Rick Denton: 0:05

You're listening to CX Passport, the show about creating great customer experiences with a dash of travel talk. Each episode will talk with our guests about great cx, travel...And just like t e best journeys explore n w directions we never anticipate. I'm your host Rick Denton. I elieve the best meals are served outside and require a pa sport. Let's get going. coming to you today from the hometown of my youth, Austin, Texas, USA cx passport is eager to welcome today's guest, Dan Bill koski. When I think of Dan, I think of customer churn No, not creating churn. But helping b2b SaaS companies address customer churn, which is one of the key symptoms of customer experience gone awry. I've learned quite a bit from his approach to fixing this issue, but also just an overall approach to customer experience. I'm excited to learn more about that today. But I'm also super excited to hear about Dan's travels, including a one and a half year long trip. Now that required a passport. Dan, welcome to cx passport.

Dan Balcauski: 1:12

Thanks, Rick. It's good to be here.

Unknown: 1:15

Now, Dan, I know you're a seasoned traveler, and I do plan to ask you more about that later in the episode. First, though. I know you spent some time at Vietnam. I've not spent much time there. But when I have I have absolutely enjoyed the experience. What are some of the experiences you've had there?

Dan Balcauski: 1:31

Well, you know, Vietnam was one of those places I really wanted to go to I had spent about a month backpacking, Thailand and Cambodia right before it was actually there was during business school, and unfortunately didn't have the time to go to Vietnam and there's a pretty well tread backpacker loop that goes through all of that Southeast Asia area. And so when I finally made it there, I end up spending two months there did the the whole route from Hoshi Minh city all the way up to Hanoi and then up into the northern mountains. So ton of experiences there I think, you know, the backpacker trope is you either you start in Hoshi man or Hanoi you buy a motorbike for $200 and you sell it on the other side of your trip. So there's just these recurring motorbikes getting sold back and forth. So I land in hoochie Minh city, and I think I'm going to do this. And I got my motorcycle license before I left the state. So you know, like, I'm ready, guys. It's all good. And I'm in hochiminh City. And I don't know if there's not really any comparison than anywhere else I've traveled but the Vietnamese love their motorbikes. And their traffic in Ho Chi Minh City is, is terrifying. It is just this sea of motorbikes weaving around each other. crossing the street is requires a faith in a higher power. Because the there's no like left turn signals. So when you see like the lights turn green, all of these motorbikes just weave like into oncoming traffic coming the other direction. So I see this and I was like, okay, maybe I'm gonna rethink my plan here. Now, I did end up doing, I was like, Alright, well, I'm not gonna do this in the city, for sure. But I did end up doing some motorbiking. Specifically, me and a group of five other backpackers. We got bikes in Hanoi, and then went up into the northern mountains of Vietnam, near the border with China. And just did that for three weeks and just all day, every day, just riding through the mountains, and we'd stop and, you know, until when it got dark, and find some little hotel that, you know, in some place that I don't know if they'd ever seen an American before, right, but we just negotiate you know, for $8 for a hotel room for the night and then get up in the morning and go do it again. And just out in the middle of nowhere seeing just some of the most stunning scenery I've ever seen in the in the world. It was fantastic.

Unknown: 4:21

I'd love that freedom. I love that idea of well, especially the motorbike, right there's something romantic and just freeing about getting on a bike the wind blowing through and going wherever you decide to go that day. Now I've I've never done that I did the the backpacking trip in Europe, I wasn't quite as bold to do the Southeast Asian certainly did not do the motorcycle thing, but was was certainly enjoyed being able to be out there.

