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S3E02 – How Customer Support is Driving Digital Transformation – Vittorio Barraja, PHD Media

Duration 35:00

Guest Speaker

Vittorio Barraja

Vittorio Barraja

Senior Director for Digital & E-commerce, PHD Media

Industry

E-commerce

Vittorio Barraja is the Senior Director for Digital & E-commerce at PHD Media and has a track record for driving business success through delivering high-level marketing (digital and offline) solutions while leading corporate marketing strategy. In addition, Vittorio Barrja as an industry expert has worked to attain growth and long-term market sustainability through delivering significant revenue growth and quantifiable Marketing ROI, producing successful commercial strategies, building high-performing marketing teams, and improving brand positioning.

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Transcript

Jude Gerald Lopez

Hello everyone and welcome to The Twenty Minute Moat podcast. We have a very special guest with us today.

I’m joined by Vittorio Barraja, who is a senior director at one of the largest media houses, PHD. and has a very very wide experience working with a lot of very interesting travel and e-commerce brands.

Today we’re going to be talking a little bit about how conversational AI, automation and customer experience, all of these things are going to play in.

I can go on and on about Vittorio but I thought it would be better if he himself gives us a little intro on his role.

So, welcome to the show Vittorio, very very happy to have you.

Vittorio Barraja 

Thanks very much for the invitation.

It’s my pleasure to be here today with you.  And also, thanks for the nice introduction.

My name is Vittorio Barraja. I am from Italy. 

I started my journey in studying mathematics and business management. After that, I immediately initiated a career in the digital space.

Mostly around performance marketing and user acquisition, where I spent… an overall, 11 years now. It’s quite a long time actually. 

And, throughout the years, I’ve been working on multiple projects almost around the… actually, almost completely around a few e-commerce players. So, where online sales represent above 90% of the overall mix as well as some luxury.

And I recently joined the media space with PHD. As you said, part of… I would say, the second… perhaps the largest media network in the world.

Jude Gerald Lopez

Oh, wow!

That’s quite an expansive experience you have had.

I mean, and that’s also why I feel like, you know, this conversation is going to be really helpful and really insightful.

So let’s jump right into the conversation then.

Vittorio Barraja 

So, there’s a lot of talk around digital transformation in almost every industry.

[02:39] Jude Gerald Lopez

It’s no longer some kind of a choice that an organization has to, you know, have this option of – do I want to be digital first or do I want digital to be a priority?

It’s the same again for brands and for, again, customer support and experience.

So what’s behind this hype?

What’s the kind of solid work that goes when you talked about customer support or customer experience

And… brand’s engagement with their users and customers, and how does it fit into this notion?

This larger than life notion of digital transformation? How is it changing the world?

Vittorio Barraja 

So perhaps approach this question from two point of view.

The first one is about the actual digital transformation topic for the world. 

And then the second one is going to be about the customer support, in general, customer experience

And being in touch with clients, or whoever is the person or the people the business relates to.

In terms of digital transformation, it’s a little bit of both, I would say. There’s a huge hype around this topic.

And, not all of this hype is actually translating into something.

But for sure, let’s say, the science of digital transformation is becoming more and more real.

At the same time, pretty much any business in the world is now opening up to the professional figure of digital experts or digital transformation experts to be able to look at every single particular step or process into the organization.

You know, to digitalize it, or to digitalize the experience of the customers with that particular brand.

So, on this regard, they absolutely feel like, yes, the world is changing. It’s changing very fast.

However, if we look in terms of… is this something consolidated or is it something that it’s replicable all over the place in a similar way?

Which, by the end, defines what is the science or scientific method?

No, not yet, but we’re getting there, absolutely. In terms of customer experience or customer support, absolutely yes. 

This is happening at a super-fast pace. 

I would say, right now, the most interesting evolution we are seeing in the customer support side on the digital aspect in the digital space policies, it’s chatbots.

Chatbots or conversational AI. The market penetration is absolutely astonishing. 

If I well remember, around 2018, the overall chatbots penetration was about 5% worldwide. In 2019, went up to 15 or 20%. In 2020, 50% worldwide. 

