did it start in kind of where are you today and what are the best case practice or something you guys are doing in your journey that you're really excited about from a social customer response component.
Yeah, and once again a great topic, big topic. I'll just try and do a better job by putting a few thoughts out there and then we can see whether the callers want to take it. As an internet company, media company, we really have two different sets of problems we're trying to solve around social media channels. One is, in more traditional tech support and billing, so somebody can't log in, has a technical issue and they either want to comment to us through a social media channel and/or they want to tell the world about a bad experience that they've had one through a social media channel to other just complainer trying to create some leverage. The second one which we get spades is really more on content, so we're essentially a platform for 600 and something million people to communicate with each other, as well as everybody else that wants to communicate to them to try. And so we also have the second issue of a spam hate speech inappropriate content of various sorts. So, in a lot of cases, just boring off topic kind of stuff. And so in our case, we really try to go after both, and the reason why I mentioned the second is for a lot of us that actually have forums or just places where the user base is involved. A part of it is about how do you leverage them, but part of it is how do you deal with the fact that not everyone is well intended and participating in that forum constructively or even relevantly. And so that's become a really big issue as the whole internet and the whole world has gone user-generated social content and the amount of content out there has gone from fairly professional to a much more amateur in nature. Around the technical support one, I think the biggest challenge is just how do you widen your funnel, so we've tried the best. We adopt as many channels as we can. So we have, as I mention before, listener, tools if you will out on.
We've got social 911 is our program. We just try to put listeners out in every normal social feed and forum to just be able to find when people are talking about Yahoo. And so we look for Yahoo combined with any type of bad word other, a technical support thing or some form of angry verb, hate name, torture, etc. And the first thing is just trying to gather all those up and to be aware of them as quickly as possible, and then as I mentioned, in order to get into more of a contact center, efficiency, you then need to funnel that down into some type of a set of tools that can triage them, organize them so you can start to put into a more traditional _47:21_ workflow and handle this case. The biggest challenge with those things is how do you get a hold of the customer, I mean it's a very practical simple thing, but there are on some other media. You don't know their email address necessarily, you have like some alias. So, the biggest problem that a lot times is how you get a hold to that costumer and so you kind of have almost have a human go out back into that media and go find them. And that's I think some of the efficiencies. Clearly, having crowd sourcing and community help is something we've all been trying to do. When you have 630 million users, it's actually very powerful tool. I think the challenge is how do you make sure that the content that they're providing to the users are actually correct because if they provide information that's incorrect or outdated, nobody blames them. Somehow, it becomes your problem. And so you really have to have people out in a lot of these forums and actively moderating. So, once again, I don't think that's something new. I think the only thing that I'm saying is I don't think there's anyway around it. You have to get your volumes down, your root cost volume down so you can move more of your people out of reactivate agent and into proactive community moderation to be out of these tools.
You have to basically be moderating in these tools and the only way to do this is to change your investment profile from reactive agent to moderator. On the content side, there's a lot of automation that has not existed in the support space but should, the ability to look for bad words, the ability to look for combinations of words that are bad intent, which other governments have done a very good job doing, fighting terrorism and listening to over phone lines, as well as the ability for pattern recognition and photos is very mature. People had not done a very good job of putting that together into a tool set that support people can use. So, we've been building our own platform and we've been trying to take a three-phrase approach. The first of which is to have machine moderation, look at the vast majority of content coming in to see if he it's good or bad or can't tell terms of the content. And then the second level which is to then have community moderation. So, we've try to assign reputation to our users. So far 630 million users, are the good reputable source and they only say nice things and when then they some things bad they're probably right. Are there bad reputation, it tends to put up a lot of nasty or off topic things and then when we start to move this to give them increasingly the ability to vote on things or say, "I don't like that or that's not appropriate" and they start taking action. It gets us leverage of once again 630 million people to help us and keep the site clean and to put some social behaviors in place. And then if anything gets to those two things and then how do we have better agent tools for taking it off. So, I realized it kind of giving you somewhat long and rumbling answer, but I think in the text support side it's really about getting agents how to react to contact center and into the moderation platforms because I think you still have to.
But you need to get the listeners out there to find a lot of stuff and to find it early before it proliferates in to long dialogues. And on the content side, put a lot more machine moderation in place so you don't have people scrubbing 100% of the content then scrubbing the remaining 2% of the content that comes through all your filters.
Excellent. We have 9 minutes left in the show. You're listening to Jeff Russakow, EVP, Executive Vice-President of Customer Advocacy for Yahoo, Chief Customer Officer of Yahoo. Another question quickly, Jeff, is in regards to the call center traditional outsourcers, where do you see these mediums -- do you know today it's a very common large model, where do you see this happening for those type of players down the road to support people like Yahoo or other large corporate enterprises within some sort of social response and capabilities?
