Customer Experience is Product Management

Anthony Schrauth, Chief Innovation Officer at Betterment, shares how his customer experience team’s insights inform product decisions and what he’s learned growing his company from 4 to 224 people.

Highlights

• What is “customer experience” and how is it different than customer support? (5:30)
• How can customer experience teams help product managers make better decisions? (15:30)
• How do customer experience people identify patterns and move the product forward? (16:25)
• What are the most important qualities to look for when hiring for customer experience? (20:30)
• How can companies innovate in highly regulated industries like financial services? (25:30)

Transcription

Anthony Schrauth: I'm Anthony Schrauth. I am the Chief Product and Innovation Officer at Betterment, the largest and fastest growing online financial advisor. Basically what we do is help people save and invest their money. I'm talking today about the importance of integrating customer experience into your product organization. Customer experience is product management.

Mike Fishbein: Anthony is the head of innovation for one of New York's fastest growing companies. I'm really excited to hear his take on the intersection of customer experience and product management. But first, I asked him to reflect on his background and journey into the industry.

Anthony Schrauth: I've always been a technologist. I've loved technology. I have kind of an engineering bent. I was coding ever since the seventh grade, so in C++ and I learned Java and all of these things. My degree is actually in operations and information management. So, I've always loved technology. Out of school, I kind of fell into the area of management consulting because I always liked solving problems and helping people. My focus there was in consumer strategy. That developed even further into more of a niche in online product management or digital product management, which, back then, really wasn't even a thing. But, people knew, like, we want to build something online and we need someone to help us do that.
So that kind of became my area. I fell into financial services but really own this niche area of online product management. And, being in financial services, that became working with a lot of online banking applications and helping people develop their online banks and help them raise deposits without branches.

So, you'll recall over a decade ago, ING Direct was all the rage and everyone was raising deposits without having a branch nearby and that was like a brand new concept. And, I was helping people do that so they could get deposits from cyberspace. So I worked with a lot of really big name companies develop out those applications and really take it from a customer perspective, which is something that, again, back at that time, people never thought to, like, hey, let's ask the customer, let's understand what their needs are when we're building a technology product.

So then, fast forward a few years, I met up with the founder of Betterment, John Stein, and he worked at the same consulting firm I did, and then went off to business school. We ran into each other by happenstance and he had said, well, I'm putting together ... I want to start an online bank but instead of having a savings account on the back end, I want to have stocks and bonds. And I'm like, well, I know how to start an online bank. I can help you with that.

So here we are, about eight years later now. It's a pretty wild ride because it started with just four of us in a room hacking this thing together. And now we're over 200 people. I started my role as the Chief Product Officer where I built out and scaled the product management team, the product design team, and the customer experience team. I also built out the investment and advice teams as well, because those are factors that worked into our product, as well. That's kind of like ... kind of a specialty thing that most product managers or product leaders wouldn't have under their umbrella, but was something that I thought was important to kind of tie everything together, because those things are all inputs into the ultimate experience that people see at the end of the day. And, ultimately, that's what product management is. It's creating these really wonderful experiences that kind of work end to end and don't feel disjointed. So, that's really been a big drive for me in how I approach product management.

More recently, I've kind of taken on an innovation role at Betterment. What that is, it doubles as our corporate strategy area as well. But it's really trying to figure out what can we be doing in the future? How can we be thinking about things strategically? What is the future direction of our product and our company and so forth? So that's what I've been focusing on the last few months.

Mike Fishbein: Anthony's career encompasses both angles of product management. The engineering and delivery part as well as ultimately having empathy for the customer. That's driven his philosophy and the topic of this week's episode. So, to start us off, what exactly is customer experience?

Anthony Schrauth: I think it's important, first of all, to make a distinction between customer support and customer experience. I really like to call it customer experience because it has a completely different connotation to it. Customer support is, you envision a call center of order takers who aren't very engaged in what they're doing and aren't really creating an experience for you, where a customer experience team is someone who is extending the experience of what you're getting in the digital product. They're really making you feel that sense of delight and accomplishment and so forth that you want to have throughout the digital experience. It should extend all the way out into when you're calling or emailing us and so forth. So I like to make that distinction there.

From day one, I fought to have the customer experience team part of the product team. In my consulting days, that would be the first thing I would do. Whenever I went to a new client, I would insist on going to their call center, even if it was in another state. I'd be like, that's okay. We're gonna fly there, I'm gonna go to a call center, because that's where the answers are. I would talk with all the agents to understand what they were hearing, what the customers were saying, what the pain points were for the customers and for the customer service people there. And, I'd sit next to them and listen to some calls and really get a sense for who the customers were that we were building these products for.