Dan Balcauski: 4:49

Yeah, I mean, you know, it took me a while to get to that level of adventurousness. So you know, don't be hard on yourself. I started with Europe as well and I highly recommend it if folks are looking To go in so logen Europe is a good soft landing. You know, there's there's a lot of, you know, familiar infrastructure and it's it's, it's, it's easier as well. And it definitely gave me the ability to get more adventurous as my, my travel journey went

Unknown: 5:20

on. Very nice. And you know, one of the things I think about is, when you're traveling, you get such an exposure to the culture, you get that depth, you get that full suite of understanding your the culture that you're in the people that you're around, and when you really take some time to kind of steep in there. And I think about that, too, from a customer experience perspective that you and I have talked about quite a bit about needing to drive this idea of a total Voice of the Customer programs, something that is the 360 degree view of the customer, yet I know companies really struggle with that view. And why is that view so important? And how do you go about getting that 360 view? Yeah, this

Dan Balcauski: 5:57

is a great question. And, you know, to certain extent, I always want to start with you, what's the business problem that you're trying to solve for any of these type of programs or ideas of, you know, getting customer feedback, establishing systems to establish like a 360 view of the customer. Because at the end of the day, you're never like, no company is going to be perfect until we're all plugged into the matrix. Or Ilan fits all of our customers with neuro links. And we can immediately measure surprise and delight and frustration in real time, you're always going to have gaps. And so perfection is the enemy of this process. Right? And so then it's what are the what are the problems the business is really facing? And where are, where's that manifesting in the gaps that you have about your customers experience. And so, you know, one of the joys I have in working with b2b SaaS companies is, you know, I started my career in, I've always been in software and technology. But back in the day, everything was on premise. And so when you have all your products on premise, the ability to get insight into your product, and how your customers are using that product is is limited. But now we are just, you know, have so much data coming off of these SaaS platforms in terms of how customers are using it. The problem that I mostly run into on the customer retention space is that the this product usage data is incredibly useful. However, it's it's limited. It's only it only gives you one perspective. And so immediately, the problem that a lot of clients run into is the fact that they have, for example, their subscription management system, which is the system of record for is that is the customer active, you know, What plans do they have? How much are they paying for those plans? completely separated from all the other systems? Are there, their marketing systems, the prosecution systems? And so that's usually where, you know, I first have people start say, Okay, well, like you really want to figure out how your product usage is influencing people maintaining their subscriptions, you got to link those two systems together, right. So that you can you can get that information. And so the other way I think about it is, you know, those systems are, you know, if you think about the, the different types of questions, who, what, who, why, what, where, when, how, those systems are always very good for everything except the why the why or remain elusive in those pure sort of IT systems. And that's the other area I really see companies struggle with is like, Hey, we have all this data, but we still don't know why customers buy or why they leave. Yeah. And and then you're you there, there are ways to patch that with different qualitative data. But you know, my preferences is really taking sort of a, like a jobs to be done type approach. And we can talk about that at length if you want. But that's really key to helping understand the why behind customers buy, because, you know, it's one thing to sort of look at this historical record and see the score, but you don't really understand you know, what was the the causes behind that, and that really limits your ability to take action, solve that problem? Well, I

Unknown: 9:38

definitely I would like to unpack that a little bit because I know that that's a difficult thing to get, right. I like to use customer verbatims or conversations or different things to unpack that a little bit. But how have you been able to help companies unpack that? Why really get at that why, and go beyond just what the score is and really as best as can be done? Get inside the customer's head and understand the motivation.

