Building customer loyalty is every company's first challenge. Charlie Cole, CEO of FTD, a 100-year-old retail and ecommerce brand, explains how to create customer loyalty in 2022.
CEO Perspective: How to Build Customer and Brand Loyalty
Chief Executive Officer
Building customer and brand loyalty is every company's first challenge. This holds true especially in the highly competitive world of e-commerce as well as in brick-and-mortar retail. Charlie Cole, CEO of FTD, a 110-year-old retail and ecommerce brand, explains how he builds customer trust and brand loyalty in his organization.
The conversation goes beyond customer service to focus on core aspects of business transformation and digital customer experience, looking across all touch points of the customer journey.
The discussion includes these topics:
- About FTD
- On customer loyalty and customer experience
- On the components of customer experience
- On the building blocks of customer loyalty
- On the technology elements and martech stack used to create customer loyalty
- On how to understand the customer
- On the future of technology for creating customer loyalty
- On how to build customer trust that leads to loyalty
- On advice for creating customer loyalty and brand loyalty
Charlie Cole is Chief Executive Office of FTD, the modern florist collective, where he oversees people and operations. Before joining FTD, Charlie served as the first Global Chief eCommerce Officer for Samsonite while simultaneously serving as Chief Digital Officer for Tumi.
Charlie Cole: What makes a great experience? It's a thousand things. But ultimately, it's the trust that those thousand things are made right every single time. And so, I think trust is a perfect word as what really adds up to loyalty.
It's about how you own your mistakes. It is probably the most important aspect of building trust, and it's true with every partner across the customer experience.
Michael Krigsman: That's Charlie Cole, CEO of one of the largest florist retailers and distributors in the world, FTD.
Charlie Cole: We've been around for, actually, 111 years. FTD functions as a two-sided marketplace between consumers and predominantly florists. We fulfill flowers, plants, gifts around the United States and have international relationships as well where we can wire orders around the world.
Our job is really to become the enablement layer for (in a lot of ways, Michael) the most important moments of your life. That might sound a little bit self-aggrandizing, it might sound a little bit self-important, but it's really true.
One of the things you learn when you're in the gifting space, so to speak, is the stakes will never be higher in a consumer journey because it might be the birth of your son, it might be the marriage of your daughter, or it might be the mourning of a lost one. We always are that e-commerce marketplace experience that allows you to acknowledge those moments with the appropriate touch. That's what we do best, and it makes our job rewarding and also, in some ways, somewhat stressful because you just don't want to mess those things up.
Michael Krigsman: You're involved with, as you said, the most important moments of people's lives. I guess that creates a little bit of pressure for you.
Charlie Cole: To me, it became abundantly clear early on because all it takes is to receive one letter from a customer that we let down. Usually, it's, "Hey, you missed this remarkably important event."
It's the happiest and saddest moments of your whole life, and we are meant to serve a very specific purpose in those moments. We take that pressure remarkably seriously.
A lot of people talk about customer-centricity. But in our case, it's not just the person sending the gift. It's also the person receiving it.
You take all of that pressure that I just alluded to, all of the emotions involved, and then you actually have two different people that you have to make sure you're matching their expectations. It's a high-pressure job, for sure, but it's the best feeling on earth when you do it right.
Michael Krigsman: When you are involved in the middle of the most important moments of people's lives, frankly, that you don't screw it up.
Charlie Cole: It's actually why I generally think of us as a technology company. I was hesitant to say that, Michael, when I started, just because I didn't really understand that.
I mean I'm not embarrassed to say that. When you start a new job, you know certain things, you don't know other things.
I was asked at a very early town hall at FTD, "Do you consider us a technology company?" I actually kind of dodged the question. I didn't say it directly, and it was just because I still had a good amount of naivety for being so new at the institution.
What I've learned is we absolutely are a technology company and it's because that is the key to doing what you just said, to make sure we don't screw up, because if you think about an order flow, it's a person comes on the website. The person buys something on the website. That order then goes through routing logic to make sure it lands with a florist that can fulfill the order on the time schedule that you demand.
That last part, Michael, is so important because it's not like sending a piece of luggage in the mail where if it sits on your porch for a little while, you're fine. Right? These are remarkably custom and fragile things that we make on a daily basis, and we have to get the timing right, we have to get the date right, and we have to get the address right.
There are so many different places you can mess up, and the technological advancements that we've had to do to make sure we decrease any refunds or returns is really the key. We invest tens of millions of dollars in tech a year, Michael, specifically to make sure we don't screw up, or at least screw up as little as possible.