You know, something interesting that I found as well through that experience of working with a number of clients is that the call centers would always fall in one of two places, and it never seemed to fit well there. They were always these digital pieces of either the marketing team or the operations team. And you can always tell a call center where they belong by how they treat you on the phone. If they belong to the marketing team, they're always trying to cross sell you shit you don't want. So you'll call Time Warner or Spectrum, or whatever they're calling themselves now, and you'll be like, my internet doesn't work, please help me. And they'll be like, well this is great. Can I interest you in a package of HBO? And you're like no. But they're incentivized to sell you more things.

If it's part of an operations department, it's all about efficiency. This is a cost center that we have to reduce the volume of and the costs of it as much as possible. So they're trying to rush you off the phone and they're trying to measure every little thing. Not that there's anything wrong with that. We measure everything. We follow all the best practices of a good call center. But, it's taken to an extreme that breaks the experience.

Whereas, I wanted to be part of the product, that it's something that is an extension of what you see online, on your mobile apps, if you're emailing or calling us, you should kind of have that same feeling. You should have the same tone. It shouldn't be disjointed and it shouldn't feel like we're being overly pushy either to sell you something or to get you off the phone. So that's why I really felt strongly that customer experience is a product.

I think that the customer experience team, they're always trusted partners to product managers and product designers. And part of that is we've really elevated them from being, again, that stereotypical order taker type of person to really being problem solvers, that they're really mini product managers and mini user researchers. And that's how we like them to approach the job. And if they notice a problem and they're seeing a pattern, like, God, I got five emails and three phone calls about this similar thing, they can say, okay, I see a pattern here. Something is going on. And they'll start probing the customer a little bit more and say, well, what were you doing? How did you get into this situation? What were you thinking was gonna happen when you pressed that button? And, by the end, they'll have a really good idea of here's exactly what's wrong with the experience and the feedback loop that we need to create to make that ... to fix that, to make that better. So we really want to empower them and give them that ability to make those recommendations.

We have a rule that you can't just complain and say, well, this isn't working or customers don't like this. It's like, great, what's the solution? You're the closest one to the customer, you're talking to them. So, what should we do about it?
That, I think, is a big difference of how we treat our customer experience team versus how a customer service team in a traditional call center works.

Another thing that I think is different about how we utilize the customer experience team as part of the product team, is they're involved very early on the process. During the ideation and conception phase, there is a representative from customer experience in the room. And, again, they're the ones talking to the customers. They're on the front lines, and they have very valid input into if we're gonna build this feature, if we're gonna do this thing, what would be the best way to execute it for the customer? Should we even be doing this at all? I think that's very different than most companies, at least the ones that I've seen, is that usually the customer service team is the last one to know about anything, that the day before a launch they might get a memo or something saying, by the way, there's a new feature coming out. Deal with it. Or, there's a new marketing promotion coming out. Forgot to tell you, sorry.

And, all of a sudden, they're inundated with all these calls about this new feature because people don't understand it and they're like, well, I just learned about it yesterday. Where, with Betterment, they've been involved since the beginning and they've been able to have input into it and get proper training on where things end up in the end. And it's extremely valuable to have that voice in the room and to bring them along throughout the process instead of tossing them in at the very end.

Mike Fishbein: You can learn a lot about an organization by paying attention to its customer support, Anthony says. And the best approach is to think about the function as an extension of the digital product, he argues.

Anthony Schrauth: I think what's really important to recognize is that the customer experience team is on the front lines. And, they're the face of the company outside of what people see on the website. And they're the face out of the company, outside of what people see on the website or the mobile app or whatever. They know the product inside and out, every little piece of it, because they have to deal with it every day. They know if a button moves. They know all the pain points of the experience and the work-arounds for it too, because I've had to help people with that. And so it's really important that there's the collaboration, this back and forth with the product team. And part of that is making sure that the customer experience team feels empowered, that they're not just this operational machine that is nameless and faceless. They need to be empowered to go to the product manager or the designer and recommend ways to improve the experience based on patterns that they're seeing or things that they're hearing from the customers when they're on the front line. The product team also goes to the customer experience team when they're concepting something or figuring out a flow, to really get the feedback of like, "How would a customer respond to that?"