Dan Balcauski: 10:03

Yeah, 100% So, um, you know, I think at the core of jobs to be done is a theory that was developed. There's multiple contributing folks who have contributed to its development over time. But I think probably the most famous of which is Clayton Christensen of innovators dilemma, fame, okay, Harvard Harvard Business School Professor recently passed away, unfortunately, but just really did a fantastic job in popularizing this theory. And, you know, where he came from was, you know, he, he was very popular in developing the disruption theory, so that the innovators dilemma, and you know, how these existing businesses have small, more nimble competitors, who spring up out of nowhere with what looks like a feature set that is incomplete or not going to be sufficient, but end up toppling the incumbent players, and so, no, so he, he did a ton of research around that. And it's a really interesting theory, but it really doesn't tell you what to do to be that innovator to be that disrupter, it's a it's a sort of a lens, looking backwards into history. And like, Oh, this is what happened. These are how these competitors disrupted the incumbents. So with jobs to be done, you know, the, this theory finally sort of gives companies a way to really understand, you know, how to really get inside of what the problem is that customers are looking to solve. And it's called jobs to be done, because the way he describes it is, when customers buy a product, they're not actually buying a product, it's more that they're hiring that product, to do a job. So and then there are different contexts in which, you know, potentially, right, if I, if I'm sitting around, and I'm bored, I may hire Facebook, or I may hire Netflix, right. And at that point, Netflix and Facebook are competitors, competing alternatives, because what I'm really doing is trying to find something to resolve the emotional context that I'm in is a person of, of trying to solve my boredom. And so it really gives you a new lens on what are the competing alternatives? And then what are the different vectors of potential innovation that you can use to approach and solving problems for your customers? And so, so as I'm going through, you know, working with companies on customer retention issues, I will use this framework to really get at what is the what is the core context that they were in when they were trying to look for this solution? Right? Well, what was the beat because the context matters. There's a big I have a love hate relationship with personas. I don't know, I don't know, how you feel about them. Similarly, what jobs be done makes clear though, is it doesn't really matter. Like, who the person is, you're the job you're looking to hire or what solutions you will look at is actually contextual to the moment. And so, so he uses a pretty interesting example of hiring a milkshake. And okay, talks about you know, they they're, they're working with this, you know, national fast food chain trying to improve milkshakes, right, doing all this innovation around near do we make it thicker? Do we make it sweeter? Do you put chunks of berries in it, etc. And the the unlock was really when they started to discover that, hey, there's people buying like, large majorities milkshakes before nine o'clock in the morning, what's going on there? And he goes through the story. And, you know, the net result of it is, you know, people were like, Oh, I have a long boring commute. And I'm hiring this milkshake, because I know my stomach's gonna be rumbling. By the time I get to the office, I got a long boring commute. So this is sort of a little bit of entertainment. You know, I've tried to eat bananas or donuts while I'm driving. And that doesn't work very well for a whole set of reasons. And so in that case, you know, you think of a whole bunch of potential ways to innovate on the milkshake that is like oh, well, maybe, you know, maybe we have a you know, a swipe card machine at the front of the store, right. So people just running in in the morning commute. They don't have to talk to anyone that just you know, it's a it's a quick service, right. So you you think about other parts of the customer journey customer experience. Yeah, to solve the problem. That customer in that context. At the same time, he tells a story of like, Okay, well maybe I go in at five o'clock at night with my with my my kid. And my kid is asking me for a milkshake. So I buy a milkshake in that because I'm trying to become a better father or trying to, you know, not be guilty for all the other times I say no. And in that case, right, it's a very different, you know, as the same product, ostensibly, but a very different motivation and different very different way, you might think about potential ways to innovate. And so yeah. So in my work with companies, it's really trying to use that lens and really understand the why and the context context behind why they were searching for that problem.

Unknown: 15:43

Yeah. And that's so vital, right? That would that why that context, I like the idea of considering, well, even in your example, then it becomes if we take the boredom example, Netflix, Facebook, and a milkshake can all be competitors. I've seen and we were all enthralled, right with that recent container ship that was trapped in the Suez Canal. And I think you saw this there was a viral meme that was making the rounds of this tiny yellow wire in front of an excavator, scooping away dirt, while was just totally dwarfed by that container ship. Now I know you've written about the traps that a company can fall into when addressing their retention and their customer success challenges. And the way you wrote about that kind of reminded me of that tiny excavator, how do companies fall into those traps? And how do they get out of them?

