How does a 110-year old flower retailer, wholesaler, and delivery network transform itself with eCommerce? We hear from the CEO of FTD, Charlie Cole, to learn about customer engagement, CX strategy, eCommerce strategy, digital transformation, and business metrics at this iconic brand.

Charlie also explains the customer service and supply chain implications of running an eCommerce website selling perishable products like flowers.

Transcript

This transcript was lightly edited for length and clarity.

About FTD and the flower business

Michael Krigsman: Customer experience, eCommerce, and digital transformation, that's our topic on CXOTalk today. We're joined by Charlie Cole, the CEO of FTD. Tell us about FTD.

Charlie Cole: FTD is really in the business of delivering flowers and gifts to folks. We do that in a couple of different ways. We have two consumer-facing websites. We have ftd.com and we also own proflowers.com. Behind those two websites is a fairly intricate network of both independent florists and kind of direct from farm florists.

If you think about it in a very basic way, we are a flower marketplace that has an extremely distributed supply chain network behind it. We've now been at it for almost six months with this new leadership team and, for a variety of reasons both micro and macro, it's been a hell of a journey.

Michael Krigsman: Now a quick thank you to Productiv, a SaaS management platform that unlocks the power hidden in your SaaS applications to bring you higher ROI, better team collaboration, and lower license costs.

You're a flower marketplace, meaning an eCommerce platform with a sophisticated and complex supply chain. Do I have that right?

Charlie Cole: Yeah. To put that last point in perspective, we have about 9,000 different points of distribution. When you start to talk about where things can go right or wrong, that level of complexity is one of our full-time jobs, for sure.

Michael Krigsman: I guess the question is, where do we begin to unpack this? Do you want to tell us, just briefly, about the florist business? I'd like to learn about the eCommerce side as well as the distribution and the supply chain.

Charlie Cole: The best analogy I can give you, Michael, is it's not dissimilar to the transformation the travel industry has gone through. There are major providers of information and also booking destinations. TripAdvisor comes to mind. Expedia comes to mind.

Behind those distribution networks is everything ranging from the smallest boutique hotel in central Maine to chains of Hiltons. I'd say that that analogy is very apt for the flower world. We have small businesses.

One of our partners, Rachel, here in the Seattle area at Ballard Blossom, she has a store. We can send her orders and she fulfills them. We also have networks of florists. Then we have large-scale farms where we can actually ship you flowers directly from Columbia. Literally, the flowers go on a plane and, two days later or the next day, they're at your home.

When you think about the florist business, there are very many flavors of florists, if you will. There is the small business, independent operator. There are the chains. Then there are these large-scale farm operations.

For us, our number one goal is, regardless of where the flowers are coming from, you as the end consumer have the best possible experience you can possibly have. I think that last point is important because, before I was a part of the flower industry, I could have never appreciated this, but I think a lot of the large-scale flower operations out there have either intentionally or unintentionally tried to commoditize the business. I would argue that the flower business is about as opposite to a commodity as you could possibly get.

There is that old expression, "A rose is a rose is a rose," but it's not true when it's been a box for two days. All the intricacies that go into delivering the best possible flower on Earth is our North Star. It's a fun industry to be a part of.

Customer satisfaction and experience

Michael Krigsman: The common thread is customer experience. That's kind of your reference point?

Charlie Cole: One hundred percent. I think it would be fair to say that that wasn't always the case at FTD and maybe that was one of the things that drove them through a bankruptcy, to be perfectly candid. But since I have arrived, as I mentioned, I started on March 23rd, which coincidentally is the first day in the 110-year history where the entire company started working remotely due to COVID-19. The circumstances have been just wild.

Yeah, we're obsessed with customer experience. We are obsessed with trying to not fail ever on delivering an order and, when we do fail, make it right. There is a lot in there that we can walk through ranging from where we source the flowers to how we pack the flowers to how those flowers are represented online to how we communicate information to delivery because one of the potentially obvious, Michael—but maybe not if you don't think about—idiosyncrasies is, nine times out of ten the person who bought the flowers is not the person who received the flowers. Right? We're in the gifting business.

It's important to understand that your kind of dealing with two different customer journeys. You're dealing with two different customer experiences. You're dealing with the experience of giving someone a gift and you're dealing with the experience of receiving a gift.

It would make sense that when you have two experiences that it's just twice as hard but I would argue it's more of a logarithmic effect. It's more like ten times as hard because, when you have those two divergent pathways that require two different messaging paths and have two different sets of expectations, it multiplies the complexity exponentially.

Challenges to creating customer success and loyalty

Michael Krigsman: Give us a glimpse into the kind of complexity, customer experience complexity, that you're describing. You say it's logarithmically more difficult to deal with both the supply side and the delivery side and all the various aspects. Tell us why.

Charlie Cole: I think the best place to start, Michael, is understanding the difference between the two types of orders we fulfill as it pertains to flowers. We have florist fulfilled, which the florist down the street from you sending orders out of their shop and their trucks and getting to your home, and we have what we call in the industry a drop ship provider. A dropship provider is also flowers in a box.

Let's just start with the florist side. We put a picture online and I think if eCommerce has done anything, it's crystalized the customer expectation because you can see what you're going to receive. We've all ordered things online and I think probably the oldest example of this is, I think about the McDonald's commercials where they would show these beautiful, large cheeseburgers on TV and then you'd get to the restaurant and maybe there'd be a little bit of a disconnect there. I think eCommerce has almost stopped that.

We have to deliver what you saw online in the picture. That immediately puts pressure on the customer experience because we have taken a photo in a studio, probably in pristine conditions, and now we're handing an order off to a group of human beings that have a varying level of flower freshness. They have a varying level of flowers in their cool. and they have a varying level of ability to deliver that to you and you, as the receiver, may or may not be home.

I've just basically thrown out three or four challenges that, frankly, are not easy. It's not easy to make sure you, as the receiver, receive the best flowers because best, in a lot of ways, is synonymous with fresh. That requires a physical handshake, you being able to grab those flowers off your porch as quickly as possible.

The customer experience challenge, to think about that in a little bit more of a stratified way, accurately represent the products online to you, the consumer. Accurately represent those expectations so the florist can deliver on those expectations because, right away, we put our partners in a really bad spot if we don't do that.

One of the honest things I've done since I arrived at FTD was, we organized a group of 50 florists and spent 10 hours with them just asking them to rip our business down to the studs: good, bad, ugly. Where has FTD let you down? What have we done right? What have we done wrong?

One of the things that all of our florists have asked is, "Look, we understand that you're in eCommerce. You've got to make these pictures beautiful but make them accurate. Set these customer expectations. Don't be the McDonald's cheeseburger that shows up flat and squished. Accurately represent these flowers."

To me, as a newcomer to the industry, that was just like, "Well, yeah. We have to do that," but I think that the larger flower providers online have been really letting florists down for the last ten years. That might sound like hyperbole, Michael. I mean it. I think that there's been a disconnect between the expectation companies like us have set and then the pressure we put on our florists.

We're acutely aware that customer means both things to us. It means not only the person giving, not only the person receiving, but our florist partners are our customers too. We have to be fair across the board.

Complexities of eCommerce

Michael Krigsman: I think we tend to think about eCommerce as the interaction point on the website where you browse and you see the photos, as you were just describing. But in your case, it's so obviously clear that the enabler of that transaction is the sourcing of these perishable goods and then the timely delivery of these perishable goods. It's quite different from, say—I don't know—downloading games, right?

Charlie Cole: Or selling suitcases, right? It's just a different thing. The thing, Michael, just to ratchet up the intensity on why customer experience is such a passion point to us is, don't forget the surrounding emotion in the process. We deliver flowers for literally the most joyful events in people's lives: the birth of a child, a marriage, an anniversary. Then the saddest events for a person's life: people passing away.

When you bracket all of the idiosyncrasies of these customer experiences and the umbrella of the emotions involved, to me it just ratchets up the stakes. That's why I really think it's a Richter scale level of importance. It's not just like, we have to match expectations.