We've had a number of instances where a designer and product manager will go to a subset of the customer experience people and say, "Well, here's how we're thinking about adding this new feature and doing this thing." And the customer experience folks will say, "Oh God, no. Please don't do that. People are already so confused in this section, and the app. You're just going to make it worse." And they'll say, "But you know what you could do is this. And not only will you make this feature better, but you'll improve this pain point that we're currently experiencing here while you're already in that section of the app." And so it's very much a collaborative relationship that product team and the design team see the customer experience team as equals, as true partners, rather than a vestigial part of the company.

Another thing that I instituted several years ago was this idea of a customer week. That every single employee at Betterman has to participate in customer week. So at least once a year, for two days out of the week, you have to work in customer experience. It really gets people to identify more with the customers and talk to them one-on-one and understand what are the issues they're having and so forth. It also makes them realize how hard the job of a customer experience rep is, that, again, people don't realize how hard it is to be on the front lines every single day. And so many people come out of their customer week saying, "I don't know how you do this day after day." But at the same time, they also bring something back with them from that experience, when they ... Whether it's a marketing person, a product person, an engineer, they understand the customer better and they bring back that experience. And they're like, "Boy, I feel like I really just need to go fix this one thing, because I talked to Sally on the phone and I completely understand her pain. And that's not a hard thing for me to fix." And so they'll actually go back and take their own initiative because of being on the front lines with the customer experience team.

It's something that has a very inclusive and a 360 view of the customer about having a customer week and having that ability for people to go back and forth and talk with one another and see each other as equals.

Mike Fishbein: Customer experience teams are on the front lines and have built up so much empathy for users that they can essentially anticipate how new features will perform before they're developed and launched. That makes these teams invaluable for product managers.

Anthony Schrauth: The reality is, and the secret is, you ... Customer research is really important and you know we have a customer research team and so forth. And we do a lot of customer development and user interviews and so forth. But the customer experience team is technically, each one of them are mini product managers. Each one of them are mini user researchers. And you can go to them and you can get great insights from them, or you can ask them, "Well, can you follow up with people next time you hear about this thing? Ask these questions." You can start to train them to be better researchers and get the information that you need. And it doesn't take a lot more work.

Mike Fishbein: Anthony explained how Betterment employees take turns on being on the customer experience team. What does a day in that role look like? How do customer experience members learn to identify patterns and move the product forward?

Anthony Schrauth: We hire people who are naturally curious and want to be problem-solvers. And we train them to be able to ask the right questions and say, "How did you get into this situation?" And really try to figure out what the root cause is and not just try to only solve the problem. And I think what is great about the customer experience team is you get nearly real-time feedback. Whenever you release a new feature or something like that, you can go to the customer experience team or you can go listen in on some calls or you can go answer some emails and see exactly what people are saying about the new feature. And issues they may be having with it. You don't have to wait a long time and set up a focus group and do all that. It really is something that you can do in real time and then tweak the experience as you go. And I think that's one of the ways that the customer experience team sees themselves as providing that qualitative feedback, that texture, to what's going on. You can look at a lot of data. I do this all the time.

We're a very data-driven company at Betterment. But the quantitative piece only tells you what's happening. It doesn't tell you why it's happening. Usually you can talk to a customer experience team and they'll tell you why it's happening. And other things that the team is good at is helping with that qualitative piece when the quantitative piece is ambiguous. And that's been something that has happened a lot. You run a split test and the results are fairly ambiguous. It looks like it works either way, doesn't improve conversion or whatever, one way or the other. But if you talk to the customer experience team, they'll be able to say, "No, no. We should definitely go with version B, because that makes a lot more sense to people. We don't get nearly as many calls about that." Or they can pinpoint exactly why that one is either working better or, if it's not working better, why we should go with that version. And so that happens all the time. An example of how the customer service team has really affected our product is just in our sign-up flow. They're constantly getting questions. They're people get tripped up in the middle.

We're a financial institution, so we actually have to ask a fair number of questions during our sign-up. A little bit than most people. We have to know your social security number, we have to know your income, and things like that. And you can talk with the customer experience team, because they've dealt with a lot of people asking questions like, "Why do you ask this?" Or "I don't understand what net worth means." And so you can resolve a lot of those things.

Another area that they've been critical in improving is our roll-over process. To be able to roll over your old 401k or an IRA to Betterment, there's a number of steps involved. And a lot of those don't only involve Betterment, because there's another party involved, your old IRA provider, 401k provider, and so there's so many steps in this flow, in this process. And the customer experience team has been extremely helpful in saying, "Well, here's where people are falling off. Here's where there's the most pain. And here's some ideas of how we could fix that. Or here's what I tell them on the phone that all of a sudden it clicks to them. They're like, 'Okay, now I know what I need to go ask Fidelity for' or whatever." Those are a couple of examples where the team is always looking out for how can we improve? How can we get more efficiency? And that ultimately results in higher conversions and things like sign-ups and roll-overs?