Dan Balcauski: 16:31

Oh, man, what a bad day, if you're that pilot, or captain of that ship? Oh, yeah, right. Having the entire world trade system be mad at you is not a good way to wake up in the morning, I have a lot of respect for the customer success movement, the customer success movement is predicated on the fact that customer retention has now become so important because this to have a viable subscription business, you need to have retained customers, because over time, the the revenue coming from your existing customers is going to be the majority of your revenue after a certain point, and it's never going back the other direction compared to new business. And so there really is a role in the need for customer success, where I see the trap. You know, CEOs are bored, the boards of directors have a retention problem. And they have a almost knee jerk reaction of Oh, we're going to hire a customer success leader, they're going to bring in a customer service team problem solves their their OKR, their KPI will be your net dollar retention or gross retention. And, you know, they own the retention in the company. And I just see that as a huge mistake. Conway's Law is essentially your your customers experience your org chart. And so, you know, it's difficult when you decide to resolve customer experience or customer retention problems, by just burying at one place in your org chart. You know, because it's not your the customers experiencing the entire lifecycle, they touch your marketing, they touch your sales team, they interact with the product, they interact with customer support. And now to say, Oh, this one department is going to be responsible for absolving the sins of all of the other departments. And as you know, that's a little bit, you know, hyperbolic in that, you know, all the all of the departments are doing what they were tasked to do, but it's the alignment between them, that becomes becomes a problem. And often, I see Customer Success leaders who are, you know, tasked with moving this number, but then sort of put in position where they, you know, it's it's impossible to move from the position they've been put in. And so there's, there's many factors that go into that. I think one is, I just bear as we mentioned before, it's it's very difficult or not, it's not impossible, but it takes a sustained effort to really understand what's going wrong. And especially with the type of you know, I usually interact with high volume businesses, and in those cases, you really can't scale. A, you know, a customer success function, by definition is trying to solve the problem with human touch. And it's, you know, although there are Customer Success platforms that allow, you know, you can lever up right, it's much more efficient for a salesperson who's using a CRM, right, it doesn't have to write everything from scratch every single time they can, they can handle a lot more leads per day, these Customer Success platforms like gainsight or to tango turn zero. Can Can lever up these Customer Success managers so they can handle you know, more more caseload effectively. But you know, if you have 1000 10,000 customers, there's just no way you can touch every single one of those customers, with with humans and then To be able to at scale figure out, you know, what are the biggest levers? What is going on? That is very difficult for, you know, one department to tackle because, you know, as we were talking about before, you know, potentially you have these different siloed customer systems. Maybe that leader doesn't have either access or knowledge of all the ins and outs of how all those work or what their goals are. And, you know, it's difficult as well, when you're also just trying to be an operator, right to go and do this in depth research. So then, you know, there's just other general, once you get into the data, there's, there's other things that just trip you up. And so there's things like timing, timing is very important when you're thinking about customer experience and retention. I don't know the last time you cancel the subscription. My my guess is, this is how it goes down for most people is you stop using something. And then a few months later, you get your next bill. And then you're like, Oh, wait, like, What is this thing? Oh, yeah, like, I'm not using it anymore. And so there's this disconnect between your, you know, when you made the decision, and when you actually cancel. And so you're part of that that trap that I see companies jump into is they're like, Oh, well, it was customer success. And then we'll also have like a retention team. And so and these people have, I mean, I just have massive respect for them. Because they have the honestly seems like one of the worst jobs in the world is just trying to convince angry people who don't want to deal with your company anymore to stay with your company. Right. And so I just I have all their spectrum in the world, I feel like they're being put in a bad position, because by that point, you're really playing from behind. And the ability, you know, if a customer was never successful onboarding, or decided months before that, you know, they weren't getting value out of your product, you like wet the moment of cancellation coming and saying, hey, like, No, you know, whatever, we'll give you a discount will stay with us. It's just it's a very difficult position for them to be playing in. And so I think it just sets up a lot of the organization for for disappointment.