On customer loyalty and customer experience
Michael Krigsman: Now we're talking today about customer loyalty. Where does that piece fit in? I have to assume that orchestrating all of these pieces, all of these suppliers, the supply chain, the delivery, all of it is what ultimately leads to customer loyalty. Tell us about customer loyalty.
Charlie Cole: The best way to ensure customer loyalty is a great, consistent experience. For us, it's really interesting to think about a buyer's journey, to start to think about how you drive loyalty.
I sort of think of two types of transactions: the ones you see coming and the ones you don't. If it's your birthday, an anniversary, Valentine's Day, Mother's Day, you can plan for those things, and you know what you want to do. There's a clear date in mind.
For us, a lot of our customer journeys start over there, but there are also the ones for which you don’t plan. Unfortunately, deaths and funerals are a big part of that.
Get well soon. You kind of have dinner with someone and you see they're a little down, right? Those are not things you saw coming. They're much more contemporaneous.
For us, loyalty is about winning both those events. If you think about it in that mindset, the customer journey is very different where, if you're shopping for a birthday, it's a little bit more of a concerted purchase, and you want to show more merchandise and not less. You want various kinds of levels versus, "Oh, my gosh! I need to send flowers for a funeral." That's a much different buying journey.
I think it's our job to really understand both of those customer journeys and be able to deliver an expected experience. I know that sounds a little weird, but what you don't want are surprises. You want to be consistent.
I think about some of the places that I have a lot of loyalty for. It's because I know I will always get a good steak. I know I will always get a good cup of coffee.
For us, it's about everything from you will always get a really fast website that's easy to use and intuitive, you will always get easy to understand delivery instructions, and to your point before, Michael, we deliver. We have to deliver what we said we would, when we said we would, with the quality.
That to me is what loyalty is all about. If you're not executing and delighting your customers, the customers aren't going to be loyal. It sounds like a simple point of view, but I think it's the right one.
Michael Krigsman: You use the term "experience" a couple of times just now. Is customer loyalty a function of good customer experience or is there something more to it than that?
Charlie Cole: You and I could sit here and come up with the best loyalty plan, right? You get points, you get cashback, you get free hotel nights, you get vacations, whatever it may be.
It wouldn't matter, Michael, if we weren't doing our job. The moment you sign up for a loyalty plan and you order flowers and they don't show up, they show up dead, or it's not what you ordered, you're not going to be loyal.
I think that customer experience is far more important than any plan. Some of the biggest brands in the world don't have a "loyalty plan." Their loyalty is driven predominately by their product. I think that's how we want to start as well.
I believe that statistically – meaning you look at net promoter score, you look at refund rates – we have the best customer experience in the entire industry. That's going to be what drives loyalty more than anything else. It's promise and deliver. That's number one.
On the components of customer experience
Michael Krigsman: What then, for you, are the components of customer experience? You've kind of alluded to it. How do you accomplish the magic? Again, we're kind of talking around the same things, but drill down a little bit for us into this.
Charlie Cole: It starts with your website experience. This is where you really have to appreciate the nitty-gritty, Michael. If you think about it from a user experience perspective, when someone presses a button, does it do what they expected?
This is the hard part about great designers. I think great designers understand one thing much better than not-so-great designers, which is, you're not designing for yourself.
Once designers can get out of that mentality, what you're doing is you're designing a predictable experience. You want most of the things on your website – most, not all. Most of the things should not be a surprise.
When you click a button, it should do something. You shouldn't just sit there.
We've all had that Web experience. We're like, "Oh, is that a link?" You sit there, and you do what's called the rage click. You click over and over and over again.
The experience starts there. You have to start with just a very user-centric experience in mind.
Then once you get that right – and, by the way, there's a ton in there, right?
- How are you going to decide how your navigation works?
- Are you going to have breadcrumbs so people can go back and forth?
- What's going to happen when someone hits the back button?
- What's going to happen when someone forgets to put www in front of the browser name?
- Did you set up your 404 redirects?
There's so much tech in there, so I don't mean to minimize, like, "Well, once you get that done." I don't mean to make it sound easy. It ain't easy.
Once you get that right, the next thing that matters is what are you selling. Is the stuff on your website the right stuff?
If you came to ftd.com, and you clicked on the button that said, "Shop Birthday Flowers," and we showed you one thing, that's not a great experience. But I would also argue, if we showed you 10,000 things, that's not a great experience either.