Jude Gerald Lopez

Wow

Vittorio Barraja 

And, I mean, 18 billion dollars, It’s a little bit more than hype. Very very real.

Jude Gerald Lopez

Yeah, yeah. That’s what drives home the point that this is happening and it’s happening at a pace where everyone needs to, you know, catch up to.

It’s happening and, I think, in the last two years, there’s been a lot of catalysts.

[06:01] Jude Gerald Lopez

So, the pandemic is one that forced people to, you know, reimagine what digital transformation means for those individual brands. And I think customer support and customer experience, those touchpoints for a customer is is a make or break for a brand. You know, interact with this particular brand.

I think you’ve gone into a little bit of… you know, what I had next.

I wanted to, ask you about…How does customer support fit the bill when it comes to digital transformation?

Why is it so…Uh, why is it like the best place for a brand to showcase how digital-first or what their digital priorities are?

And, you know, how does customer support fit the bill when you are talking about digital transformation in the space itself?

Vittorio Barraja 

That’s a very interesting question.

I mean, of course, that’s the right answer would be-It depends by the specific business.

Jude Gerald Lopez

Yes, yes.

Vittorio Barraja 

However, let’s say, I believe there are some common trends that can be analyzed.

So in terms of digital transformation, or in terms of brands which are now much more present online. 

As you very much know, there is a huge focus into… uh… first off, being supportive to the… because of the pandemic.

Same time, there is also a very very very pronounced trend in having the necessity to be present on multiple platforms at the same time.

Jude Gerald Lopez

Absolutely

Vittorio Barraja 

So, if you look at what we consider digitalization up to five years ago. A classic digitalization was about, and I am saying this smiling because today it is absolutely old school.

Jude Gerald Lopez

Yeah.

Vittorio Barraja 

Getting a website. Adding your website was already Wow you are different.

I think a nice mobile website makes you like, even cooler.

Yeah, exactly. Like you’re, you’re taking the lead It’s good.

Nowadays, this is…I actually believe there is plenty of business that are testing of not having a website to start with.

The concept of social selling, social commerce, as well as being present on multiple platforms is absolutely mandatory.

The community management is often not done on the website, but down on social media.

Vittorio Barraja 

Where the amount of queries is just beyond what can be managed by humans, but also it’s very hard to imagine a such an amount of queries.

The necessity of responding to everyone in a consistent and current way all the time.

So, in this regard, you know, conversational AI makes a huge difference.

At the same time, you know, I very much believe in the rule, the twenty-eighty.

The vast majority of queries coming from people can be really, uh, grouped into uh… common topics.

And in this point, you know, if a company or if a conversational AI is trained in a proper way, can really support people without having to deploy other people. 

Making the old process much faster in the end. Besides customers, it’s very important.

[09:04] Jude Gerald Lopez

I think, you know, this sort of brings us to, you know, uh, a greater emphasis on, you know, smart digital solutions for a brand, can not only make the lives of, say, human agents a lot easier, but they can also prioritize.

And, you know, I wanted to sort of talk about this as well.Given that a lot of brands are digital first. And, you know you have nothing tangible to work with as a customer.

And you rely so much on the quality of that experience in order for you to make that decision. Should I come back to this brand or should I not?

I just wanted to get your thoughts on how do brands who work well with you know, conversational AI or automation?

How do they create that sense of community within you know, their customer base and that creates a lot of trust. 

It’s brilliant for the brand, but it’s also brilliant for the customer. Because he or she has gone out with an experience that is quite unique to that particular brand, and there is an incentive to come back.

Vittorio Barraja 

Um, once again I believe this question should be tackled from two different angles.

The first angle is how modern businesses tend to create the concept of community? 

Which is very relevant, very recent is changing quite a lot, especially in the last couple of years. 

The second point is how brands are actually building loyalty. Which is a different topic. 

And, more specifically, how can a brand operate through customer support in order to increase the retention of the client?

So, from a community perspective, this is actually a very recent topic.

I believe Morning Brew was recently talking about it. It was the CEO, Austin Rief,

Jude Gerald Lopez

Ok.

Vittorio Barraja 

Stating how, as a matter of fact… he expects in the next five years, the big marketing budget to shift from customer acquisition.