Mike Fishbein: Whereas AB tests based on conversion are often inconclusive, customer experience teams can basically unlock a new suite of KPIs to explain why one direction is superior to another, based on customer confusion and bottlenecks. These often are important indicators for long-term retention and engagement. For organizations that want to get started, what should they look for in a customer experience candidate?

Anthony Schrauth: The number one thing you want to look for in a customer experience person is the desire to problem-solve. And that they have some intellectual curiosity. They're trying to figure out, "How can I make things better? How can I improve a process?" There's the obvious things where you want to make sure they want to go above and beyond and in the customer service aspect and really provide a great experience to people. And so that's kind of a table stakes thing. In terms of backgrounds, we want to see that they've had customer service or customer experience type of experience, but it doesn't really matter what industry they came from and how that service mentality manifested itself. A lot of people say, "Oh, you have to have someone who came from financial services." The reality is, no. You don't actually need that.

In fact, sometimes it's a hindrance, because they're trained in those environments not to go above and beyond. They're trained to say, "These are the rules. I cannot give you a credit for this ATM transaction" or whatever. And that's not the type of service that we want to provide. Although we have hired a number of people from financial services, but they're often the ones who say, "I was really upset by this rule that I had to follow, and I tried to figure out ways to still help the customer despite the rule." And those are people who you know want to give great service. And the thing is, regardless of whatever industry you're in, it's always easier to train people on that industry than it is to train them how to be good problem solvers or to give good service. So you can take someone who is doing tech support for a technology company or someone who has worked in the food services industry and you can train them on how an IRA works and things like that, but it's really hard to train someone who doesn't have that curiosity and that desire to make things better, that desire to help people. That's a hard thing to train people on.

Mike Fishbein: "Curiosity and the drive to solve problems is what makes someone awesome at customer experience," Anthony says. Now that Anthony has scaled this function at Betterman, what's the one piece of advice you'd give to his younger self?

Anthony Schrauth: It's funny, I've been at Betterman little over eight years now, since the beginning when there were four of us in a room hacking this thing together. And now there are about 224 people. And so it's really grown very rapidly. I think the biggest thing that I've learned and I think is important to recognize is that the way you have to do things, the processes that you follow and that you instill in the team are constantly changing. That what was working six months ago, or even three months ago, may not work anymore, based on how the company is changing, how different stakeholders are involved, and how big the team is and how you need to communicate with them. You always need to be evolving that. I think there's sometimes this perception that there's, like, a one size fits all, like this is the perfect process, and this is the way that you build product, and that's it. We've solved it, and the reality is, you keep on iterating on it. The same way you iterate on the product, you have to iterate on your product process, and you also have to recognize how much process is needed for the stage of company you are. I've talked with some other product leaders at different size companies, and what I think is interesting is when I talk to someone who came from a bigger organization, and then they're starting up their own company and their own product, and they just have a handful of people and a couple of engineers, and they're still trying to apply those same processes from a big organization.

They're like, yeah, every single person has these OKRs in there, and we're trying to do this thing, but for some reason, it's just not working. I'm like, well, yeah, there's five of you. You don't need OKRs. The way you need to think about the product is very different because there just aren't the same types of stakeholders and the same types of conversations. I think it's always good to make sure you're right sizing your process, and also just thinking about the most efficient way to do things based on your current situation and constantly evolving that.

Mike Fishbein: Like building a product, building out a team requires constant testing and iteration. Beyond customer experience, I asked Anthony what it's like to innovate in a highly regulate industry, like financial services.