It's about really merchandising your site in a way that allows for a customer to feel like they have options but are not also overloaded. Certain sites function in that kind of overloaded way and do it quite well, but especially with gifting, it's about that kind of guided journey, making sure our merchandise inspires you, and you feel like you've really given something special because that's what it's all about.
That's what gifting is all about. I want to give you something that makes you feel really special. And myself, as the gift giver, I was like, "I did my job. They had an amazing experience."
Once you get those two things right, I think one of the most underrated aspects of experience today, Michael, is the delivery. Delivery is so darn important in this world of e-commerce that we live in.
I think we both agree, it gets screwed up a lot. I'm including a lot in delivery. I would include, how is the thing packaged? How is it presented?
I go, and I do deliveries for one of our local florists in Seattle. It's called Neilsen Florist. Her name is Lisa.
Hi, Lisa. If you watch this, she's the best.
When I do deliveries for her, one of her first instructions to me was, "When you have it in your car, make sure the vase is in a box." Then it doesn't jostle and doesn't move around.
I just think that's such a nice little detail about making sure that, when we get there, you take the vase out of the box and you give it to someone. But that little detail about how something is delivered and how you work in transit is so bloody important.
To me, you start with the Web experience. You merchandise it properly. Then you nail the last mile.
The one thing I would say that's consistent, all of that is messaging. What is the messaging that you give someone when they're on the website? What do you give, some of the messaging between purchase and delivery?
That's an important time, by the way, that cognitive dissonance that you get. We've added to the cart. We bought it. What happens for those five days, seven days between the purchase?
You said, "I'm going to need to send flowers for Mother's Day." People are buying for Mother's Day right now, like T-minus 60 days.
How do you make sure the customer feels like, "Okay, they didn't forget about me"? There's just that natural feeling.
Then arguably the most important, what do you do after it's been delivered? Like, "Hey, we did our job." Do you send a picture?
The thing that's cool about flowers is, nine times out of ten, the person that receives them, what are they going to do? Shoot it with their cell phone and text it to you. So, we get a little bit of support there from our customers.
To me, you have to be paying attention at a remarkably minute level of detail at every single one of those steps. The coalescence of all of them is what I encapsulate as a good experience.
Here's the rub, Michael. You screw any one of them up, it's all kaput. It doesn't matter if you hit 99 out of 100. If you mess one up, the customer is going to have a pretty subpar experience.
On the building blocks of customer loyalty
Michael Krigsman: Building loyalty then is the expression of all of these steps without excluding anything from the entire customer journey (from the beginning all the way out to the end).
Charlie Cole: And I would say it's a mix of two things. This is going to sound a little weird, but just indulge me for a second. I think it's a mix of matching their expectations in certain areas and exceeding and surprising them in other areas.
It's interesting, Michael. One of the more ubiquitous phrases you hear when people talk about customer experience, they use the phrase "surprise and delight." Now, that is certainly a part of a good experience, but you don't want to surprise a customer everywhere.
Go back to my point before. A Web navigation, you don't want people to be like, "Oh, that's surprising. I didn't know it was going to work that way." You just want it to work.
It's just like, you know what I never want to be surprised by? A stoplight. I want a stoplight to work the way it's supposed to work. I never want it to surprise me. The way it delights me is being predictable.
There are certain aspects of an experience that you should be aiming for commodification. You should be aiming for consistent. You shouldn't be aiming for surprise and delight.
But then there are other areas where it's just like, "Oh, I didn't see that coming. This packaging is super unique. That was delightful."
"I didn't expect that kind of extra message," where your item is out for delivery. Your item has now been delivered, like, "Oh, that extra message was a surprise. I love that. That was delightful."
I think the way you drive customer loyalty is this strange amalgamation of being really predictable and then being completely surprising at areas that are just these moments, these moments in time that give your brand a chance to set apart. It's how you balance those two things, I think, are what can be the ultimate driver of customer loyalty.
Michael Krigsman: We have some questions coming in from Twitter and LinkedIn. Why don't we jump to a few of those?
Arsalan Khan is a regular listener. He asks great questions on Twitter. Thank you. He says, "There seems to be a link between customer experience and customer loyalty. Is there a link between customer loyalty and employee loyalty?"
Charlie Cole: I think yes. My snap reaction is yes, and here's why I would say yes.
The words loyalty and employee kind of chase me a little bit because it almost sounds like it's this weird ownership relationship. But I want to work with employees forever. It's idealistic. It's never going to happen. People change jobs. People get amazing jobs, and then they get promoted. In some ways, that's the biggest compliment.