So the classic Facebook, I mean, any major brand in the world to actually move towards community building and management and content creation.

If we look at some extremely successful brands in terms of customer loyalty.

Uh, we might talk about not loyalty… sorry, community management, perhaps Porsché.

It’s a great example. Ok. Or Nike, or so, Nike and Adidas are great at this game.

What you are going to not see is the brand tries to associate some emotional feelings to the actual product.

When you purchase a Porsché or when you purchase a, I don’t know, a piece of sportswear. From Nike you’re not just buying an item. 

Because an item, you know, does not generate any kind of feeling in terms of community. 

You are fulfilling a dream, if you’re perhaps buying the car of your dreams, or you are joining a journey for fitness. 

Then it empowers you.

As a part of that, the people that join.

That join this kind of… let’s say, path together tend to connect on an emotional level. And this is how brands are actually building the community. They create these occasions for people to gather together. 

Whether it’s digital or in-person and let them share their passion with each other and this creates a bond between the customers and the brand.

It is basically a triangle, and it works really great.

Truth be told, It’s very powerful. Now, in terms of actually the customer… the loyalty.

The retention of the customer. This is a different ball game. And very much depends on customer support.

So I completely agree with you. In this case, I will move from, let’s say, physical products.

Which are a little bit, I won’t say on the easy side to digital products, perhaps travel.

OK, when you purchase digitally… something which is pretty much like a commodity. So it’s very hard to build the sense of community out of a commodity, in fact.

And, at this point, what really matters is how you get serviced? 

And that’s the real deal.  In this case, I strongly believe, and this is something, in my previous work, we discussed a lot, in terms of the management team.

How can we ensure a response rate of 100% and, as much as possible, a satisfaction rate? 

So, and this is a completely different ball game. It really depends a lot on what you are selling and the conditions.

Of course, during the pandemic, a lot of things happen. 

Jude Gerald Lopez

Yeah yeah

Vittorio Barraja 

So it’s very hard to, let’s say, create a common case about it. But in general, or if I can take a rule of thumb, I would say, maximizing the response rate is absolutely the first step towards generating retention.

And conversational AI is actually one of the best ways so far to ensure to maximize this KPI.

[14:24] Jude Gerald Lopez

Interesting. I mean, it’s quite interesting how you put it.

When there is no physical commodity, so much depends more on the overall experience that it has to be greater than the sum of the parts. And if you can add emotions to it, and if you can add a kind of aspiration to it.

Customers are going to retain that because at the end of the day. The commodity fades away eventually. It could be a service that you have already used. It could be a product that you have used. And you no longer… think of it as a new thing.

But, I think that emotional quotient and that aspirational angle really stick with the customer.

Now, we’re talking about, you know, brilliant and delightful customer, you know, experiences.

Do you think there is a mismatch between or do you think there is this issue with expectations from customers?

And, you know, as a brand, say for example, who works in travel.  Offers booking services or even a B2C brand fits, or an E-commerce brand that’s selling something.

Like, how do you deal with the expectations customers have? 

And from an operational point of view, what are the biggest challenges a brand faces in such a scenario, especially when it’s digital?

And there is this, you know, very, very heightened sense of expectation. How do you ensure that the quality of service every time is, you know, kind of… uniform and fulfilling?

Vittorio Barraja 

That’s a billion-dollar question at least. Probably more than a billion-dollar question.

Again, let’s split in two.

One perhaps you sell a physical product. Something that can be shipped.

Let’s make it easy. Commerce classic, kind of organization, or, in the second case, digital-only products. In this case, I’m going to use travel, because it’s a little bit more my cup of tea. 

In terms of the physical products, of course, uh, let’s say happy customers are complex to get you to know. 

Of course, the digital transformation does not only touch businesses but also people.

This means that the bar keeps rising, and it’s normal. That’s how it should be. Purchasing online is becoming easier and easier.

I mentioned before social commerce, it’s absolutely a big trend. It’s more than a trend, right now, it’s a reality.

So, in fact, You know, purchasing online is becoming super easy for everyone.

Also for people which are not particularly savvy. And now everything works.