Unknown: 22:13

Yeah. And I think that that gets back. That's exactly that trigger that made me think of that small little excavator, which Yeah, eventually, right, the the container ship was freed. But there were so many other pieces that went into how that container ship got stuck. There are so many peas that before the repair, right, so just like you said, the relationship with the customer got stuck in those first 90 days or in that onboarding. And then this poor retention team has to try to unstuck the customer using the tiny front end excavator. And I think to what I like is how you're talking about the root cause, right? You can't just go out and hire a team but rather, it's it's a universal experience across the entire company, entire brand. And being able to look across those silos is how you'll unpack that root cause and be able to really improve not just the customer success, but the overall customer experience as well.

Dan Balcauski: 23:07

Yeah, and and and I think, you know, one thing when it comes to retention is there's a there's a good quote, I think it was Ben Horowitz of Andreessen Horowitz who said he's like there's no silver bullets all we have for this as a lot of lead bullets.

Unknown: 23:25

Little change of pace here join me in the first class lounge we'll move quickly here and hopefully have some fun, Dream travel location from your past. Oh,

Dan Balcauski: 23:36

I love Thailand. Thailand is just it's got something for everyone. It's got beautiful nature it's got amazingly friendly people it's super affordable some of the most beautiful beaches ever seen temples just just amazing all around.

Rick Denton: 23:52

Dream travel location you've not been to yet.

Dan Balcauski: 23:57

I would say Nepal. I didn't get a chance to do it on my last go round but it gives me a reason to get back on the road.

Unknown: 24:02

Very nice. But that backpack on and head over to Nepal What is your favorite thing to eat?

Dan Balcauski: 24:10

Now that we got Vietnam and Southeast Asia on the on the mind, I would say the bond me's in Ho Chi Minh City?

Unknown: 24:17

Yes, yes. Well, on the other side, what is the thing your parents forced you to eat but you hate it as a kid?

Dan Balcauski: 24:25

I feel very lucky. My parents were never that type where they they forced me to eat a bunch of stuff I didn't like also I wasn't I don't think I was that picky eater. If I had to say one thing, and this usually surprises people is lasagna. Oh my gosh, what? I know. I know. I don't know Tanya.

Unknown: 24:41

So interestingly enough, my daughter is in the same boat as you and I it makes me wonder how are you human? Because to me, lasagna is one of the greatest things in the world. But we're an accepting group here. We're very tolerant and we appreciate all cultures and views so fine. If you're anti lasagna, we'll we'll let you continue. What is one Travel item you will not leave home without

Dan Balcauski: 25:02

easy smartphone. It's almost it's like cheating, honestly, at this point, Google Translate Duolingo you know, maps, it's just it makes it too easy, honestly.

Unknown: 25:21

So one and a half years of travel, I am absolutely fascinated by that. Tell me, how did you decide to head out for that long? And what was it? Like, I would love to hear some of the great experiences or even some of the not so great experiences.

Dan Balcauski: 25:35

Um, yeah, so that's, it could be a long story. So I'll try to give you the short version. Um, my, you, I had some really good friends who had gone on multi year trips. And that combined with Tim Ferriss four hour workweek, was this lingering inspiration to go do a trip like this, and then I got, I got, I built up to it over time, where I had done, you know, three week trip a month and a half, three months. And then finally, I was like, Alright, I wouldn't want to do this big multi year trip, if I never do it, it's never gonna get easier time is now corporate dm you never know when a global pandemic is going to ruin your ability to go travel the world. So and then, you know, man, so many good experiences, I would say, you're probably one of the most transformational I did was I did, I completed 210 day meditation retreats, while I was on my travels. And those were, those were journeys of the, of the internal variety. Right, and but, you know, to a certain extent, I was I looked at, I did my first one before I actually left, so right before I left, and I just viewed it as a down payment on the rest of my trip, meaning, you know, I didn't want to be in some exotic location, not able to appreciate the present, always thinking about like, okay, where am I going next? Okay, this is interesting, where am I going next? And so, I think that really helped me establish, being extremely present, being able to savor you know, that entire year and a half. And then I think the probably the other common question I get is, is what was the most surprising place? I would say the the west coast of Norway was just unbelievable. So, yeah, I rented a car in Sweden. Hi, good tip there, rent a car in Sweden, not Norway, because Norway is incredibly expensive for everything. And then drove it over to the west coast and just did like three weeks up the coast. Driving through the fjords, it was just spectacular.