If employees are loyal to the brand, they're going to take more pride in all of those details that I just described.
We've all done a job that we didn't really feel like doing: raking the leaves, mowing the lawn, doing the dishes. When you have that sort of regretful feeling like, "Ugh. I don't want to be doing this," I promise you; you don't take as much pride in your work.
To me, the link of employee loyalty and customer loyalty is this idea of having employees that take remarkable pride in extreme detail orientation, and I would guess there is that kind of correlation. The most loyal employees are the people that are going to be the most attentive to those details that make a great experience.
Michael Krigsman: You know, as I have interviewed many CEOs, one of the things that really sticks in my mind is (a while ago) I was interviewing (on CXOTalk) Aneel Bhursri. He's the CEO of Workday. He made the comment that you have to put employees first because everything else, all the customer experiences, everything else comes from your employees. It's really just what you said. If you treat your employees well and you develop loyalty among your employees, of course, that's going to translate back to your customers. That seems logical.
Charlie Cole: I 100% agree with that statement, and I actually think the best way you can put your employees first is just being so transparent with them.
I think we've all been in situations, Michael, where you feel like you're not getting the whole story or someone does a presentation but they leave out a massive detail.
I think one of the things I always try to do – and try is the keyword there, right? You're never going to be perfect. I never want our employees to be surprised.
If we're doing well, I want them to know it. If we had a rough day, I want them to know it. If we executed at an extremely high level, I want them to know it.
Valentine's Day last year (2021), it's the single worst experience I've had working in e-commerce because—if you remember it, Michael—it was the worst weather in the history of Valentine's Day. 60-70% of the country was under winter weather warnings. Louisville shut down for UPS. Memphis shut down for FedEx. Texas froze solid. There was a four-day power outage.
You know what that means for us? A lot of screwed-up orders. You just sit there, and you feel helpless because you know there are flowers sitting on the back of a truck frozen in Memphis that are never going to get to their recipient.
You have one of two options there (when you talk to your employees). You can be shiny, happy people and tell them, "Oh, wasn't this a great Valentine's Day?" Or you can say, "Hey, guys. We disappointed a lot of people today. It's just about how we do our best to fix it."
To me, that's how you put your employees first, that kind of just ruthless honesty. If you maintain that honesty and pragmatism, I think you'll have an employee-first mentality.
On the technology elements and martech stack used to create customer loyalty
Michael Krigsman: We have another question coming this time from LinkedIn. This is from Alex Forbes. He asks, "Is there a particular marketing technology or martech stack that contributes to FTD's customer loyalty success? Is it a digital experience platform, a customer data platform? How do you give customers a personalized experience?" Share with us any thoughts on the technology you use to make this magic happen.
Charlie Cole: I go back to how I describe the experience and all of those touchpoints. The first one that leaps to mind is one of our partners named Nacelle. The CEO is a guy named Brian Anderson. He's an awesome guy.
You know what Nacelle does, Michael? It makes our website really damn fast. It's just so fast on mobile.
I was actually showing somebody last night at a restaurant, and I was playing on our site. I'd never met her before. She openly remarked, "Wow! Your website is fast."
That's Nacelle. They are such a key enablement layer to experience because, is there anything worse than a slow website when you're trying to shop online? It's debilitating. It just ruins your experience.
Never underestimate speed. Never. Nacelle is someone that we use for that specifically for our headless commerce platform.
Then the other one, it's a name that's very household. You know what Shopify does extremely well? Their cart and their checkout experience is just delightful, the sign-in with Shopify, the Shop Pay, the Shop App.
We're very, very much partners with Shopify. I think sometimes there's this commodification of e-commerce platforms. Look. I'd say 90-95% of what e-commerce platforms do is sort of commodified like item masters, filters, and that kind of stuff.
I just think Shopify's cart is best in class. I think what they do for us to make that checkout experience just delightful is so important.
I'm going to give ourselves some credit here. Matt Powell is our CTO. He has worked with his team, and I could name people all day: Alexander Baron, David Thornley, Shivam Patel.
These folks have actually made a custom platform that works from order to delivery specifically for our use case. In a lot of ways, Michael, that's our secret sauce.
You shop with FTD because this technology platform is the best in class at order routing, communication with the florists, communication with the customer, delivery. I think it's the area that we've made a ton of progress on in the last few years, and it's really a testament to our entire technology team.
I think that that's where it's not a martech. It's not a SaaS solution. It's something that's custom to us.