So, I definitely think that they are capable of doing that kind of work. I mean whether it's in-house or outsourced, it's really I think the challenge from outsourcers is how do you put more infrastructure in place to be able to route in channel, those kind of interactions so that you can put it into more of a workflow, in a recorded metricized sort of a way. So, it's really about funneling it into the more traditional model that they use to operating in and so in terms of how to deal with social media, I don't know if in-house or outsource makes a big difference in the type of things that you need to get built. I think one interesting question is this do we want to maybe press that the BPO community to maybe do some investment, to maybe help us build out some of these tools. They have very large infrastructures of CRM and self-help, and they're always looking to do something new. So, it's really more where is the investment going to come from to innovate some of this newer tools we need to do to take unstructured social commentary and turn it into a structured feed that it's very hard for all of us, particular company to find the budget around to do, it's probably in their interest to do it and develop a standard.
A very good comment though. I wanted to let all the listeners know that we are offering our KPI complementary report. This is key performance indicator for social media response which has a large context in our component to it. We published this last November, it was a huge hit. If you'd like a commentary copy of that report and findings you can either email me firstname.lastname@example.org or you can send me an email on the URL Voice of the Customer Radio Show through comments there. One quick question, I'll go to and try to go as fast as I can Jeff, but you've been involved in outsourcing work for BPO for 15 years and for those of us who had been outsourcing, what leaders trends do you see or do you have any predictions you want to throw out there to kind of leave us in closing.
Sure. I think there are several things there. One is the labor arbitrage opportunity is narrowing. I think revenue -- wages have been flat in the US and in Europe for 10 years now and it's continuing to go up at 15% a year in India, and 8.9% the rest of Asia. I think we're getting to the point now were -- that 3, 5, 7-year kind of timeframe of you know where you want to put in next contact center. The labor arbitrage is going away where you can start to put people in lower cost locations like up in the Pacific Northwest and the economic reason to move some places is not really compelling anymore. And so it's no longer where do you go for less expensive talent, it's really just where in the world do you go for talent. And so I think it forcing the BPO players to really be able to compete more and know straight head to head on talent and/or to be able to offer things about business process improvement, to be able to take over a whole bunch of your stuff and really make it more efficient because of superior skills around that and/or to go to more of an outcomes-based process where they're going to take on a volume of customers for amount of money and just handle it for you, and let them innovate whether or not they do root cause reduction or self-help or handle it through contact center. So, I think that's one thing I think the second trend is the map was opening up. We've all mostly been going to India and Philippines and mostly move a lot of our English there and then we've always been challenged by the European languages. We certainly start to see North Africa, Egypt, kind of come on online and kind of offer second location on the map.
I know that they've had some recent turbulence but that's really actually an indication of economic prosperity starting to happen and more educate the people looking for good jobs and so I think there's an opportunity to leverage that side of the map. That's maybe as exciting as India or Philippines was 10 or 15 years ago. But in terms of the business relationship with them it's definitely a lot more about what can they do that's actually better than what you can do as oppose to cheaper, because the cheaper parts is going away unless you start going to some very remote provincial parts of the world.
Fantastic and just terrific insight. A couple of things in closing to all the listeners today. First of all, if you -- easily can become a follower of our radio show, www.blogtalkradio.com/execsintheknow. There's a simple button there to click to be a follower and stay abreast of our -- all of our shows. Also if you enjoyed today's show being a follower, being part of that URL, you can simply click a button to Tweet, excuse me Tweet and Facebook your followers a recording link of today's show. Next Friday the 1st of April at 12 o'clock Eastern we're going to have Toby from Microsoft online with us and hope you can make the show. Jeff just in closing though, this has been tremendous and you've given some incredible insight even an absolute pleasure to have on the show and I really want to personally thank you and wish you a lot of luck as you continue your journey. You've done some terrific things over there and you're continuing to do a lot of things so I want to wish you a lot of luck and continued supporting.
Thank you very much. Thank you for having me.
Well, we hope you will come back and be part of our community and I'm sure I'll get a lot of feedback from the community about how much they've enjoyed having you on our show.
Anytime. I was just going to say, I only regret I realized we have a lot of topics said at 50,000 feet. I know that each one in its own could have been a dialogue, so if I can be helpful I'm happy to do it anytime.
Wonderful. You have a great weekend and thank you so much and everyone have a great weekend, and this will end the show. Thank you, Jeff.
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