From Cost Center to Revenue Driver: The Transformative Role of AI in Customer Support

The Future of CX: A Conversation with Gerald Hastie

We sat down with one of our strategic advisors, Gerald Hastie, over the holidays to pick his brain on topics ranging from the role of GenAI and the opportunities for customer support. Given the wealth of experience he has leading support teams at companies like Roblox, Pinterest, Time Warner Cable, Evernote, and Masterclass, we knew there would be a ton of value in the conversation. 

A Journey Through Customer Experience Leadership

Aakrit: I’m super excited to have Gerald on to share a little bit more about his perspective on the future of CX.

Gerald: Yeah, happy to do that. Thanks again for inviting me. First, when I think about my background, I think about it in three parts. The first part was more from the vendor side when I worked at Avaya communication where I did a lot of stuff around building out contact center tools for Fortune 500 companies switched over to the consulting world and did consulting both at Deloitte and McKinsey and working with companies across the globe to think through customer service operations and how to best effectively execute that. Then I decided to run an operation. So for the last 18-plus years, I’ve been running operations for major companies like Time Warner Cable, Google, and Pinterest. I’ve had a lot of experience, my degrees in electrical engineering have nothing to do with customer service at work.

The Impact of Generative AI on Customer Support

Aakrit: One of the most exciting things that we’re seeing in the industry is Generative AI coming into the space and how that’s changing the impact of support organization is the future of CX and it’s been a buzzy topic over the past year. One of the biggest areas and organizations that are feeling the most value, at least what’s being cited is around either customer service or R&D teams.

What are some of the things that you’ve seen over the past year to year and a half, where generative AI sounds like a compelling technology for customer support?

Gerald: Yeah, that’s a good point. I have seen some interesting things going on in the space. We’re not fully there yet, obviously, so it’s not like the silver bullet that everybody thinks it is, but there is some real value in generative AI.

And it’s interesting that, as you cited, it’s in R& D as well as in customer support. And I think the linking between those two has something in common. It’s knowledge, right? So you’re able to do good, good R&D, and maybe do customer service. 

It’s all about knowledge. 

I think our agenda of AI is providing a front end for the customer service side, providing frontline folks quick access to knowledge and information that they can then use to solve customer problems.

So that’s where I see a big piece. I don’t look at it as it’s a way to provide knowledge to our customers, even more to our agents. And I see it as a tool for both, right? So there are some things where AI will help to provide knowledge to their customers and therefore the customer doesn’t need to interact with a human being, there’s other points where AI can help educate the frontline agent to better serve their customers.

So I see it as a twofold support and that’s where I see the trend going for GenAI within customer support. 

The Evolution of Knowledge Management in Support

Aakrit: As you’re sharing, one of the things that we continue to observe with AptEdge in our domain is that knowledge is only growing. There’s more and more knowledge being created, and more systems of information coming into play.

You’ve got community LMS knowledge systems, and you’ve got more information in bug tracking systems because products are changing more quickly. And then you’ve got a lot of collaboration products. Now, Slack and Teams are probably more dominant. But let’s maybe talk about the impact of support and service teams on just the fact that there’s more knowledge and the knowledge is itself in different systems, different places, and changing more quickly than ever before.

Gerald: Yeah. I’m gonna expose my age with you, but when I first started 25-plus years ago, it was just phone calls, right? It was an 800 number and what have you. And since then we’ve got chat, we’ve got email, we’ve had social media to your point community.

So there’s the different types of communication or channels, access channels that we have added in the 25 years I’ve been in this business. Yeah. And because of that, you have different sources of information and knowledge that’s coming through, and that you need to send out to. So that’s where I see a big change is that it’s just so diverse as far as where you communicate with your customers and therefore where you need to provide the knowledge in real-time.

So I think that one’s driving this piece. I think the other part too, where I’m seeing with GenAI and this knowledge in general going is that’s the one side of knowledge as far as providing for a frontline agent. To be able to solve the customer issues, but also get that knowledge back from these customer interactions that we give to the product team, right?

Like I said, when I started this 25 years ago, you’re primarily just toll toll-free number coming in. And we had people on the phone taking these calls. So you had the central location where you can access and see what’s going on and then go back to our product team.

Now it’s so diverse of where we get feedback from our customers that, having that knowledge and centralizing that piece is great. So I think one thing that’s cool about AptEdge in particular is the fact that you can actually articulate, and understand real-time escalations and then capture that information, bringing it back across different channels.

And you don’t see a tool that’s sophisticated enough to do that piece. And I think that’s where I think your tool is a very interesting play on the customer service space. 

Adapting to Rapid Product Changes

Aakrit: One of the patterns that we’re also seeing. Is that the products are going to continue to change faster and faster.

What does that mean for the world of the support rep?

Gerald: There’s a point of getting the feedback from the customers that we can invite to the product, but on the same token, what we have to do since the products are moving fast is 

how do our customer support teams get the information from the product teams or the engineering team?