It's almost cliché, Michael, at this point for an eCommerce person to come up here and talk about customer experience. But when you actually distill it down, it's a very different emotion, Michael, when I send you a suitcase versus when you're celebrating the birth of a child. It's just a different level of stakes.

We have to internalize that as a company. One of the things I say quite a bit is, "Take it personally. Take it personally."

We did something both because of need but because also, I think, is a good practice. Over the Mother's Day holiday, which all these experiences and complexities were ratcheted up by the realities of COVID-19, every person in the FTD company—it doesn't matter if you're the CEO or a customer service agent—did a stint in customer service. When you do that and you see what happens when you screw up a delivery, take it personally. Right?

That's something that we're obsessing over and making a hell of a lot of improvements. But I won't like to you, Michael. We've still got a ways to go and I think that that continues to be the thing we chase and will always chase until we're perfect.

Michael Krigsman: We have a very interesting comment from Twitter from Arsalan Khan. I always say, Arsalan always gives us great questions. Arsalan, thank you so much for participating every week. Arsalan says that in the online world there is no such thing as "regular hours." How do you manage customer experience in that scenario? The dimension now of this basically unbounded, you know, we're not limited to an office or to hours, how do you manage that aspect of it?

Charlie Cole: Ecomm is a 24/7/365. This year, a 366 job, right? It's just the reality. Your store is always open.

I think there's a pragmatic answer and there's a bit more of an idealistic answer. I'll give both.

Pragmatically, we have an extremely diverse customer service backend that allows us to have call centers open if we need them, whenever. We can spin them up in the Philippines. We can spin them up in Egypt. Then we have localized, in-house call centers in the Downers Grove, Illinois, and Centerbrook, Connecticut, area.

I think, pragmatically, you have to start answering this question with, how are you actually staffing for that reality? I think we have a very flexible infrastructure.

But idealistically, the only logical answer to this question is based in passive communication. You have to be able to have the best self-service options online. I'll be very candid. We don't yet. It's one of our key priorities and we continue because we focused on this.

We also have to have passive ways to communicate. What does that mean? Not everything is going to happen over the phone. It needs to be email. It needs to be WhatsApp. It needs to be Facebook Messenger. We continue to move that way.

I think being self-critical, that reality posed in the question, Michael, is something we're acutely aware of and we continue to strive for. But until we have the ability to basically meet customers where they want to talk to us, we're not there. I think that we still have some work to do and this was a focus we had at Tumi and Samsonite as well. I think the question is another thing that we always have to keep in mind because everybody talks to companies different ways these days.

Michael Krigsman: We have another question from Twitter. You can see, Charlie, I try to emphasize the questions from Twitter because very often they're better than my questions.

Charlie Cole: I love it.

CEO priorities

Michael Krigsman: Tim Wilson says, "It sounds like you have a lot to focus on. You can't focus on everything and so how do you think about establishing your number one priority and what it is?"

Charlie Cole: When I joined over the course of the first two months, I hired four other executives. Every once in a while, we would catch ourselves really flustered because of this exact question, which is, I think if you asked the eight leaders within FTD, and there are a lot more employees in the company that are equally important, but if you were to ask the eight folks that, frankly, report to me, "Where are you going to be in six months?" I think you'd get very similar answers. I really do. But the hardest part is what Tim is inferring here, which is the order of operations.

Coming out of Mother's Day, we did a process where we basically put what we're calling our strategic initiatives up on the wall and said, "These are the six things we have to do to beat our competition." This concept of customer experience, by the way, was bullet one. Then when you do that sort of thing, that's really easy to say. I think, on shows like this and in webinars and whatever you might see on the Internet, it is so easy to say the right thing, and then actually putting the tactical acumen behind it to accomplish them is glazed over.

I would say, Tim, it's not just your first priority, which for us is having the best customer experience in the industry. It's measuring it, right? It's measuring customer NPS. It's measuring lifetime value. It's measuring return rate. It's measuring our florists' NPS. It's measuring our website NPS. Behind every one of our six strategic initiatives is a group of KPIs and budgets where we're holding ourselves accountable.

I'm always quick to say one of my favorite managerial idioms, if you will, comes from one of my mentors, a guy named Tarang Amin. Tarang used to say, "Make sure people have the tools to do their job." Whenever you're putting this level of priority around customer experience, you can have a very candid conversation about, "Do you have the right software, the right people, the right bonus structure, the right compensation?"

Being new, it allowed us to really strip this down to studs. But the answer is, we start with customer experience, and then there are other things that flow through there. But that was a pretty easy process that was done via a strategy session, but I would quickly say that if you were to do an exercise like this, it's only as good as the tactics and KPIs behind it.

Michael Krigsman: Wayne Anderson has an excellent question. He says, "In the FTD model, there's no retail counter and you don't own the delivery handoff, so where do you focus employees on humanizing the customer experience and where is the friction being removed?"

Charlie Cole: It's all about how we process information. Go back, Wayne, to what I said at the start of this call, which is, we actually have two people we have to make sure we're disarming and make sure we're reducing the friction on.

Whenever you give someone a gift, I think we all have experienced this. My wife, Alissa, just sent her friend Paige a birthday present. It's Paige's birthday today. Whenever you do that via the Web, you're kind of metaphorically sitting there looking at the clock and being like, "Is it there yet? Is it there yet? Did she like it?" There's a whole suite of emotions.

One of the really interesting parts of our business is, I might order flowers today to send two weeks from now. What does that customer journey look like and what does the messaging look like to get there? That's something that we have to nail. We have to make sure the person sending the flowers feels really good that we didn't screw up the process.

To Wayne's point, that means delivery confirmations that our florists pass back to us and then we pass it back to them. That means getting the right information.

If I'm sending Michael a gift, FTD doesn't really care about my phone number. They want Michael's phone number. These are all little parts of the customer journey that are so important. That's the first thing.

The second thing is the person receiving. Well, this is hard because gifts, you want them to be a surprise. You have to put this foundation of what the intent is and then bracket it in reality.

I think that the communication of the person receiving the flowers is honestly probably the most important. Go back to this idea of freshness is table stakes. In the summer, if flowers sit on your porch, we're doomed. We're just doomed.

The flowers are going to not look good. They're going to wilt. And it doesn't take long, by the way. It doesn't take long at all. That's the nuance that I think we're in the process of nailing.

To Wayne's point, there's a whole lot of technical plumbing that needs to happen because our florists need to have an app on their phone that says the flowers were just delivered. That pushes to our system. That system pushes out messages to both the gift sender and the gift receiver. This is the waltz.

It's this idea of taking disparate systems and combining them into a holistic experience. Probably the challenge that our CTO Matt Powell is losing sleep at night, but one that we're certainly up to.

Corporate culture and customer service

Michael Krigsman: It's obvious that you can't physically be the person who is delivering the flowers and answering the phones. And so, how do you create the kind of culture where people do take it personally, as you described earlier?

Charlie Cole: Delivering the best possible customer experience and making our internal corporate culture rally around that starts with our florists and growing partners. We are reliant on our partners like Vistaflor in Columbia to grow the best flowers on Earth. We are reliant on people like Bart Guzzardo in Chicago to deliver flowers in the form that we positioned them on the website.

In a lot of ways, FTD is at service to our florists and at service to our growers, not the other way around. I think something that FTD did wrong, and I'm going to speak kind of off the cuff, Michael because, as you know me, it's kind of the only speed I've got. They flipped that script. They thought the florists worked for them. If we don't respect and elevate our florists in the process, we are doomed to fail.

If an order comes in from FTD and a florist receives it and says, "Oh, great." Right? Like, "Oh, they didn't accurately represent the product online. I don't necessarily have the stems. They don't know what my profitability is." The tragedy is this is what the flower industry did to florists for the last decade.

The first thing we did is this florist advisory board. Michael, those ten hours of recordings, and all of the chat logs are available online to our entire company. Not just the C-suite. I'm talking customer service agents have access to this. For us, to take it personally, it's not just a customer journey. We have got to understand our partners.

I go back to the Expedia analogy. If Expedia represents a boutique hotel online inaccurately, who gets the heat? The hotel. When you show up, you're going to be yelling at them at the lobby and it's not their fault. I think that that's so important to us to give the best possible customer journey is to have a ton of empathy for our florists.