Anthony Schrauth: Yeah. The funny thing about regulation, and people actually ask me this all the time, like, boy, it must be so hard to build a product in a regulated space. The funny thing is, is that it actually isn't. It creates barriers of entry, for sure, and we spent a lot of time, before we launched, dealing with all the regulations and trying to figure out the exact right way that we had to build the company and the product to meet the regulatory standards, but at the end of the day, regulations aren't necessarily bad things. They are meant to look out for the customer and to make sure that they are going to be all right.
As a good product manager, that's your job. You should be looking out for the customer, trying to do the right thing for them, and so the regulations aren't actually opposed to that. You just have to figure out how to work with them and make sure that you remember, that's the spirit of what they're doing and really try to execute that spirit in a really modern way. It doesn't have to be a terrible experience at all. One way that we overcome the challenge of being in a regulated industry is by involving our legal and compliance team early on in the product process and in the conception phases of what we're doing.
We have an awesome legal and compliance team at Betterment. They recognize that their role is to help us build a better product, not to say no. I think that's how most compliance departments see themselves, is like, they just have to say yes or no to things, and more often than not, say no, so everyone is upset with them. With us, they're partners. We bring them in early and say, "Here's what we're trying to do." They're like, "That's interesting. Here's where a couple pitfalls I can see are going to be. I can see where this could be a problem here, but let's figure out how we can work with that."

At the end of the day, we're able to create the product that we wanted to create, and it's probably even better, and then we know that it's going to meet all of the regulatory requirements, versus how I've seen it done at other places where the whole product process goes on. In fact, you maybe even built the product. It's almost ready to go, and it's in a beta phase. You're like, "Hey, legal. Take a look at this." They look at it and go, "What are you doing? No, absolutely not." Then everyone has wasted the time. You're trying to go back and band-aid things over, and that's how you end up with those really broken customer experience because when you recognize that's the process that happened, you can see where a flow or an experience was meant to be different.

Then, all of a sudden, it was band-aided with some things that made it, like, compliant, and you end up with all of this fine print that's just weirdly tacked on somewhere and doesn't feel like it's naturally part of the conversation that you're trying to have with the customer. I think that comes from the fact that you just didn't partner with your legal and compliance team early. You, similar to the customer experience team, treated them as this vestigial thing that aren't part of the team, when the reality is, the customer experience team, the legal and compliance team, just as valid of stakeholders as the marketing team or the customers.

Mike Fishbein: From support to experience to compliance, aligning teams around the customer is a recipe for success. Next up is the benchmark. Let's see how Anthony reflects on the next series of questions we ask all interviewees to ask themselves.

Anthony Schrauth: How do I eat my own dog food? Well, the thing is, is that I've personally worked in the customer experience team. When we first launched, I was the customer experience team when there were only four of us. All four of us took turns answering the phones and answering emails. That was such a valuable experience to do that and really understand the customer. That's part of why I ended up creating the customer week program so that everyone in the company, no matter how large we grow, have that same experience and get to touch the customers. Even now, I still answer emails. I still pop into the queue every now and then. I constantly talk to customers. I'm, in fact, having my customer week next week.
How do I get out of the office? I get out of the office a lot virtually by talking to customers on the phone and participating in customer interviews. I love sitting in when our user research team is talking to customers, and just listening in and seeing what people are saying, and watching them go through, use ability test and things like that. You just get so much insight from kind of watching that live, and also then just having that discussion with the research team ,and the product managers, and designers who are involved in that session, just to talk about, what did we just see? What just happened there? I think that's really important.

We haven't been doing as much in-person things because we just found it's more efficient to do it virtually, but we use GoToMeeting so you can see the person's face on their webcam, and you can also see their screen at the same time. The thing I love about that, too, is when you see the webcam and you can see them furrow their brow and be like, I'm not sure what's going on here, then you can ask them a follow-up question and be like, "So, I see you're having a little trouble here. What are you thinking?" And things like that. The other part, which is really awesome, and kind of hilarious sometimes, is you see the environment that they're in. You see where they are when they're using Betterment, if it's in their office cubicle, if it's at home, and you see cats walking around on the back of the couch. You're like, okay, now I really understand who the customer is and what environment they're using our product in.

What am I reading right now? I'm always reading the First Round review blog. I think it's great, the content that they put out, 'cause it's so varied in all the different things and all the things that you think about as you're building a company. I think that's a great service that they're putting out there.

What is the recurring product management nightmare I have? I think it's this nightmare that I'm never gonna have enough resources to do everything I want. You're constantly prioritizing resources, and you're constantly saying, okay, we can do this thing, and this other thing that I want to do, we'll do it later, and then something else gets prioritized above it, and something else gets prioritized above it. I just have this fear that sometimes we're never gonna get to this one thing that I know is really cool and that customers are going to love, but there's other priorities that keep coming up in the moment. You're like, yeah, that one is more important to get done. It's one of those things, as the company keeps growing, they keep getting more resources. You're like, yeah, we're gonna be able to get to that thing now, but then somehow, there's always more priorities and different things that get moved ahead. I think that's my worst nightmare, is we don't get to do some of these other things that we know we really want to get done that the customers are going to love.