Episode #86: The Real Value of Customer Engagement, with Jon Hyman

Want to exceed your revenue goals? I thought so. Today we talk with Jon Hyman, cofounder and chief technology officer at Braze, about their just-released Global Customer Engagement Review. It’s a deep dive into great customer engagement, and how it translates directly to business success.

All podcast episodes

Go Now

PODCAST TRANSCRIPT

Grad
All right. Welcome to a special CXM Experience. I’m your host, as always Grad Conn CXO, chief experience officer at Sprinklr. And today we’ve got a special guest. I’m going to introduce him and quickly overview some of the things we’ll be talking about today. And then we’ll get going on our conversation.

Today we have Jon Hyman, who is the co-founder and CTO of Braze. And Braze just released their 2021 Global Customer Engagement Review. Braze is focused on customer engagement. We’re gonna get Jon to talk a little bit about what customer engagement is. But they’ve got some amazing findings. In that review. Most brands understand that excellent customer experience is critical to building loyalty. But there’s also a direct correlation between customer engagement and business growth. It’s kind of a neat finding. And marketers who rated their own practices as excellent, were more likely than those who rated as poor to hit their revenue goals. So, CX is a way to hit your goals. CX is a way to build your business. But Jon’s gonna talk about why customer experience engagement matters to drive revenue and growth for their brands. And he’ll probably reference some recent case studies as well. So welcome, Jon, to the CXM Experience.

Jon Hyman
Hi, Grad, thanks so much for having me here.

Grad
I really appreciate your time today, I really appreciate you coming on. So, let’s start with a little bit on maybe what is Braze. You’ve been there 10 years, pretty exciting. And also, what is customer engagement, just so we level set the audience on that.

Jon Hyman
Braze is a modern and comprehensive customer engagement platform. Our mission is to help consumer brands use data to deliver relevant and memorable customer experiences through personalized messaging. So, what this really translates down into is, we help brands deliver personalized emails, push notifications, in-app and in-browser messages, text messages. Really any kind of communication that a brand is having between themselves and the consumer, we want to help make sure that that communication is relevant, it’s timely for what makes sense for the customer journey. And ultimately strengthens the relationship and adds a lot of value to both the end user and to the brand itself.

Grad
How do you make the personalization happen.

Jon Hyman
There’s really a couple of different things here. We work with a lot of first party data. And so we’re understanding what our brand’s customers are looking for. We help our brands essentially, listen to their audience, understand their preferences. And then really understand a bit more about them, about the things that they may be interested in to personalize what type of channels they’re interested in and receiving messages on, like emails, push notifications. We help identify the best channels for users. And then we help them act. Take action on their engagement strategies and build multi-day multi-message multi-channel strategies that essentially are targeting users again, at the right time in a customer lifecycle.

Grad
Awesome. And are you producing content? Are you providing the guidance for content production?

Jon Hyman
We are the technology platform that marketing engagement teams, product, and engineering groups are using in order to execute on their strategies. So, we’re not coming up with any of the content ourselves or helping them literally devise the thing to do. But rather provide them with the means to execute on their goals and ideas.

Grad
Very cool. Very cool. Congratulations. I mean, Braze is doing really well. Very exciting. You’ve won a number of awards lately, and the business is growing very quickly. So it’s very cool, must be very rewarding after so many years to see the business continue to accelerate.

Jon Hyman
Yeah, it certainly has been an amazing 10 years. And what’s nice and validating for us, too, is that we’ve seen the shape of the market really hone in on customer engagement. When we started back in 2011, there were a lot of folks that were focused on downloads. Customer acquisition was kind of the big thing. How do you get people to download your mobile app? And really, there wasn’t a huge focus on retention. And nowadays, particularly past COVID, there is no question that there is such a strong importance that needs to be placed on customer engagement. I mean, it’s really the weapon that’s going to differentiate exceptional and enduring companies. It’s all about how effectively and how much high-quality customer engagement they can provide and help them build a direct relationship with the consumer. And folks weren’t thinking about that 10 years ago. They certainly are now. And so it’s been exciting for us to see it in working directly with businesses. And then throughout our research, which I’m sure we’ll be talking more about shortly, to learn about how so many businesses now are finding that customer engagement is something that they have to invest more and more into.