Michael Krigsman: How do you ensure that there are no missteps because you've got this elaborate chain with so many pieces? If one person screws up along that chain, leaves the flower in the summer as you said—

Charlie Cole: Yeah.

Michael Krigsman: –and the flowers come and they don't look good, the person that gets them says, "God, look at these crappy flowers."

Charlie Cole: Yeah, we're limited by the loop being closed. I mentioned Matt's name earlier, but Matt Powell, our CTO, said the other day. He's like, "I think we all know that if our refund rate is, call it, 3%, that means it actually should be more like 5%," because there are people that are going to receive a subpar product and just live with it. I hope they don't, frankly, because that's who we rely on to close the loop and make sure we did our job.

I think there is a very important tactic here, Michael. I referenced the six strategic initiatives. One of them is what we're calling data democratization. Every single person in our company needs to know what's going on.

One of the metrics we all need to know at all times is, what is our refund rate this year versus last year, this year versus last month, this week versus last week? Seeing those numbers. If they get worse, we are going to poke on that soft spot until it gets better. We are going to ask the questions of why.

Go back to the intro here. There are so many things that could go wrong. Were the flowers fresh? Did we accurately represent them online? Did the gift receiver enter the right zip code? We have to address verification – that level of tactics.

Then it gets to the florists. Do the florists have the right flowers in stock? Did we give them the right vases? We have to check every single one of these points in the entire time.

Look, I'll admit. Two hours before this call, I received a message on LinkedIn from a woman who we messed up her order. We are going to forensically analyze that example and fix it. That's the hard part about this is, at a certain point, you have to accept your failures and learn from them.

The thing that I'm proud of is, we've reduced our refund rate by about 80% since I joined the company and I'm telling you right now we can go another 200. We can go down to 10% to 6% to 2%.

But to get there, like you said, Michael, I'd say acknowledging, owning, and analyzing the hell out of those failures is probably the most important thing we can do. You don't want them to happen but when they do happen, don't just pretend like it's not a big deal. Take it personally, analyze it, and fix it. If you do that, you're going to make a much better customer and, more importantly, for us, a happy florist.

Michael Krigsman: Somebody reached out to you on LinkedIn. Is this a retail customer or a wholesale customer?

Charlie Cole: Yeah, and I'll tell you it's happening a heck of a lot less than it was in March, which I'm happy about. I love it. I don't love that we screwed up an order, but I love it when customers reach out to me personally because it gives me an opportunity to exceed an expectation.

It's probably happened; in March, Michael, I won't lie to you, it probably happened 20 times. Now, I think I receive one about once every three weeks. Anecdotally, that's progress, but it's still one too many.

The initial thing we do is, our COO, our head of customer experience, their names are Patty and Amy, respectively, and I are going to close the loop on this issue. We are, one, going to make the customer happy.

But this is the thing, Michael, that I think companies screw up too much. We can't put that genie back in the bottle. If it's your birthday today and I didn't send you really good flowers today, you can't fix that. You are now in triage mode. You are doing your best to make better a bad situation but don't pretend it's not a bad situation.

I missed your birthday. I missed your mother's Mother's Day. I missed your wedding day. I think that's this idea of empathy but, more importantly, accountability of why these stakes are so high and why we need to take it so personally. You're going to have three people in our executive suite who are going to follow this problem from problem to solution to preventing it from ever happening again.

I don't sit here and I'm not an idealist. I know we're always going to make mistakes, but that's the level of gravity we approach every single one of these problems. I think that's a start and I think you just have to keep on kind of rolling that rock uphill and seeing how good you can do.

Michael Krigsman: You know I have to say I believe you.

Charlie Cole: I'll tell you, Michael, another anecdote and it just eats at you. During COVID-19, we would receive complaints of, like, "My grandfather and grandmother didn't receive their flowers for their birthday." Okay. That sucks no matter when but, in this world of isolation we've all been living in, good lord. That's the closest to a hug any of us are going to get.

I think that's why this idea of taking things personally and accepting the gravitas of our responsibility is so important. I truly believe our company is rallying around that. The progress is undeniable but we've got a long way to go. I think just being self-aware about that is important.

Michael Krigsman: You've kind of answered this. How has COVID-19 complicated the delivery experience for drivers, for staff? You just touched on it, but maybe you can elaborate a little bit more.

Charlie Cole: Let's do a little bit more inside baseball because the strain is probably bigger than anyone could possibly realize. It's getting better, but let's flashback to April. In April, shelter in place did not mean shelter in place did not mean shelter in place. The order that came out in Chicago versus San Francisco versus LA versus Seattle versus Minneapolis, they were all slightly different. And it wasn't state-by-state. It was municipality-municipality. It was county-by-county.

What that meant for us is we had florists that just disappeared. They were not allowed to work. We had farms that disappeared. They were not allowed to work.

Any expectation we set for the customer had to allow for that reality.

If all of us can think back to April, it's not a very pleasant memory for most. I am fully aware. It was a moving target. No one really knew what was going on, right? We were all living through this for the first time. We were doing our best but it was a moving target.

You layer on UPS started being late for deliveries because they had a mound of demands they could never possibly fathom, to no fault of their own. All of those things needed to be captured and represented on the front-end. Big banners at the top of the website saying, "Due to COVID-19, delivery times may be delayed." Small things like that.

The one thing I think I'm really proud of, of the entire eCommerce industry, all of us, I think, did our best to set proper expectations. That doesn't mean we always hit them, but I think we were all fairly vulnerable about it.

The one for me, Michael, that crystalized the stakes was Mother's Day. Mother's Day was in the peak of COVID-19 and it is the number one flower gifting holiday for us every year. I'll just say it. We messed up a lot of orders because of some of our own fault, because of COVID-19 exacerbated fault. It was just hard to watch but, for all of us, I think it was a sobering reality for us that we were now like, "Okay. This is why this is important. This is someone's mom."

My mom passed away some time ago and I would give anything to send her flowers. I think everybody feels that way. COVID made everything harder, but if you want to set positive spin on it, which I have a tendency to do, if we can make it work now, we should be that much better when, God willing, this thing is over.

I think, for us, it put pressure on the supply chain. It put pressure on our florists having to close their doors. It put pressure on consumers exacerbated who wanted to do something because they couldn't go hug their mom. It's not an understatement to say, it made everything harder, but I think, when we're done, we're going to be that much better because making things work in this moving target just is going to up the challenge for us. But you can't understate the level of complexity it added to the process.

Michael Krigsman: Wayne Anderson says, "Remote work forced a C-level priority during March, during this period. That's when you started, when you walked in the door. What were your top priorities, your lessons looking back at that time in terms of valuing employees and enabling and delivering customer experience during those first few months that were chaotic for everybody?"

Charlie Cole: Let me just set the stage here, Wayne. I'm talking to you from Seattle, Washington. Since I started my job, I have never been to an FTD office. I've never been to a florist, so it's continuing today. I have met, in person, not including the folks I've hired after the fact, I've met in person three of our employees.

[Laughter] To talk about how this is on the top of my mind, you can't understate the importance. First off, you take for granted the little things that happen when you're in an office. Passing people when you're getting a coffee. Coming into the door at the same time, being able to say hi. All of those natural interactions are gone, and so you have to be so intentional at how you communicate.

The way I did this in my first 3 weeks, I did 60 30-minute calls with all the folks in the company, and then, for every week since then, I have done 2 hour-long what we call coffee talks. I really think of them as office hours where we invite 12 to 14 people to show up.

What I say at the start at every one of these calls is, "Look. The hardest part of this call is to convince you that there is no agenda. I'm just here to get to know you. I'm going to tell you about my dog. I'm going to tell you about my wife. I'm going to tell you about my kids. I'm going to tell you about how I like to play volleyball. I'm going to tell you how I like to cook. Then I want to hear about you. Then you can ask me anything. Nothing is out of bounds."

Man, did I get some doozies. I got some doozies on the personal side. I got some doozies like, "Hey, do you think our compensation structure of customer service agents is right?" Okay. You want to have this conversation? Let's have it.