But I would challenge everybody listening to your show. Ask yourself where you need to be custom. Ask yourself where you need to build something unique to your business as opposed to an off-the-rack SaaS solution.
Off-the-rack SaaS solutions are usually a great solution. I am not going to build an ESP. I'm not going to build an email service provider. I'm just going to use something. That's not something that I think I'm going to differentiate on. But I might build custom behavioral language that sends email in an automated way that's custom to us because our journey is so different.
I would challenge everybody listening to this. Where is SaaS good enough, and where do you need to invest in custom solutions? In our case, I think the best part of our experiential platform is the stuff we've built ourselves specifically around order routing and the technology there.
Michael Krigsman: It's becoming a little bit clearer why you describe yourselves as a technology company or, at the very least, why you say that technology is at the heart (for you) of creating customer loyalty. But in a way, it's a little bit unintuitive because, from the outside, one might think, "Well, the way to create customer loyalty in the florist business is to find really nice flowers."
Charlie Cole: They're a commodity. You know what I mean?
We do find the best growers in the space. I always mention my friend Juan Carlos Hannaford. He's a remarkable growing partner out of Columbia and Ecuador.
I think, from there, Michael, you know what the best FTD experience is? There's got to be a better way to say this, but it's when we're invisible because if I'm sending you flowers, probably the only way you don't say, "Thank you, Charlie," is if FTD screws up.
If you receive flowers, you look at them, you read the card, you say, "Gosh, that was thoughtful from Charlie," and you never even say the letters FTD, that's when we did our job perfectly. In order to do that, there are so many little nooks and crannies that are enabled by technology.
It's sort of odd to say that the best experience is when a brand is invisible, but I think, in our case, it's true because I want you to get the credit if you sent me flowers. That's, I think, what gift-giving is all about. It's not about me taking credit for your thoughtfulness.
On how to understand the customer
Michael Krigsman: You are enabling a very smooth, hopefully seamless order flow, seamless process, from the ordering of the flowers to the delivery of the flowers, and you are that enabling infrastructure that your customer—namely the person who paid for those flowers—can then take credit for.
Charlie Cole: 100%. I think about the experiences that delight me the most, and it is that part that's invisible, but it's also the things that sometimes you don't notice.
One of the things that we're working really hard at is this idea of vessels and containers because I think a lot of us have received flowers, and the flowers live however long they live. Then you get done and you're like, "What the hell am I going to do with this vase? I don't want this thing." You know what I mean?
We've realized that, and so we have spent so much time. I'm going to tell you right now, Michael. We haven't gotten it perfect yet. We're still in the test and learn phase.
Is it about having the most versatile container? Is it about having a biodegradable container? Could we make a container that's recyclable? Could we do a program where, when we drop off a vase, we'll come pick up your vases for you if you don't want them?
This is where we're still kind of experimenting. Just think about something as trivial as a vase. I would argue that it's a really critical part of the experience because the last thing you want when it's all said done – your flowers last three weeks – is to have this thing in your house that you'd rather not have. [Laughter]
It's amazing the amount of conversations we have around containers and how those little idiosyncratic details can be such an important part of the experience. The experience isn't over when the flowers wilt. That's the key is it's actually thinking about that entire aspect.
If you think all the way to that, you get done, and you're like, "Oh, man. I'm so glad I have this vase. I'm going to reuse it," or "Oh, it's a compostable vase. I can just throw it in the compost."
Those little things are actually the things to be like, "You know what? I'll just go back to FTD because I love the fact that they fixed that vase problem for me."
You just never know where it is, but it's a good reminder. The experience isn't over just when you are done with the delivery. They're still messaging and you have to really experience what the customer goes through all the way to the end.
Michael Krigsman: I have to say I was never really aware in such an acute manner of the complexities of delivering flowers.
Charlie Cole: It is the funnest and most challenging business I've ever worked in, Michael. It's logistics.
Go back to my Valentine's Day Story. If I was still at my previous job and selling suitcases, an ice storm is not fun, but it just means you get it a day or two later, but it's still a suitcase.
In this case, we deliver you frozen and/or dead flowers. That's tough, right? [Laughter]
Perishables are a tricky logistical business. Flowers in particular are remarkably finicky.
There's the old cliché, a rose is a rose is a rose. It's B.S., right? There are really different roses in the world. [Laughter]
Yeah, I've never had a harder job. Also, you combine that with the emotional levity that we work in. But that is what makes it truly rewarding.