Grad
Well, the last year has been a massive reinforcement of that. It’s always interesting how these black swan events will come in, out of nowhere. People have been poking at the bear for a long time but suddenly it becomes a strategic priority. Have you noticed a real change in your business or the way your customers are urgently looking at customer engagement now versus where they were before?

Jon Hyman
We certainly have seen a big shift toward customer engagement. And when we look at our research, we’re seeing that it’s not just more modern companies, younger nimbler companies. But in fact, older brands are starting to understand the rise and expectations and the demand for customer engagement. We actually did some research and saw that 48% of companies older than 20 years ranked the investment in customer engagement technology as one of their first priorities. They plan to increase their budgets on doing things like that.

Grad
And why do you think older brands are doing that? Is it because they were so far behind, or…?

Jon Hyman
I think that there’s been a shift that, in some cases based on what industry they’re in, attack from all angles. Or that they’re just seeing that customer expectations are rising due to lots of different product experiences blending together. When I think about this first thing, for example, a lot of businesses, even if you look at, say, retail brands, these brands may be attacked at the top by Amazon and at the bottom from direct consumer Instagram brands that have really great customer experiences and customer service. And they need to compete on that. And so we’re seeing a lot of brands that maybe just made sense for them in the past to just put their product at eye level in the grocery store and run some commercials on TV about families buying those products. And maybe that was sufficient.

But nowadays, we’re seeing that a lot of brands are trying to build communities directly with their consumers. You’re having folks build mobile apps and excitement around things like health, and wellness, and lifestyle. And then parlaying that into building a strong brand relationship, whether that is baby food, or diapers, or toys and books. And all of those things that now brands have to compete for. So, on one side, I think that it’s just the competition’s really intensifying, and individuals are choosing to go with brands that know them as humans and understand their preferences and are essentially personalizing their experience toward that. And then on the other side of it, one of the things that I was saying about customer engagement is you have to do this because everything around you is improving and raising the bar. So if you’re even being served better recommendations by Netflix, that’s going to raise the bar for any other content provider, whether you’re in streaming or not. You’re getting great product experiences all the time from big brands. So, whenever you download a mobile app, or you visit a website, or you start interacting with a brand, all your experiences for how good it is when you interact with Amazon, or with Netflix, or with Pizza Hut, or any of these kind of things that you might interact with, those are all feeding into your expectations. And so it’s just that rising tide is rising all expectations for everyone.

Grad
I actually love talking about this. I think a lot of people forget that consumers don’t really differentiate by industry. Right? If you get used to Uber, why can’t I see where all the things that I’ve ordered are at any point in time? Domino’s is basically done an amazing job with their app. And that Domino’s app is incredible. They tell you when it’s gone in the oven, who’s cooking it. And my favorite thing in the Domino’s app is you can send encouragement to the person who’s cooking your pizza. Not money, just encouragement like, you know, “way to go.” I love that.

Jon Hyman
It’s exciting.

Grad
Yeah, so some of these brands are getting it. But there’s many people that think that Uber is a different industry, I don’t need to worry about Uber. But the changed consumer expectation affects all industries.

Jon Hyman
Absolutely right. And then you see clusters of: is an industry starting to take notice? And in particular, you’re talking about Domino’s Pizza, we see this a lot with quick service restaurants. I now live in the suburbs. And so there’s a lot of fast food opportunities around me. And I’ve downloaded all their mobile apps and I have been very impressed with the quality of service that they’re providing from the mobile app experience, even then to the customer experience when you’re doing say, curbside pickup. But importantly, on mobile, I’m getting great, timely push notifications about things that maybe I’m interested in as part of their product. They’re remembering past orders. Make it very easy for me to reorder. I’m getting in-app messages that are really directing me toward coupons or deals of the day. Knowing that it’s Wednesday, so it’s 99 cent Whoppers or something like that. And so they’re really coming from this great cross-channel engagement strategy. And they’re leveling up what they are doing best. And then again, that’s then making my expectations go higher and higher for anyone that I’m interacting with. Because you know, all these other food businesses are doing a great job.

Grad
So let’s assume for a second, we’ll play a little roleplay here. So, I’m a brand manager. I’m in a large, older, traditional company. I get it. Okay, so I get it. I’m listening to the two of us right now. And I’m going Yes, yes, yes. Right? But my management doesn’t get it. Okay, management doesn’t get it. They’re like just need end-aisle displays. We just need to keep pushing into the channels that we’ve always pushed into. How do I convince my management that we need to change the way we’re doing our customer engagement, and we need to invest in these kinds of digital tools?