That level of vulnerability but availability is so important because, when you're in an office, you're naturally available way more than you realize. Just walking through the halls, waving to people, body language, all those things are gone. That's the first thing. I think that availability and vulnerability were huge.

Then actions speak louder than words. Go back to Mother's Day. Everything is complicated – everything. Who does that fall on? When you get through all the funnel, it falls on our customer service team.

For the first time, coming out of Mother's Day, it was remarkably successful for FTD despite our shortcomings, which were real. I don't mean to downplay them. They were real.

We paid our customer service agents bonuses. I had people tell me, "I've worked for FTD for 20 years and I've never received a bonus until now."

I think if you're going to come up on shows like this or on the Internet and talk about customer experience, that doesn't mean your COO gets a good bonus check. Take care of the people on the phones, man. They're the ones that are ultimately forced into a triage situation.

They didn't cause the problem. You did. You did with your customers. You did it with your website. You did it with your expectations. You did it with your technology that you didn't send it right to your florists. Right? They're the ones that are being forced to deal with this terrible situation.

I think it's a combination of both doing the right actions yourself and making sure people know that you're approachable and available, and I hope I do that. I do my best and I still do it to this day. But more importantly, actions speak louder than words. Don't look at a financial windfall as a way to pay out all your executives when the people that really brought you through it were your customer service agents and our florists.

We saw, going into this. I've talked a lot about florists. In April, we basically gave $1.6 million back to our florists, like, "Look. We know you had to close your doors. Don't pay us this month. Let's get through this together," kind of thing.

I don't pretend, Wayne, to have the equation perfect yet, but I think it's an area where doing small things like making the bonus plan for every employee versus just executives, like actions are ultimately going to speak louder than words. Me getting up here and doing this is the easy part, but I hope our company is starting to feel the momentum on a more personal front.

Building customer loyalty and employee trust

Michael Krigsman: Arsalan Khan is asking about trust, and you've been talking about that, but how do you create trust among employees, partners, customers who report something that went wrong?

Charlie Cole: Own your mistakes. Don't try to pretend like it didn't happen. Remember that this is a time-sensitive business and honor those commitments. At the same time, just be a human, corporately.

A good example of an FTD policy is, we don't plan on reopening our offices or forcing anyone back into the office until virtual learning is not a thing because, if you're a parent, it's just one more stress and probably the most stressful situation I've ever lived through. Don't forget that we have more to life than the four walls of a work culture. I don't know what percentage of people listening to this are in a virtual learning scenario, but if you have to go back into an office, that's an untenable situation.

I think this idea of being human to both your customers, as in like, "Man, if that happened to me, I'd be furious," and we screwed it up. Right? Don't sweep the stuff under the rug.

I think that'd be my short answer is don't pretend like you're just this hollow corporate core. Golden rule, right? Treat others how you want to be treated, but I think you have to expand that to every employee in your company as well.

Michael Krigsman: Tom Bruce says, "Do you envision significant changes or disruptions to the flower delivery industry in the next few years and how are you planning for it?"

Charlie Cole: I think where we can drive this forward, from an FTD perspective, is be more thoughtful about the vessel flowers come in. How many people have a closet full of vases that they hate? You know there are so many people.

You know what that is, Michael? It's unsustainable. It's not good for you. It's not good for the environment. Clutter sucks. There's literally a show called Hoarders showing how much it sucks.

I think, for us, we need to think about how we can change the basic attributes of flower delivery that people hate. People hate overly complex packaging when you get flowers in a box.

We did this cool thing during our last board meeting. We sent every single board member flowers before the board meeting. What a novel concept, right?

Three of them complained about the same thing, which is how hard the zip ties were to get off. Our COO heard that and, if they said it, all of our customers are thinking that.

I think you have to start and make it as seamless and easy as possible. I'll say it again, Tom. We're going to be the ones that cause the disruption, so I think everybody will be chasing us.

Using data in corporate operations

Michael Krigsman: Let's talk about data. You mentioned data earlier. How do you use data to run your business and to drive this kind of customer experience and, basically, all throughout your operations?

Charlie Cole: It's the ultimate barometer of success and it's the ultimate source of truth, if presented properly, Michael. I've got to give a lot of credit. This is the third time I've said his name. Matt gets a lot of credit, but Rob Van Auken deserves a lot of credit for this too.

The first thing we did, Michael, was to recreate a business dashboard. I've got to give another nod to Jim Lindquist in our company, which was giving ourselves actionable data to allow us to manage the business on an hour-by-hour level.

Now, look. Another perfect example of something that probably a lot of people say. When we got done, I heard from probably 50 people at FTD that were there before me saying, "We have never had a tool like this." It was just basically poking on the question, "What are the numbers that truly matter? What should we be optimizing to?"

It's not just profit. It's things like customer NPS. It's things like refund rate. It's things like florist NPS. Which one of our florists has an outsized customer satisfaction? Which ones don't? Let's find those ones that don't and figure out why.

I think it's not just data, Michael, because there's so much out there and it's becoming more ubiquitous than it ever has. It's like, "What are the numbers that truly matter?"

We had that conversation as a leadership team and now I think we feel pretty damn good about the dashboard. We can actually look at a dashboard that allows us to manage the business.

Michael Krigsman: The key thing then about the data is understanding what pieces of data are relevant to support what you're trying to do with the business.

Charlie Cole: And contextualize them, right? My least favorite datapoint, Michael, the thing that makes me cringe more than anything is when I hear companies talking about conversion rate. That's a worthless metric.

Conversion rate with no context is a worthless metric. I would even say conversion rate by device is a worthless metric. If you just ran a huge top of funnel campaign driving to your mobile device, guess what? Your conversation rate is going to suck. But that's not the story, and so I just think it's this idea of what numbers truly matter and providing them with the proper context to allow you to manage the business because it's so easy to be like, "Hey, what's your conversion rate?"

It's a meaningless conversation. Run away. It means the person doesn't really want to answer the question. I think contextualizing the numbers and using the right numbers is extremely important.

Michael Krigsman: Obviously, that implies that you have a deep understanding of the business and the dynamics driving the business.

Charlie Cole: Well, and that's why I think it's a really great point, Michael. When we made this dashboard, I didn't do it in a vacuum because I didn't know a damn thing about the flower industry. I relied on guys like Tom Moeller that have been working with florists for ten years. I relied on guys like Rob Van Auken. I think that that's important, which is, know what you don't know and ask questions to make sure you get to the right numbers, because far too often, it's been my experience, companies aren't looking at the right thing.

Michael Krigsman: As we finish up, can you leave us with two, three takeaways, pieces of advice that folks listening can learn from your experience regarding customer experience?

Charlie Cole: It starts with your employees and your supply chain. Don't forget that. I think far too often we think of customer experience—you said it earlier, Michael—of what's on the website. I would argue that's a byproduct of, not a driver of. It starts with your employees and your supply chain. In our case, it really starts with our florists. Don't forget that.

If you're not selling a quality product, what are we doing here? Right? I think the world of selling a subpar product is over. You have to actually strive.

Flowers are not a commodity. If we're not selling high quality, fresh, great flowers, then the rest is, frankly, academic.

I think that's true, by the way, of anything. I don't care if it's a T-shirt, a pie, whatever. Your product has got to be kick-ass in the year 2020.

Then, finally, don't be afraid of your failures. In a lot of ways, you learn more from those than you do just sitting there patting yourself on the back. For us, I can honestly say, coming out of Mother's Day, FTD had the best financial Mother's Day it probably ever had and all of us felt pretty crappy because we were looking at all of the customer complaints and all the moms we disappointed.

I'm not saying to just live in a cloud of despair because you're messing up orders. I am saying, look at them, learn from them, and take them personally. Far too often, people go into business reviews and talk about the good. I think poking on the bad is extremely important to optimizing your customer experience.

Michael Krigsman: Okay. Great. A lot of wisdom. Charlie Cole, thank you so much for taking your time to speak with us today.

Charlie Cole: Any time, Michael. I look forward to doing it again.