I work with some of the most passionate people you've ever seen in your life, both at FTD and, I'd be remiss, it's really about our florists. The amount our florists care is unbelievable.
I'll share with you a great statistic, Michael, just to give you an idea of what customer experience is all about.
Valentine's Day, February 2021, worst weather that anyone can remember – ever. It was just awful.
We had two metrics for on-time delivery. We had on-time delivery that came from UPS, FedEx, USPS, so this was all shipping. We had on-time delivery from florists.
Now, I was in Seattle at the time. Seattle got 15 inches of snow. It was not drivable. It was very, very challenging.
Our on-time delivery rate from shipping was in the low 70s. Our on-time delivery rate for florists was in the high 90s.
You want to talk about how you drive customer loyalty? Get flowers there in the snow. That's where florists are just a different ballgame. They're just a different breed.
With all due respect to the USPS (nor rain, sleet, or snow), well, I'm telling you, florists were better at it. [Laughter] They just get it done no matter what. To me, that's what drives loyalty.
I delivered flowers that morning, and this really nice lady opened the door. Her first reaction was, "I can't believe you made it here." That's how you drive loyalty.
Michael Krigsman: It sounds like you love florists.
Charlie Cole: We couldn't do what we do without them. When you talk about selling flowers, florists make a much better experience. I don't think I would have ever appreciated it until I had this job.
There's a colloquialism in the industry called Flowers in a Box, which is you ship them, throw them in a box, and sometimes they end up great. I promise you; you will have a better experience if you work with our florists.
I think FTD florists, in particular, they're just a different breed of small businessperson. They just get it done, and they take remarkable pride in what they do.
Yes, I definitely love florists. We couldn't do what we do without them.
Michael Krigsman: You're inspiring me. I sort of now want to become a florist and work with FTD. [Laughter]
Charlie Cole: [Laughter] Well, we could definitely use more good ones. It's not for the faint of heart is one thing I've learned about florists.
I've now spent a good amount of time with them. The stuff they go through to get it done on these big peaks—on, like, Valentine's Day, Mother's Day—they're renting cooled trucks or they're setting up tents outside where it's already naturally cold. But if it's too cold, the flowers will freeze.
The detail orientation that happens at just the florist level – forget about the website experience, forget about all that other stuff – the amount of detail that florists need to do to ensure a remarkable experience is not for the faint of heart at all, and they get it done. They're a remarkable breed of human beings.
On the future of technology for creating customer loyalty
Michael Krigsman: Let's shift gears for a moment and go back. Arsalan Khan, again, comes back with a question. He wants to know more about the technology and where do you see the technology going. Are you thinking at all about AI, virtual reality, augmented reality? What else can help improve customer loyalty?
Charlie Cole: We are so just getting started on the technology side. AI is a remarkable opportunity.
I'll share with you, Michael, my favorite technological challenge – my favorite one.
You order this online. This is a bottle of water. You order it online.
How do you fulfill it? I've got to send it to you. How am I going to send it to you?
Let's just think about this. Let's just say that bottle of water was a dozen roses. You're in Seattle, and you want to send them to New York City.
Okay. New York City is not a small place. Let's call it – I don't know – three miles across, ten miles long (if you're just thinking about Manhattan). I made that up, but let's just hope I'm remotely close. [Laughter]
I have ten florists in New York City. Which one gets the order? Do you give it based on how close they are to deliver because proximity really matters? Do you give it to the person that just ordered flowers yesterday, so you know they have fresh roses? Do you give it to the person that's the most consistent and has the highest NPS scores, but you don't know what's in their cooler?
That's where our technology has to differentiate. That layer of logic is so complex. The only way you solve that is with automated technology like AI. I think we're just now obsessing over it.
I'll share a really tricky part of our business that AI is kind of the only way you can solve it. Our florists might have someone walk into their store moments before or after. Actually, after is better.
We send them a dozen roses. They accept the order. As they hit "accept" on the order, someone walks into their store and says, "Hi. Can I have 128 roses, please?"
That person is there in front of them. They're going to give them the roses and walk out the door. Now what?
Those kind of problems can only really be solved with artificial intelligence. That's where our team is obsessing every day. We have to land that logic so well to ensure the dozen roses show up on your doorstep two days later.
The things that can go wrong and the use cases and scenarios, it's about an automated technology product that allows us and the florists to communicate in real-time. That's called Mercury for us.