Nonetheless, of course, as customers, they have rights. They have expectations. And these kind of expectations needs to be managed.

Usually, when someone purchases something online for the first time. They, let’s say, the first wall they hit, is the shipping time. That’s the 95% is the first question that people get. 

It’s completely normal.

In this regard, Of course, the CRM connected to conversational AI can be a huge help.

In this case, at least what has been my experience so far. Most of the people really appreciate having constant updates on the status of the shipping.This, of course, it’s very hard to be done by a human. Especially for businesses that do thousands of shippings a day, like Amazon.

Uh, however, it’s possible to completely automatize and be sure that people got not only updates over email or WhatsApp or messages on whatever feels comfortable to them to.

Get updates, but also to have someone who’s going to check in real-time where the parcel is?

And that’s like a huge huge difference. At the same time, the second wall, and this is especially a reality for, I would say, fashion/retail kind of brands, returning, return shipping.

Again, It’s a very similar story in terms of following up with the client in all the possible steps to be sure that someone feels comfortable in knowing if the purchase goes wrong or if the product doesn’t come as expected.

Or there is a change of heart for any reason.

There’s a… a consolidated process that assists the customer to actually be able to, you know, to return and get the money back. It just, you know, brings peace of mind to a lot of people.

On the digital side, especially on… on travel, this is completely different. On the digital side, most of the time, you know, you are purchasing either software or you are purchasing a digital good where there is no shipping time. 

Your purchase and your product immediately get activated.

Uh, in the case of travel, it is slightly different, of course, but there are quite a lot of rules in between how the money go from one supplier to another. It’s a very intricate kind of industry. Therefore, there are extremely tight rules that need to be fully understood. Most of the customers don’t. And honestly, I can’t blame them because, after so many years in travel, I have my doubts still.

Uh, so it’s really understandable. And, the classic, let’s say, last two years that we all lived, is about the refunds. Flight cancelled. Perhaps positive COVID case that blocks from travelling, or a country blocks. This kind of situation. In that case, unfortunately, conversational AI can only help this much.

The truth is these are all complex cases that require human beings to get in touch with multiple partners around the world.

To be sure that every single case gets chased. So, how can a brand actually prove to clients that they’re doing their best by really trying to enforce, expedite refunds?

Talk to the potential suppliers. Try to accommodate them. Try to assist them in any possible way.

And, of course, in this case, the conversational AI comes in assistance to take care of all the other queries in order to reduce the pressure on humans to really only focus on what requires a human.

Focus our attention to be done.

Jude Gerald Lopez

Yeah. That’s, uh, that’s quite interesting. And I think in the last, you know, couple of years. It’s also brought about the scalability issue. A lot of you know, what really was exposed during the last two years was how effectively can you scale up operations without really, you know, messing up the fundamentals?

I wanted to know…

Vittorio Barraja 

That’s very complex to do.

Jude Gerald Lopez

Yeah. And there there’s always this.

What do you call, there’s always this gap between scalability and highly customizable experiences.

So, for people who say that you know, we want to provide very, very personalized experiences, can you also provide it at scale?

And I hope… and I think conversational AI is that…uh… the element that is bridging that little problem that many businesses have to a certain extent.

Vittorio Barraja 

Absolutely. I mean… everyone, I guess everyone should read once in a lifetime, the book-delivering happiness, that speaks about Zappos.

It’s a…yeah, and that’s absolute, I would say, very relevant in this regard.

The final goal would be to have a sort of mixed model of AI plus human beings able to deliver such an experience to the customers.

Jude Gerald Lopez

Yes

Vittorio Barraja 

That’s very complicated to achieve, I would say.

[22:14] Jude Gerald Lopez

Yeah yeah, and I think that’s also like the essence of the whole digital transformation narrative that neither party is trying to replace each other.

It’s mostly how can man and machine work better together and prioritize to play to each other’s strengths.

Like I mean, for, you know, higher-order skills you always prefer a human agent to come into the picture and, you know, handle it. Uh, and again, large scale automated queries, if it can be taken off the human agent’s shoulder.

He can put him… he or she can put himself to better use. Uh, I wanted to sort of, you know, take a deep dive into another…coming into conversational AI.