Michael Krigsman: Everybody, we've been talking with Charlie Cole. He is the CEO of FTD.

Before you go, please, please subscribe to our YouTube channel and hit the subscribe button at the top of our website. We'll send you great material that you'll love to read. Everybody, have a great day, and check out CXOTalk.com. We'll see you again next time. We have amazing, amazing shows coming up. Bye-bye.

This transcript was lightly edited for length and clarity.

About FTD and the flower business

Michael Krigsman: Customer experience, eCommerce, and digital transformation, that's our topic on CXOTalk today. We're joined by Charlie Cole, the CEO of FTD. Tell us about FTD.

Charlie Cole: FTD is really in the business of delivering flowers and gifts to folks. We do that in a couple of different ways. We have two consumer-facing websites. We have ftd.com and we also own proflowers.com. Behind those two websites is a fairly intricate network of both independent florists and kind of direct from farm florists.

If you think about it in a very basic way, we are a flower marketplace that has an extremely distributed supply chain network behind it. We've now been at it for almost six months with this new leadership team and, for a variety of reasons both micro and macro, it's been a hell of a journey.

Michael Krigsman: Now a quick thank you to Productiv, a SaaS management platform that unlocks the power hidden in your SaaS applications to bring you higher ROI, better team collaboration, and lower license costs.

You're a flower marketplace, meaning an eCommerce platform with a sophisticated and complex supply chain. Do I have that right?

Charlie Cole: Yeah. To put that last point in perspective, we have about 9,000 different points of distribution. When you start to talk about where things can go right or wrong, that level of complexity is one of our full-time jobs, for sure.

Michael Krigsman: I guess the question is, where do we begin to unpack this? Do you want to tell us, just briefly, about the florist business? I'd like to learn about the eCommerce side as well as the distribution and the supply chain.

Charlie Cole: The best analogy I can give you, Michael, is it's not dissimilar to the transformation the travel industry has gone through. There are major providers of information and also booking destinations. TripAdvisor comes to mind. Expedia comes to mind.

Behind those distribution networks is everything ranging from the smallest boutique hotel in central Maine to chains of Hiltons. I'd say that that analogy is very apt for the flower world. We have small businesses.

One of our partners, Rachel, here in the Seattle area at Ballard Blossom, she has a store. We can send her orders and she fulfills them. We also have networks of florists. Then we have large-scale farms where we can actually ship you flowers directly from Columbia. Literally, the flowers go on a plane and, two days later or the next day, they're at your home.

When you think about the florist business, there are very many flavors of florists, if you will. There is the small business, independent operator. There are the chains. Then there are these large-scale farm operations.

For us, our number one goal is, regardless of where the flowers are coming from, you as the end consumer have the best possible experience you can possibly have. I think that last point is important because, before I was a part of the flower industry, I could have never appreciated this, but I think a lot of the large-scale flower operations out there have either intentionally or unintentionally tried to commoditize the business. I would argue that the flower business is about as opposite to a commodity as you could possibly get.

There is that old expression, "A rose is a rose is a rose," but it's not true when it's been a box for two days. All the intricacies that go into delivering the best possible flower on Earth is our North Star. It's a fun industry to be a part of.

Customer satisfaction and experience

Michael Krigsman: The common thread is customer experience. That's kind of your reference point?

Charlie Cole: One hundred percent. I think it would be fair to say that that wasn't always the case at FTD and maybe that was one of the things that drove them through a bankruptcy, to be perfectly candid. But since I have arrived, as I mentioned, I started on March 23rd, which coincidentally is the first day in the 110-year history where the entire company started working remotely due to COVID-19. The circumstances have been just wild.

Yeah, we're obsessed with customer experience. We are obsessed with trying to not fail ever on delivering an order and, when we do fail, make it right. There is a lot in there that we can walk through ranging from where we source the flowers to how we pack the flowers to how those flowers are represented online to how we communicate information to delivery because one of the potentially obvious, Michael—but maybe not if you don't think about—idiosyncrasies is, nine times out of ten the person who bought the flowers is not the person who received the flowers. Right? We're in the gifting business.

It's important to understand that your kind of dealing with two different customer journeys. You're dealing with two different customer experiences. You're dealing with the experience of giving someone a gift and you're dealing with the experience of receiving a gift.

It would make sense that when you have two experiences that it's just twice as hard but I would argue it's more of a logarithmic effect. It's more like ten times as hard because, when you have those two divergent pathways that require two different messaging paths and have two different sets of expectations, it multiplies the complexity exponentially.

Challenges to creating customer success and loyalty

Michael Krigsman: Give us a glimpse into the kind of complexity, customer experience complexity, that you're describing. You say it's logarithmically more difficult to deal with both the supply side and the delivery side and all the various aspects. Tell us why.

Charlie Cole: I think the best place to start, Michael, is understanding the difference between the two types of orders we fulfill as it pertains to flowers. We have florist fulfilled, which the florist down the street from you sending orders out of their shop and their trucks and getting to your home, and we have what we call in the industry a drop ship provider. A dropship provider is also flowers in a box.

Let's just start with the florist side. We put a picture online and I think if eCommerce has done anything, it's crystalized the customer expectation because you can see what you're going to receive. We've all ordered things online and I think probably the oldest example of this is, I think about the McDonald's commercials where they would show these beautiful, large cheeseburgers on TV and then you'd get to the restaurant and maybe there'd be a little bit of a disconnect there. I think eCommerce has almost stopped that.

We have to deliver what you saw online in the picture. That immediately puts pressure on the customer experience because we have taken a photo in a studio, probably in pristine conditions, and now we're handing an order off to a group of human beings that have a varying level of flower freshness. They have a varying level of flowers in their cool. and they have a varying level of ability to deliver that to you and you, as the receiver, may or may not be home.

I've just basically thrown out three or four challenges that, frankly, are not easy. It's not easy to make sure you, as the receiver, receive the best flowers because best, in a lot of ways, is synonymous with fresh. That requires a physical handshake, you being able to grab those flowers off your porch as quickly as possible.

The customer experience challenge, to think about that in a little bit more of a stratified way, accurately represent the products online to you, the consumer. Accurately represent those expectations so the florist can deliver on those expectations because, right away, we put our partners in a really bad spot if we don't do that.

One of the honest things I've done since I arrived at FTD was, we organized a group of 50 florists and spent 10 hours with them just asking them to rip our business down to the studs: good, bad, ugly. Where has FTD let you down? What have we done right? What have we done wrong?

One of the things that all of our florists have asked is, "Look, we understand that you're in eCommerce. You've got to make these pictures beautiful but make them accurate. Set these customer expectations. Don't be the McDonald's cheeseburger that shows up flat and squished. Accurately represent these flowers."

To me, as a newcomer to the industry, that was just like, "Well, yeah. We have to do that," but I think that the larger flower providers online have been really letting florists down for the last ten years. That might sound like hyperbole, Michael. I mean it. I think that there's been a disconnect between the expectation companies like us have set and then the pressure we put on our florists.

We're acutely aware that customer means both things to us. It means not only the person giving, not only the person receiving, but our florist partners are our customers too. We have to be fair across the board.

Complexities of eCommerce

Michael Krigsman: I think we tend to think about eCommerce as the interaction point on the website where you browse and you see the photos, as you were just describing. But in your case, it's so obviously clear that the enabler of that transaction is the sourcing of these perishable goods and then the timely delivery of these perishable goods. It's quite different from, say—I don't know—downloading games, right?

Charlie Cole: Or selling suitcases, right? It's just a different thing. The thing, Michael, just to ratchet up the intensity on why customer experience is such a passion point to us is, don't forget the surrounding emotion in the process. We deliver flowers for literally the most joyful events in people's lives: the birth of a child, a marriage, an anniversary. Then the saddest events for a person's life: people passing away.

When you bracket all of the idiosyncrasies of these customer experiences and the umbrella of the emotions involved, to me it just ratchets up the stakes. That's why I really think it's a Richter scale level of importance. It's not just like, we have to match expectations.

It's almost cliché, Michael, at this point for an eCommerce person to come up here and talk about customer experience. But when you actually distill it down, it's a very different emotion, Michael, when I send you a suitcase versus when you're celebrating the birth of a child. It's just a different level of stakes.