We've rolled new versions of Mercury basically every three months (in the last year), but we're still just getting started. I think that that's where we're really beating up on the competition. I don't mind bragging for our tech team a little bit, but we have a long way to go, still.
Michael Krigsman: All of this ultimately is about removing the friction between that customer intent (when they buy the flowers) all the way through the chain to when the flowers show up at the recipient in good shape.
Charlie Cole: I would also say anticipating the friction. Yes, I've got to remove it, but you also have to come up with all the little use cases that might go wrong.
Look. The world is not a consistent place. The only consistent thing on Earth is entropy. [Laughter] Stuff is just always going wrong.
You have to anticipate a snowstorm. You have to anticipate someone walking in with a massive event. You have to anticipate a florist getting sick.
Is there one thing that we've all been affected over the last two years? COVID can change your labor situation instantly. It's not our customer's job to solve that problem, Michael. It's our job.
If we have a B2B order. We're partnering. One of our best partners is USAA, and USAA is having an event. They need to have 60 centerpieces for an event. We tell them two weeks ahead of time, like, "Oh, yeah. No problem. No problem."
Then we facilitate with a florist in San Antonio, Texas, which is where USAA is based. The florist is like, "Oh, yeah, yeah. No problem."
Then the day before the event, they have a COVID outbreak. Now what?
I think it's about anticipating that friction and being ready and proactively ready to disarm it.
Take that scenario. We can instantly send that order out to every florist we have in San Antonio, like, "Who can do this today?" If they can't do it, then we can overnight roses ourselves and get them there.
Technology has to allow for our florists to say, "I have a COVID outbreak," and we can instantly react. That's what great technology does to enable an experience is anticipating and resolving that friction.
On how to build customer trust that leads to loyalty
Michael Krigsman: If we take a step up, would it be accurate to say that ultimately all of this leads to customer trust and that customer trust is really the foundation or the driver of loyalty?
Charlie Cole: Absolutely. To me, trust is key.
I'm doing this interview right now, Michael, from the W Union Square. I'm in New York City, and I'm at a W Hotel.
I always know what to expect when I go to the W brand. I used to stay at the W Hong Kong. We do nights away in the W Seattle.
To me, that's what trust is all about is that when I walk into a W, it's going to deliver what I want. That's why I always stay in Ws. That's the definition of loyalty.
But if you were to ask me the question really in a cerebral way, like, "Charlie, why do you stay at Ws?" it's actually a very simple answer, which is, "I know exactly what I'm going to get and I like it. I know they have good gyms. I know the beds are comfy. I know the air conditioning works."
Air conditioning is such a big deal for me in hotel rooms. I'm always 1000 degrees. But if I know the air conditioning is good, I'm going to want to stay.
If you started listing off, Michael, what makes a great experience, it's a thousand things. But ultimately, it's the trust that those thousand things are made right every single time. And so, I think trust is a perfect word as to what really adds up to loyalty.
Michael Krigsman: Where does trust play a role for you across your very complex supply chain with the florists, with the delivery partners, and all the pieces in between?
Charlie Cole: Well, it's a great question because you sort of have these micro-moments of trust in the entire buying experience. I trust Shopify is going to do their end on cart. I trust Nacelle is going to do their end on speed.
All those folks I mentioned before, there are these micro-moments of trust at every single step. That's why you renew contracts. That's why you partner with Juan Carlos at Elite. That's why I can tell you the names of Elton Soriano, Kyle Brown, and Julie Gelb—those are all florists—Lisa Packet. I know that they will bend over backward and make a customer happy.
To put it another way, Michael, I trust them. I think that trust is earned.
I think, for me at FTD, something that I didn't mention initially was FTD was coming out of a bankruptcy in August of 2019. When a company goes into a bankruptcy, chances are there was some trust broken with people down the line, on the way coming down.
A lot of what we've been doing is, florists didn't necessarily believe we were going to hold up our end of the bargain. They had been told that new POS solutions had been coming for literally a decade, Michael – literally – and they never got anything.
It's not like we show up and be like, "No, no. New regime. Trust us." We've had to chip away at that.
I think that in every single of those relationships, trust is earned. For us, there are still florists that really dislike us, and I personally have received some pretty decent vitriol for something that happened ten years ago, and I didn't work at FTD ten years ago.
I appreciate that, and I think that you always have to remind yourself; trust is earned. Think about that with every single one of your partners in the customer experience.
Here's the other thing. Hold them accountable.
I think it's important to note, Michael. No one bats a thousand. No one is perfect all the time. And so, a lot of how you can earn trust is what you do when you screw up.