Hey, we just made this change to the product. Now here’s the latest and greatest piece that you need to have. So it’s more, more interactive between product engineering and operations. More so than it was in the past because things are to your point, things are changing so fast that how do we get that knowledge to the front lines?

As we change and identify bugs and fix bugs, how’s that then relayed back to the frontline folks, so they can then in-turn get that knowledge to our customers as they keep calling and asking for questions? I think there’s a huge pressure on customer operations teams to work more closely with the product and with engineering, again, it’s a two-sided coin. One is providing feedback to them, but just as important is making sure that we get the feedback back from product engineering when changes are being made, so we can articulate that to the customers.

And that’s where a good, strong kind of knowledge base tool is helpful. 

Aakrit: You’ve worked at some of the best brands out there, companies like Google, Pinterest, and Roblox, running large customer service teams, but also companies that have B2B and B2C teams. So you’ve seen the whole gambit of what success looks like across the entire ecosystem of companies and different verticals and different types of customer support.

What have you seen in Generative AI? Where do you see it adding value?

Balancing Cost Pressure with Customer Experience

Gerald: Right now what you’re seeing creates a lot of pressure, cost pressures being pushed on customer service organizations. And it’s no different in the last couple of companies I’ve worked for.

And this is, I think where GenAI can help, but I don’t look at it as strictly a cost reduction or deflecting tickets because that’s where a lot of people think “Hey, with this GenAI, I could deflect tickets all day.” And I see that as, an advantage, but I think even more an advantage is empowering our agents who do have to interface with customers.

To have that information at their fingertips. And I think that’s where the strength lies. So I know this whole, this cost pressure piece that I just talked about and the defecting tickets, but also what I call enhancing tickets. So using GenAI to enhance the tickets that come to an agent, where if we go to a live agent, how can we give them all the information they need about what the customer needs or asking for? We can then provide a quicker answer to our customers and a more accurate answer.

Then the third thing is maybe what I call avoidance, which is again, how can we help our customers? So they don’t have to ask that question to begin with. If we provide better information about our products and services, then there’s no need for the customer to even ask a question because it probably just works and that’s where it’d be helpful. 

Lastly, I talked about the cost piece, which is very important. That’s where a lot of focus is on, but at some point, the cost is going to be as much as you can do, right? As far as squeezing the cost out there, then the next thing is going to be about the customer experience, right? So people always ask me like, Gerald, you’re, you got your MBA in finance. You’ve got an elective engineering degree.

Why are you in customer service? And I always answered it this way, which is, you can have these great new products and innovations, but then someone’s going to maybe amendment that at some point. And then your product becomes a commodity. The only thing that differentiates one commodity from another commodity is how you service that commodity.

And I think focusing on the customer experience. It’s going to be very important in the near future, right? Because product A and product B can be pretty much the same as far as features and functionality. It’s how you support that product to be important. I think the tool, again, like AptEdge is helpful to provide a better and more enriching experience in the customer experience space.

Aakrit: Yeah. And one of the things that we continue to hear is, every company has way more competitors than it did before. And so customer service becomes a differentiation, being able to provide high-quality customer service.

The CFO is looking at every budget. Is there an opportunity for customer service executives, to be able to use technologies like generative AI products to drive efficiency? Maybe be able to get a deeper dialogue with the CFO to show how their organization is becoming more efficient with this new technology.

Gerald: I want to go beyond efficiency too, but I’ll talk about that first, which is, yeah, I think the struggles that we have and I had, in the last couple of roles I’ve had, it was around trying to articulate the ROI for what, for this tool that we want to benefit from, right?

How do we show the CFO “Hey, this is going to generate some high benefit for us”? Having the data and the understanding so you can articulate that too. To a financial officer is very important. To the CFO, the other key thing, is the efficiency piece, but also to think about things like retention, right?

How can this tool help us retain our customers? And that to me, it’s a revenue play, right? If I could retain a customer, that would be more additional revenue for the company. So I think there’s this mix of Hey, I do want to generate and drive some efficiencies.

And that’s easy to document. Which might be more of a challenge, how what I’m doing can help to retain customers and thus increase our bottom line? And I think that’s where as CX leads like myself, we should work more closely with CFOs, which we didn’t do in the past. You didn’t have that close relationship with the CFO.

It’s a lot more challenging now than it is in the past because you’re getting cost pressure and we have the understanding okay, how can we drive to a better customer experience and better revenue? 

I’m curious to get your take on this, support has always been a cost center and that’s been driven by perpetual licenses. And now we’re moving into a world of subscription and pay-as-you-go and customers are monthly or daily and now support becomes more critical.

The Transformation from Cost Center to Revenue Driver

Aakrit: There’s almost like a future where the reps if they can continue to be empowered with technology to be more efficient, can change the importance of a customer service team from a cost center into a team that’s looking for opportunities to drive more revenue.