Jon Hyman
So I’d say there’s a couple of things there. First is just understanding where you excel. And think about what are your capabilities today. One of the things that we did when we were talking to our customers or doing our research is trying to essentially have people self assess against a number of different factors to identify just how you’re doing. So, the first thing I’d say when it comes to any kind of improvement is you want to look toward the data. So you can ask brands, okay, what makes sense? What is our staffing look like? What’s our cross-channel strategy look like?

Our research shows, for example, that you can’t just live on one channel alone. And that, if you’re using multiple channels, you’re seeing things like 60% increase and 30-day retention. You’re seeing that customers are more than 75% more likely to make a purchase, and you’re getting a huge increase of lifetime value. So tie it to those things. How are you performing on cross channel? How are you thinking about being able to measure your engagement to your revenue? What’s the collaboration look like internally?

So, you can map all of these things out internally to just say, Okay, where do we fall if we had to measure ourselves between saying we are just starting to activate our engagement strategy. Or are we kind of aces at this, and we really know exactly what we’re doing. I would say to look toward research to get a sense for what’s happening in the industry. And that’s where I think that our Global Customer Engagement Review that we have just published is a great place to start. So what we’re doing here is we’re trying to help define what good customer engagement looks like, how that translates directly into business goals, and where brands are able to find opportunities to improve their customer engagement strategies.

Grad
As you did the review, and as you compiled all the results, what would you say was maybe the most surprising thing that you found as you were doing it? What sort of made you go, that’s unusual or unexpected?

Jon Hyman
So there are three main ones that I thought were pretty surprising. One is that there was going to be the big focus on customer engagement, but importantly, that it was coming from bigger and older companies. And maybe this isn’t as surprising. We just talked about this. But you know, just generally the sense that everyone’s now looking at this. So perhaps not as surprising, it is validating. But a surprising metric, then I’ll say was that even brands that are confident in their strategies, can struggle to demonstrate the return on investment in their success. And so we looked and we saw that… we found this stat: 88% of marketers that think their teams have excellent or good customer engagement practices, of those nearly 75% still worry that their metrics aren’t translating into tangible business outcomes. So they’re trying to understand how do they break through? How do they stand out in a crowded market? How does this impact revenue? We still may not be able to have that ROI. That was that was fairly surprising.

And one of those angles is, just thinking about digital transformation being the backbone of this, is data really is so important to be focusing on. Understanding your consumers and understanding your strategies. And so that tells me that there’s still a huge amount of folks out there who may not be taking as good of a data-driven approach as is possible.

And then the last one I’ll comment on that was surprising is that more and more brands are finding customer engagement is critical to their business growth. So, we had customers — sorry, not customers — we had folks in the research study assess themselves on how they thought their engagement practices were. Anything from poor to good to excellent. And then we looked at the budgets there, we looked at by how much they’re exceeding revenue goals. And what we’re seeing is that folks who rated their engagement practices as excellent are much more likely to hit their revenue goals than folks who rated this poor. And so again, what’s surprising is that track of people have a pretty good understanding of if they’re doing a good job or a bad job or not. People who are rated at poor missed their goals, people rated excellent are hitting their goals. So folks know that there’s problems and maybe looking for the technologies and the strategies for how to improve that.

Grad
Interesting. That’s fascinating. So we’re nearly on time. And by the way, this has been great. I’ve really enjoyed this. And I’ve learned a lot as we’ve been going through this discussion. If you’re giving one piece of advice to someone who may be thinking that they really need to do more in the customer engagement area, but really don’t know where to start… they’re a little overwhelmed when you are listing off all the different things people need to focus on, right? And it’s like, geez, I can’t do all of that. I’ve got to pick one thing. Where would you recommend people start? How do you think they should focus and get a program off the ground?

Jon Hyman
So one of the first things I would say is start with the industry data. So our Global Customer Engagement Review is, I’d say, the best place to go to because you can read and understand decision makers. We talked to over 1,300 marketing executives. I’m able to understand and embrace customer data. We took data from over 5 billion end users across our customers to understand acquisition and retention and monetization metrics around engagement. So first, I’d say, is become educated in what’s out there, and start there.