We have to internalize that as a company. One of the things I say quite a bit is, "Take it personally. Take it personally."

We did something both because of need but because also, I think, is a good practice. Over the Mother's Day holiday, which all these experiences and complexities were ratcheted up by the realities of COVID-19, every person in the FTD company—it doesn't matter if you're the CEO or a customer service agent—did a stint in customer service. When you do that and you see what happens when you screw up a delivery, take it personally. Right?

That's something that we're obsessing over and making a hell of a lot of improvements. But I won't like to you, Michael. We've still got a ways to go and I think that that continues to be the thing we chase and will always chase until we're perfect.

Michael Krigsman: We have a very interesting comment from Twitter from Arsalan Khan. I always say, Arsalan always gives us great questions. Arsalan, thank you so much for participating every week. Arsalan says that in the online world there is no such thing as "regular hours." How do you manage customer experience in that scenario? The dimension now of this basically unbounded, you know, we're not limited to an office or to hours, how do you manage that aspect of it?

Charlie Cole: Ecomm is a 24/7/365. This year, a 366 job, right? It's just the reality. Your store is always open.

I think there's a pragmatic answer and there's a bit more of an idealistic answer. I'll give both.

Pragmatically, we have an extremely diverse customer service backend that allows us to have call centers open if we need them, whenever. We can spin them up in the Philippines. We can spin them up in Egypt. Then we have localized, in-house call centers in the Downers Grove, Illinois, and Centerbrook, Connecticut, area.

I think, pragmatically, you have to start answering this question with, how are you actually staffing for that reality? I think we have a very flexible infrastructure.

But idealistically, the only logical answer to this question is based in passive communication. You have to be able to have the best self-service options online. I'll be very candid. We don't yet. It's one of our key priorities and we continue because we focused on this.

We also have to have passive ways to communicate. What does that mean? Not everything is going to happen over the phone. It needs to be email. It needs to be WhatsApp. It needs to be Facebook Messenger. We continue to move that way.

I think being self-critical, that reality posed in the question, Michael, is something we're acutely aware of and we continue to strive for. But until we have the ability to basically meet customers where they want to talk to us, we're not there. I think that we still have some work to do and this was a focus we had at Tumi and Samsonite as well. I think the question is another thing that we always have to keep in mind because everybody talks to companies different ways these days.

Michael Krigsman: We have another question from Twitter. You can see, Charlie, I try to emphasize the questions from Twitter because very often they're better than my questions.

Charlie Cole: I love it.

CEO priorities

Michael Krigsman: Tim Wilson says, "It sounds like you have a lot to focus on. You can't focus on everything and so how do you think about establishing your number one priority and what it is?"

Charlie Cole: When I joined over the course of the first two months, I hired four other executives. Every once in a while, we would catch ourselves really flustered because of this exact question, which is, I think if you asked the eight leaders within FTD, and there are a lot more employees in the company that are equally important, but if you were to ask the eight folks that, frankly, report to me, "Where are you going to be in six months?" I think you'd get very similar answers. I really do. But the hardest part is what Tim is inferring here, which is the order of operations.

Coming out of Mother's Day, we did a process where we basically put what we're calling our strategic initiatives up on the wall and said, "These are the six things we have to do to beat our competition." This concept of customer experience, by the way, was bullet one. Then when you do that sort of thing, that's really easy to say. I think, on shows like this and in webinars and whatever you might see on the Internet, it is so easy to say the right thing, and then actually putting the tactical acumen behind it to accomplish them is glazed over.

I would say, Tim, it's not just your first priority, which for us is having the best customer experience in the industry. It's measuring it, right? It's measuring customer NPS. It's measuring lifetime value. It's measuring return rate. It's measuring our florists' NPS. It's measuring our website NPS. Behind every one of our six strategic initiatives is a group of KPIs and budgets where we're holding ourselves accountable.

I'm always quick to say one of my favorite managerial idioms, if you will, comes from one of my mentors, a guy named Tarang Amin. Tarang used to say, "Make sure people have the tools to do their job." Whenever you're putting this level of priority around customer experience, you can have a very candid conversation about, "Do you have the right software, the right people, the right bonus structure, the right compensation?"

Being new, it allowed us to really strip this down to studs. But the answer is, we start with customer experience, and then there are other things that flow through there. But that was a pretty easy process that was done via a strategy session, but I would quickly say that if you were to do an exercise like this, it's only as good as the tactics and KPIs behind it.

Michael Krigsman: Wayne Anderson has an excellent question. He says, "In the FTD model, there's no retail counter and you don't own the delivery handoff, so where do you focus employees on humanizing the customer experience and where is the friction being removed?"

Charlie Cole: It's all about how we process information. Go back, Wayne, to what I said at the start of this call, which is, we actually have two people we have to make sure we're disarming and make sure we're reducing the friction on.

Whenever you give someone a gift, I think we all have experienced this. My wife, Alissa, just sent her friend Paige a birthday present. It's Paige's birthday today. Whenever you do that via the Web, you're kind of metaphorically sitting there looking at the clock and being like, "Is it there yet? Is it there yet? Did she like it?" There's a whole suite of emotions.

One of the really interesting parts of our business is, I might order flowers today to send two weeks from now. What does that customer journey look like and what does the messaging look like to get there? That's something that we have to nail. We have to make sure the person sending the flowers feels really good that we didn't screw up the process.

To Wayne's point, that means delivery confirmations that our florists pass back to us and then we pass it back to them. That means getting the right information.

If I'm sending Michael a gift, FTD doesn't really care about my phone number. They want Michael's phone number. These are all little parts of the customer journey that are so important. That's the first thing.

The second thing is the person receiving. Well, this is hard because gifts, you want them to be a surprise. You have to put this foundation of what the intent is and then bracket it in reality.

I think that the communication of the person receiving the flowers is honestly probably the most important. Go back to this idea of freshness is table stakes. In the summer, if flowers sit on your porch, we're doomed. We're just doomed.

The flowers are going to not look good. They're going to wilt. And it doesn't take long, by the way. It doesn't take long at all. That's the nuance that I think we're in the process of nailing.

To Wayne's point, there's a whole lot of technical plumbing that needs to happen because our florists need to have an app on their phone that says the flowers were just delivered. That pushes to our system. That system pushes out messages to both the gift sender and the gift receiver. This is the waltz.

It's this idea of taking disparate systems and combining them into a holistic experience. Probably the challenge that our CTO Matt Powell is losing sleep at night, but one that we're certainly up to.

Corporate culture and customer service

Michael Krigsman: It's obvious that you can't physically be the person who is delivering the flowers and answering the phones. And so, how do you create the kind of culture where people do take it personally, as you described earlier?

Charlie Cole: Delivering the best possible customer experience and making our internal corporate culture rally around that starts with our florists and growing partners. We are reliant on our partners like Vistaflor in Columbia to grow the best flowers on Earth. We are reliant on people like Bart Guzzardo in Chicago to deliver flowers in the form that we positioned them on the website.

In a lot of ways, FTD is at service to our florists and at service to our growers, not the other way around. I think something that FTD did wrong, and I'm going to speak kind of off the cuff, Michael because, as you know me, it's kind of the only speed I've got. They flipped that script. They thought the florists worked for them. If we don't respect and elevate our florists in the process, we are doomed to fail.

If an order comes in from FTD and a florist receives it and says, "Oh, great." Right? Like, "Oh, they didn't accurately represent the product online. I don't necessarily have the stems. They don't know what my profitability is." The tragedy is this is what the flower industry did to florists for the last decade.

The first thing we did is this florist advisory board. Michael, those ten hours of recordings, and all of the chat logs are available online to our entire company. Not just the C-suite. I'm talking customer service agents have access to this. For us, to take it personally, it's not just a customer journey. We have got to understand our partners.

I go back to the Expedia analogy. If Expedia represents a boutique hotel online inaccurately, who gets the heat? The hotel. When you show up, you're going to be yelling at them at the lobby and it's not their fault. I think that that's so important to us to give the best possible customer journey is to have a ton of empathy for our florists.