But what does that mean five, 10 years down the line in CX, right? Could customer support be an avenue to unlock opportunities to drive revenue and growth, not just make sure you don’t have churn and you have a great customer experience?

Gerald: No, I think that’s exactly right. And I think that’s where I’m talking about in the past about how we all have to work together between your product engineering and what have you and with the finance team as well. So all four teams have to work closely together.

As we get past this phase of cost-cutting, cause that’s what I’m seeing a lot of these companies now and this whole build versus buy. I can’t believe we’re in 2023 and we’re still talking about “Hey, maybe we should just build it ourselves. We got all these great tools, like an app that’s out there.”

Why are you thinking about even considering building something from scratch? 

When there’s great tools out there that you’re going to leverage? You’re going to cross that trend where people are going to stop thinking about that and say, Hey let’s use these tools.

And then let’s use these in the sense that, Hey, we can generate a better customer experience, which we know in turn, creates more customer loyalty and a better customer experience overall. And I think that’s going to be true. I think we’ve got to get through this period of “Let me rent as much cost as we can.”

And then those companies that are going to be successful are the ones who think about the customer experience, right? So think about companies like Nordstrom, Neiman Marcus, Zappos, and American Express where they’re much more interested in the customer experience than they are in the cost.

And that’s why you see their values a little bit higher than other folks. And I think as other companies start thinking about this and say, all right, I think by providing a good customer experience. 

Some of the companies I’ve worked for in the past aren’t there yet. They’re more cost-conscious, which is fine. But at some point I’m going to have to turn around and say, all right, we’re going to think through the customer experience more than about the cost. 

The Evolving Role of Support Agents

Aakrit: The role of the agent, the largest representation of the support team is the frontline agent. There’s a lot of news around, are they getting eliminated, the chatbots evolving, and we’re not going to need as many agents. Where do you see the role of the agent and the agent success evolving with GPT? 

Gerald: Yeah, that’s a good question. And you’re right. There’s this whole thing we’re going to get rid of all agents. 

70-75 percent of customer service costs are the frontline folks. So they’re going to be critical in this piece. I think their role is going to change from just strictly answering your frontline questions and questions from customers to where they’re going to be our knowledge base as we work on training our AI and our machine learning tools. They’re going to shift from not just answering questions, but also to helping build those self-service tools and machine learning tools by how they answer just with customization.

So I think that’s where the future of the frontline agent is going to change in the next three to five years for sure.

Looking to the Future of Customer Experience 

Aakrit: That’s exciting. I think the ability of the frontline reps to enhance an experience with GPT is probably the most one of the most important roles for improving how the customer experience continues to evolve.

That’s an opportunity that frontline reps have with technologies like generative AI. 

Gerald: We talked before about making sure that we’re providing feedback back to the product team. I think these frontline folks will be providing feedback to engineering from the AI machine learning perspective.

This is going to be a huge role and expectation that they’re going to have. A relationship to both the product as well as to AI and machine learning. So yes, it’s going to be very interesting. 

Aakrit: Yeah. I couldn’t agree more. The opportunity is massive where customer service can transform into opportunities to drive more revenue, but also leverage this technology to be more efficient and optimized.

That’s where the short-term purview is right now. Every company wants to become more profitable. 

Gerald: Yeah, I think so too. We have to, and I’m not saying don’t think about cost Where some people are short-sighted, it’s they’re only thinking about cost.

And my argument is, yeah, think about cost, but as you lay down these tools and services and processes. Am I laying the foundation to allow us to provide a good customer experience maybe three years down the road after I’ve wrung out all the costs I can’t get out of it?

Keep on working on driving costs, but make sure that the foundation we’re putting down is solid enough that we can build on that and provide a good customer experience. 

Aakrit: yeah. So that, that, that’s well said, thank you for that perspective.

And I think it’s interesting, that we’ve got all these cost pressures and dynamics that are playing into the world of CX, but at the same time, you’ve got the macro pressure that’s also driving that. And people say under pressure diamonds are made. I think there’s going to be some interesting learnings in the next five, five years where under this pressure, I think new evolutions of how people operate and especially perform and drive more value.

I think it’s going, we’re going to see more of that in the customer service organization than almost any other organization. And I think that’s going to be a super exciting thing in the future of CX over the next five to 10 years. 

Gerald: Oh, yeah, I’m very excited about CX and where it’s going. And there’s a lot of opportunity there.

And to your point, I think you’ll see more and more companies put a lot more focus on CX than they did 10 years ago. I’m just excited to see where it’s going to go in the next five years five to seven years. I think there’ll be some big changes coming forth for sure.

Aakrit: Awesome. Thank you so much, Gerald, for sharing your perspective and your insights. I think your experience from all the great companies you’ve been at really ties into where the future is going. 

Gerald: Happy to do that. Thanks for the time.