Unknown: 27:58

I know that I'm sitting here as a host, just kind of closing my eyes visualizing what it would be like to have that kind of slow pace of travel. And I'm sure listeners are doing the same thing. Or maybe they're over all tabbing and googling, okay, west coast of Norway, how can I get there? I do think it is amazing how travel shapes us, and how travel that even I take my travel experiences, and it shapes who I am as a person outside of work, who I am as a person inside of work, and just who I am as a human. And I you and I have talked about going back to Vietnam, some of the experiences you've had there, even in Hanoi, and how that drove you to think about overall customer experience. And so kind of combining those worlds when you've experienced this in Hanoi or anywhere in your travels. How do you when you're working with your clients take those travel experiences to influence your perspective with your clients?

Dan Balcauski: 28:49

Yeah, that's a great question. So, you know, I think, you know, the best takeaway I have from that, in terms of what I apply to clients is, in terms of myself traveling, right, I think people have a lot of assumptions about what it takes to be a traveler or like to go do a trip like I did. And, and I, I met so many different types of people, right? People will assume like, Oh, well, you need a certain amount of money, or Oh, I can't travel if I have children, or you know, I can't travel if I'm a certain age. And those are absolutely not true and how it relates to customer experiences. I think people make a lot of assumptions about their customer and they have one kind of customer and that customer is, you know, XYZ demographic demographic and has these needs. And it's just not it's just not true. I met traveling families. I met people who I met kids straight out of college or 18 year olds who are you know, volunteering across the world at different places. You know, hitchhiking rides. You know, I met traveling people in their in their 60s. Staying in hostels. So, really, you know, there's all varieties of people. And it also applies to your customers, I think people that are companies that don't, you know, do the work to appreciate that and really, you know, segment and understand their, the different people in their customer base are doing themselves a disservice and losing out on a whole lot of opportunity.

Unknown: 30:21

I too, have found that travel has opened my mind to people to cultures to differences, and recognize that there's a wide spectrum of humanity out there and being able to then take that into a customer experience conversation. So even back to the persona conversation we were having earlier, that well, it can be important to understand general segments, the reality is your customer base is a much more diverse set of individuals and a diverse set of experiences, then you may realize as a company and helping them understand that, Dan, it has been brilliant talking with you, I, I would love to spend more time talking about that year and a half trip and maybe maybe you can come back on and talk a little bit more about some of the other places you've been. But I've loved that you've been able to show us that, you know, a milkshake actually can be a competing item to Netflix and Facebook. I love the idea of focusing on the root cause of customer success challenges, and how that really is something you have to figure out at scale. And then thank you for taking us in a area where we need to be reminded that it's a big wide world out there with a lot of diversity and a lot of spectrum of experiences, and how that applies into a company's approach towards customer experience. I thank you so much for giving your time and I really thank you for opening my mind in today's conversation. I really enjoyed it, Dan, thank you.

Dan Balcauski: 31:47

Thank you. I appreciate it is great to be here.

Unknown: 31:53

Thanks for joining us this week on CX Passport. Make sure to visit our website cx assport.com where you can hit ubscribe so you'll never miss a how. While you're at it, you an check out the rest of the EX CX website. If you're looking t get real about customer e perience. EX4CX is avai able to help you increase reve ue by starting to listen to your customers and create great expe iences for every customer ever time. Thanks for listening to c passport and be sure to tune in for our next episode. Unti next time, I'm Rick Denton and believe the best meals are serv d outside and require a pass ort.