Michael Krigsman: How do you ensure that there are no missteps because you've got this elaborate chain with so many pieces? If one person screws up along that chain, leaves the flower in the summer as you said—

Charlie Cole: Yeah.

Michael Krigsman: –and the flowers come and they don't look good, the person that gets them says, "God, look at these crappy flowers."

Charlie Cole: Yeah, we're limited by the loop being closed. I mentioned Matt's name earlier, but Matt Powell, our CTO, said the other day. He's like, "I think we all know that if our refund rate is, call it, 3%, that means it actually should be more like 5%," because there are people that are going to receive a subpar product and just live with it. I hope they don't, frankly, because that's who we rely on to close the loop and make sure we did our job.

I think there is a very important tactic here, Michael. I referenced the six strategic initiatives. One of them is what we're calling data democratization. Every single person in our company needs to know what's going on.

One of the metrics we all need to know at all times is, what is our refund rate this year versus last year, this year versus last month, this week versus last week? Seeing those numbers. If they get worse, we are going to poke on that soft spot until it gets better. We are going to ask the questions of why.

Go back to the intro here. There are so many things that could go wrong. Were the flowers fresh? Did we accurately represent them online? Did the gift receiver enter the right zip code? We have to address verification – that level of tactics.

Then it gets to the florists. Do the florists have the right flowers in stock? Did we give them the right vases? We have to check every single one of these points in the entire time.

Look, I'll admit. Two hours before this call, I received a message on LinkedIn from a woman who we messed up her order. We are going to forensically analyze that example and fix it. That's the hard part about this is, at a certain point, you have to accept your failures and learn from them.

The thing that I'm proud of is, we've reduced our refund rate by about 80% since I joined the company and I'm telling you right now we can go another 200. We can go down to 10% to 6% to 2%.

But to get there, like you said, Michael, I'd say acknowledging, owning, and analyzing the hell out of those failures is probably the most important thing we can do. You don't want them to happen but when they do happen, don't just pretend like it's not a big deal. Take it personally, analyze it, and fix it. If you do that, you're going to make a much better customer and, more importantly, for us, a happy florist.

Michael Krigsman: Somebody reached out to you on LinkedIn. Is this a retail customer or a wholesale customer?

Charlie Cole: Yeah, and I'll tell you it's happening a heck of a lot less than it was in March, which I'm happy about. I love it. I don't love that we screwed up an order, but I love it when customers reach out to me personally because it gives me an opportunity to exceed an expectation.

It's probably happened; in March, Michael, I won't lie to you, it probably happened 20 times. Now, I think I receive one about once every three weeks. Anecdotally, that's progress, but it's still one too many.

The initial thing we do is, our COO, our head of customer experience, their names are Patty and Amy, respectively, and I are going to close the loop on this issue. We are, one, going to make the customer happy.

But this is the thing, Michael, that I think companies screw up too much. We can't put that genie back in the bottle. If it's your birthday today and I didn't send you really good flowers today, you can't fix that. You are now in triage mode. You are doing your best to make better a bad situation but don't pretend it's not a bad situation.

I missed your birthday. I missed your mother's Mother's Day. I missed your wedding day. I think that's this idea of empathy but, more importantly, accountability of why these stakes are so high and why we need to take it so personally. You're going to have three people in our executive suite who are going to follow this problem from problem to solution to preventing it from ever happening again.

I don't sit here and I'm not an idealist. I know we're always going to make mistakes, but that's the level of gravity we approach every single one of these problems. I think that's a start and I think you just have to keep on kind of rolling that rock uphill and seeing how good you can do.

Michael Krigsman: You know I have to say I believe you.

Charlie Cole: I'll tell you, Michael, another anecdote and it just eats at you. During COVID-19, we would receive complaints of, like, "My grandfather and grandmother didn't receive their flowers for their birthday." Okay. That sucks no matter when but, in this world of isolation we've all been living in, good lord. That's the closest to a hug any of us are going to get.

I think that's why this idea of taking things personally and accepting the gravitas of our responsibility is so important. I truly believe our company is rallying around that. The progress is undeniable but we've got a long way to go. I think just being self-aware about that is important.

Michael Krigsman: You've kind of answered this. How has COVID-19 complicated the delivery experience for drivers, for staff? You just touched on it, but maybe you can elaborate a little bit more.

Charlie Cole: Let's do a little bit more inside baseball because the strain is probably bigger than anyone could possibly realize. It's getting better, but let's flashback to April. In April, shelter in place did not mean shelter in place did not mean shelter in place. The order that came out in Chicago versus San Francisco versus LA versus Seattle versus Minneapolis, they were all slightly different. And it wasn't state-by-state. It was municipality-municipality. It was county-by-county.

What that meant for us is we had florists that just disappeared. They were not allowed to work. We had farms that disappeared. They were not allowed to work.

Any expectation we set for the customer had to allow for that reality.

If all of us can think back to April, it's not a very pleasant memory for most. I am fully aware. It was a moving target. No one really knew what was going on, right? We were all living through this for the first time. We were doing our best but it was a moving target.

You layer on UPS started being late for deliveries because they had a mound of demands they could never possibly fathom, to no fault of their own. All of those things needed to be captured and represented on the front-end. Big banners at the top of the website saying, "Due to COVID-19, delivery times may be delayed." Small things like that.

The one thing I think I'm really proud of, of the entire eCommerce industry, all of us, I think, did our best to set proper expectations. That doesn't mean we always hit them, but I think we were all fairly vulnerable about it.

The one for me, Michael, that crystalized the stakes was Mother's Day. Mother's Day was in the peak of COVID-19 and it is the number one flower gifting holiday for us every year. I'll just say it. We messed up a lot of orders because of some of our own fault, because of COVID-19 exacerbated fault. It was just hard to watch but, for all of us, I think it was a sobering reality for us that we were now like, "Okay. This is why this is important. This is someone's mom."

My mom passed away some time ago and I would give anything to send her flowers. I think everybody feels that way. COVID made everything harder, but if you want to set positive spin on it, which I have a tendency to do, if we can make it work now, we should be that much better when, God willing, this thing is over.

I think, for us, it put pressure on the supply chain. It put pressure on our florists having to close their doors. It put pressure on consumers exacerbated who wanted to do something because they couldn't go hug their mom. It's not an understatement to say, it made everything harder, but I think, when we're done, we're going to be that much better because making things work in this moving target just is going to up the challenge for us. But you can't understate the level of complexity it added to the process.

Michael Krigsman: Wayne Anderson says, "Remote work forced a C-level priority during March, during this period. That's when you started, when you walked in the door. What were your top priorities, your lessons looking back at that time in terms of valuing employees and enabling and delivering customer experience during those first few months that were chaotic for everybody?"

Charlie Cole: Let me just set the stage here, Wayne. I'm talking to you from Seattle, Washington. Since I started my job, I have never been to an FTD office. I've never been to a florist, so it's continuing today. I have met, in person, not including the folks I've hired after the fact, I've met in person three of our employees.

[Laughter] To talk about how this is on the top of my mind, you can't understate the importance. First off, you take for granted the little things that happen when you're in an office. Passing people when you're getting a coffee. Coming into the door at the same time, being able to say hi. All of those natural interactions are gone, and so you have to be so intentional at how you communicate.

The way I did this in my first 3 weeks, I did 60 30-minute calls with all the folks in the company, and then, for every week since then, I have done 2 hour-long what we call coffee talks. I really think of them as office hours where we invite 12 to 14 people to show up.

What I say at the start at every one of these calls is, "Look. The hardest part of this call is to convince you that there is no agenda. I'm just here to get to know you. I'm going to tell you about my dog. I'm going to tell you about my wife. I'm going to tell you about my kids. I'm going to tell you about how I like to play volleyball. I'm going to tell you how I like to cook. Then I want to hear about you. Then you can ask me anything. Nothing is out of bounds."

Man, did I get some doozies. I got some doozies on the personal side. I got some doozies like, "Hey, do you think our compensation structure of customer service agents is right?" Okay. You want to have this conversation? Let's have it.