And you know, chatbots, voice and uh… chat-based bots. You’ve been with a, you know, e-commerce and travel companies and, uh, you’ve had a very expensive overview of this particular space.

And again, speaking from the Dubai region. What are our customers still wary to talk to? Or when they are aware of the fact that they are speaking to a bot?

Uh, mostly a chatbot or a, now in this case, voice is also gaining traction, but are customers still wary to talk to them?

Or do they still come back and say, you know, I still want to speak to a human agent. Despite what the query is?

Vittorio Barraja 

Well, actually yes and no.

I would say people are very aware of speaking with the bot only.

When the bot sucks. Or when they get frustrated. So in that case, absolutely yes. Overall, uh…I believe I was reading… I was reading about this topic a few days ago. Where… I think it was insider, but don’t quote me because I might be wrong.

I think was sharing statistics where uh… around 40% of people express happiness in dealing with… uh…

Let’s say, bots before human beings. As it expedites the overall process. I believe that should be told. So yes, people definitely understand when they are speaking with the… with the bot.

And overall, I believe the real discriminator is… and people are smart.  So they understand when it happens.

If a brand is using bot to assist people or to slow them down in the process of reaching to human being. And that’s… it’s honestly night and day kind of difference. 

[24:42] Jude Gerald Lopez

Yes. It takes you back to the era when we had to, you know dial up, uh, IVR facility and, I mean, I from experience knew, you know, if what combinations would take me to a human agent. 

Because that would always be hidden at the end of, you know, whatever combinations that you have to go through to get to a particular person. But I think, uh, with automation. As long as queries are answered and resolutions are given, I think people are more than happy to, you know, they’re fine with it because they have gotten something out of it. 

And this is not just data being collected, you know, and they are not repeating themselves over and over again. OK, what is the query? What is wrong with this particular thing?

What should the metrics be for brands that are high on digital transformation, high on automation and, you know, automated processes in customer support and experience?

What should they be looking at to ensure that this works? It reflects customer sentiment and, you know, this is doing more good than harm.

Like what should they be looking at? What should they be tracking? What are your thoughts on that?

Vittorio Barraja 

Well, Warren Buffett, who will respond “The revenues”. Simple as that. Bottom line is the revenues.

Uh, no, but on a serious note. I would say of course, it will be important to understand the response rate of the combination of humans and bots.

At the same time, I’m a huge fan or believer in the concept of NPS. Applied to different statuses. Different stages of the funnel. So in general, keeping a pulse of …Uh, keeping a pulse on, uh..let’s say, uh…customer feelings, customer satisfaction, super important.

And then, for the brands, they want to go above and beyond what they just said, I believe sentiment analysis, is also great for that. 

Or, which basically means analyzing all the chats, whether verbal or written, clusterize the kind of comments and understand if they are polarizing in direction.

Are they… and trying to have, uh, in understanding on how the actual interaction besides the satisfaction goes. It’s very important. It’s super hard ’cause it really requires a lot of computational power. 

Jude Gerald Lopez

Yeah 

Vittorio Barraja 

But it’s very important.

[27:21] Jude Gerald Lopez

Do you see like any tech trends that are going to positively affect this particular space? I mean, yes, machine learning and automation.

All of that, but, apart from that, like what are the things that you would keep track of and do you think… and that you think, in turn affect customer support or customer experience? say in the next one year, two years?

Vittorio Barraja 

I would say. Quantum computation, most likely. The thing is, in terms of learning time frame… classic… from a classic machine, it takes really long time to be able to discern and understand the context of a human to be able to respond.

Quantum computation actually can assist in speeding up this process multiple thousands times.

Jude Gerald Lopez

Yeah

Vittorio Barraja 

And actually bringing a machine up to speed in terms of being able to truly understand the human being beyond. Let’s say, the obvious kind of scope.

Jude Gerald Lopez

I think this is also going to help a lot with the emotional intelligence of automated processes in terms of….

Vittorio Barraja 

So that’s a good question. Uh… I’ve been working on a project… sort of project about these topics quite some time ago. I guess it very much depends on what we mean by emotional intelligence.

You know, I would… I would split emotional intelligence from empathy.