When you’re then going to look at your strategy, I would say to focus on making sure that you are able to break down any kind of silos that may exist, or you may be leaning toward, or your organization may be structured, with respect to your channel or your data strategy. What I mean here is not thinking about it as your email team, and your web team, and your mobile team. Instead, be thinking about it like an engagement team. So this is really the first of the mindset shift of looking at this of customer engagement is the overall strategy. End users don’t care that the message came from the marketing team or the product team. They don’t care what your internal organization structure looks like. They ultimately just want a good customer experience and product.

So getting into that mindset is, I’d say, step number one. And then from there, go find a great technology that you can incorporate, such as Braze, that can help you execute on all of your goals. And look for something that is going to be able to grow with you that you’re not going to hit any kind of ceiling. Sometimes folks think, Oh, I gotta get started as fast as possible, and maybe go with something that is easy to get up and running tomorrow. But you may find that down the line, it’s not able to scale with you to do the things you have to do, that the research tells you to do, like cross channel. So take the time to make sure you’re choosing the best technology partner. Choosing a partner that can then amplify your other investments in your technology and marketing ecosystem. And then from there, they’ll maybe be able to point you in the right direction with how to grow that. But just starting with getting educated, thinking about it in the right way, and then choosing the best technology, I’d say that’s a key to success.

Grad
Jon, that’s great advice. I love it. So, we’re getting ready to wrap now. Before we leave Jon, any last thoughts, and then maybe you could finish with a quick pointer for how folks can get their hands on the Braze review that you’ve been talking about so they can read more and learn more from the work that your team has done.

Jon Hyman
For folks who are interested in customer engagement, you can definitely check out our Global Customer Engagement Review available at Braze.com. Go there and essentially follow the links that will find it there. And you’ll learn from over 1,300 marketing executives. You’ll learn from data of over 5 billion end users that Braze has looked at metrics around acquisition, retention, monetization metrics associated with customer engagement. But I wanted to perhaps leave with is an example that you can find in the customer engagement review. We didn’t really talk so much about case studies or the ways in which our customers are breaking boundaries when it comes to delivering great customer experiences. And one is with the NBA, which is something near and dear to people’s hearts. In 2020 the NBA season was unfortunately halted just as COVID was beginning to take hold. And then it was restarted. But we started in the summertime, a time when fans were not really accustomed to seeing games. So the challenge that the NBA had in front of them was how can they be strategic to announce their restart plans and essentially get users to subscribe to NBA league pass, right in the summertime when they’re not really accustomed to watching games.

What they did to reengage users is they created a great cross-channel strategy here. They had in-app messages with custom messaging that would update daily about upcoming games. They would send out product messaging like push notifications that were personalized to folks’ favorite teams and had dynamic content that let you sync your calendars to the game schedule. And they saw a tremendous amount of success in doing this. And even though the NBA restarted at an offseason time, typically, they saw nearly a 10X increase in daily active users, more than a 25X lift in app usage, and nearly a 20X increase in new users and also a very high conversion rate.

The things that we’re talking about here have very real tangible business outcomes. And with technology like Braze, you can not only execute on them, but optimize and measure as well. So I’d encourage folks to check out the report. It has a lot of other exciting case studies from businesses in the wellness space like Headspace. If you’re into sneakers, GOAT also has a case study. And there’s some other brands in there, too, that are all very exciting. So I hope you all enjoy reading through the report. And it adds value to you and the way you think about customer engagement. And, Grad, I just want to say thanks for having me here.

Grad
Well, thank you, Jon. That was awesome. Those stats by the way, those NBA stats are amazing. Those are incredible numbers. I always wondered how that was gonna fall, right? Because that summer season just seemed a bit like risky. And it’s great to see they’re able to pull it off.

So that’s it for today. This was a fascinating look at customer engagement. Thanks for being on the leading edge of this and I really appreciate the report. I love it when businesses publish things like your Global Customer Engagement Review, because it’s really great to get that data out there. It helps bring the whole industry along and, I’ve read it, it’s a very, very thorough report. It’s got some fantastic stuff in it. So congrats on that. So Jon, we’re gonna say goodbye now.

Jon Hyman
Thanks so much Grad, I appreciate it.

Grad
Okay, and for the CXM Experience. I’m Grad Conn, CXO at Sprinklr. And today my guest was Jon Hyman, co-founder and CTO at Braze. And that’s all for today. I’ll see you next time.