That level of vulnerability but availability is so important because, when you're in an office, you're naturally available way more than you realize. Just walking through the halls, waving to people, body language, all those things are gone. That's the first thing. I think that availability and vulnerability were huge.

Then actions speak louder than words. Go back to Mother's Day. Everything is complicated – everything. Who does that fall on? When you get through all the funnel, it falls on our customer service team.

For the first time, coming out of Mother's Day, it was remarkably successful for FTD despite our shortcomings, which were real. I don't mean to downplay them. They were real.

We paid our customer service agents bonuses. I had people tell me, "I've worked for FTD for 20 years and I've never received a bonus until now."

I think if you're going to come up on shows like this or on the Internet and talk about customer experience, that doesn't mean your COO gets a good bonus check. Take care of the people on the phones, man. They're the ones that are ultimately forced into a triage situation.

They didn't cause the problem. You did. You did with your customers. You did it with your website. You did it with your expectations. You did it with your technology that you didn't send it right to your florists. Right? They're the ones that are being forced to deal with this terrible situation.

I think it's a combination of both doing the right actions yourself and making sure people know that you're approachable and available, and I hope I do that. I do my best and I still do it to this day. But more importantly, actions speak louder than words. Don't look at a financial windfall as a way to pay out all your executives when the people that really brought you through it were your customer service agents and our florists.

We saw, going into this. I've talked a lot about florists. In April, we basically gave $1.6 million back to our florists, like, "Look. We know you had to close your doors. Don't pay us this month. Let's get through this together," kind of thing.

I don't pretend, Wayne, to have the equation perfect yet, but I think it's an area where doing small things like making the bonus plan for every employee versus just executives, like actions are ultimately going to speak louder than words. Me getting up here and doing this is the easy part, but I hope our company is starting to feel the momentum on a more personal front.

Building customer loyalty and employee trust

Michael Krigsman: Arsalan Khan is asking about trust, and you've been talking about that, but how do you create trust among employees, partners, customers who report something that went wrong?

Charlie Cole: Own your mistakes. Don't try to pretend like it didn't happen. Remember that this is a time-sensitive business and honor those commitments. At the same time, just be a human, corporately.

A good example of an FTD policy is, we don't plan on reopening our offices or forcing anyone back into the office until virtual learning is not a thing because, if you're a parent, it's just one more stress and probably the most stressful situation I've ever lived through. Don't forget that we have more to life than the four walls of a work culture. I don't know what percentage of people listening to this are in a virtual learning scenario, but if you have to go back into an office, that's an untenable situation.

I think this idea of being human to both your customers, as in like, "Man, if that happened to me, I'd be furious," and we screwed it up. Right? Don't sweep the stuff under the rug.

I think that'd be my short answer is don't pretend like you're just this hollow corporate core. Golden rule, right? Treat others how you want to be treated, but I think you have to expand that to every employee in your company as well.

Michael Krigsman: Tom Bruce says, "Do you envision significant changes or disruptions to the flower delivery industry in the next few years and how are you planning for it?"

Charlie Cole: I think where we can drive this forward, from an FTD perspective, is be more thoughtful about the vessel flowers come in. How many people have a closet full of vases that they hate? You know there are so many people.

You know what that is, Michael? It's unsustainable. It's not good for you. It's not good for the environment. Clutter sucks. There's literally a show called Hoarders showing how much it sucks.

I think, for us, we need to think about how we can change the basic attributes of flower delivery that people hate. People hate overly complex packaging when you get flowers in a box.

We did this cool thing during our last board meeting. We sent every single board member flowers before the board meeting. What a novel concept, right?

Three of them complained about the same thing, which is how hard the zip ties were to get off. Our COO heard that and, if they said it, all of our customers are thinking that.

I think you have to start and make it as seamless and easy as possible. I'll say it again, Tom. We're going to be the ones that cause the disruption, so I think everybody will be chasing us.

Using data in corporate operations

Michael Krigsman: Let's talk about data. You mentioned data earlier. How do you use data to run your business and to drive this kind of customer experience and, basically, all throughout your operations?

Charlie Cole: It's the ultimate barometer of success and it's the ultimate source of truth, if presented properly, Michael. I've got to give a lot of credit. This is the third time I've said his name. Matt gets a lot of credit, but Rob Van Auken deserves a lot of credit for this too.

The first thing we did, Michael, was to recreate a business dashboard. I've got to give another nod to Jim Lindquist in our company, which was giving ourselves actionable data to allow us to manage the business on an hour-by-hour level.

Now, look. Another perfect example of something that probably a lot of people say. When we got done, I heard from probably 50 people at FTD that were there before me saying, "We have never had a tool like this." It was just basically poking on the question, "What are the numbers that truly matter? What should we be optimizing to?"

It's not just profit. It's things like customer NPS. It's things like refund rate. It's things like florist NPS. Which one of our florists has an outsized customer satisfaction? Which ones don't? Let's find those ones that don't and figure out why.

I think it's not just data, Michael, because there's so much out there and it's becoming more ubiquitous than it ever has. It's like, "What are the numbers that truly matter?"

We had that conversation as a leadership team and now I think we feel pretty damn good about the dashboard. We can actually look at a dashboard that allows us to manage the business.

Michael Krigsman: The key thing then about the data is understanding what pieces of data are relevant to support what you're trying to do with the business.

Charlie Cole: And contextualize them, right? My least favorite datapoint, Michael, the thing that makes me cringe more than anything is when I hear companies talking about conversion rate. That's a worthless metric.

Conversion rate with no context is a worthless metric. I would even say conversion rate by device is a worthless metric. If you just ran a huge top of funnel campaign driving to your mobile device, guess what? Your conversation rate is going to suck. But that's not the story, and so I just think it's this idea of what numbers truly matter and providing them with the proper context to allow you to manage the business because it's so easy to be like, "Hey, what's your conversion rate?"

It's a meaningless conversation. Run away. It means the person doesn't really want to answer the question. I think contextualizing the numbers and using the right numbers is extremely important.

Michael Krigsman: Obviously, that implies that you have a deep understanding of the business and the dynamics driving the business.

Charlie Cole: Well, and that's why I think it's a really great point, Michael. When we made this dashboard, I didn't do it in a vacuum because I didn't know a damn thing about the flower industry. I relied on guys like Tom Moeller that have been working with florists for ten years. I relied on guys like Rob Van Auken. I think that that's important, which is, know what you don't know and ask questions to make sure you get to the right numbers, because far too often, it's been my experience, companies aren't looking at the right thing.

Michael Krigsman: As we finish up, can you leave us with two, three takeaways, pieces of advice that folks listening can learn from your experience regarding customer experience?

Charlie Cole: It starts with your employees and your supply chain. Don't forget that. I think far too often we think of customer experience—you said it earlier, Michael—of what's on the website. I would argue that's a byproduct of, not a driver of. It starts with your employees and your supply chain. In our case, it really starts with our florists. Don't forget that.

If you're not selling a quality product, what are we doing here? Right? I think the world of selling a subpar product is over. You have to actually strive.

Flowers are not a commodity. If we're not selling high quality, fresh, great flowers, then the rest is, frankly, academic.

I think that's true, by the way, of anything. I don't care if it's a T-shirt, a pie, whatever. Your product has got to be kick-ass in the year 2020.

Then, finally, don't be afraid of your failures. In a lot of ways, you learn more from those than you do just sitting there patting yourself on the back. For us, I can honestly say, coming out of Mother's Day, FTD had the best financial Mother's Day it probably ever had and all of us felt pretty crappy because we were looking at all of the customer complaints and all the moms we disappointed.

I'm not saying to just live in a cloud of despair because you're messing up orders. I am saying, look at them, learn from them, and take them personally. Far too often, people go into business reviews and talk about the good. I think poking on the bad is extremely important to optimizing your customer experience.

Michael Krigsman: Okay. Great. A lot of wisdom. Charlie Cole, thank you so much for taking your time to speak with us today.

Charlie Cole: Any time, Michael. I look forward to doing it again.

Michael Krigsman: Everybody, we've been talking with Charlie Cole. He is the CEO of FTD.

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