So, what we want to achieve is to have a conversational AI. Which is capable of showing a degree of empathy towards a customer’s problem.

Perhaps… I don’t want to go into medical. Because even though medical is a big topic for chat… chatbot, I prefer to leave it on the side because. Complex topic 

And, very polarizing. Let’s take in the travel space.

You know, if someone is forced to cancel his Trip, perhaps…OK, of course, the person is going to be frustrated, at least. 

So, having a super cold, the kind of chats of a… Give ticket number. Give reference number. These are the conditions. OK, it’s not going to cut it. Maybe it’s going to get the job done, maybe.  But most likely, it’s a cold interaction with someone who’s already frustrated. 

Being able to… to show actually a degree of smart empathy, which is like… dear Jude, we are sorry to hear. So but not as an automatized message, but something crafted makes a difference.

Jude Gerald Lopez

And this will also make… I’m so sorry, but this will also make the life of the human agent, which it might end up reaching, a lot easier.

Because people take out all the anger and frustration that the bot creates on the person at the end of the day.

Vittorio Barraja 

That’s a very true topic. On the other hand, you know, it’s also true that this can’t be accelerated. As on the other side, the human beings. I don’t think there are any chatbots that passed the Turing test as far as I’m aware.

Maybe I’m wrong, but so people know when they’re speaking with the machine. For the ones that don’t know about it, the Turing test is when it’s performed the blind test to understand if a person understands to be interacting with the machine.

And the… the treaty is, if you are aware that you’re interacting with the machine, and perhaps you’re in a rush, or you know, you just want to query to be solved. Maybe you’re not in the mood to be empathized by a machine. That, by definition, does not feel anything. So, it’s a very subtle kind of line. 

Jude Gerald Lopez

Yeah, yeah

And, I think, each brand has to discover that particular line that works for them.

Technology can empower them to discover that, but it can’t really… uh… spoon feed and say Ok, this is what, you know, the line is for you.

[31:32] Jude Gerald Lopez

I, I mean I… this brilliant talking to you. I just have one more question you know, we can go on and on otherwise I’ll eat into your calendar. I have one more question.

There’s a lot of folks who are, you know, starting up and, you know, they’re also looking at, say…Uh, entering this particular digital… space and introducing automation.

What do you think a brand should look for when they are, sort of, getting into conversational AI and automating, you know, the customer experience part of things?

What should the best practices be?

Vittorio Barraja 

The first best practice, which is also the most important, is to not believe that all the customer… uh… all the customer problems, all their customer support problems are going be solved with the snap of their fingers.

That’s one of the main issues that I’ve seen happening multiple times over the years. And it creates a lot of problems.

This is not how it works. In fact, whenever businesses thinking about moving into conversational AI, they should be really mindful of the amount of time they need to spend on really analyzing. 

How the single conversations go to be able to address the machine out, to uh…

How to actually change, or how to build the actual experience between the machine and the person, which takes a long time. It’s not an easy task. It’s not a task that should be performed by anybody. And so, do not, let’s say, externalize the problem. Do not roll the barrel on a machine because machines are not ready for that.

Jude Gerald Lopez

Yeah

Vittorio Barraja 

And that’s the first one. The second best practice is to… as much as possible. 

Vittorio Barraja 

Try to deal with the partner, which has direct experience on the vertical the brand is dealing with, and that’s super important.

The reason for that is, the basic of conversational AI is the amount of training the AI had.

In a specific language, in a specific region, and in a specific business. The reason for that is by region, or let’s say language. There are different noises on how people interact with the… the ones in front of the sets, whether it’s a machine or it’s a human being.

Vittorio Barraja 

At the same time, the interactions are completely different based on the vertical we are dealing with. Therefore, in order to expedite the process. As much as possible, it’s a good idea to take advantage of the machines that have already been learned from other businesses.

And, this is something I would strongly recommend looking at.

Jude Gerald Lopez

This is brilliant, I think, uh, I think all our people should be taking notes, it’s very insightful to be very honest.

And uh, I’m so happy that I had this conversation with you, Vittorio.

Vittorio Barraja 

I appreciate it so much. Thank you