What do you do when you make a mistake? Do you blame something else? Do you kind of pretend like it didn't happen? Do you tell the customer, "Oh, well, we'll just get it right the next time"?
I think that's an area where great partnerships are made.
I get a lot of notes on LinkedIn from customers. They'll find me on LinkedIn and be like, "Hey, you messed this up."
You know one thing I never say? I never say, "Oh, well, let's fix this."
You can't fix it. It's already broken.
The language I always try to use is, "Let me see what I can do to improve the situation." To me, that's how trust is built is ownership that you've already messed up and do what you can to improve it because I think the last thing you want to do when you make a mistake is to be holier than thou. That's really where great partnerships come from.
I think about a marriage. You're going to fight. Someone is going to let each other down at a certain point. It's about how you own your mistakes is probably the most important aspect of building trust, and it's true with every partner across the customer experience.
On advice for creating customer loyalty and brand loyalty
Michael Krigsman: What advice do you have (for folks listening) on building customer loyalty and brand loyalty?
Charlie Cole: We actually built our entire customer journey including scenarios. What I mean by that is, what if they select zip code? What if they select date? What if they select a flower? What if they select chocolates? What if they're checking out with multiple addresses?
Every single scenario, it ended up being this big flow diagram, Michael. It was on this laminated rollout. We then mailed it to every board member. It was laminated, so you could draw on it with dry-erase markers.
Start there. Start there. Draw out your entire customer experience and ask yourselves, "Okay. Where can we delight our customer and where, if we mess up, is it a death note?"
There are certain areas of the customer journey where customers will probably give you a pass. If you have to double click on a navigation when you were expecting a single click, not a good thing but you're probably not a death note.
If you get to the checkout process and they don't accept PayPal, you might lose that customer. You might. That might be a death note.
Take the time. It's arduous. It's arduous work. It takes very detail-oriented work, and it's a lot of little boxes and arrows and lines.
Take the time and map your entire customer journey, and you identify the most important points and, importantly, one of two things: the place where the customer will stop (they will give up), and places where you can exceed their expectations.
I think, if you do that in your customer journey and you actually force yourself down that rabbit hole, you'll come up with some really good ideas. At least we did.
Michael Krigsman: What's the hardest part about all of this, about building brand loyalty and customer loyalty? If you net it all out, what keeps you up at night around these issues?
Charlie Cole: I don't think customer expectations have ever changed as quickly as they are right now. If you think back ten years, Michael, you were totally happy.
This is going to sound crazy because it's going to seem like it was eons ago, but it was ten years ago. If something took five to seven days, no big deal. Like ground shipping, no problem. I'm not going to pay $18 (or whatever they're going to charge me) for 2 days. Five to seven days ground shipping, great.
Then this company called Amazon came around and decided Prime was a thing. Now, the customer expectation has changed. Two days is now what ground shipping was. That is the customer expectation.
If brand loyalty is a byproduct of an entire consumer journey, and building trust without it, our biggest challenge is keeping up and exceeding an ever-changing customer expectation. I think that it's a really nice thing to remind yourself is that what your customer sees as a great experience today might not be what's a great experience in two days.
Think about how COVID has changed the narrative around delivery. Think about how what we want in a grocery store has changed. How prevalent are berries at a grocery store now versus ten years ago?
Customer expectations have changed. Customer desires have changed, and I think they're changing more rapidly now than they ever have in history.
That means you have to be constantly revisiting your experience and question it. That's, I think, our biggest challenge is trying to keep up with the customer sentiment that is changing at such a rapid rate.
Michael Krigsman: I think that's a great way to close with this phase you just said. Essentially, brand loyalty is the culmination of a customer journey that builds trust and meets the customer expectations. It seems like a good summary.
Charlie Cole: If I said it, I'm proud of myself. I'll take it.
Michael Krigsman: Charlie Cole, CEO of FTD, thank you so much for taking time to be with us and to join us today. I really, really appreciate it.
Charlie Cole: It always feels like it's done in five minutes, Michael. It's always so fun to talk to you. I had a great time.
Michael Krigsman: Everybody, thank you for watching, especially those folks who ask such great questions. Now, before you go, please subscribe to our newsletter, subscribe to our YouTube channel, hit the subscribe button at the top of CXOTalk.com, and check out CXOTalk.com. We have great shows coming up. Thanks so much, everybody, and I hope you have a great day.
Published Date: Mar 04, 2022
Author: Michael Krigsman
Episode ID: 741