Focus on value to your customer. When companies collect information about their customers but don’t build an experience that’s valuable to their customers, that’s a disconnect. If the rewards don’t have value to customers they will not improve lead to improved customer loyalty or lifetime value.
As part of my series about the five things a business should do to create a Wow! customer experience, I had the pleasure of interviewing Christian Selchau-Hansen, CEO and co-founder of Formation.
Christian Selchau-Hansen is the CEO and co-founder of Formation, an enterprise software company that optimizes the customer journey through personalized marketing experiences. A 20-year tech veteran, Christian has helped develop new products and drive growth at companies like Square and Zynga. Prior to launching Formation, he was a partner at BCG Digital Ventures, using his experience to advise large companies and incubate innovative startups. Christian earned his M.B.A. with honors from The Wharton School of the University of Pennsylvania and has bachelor’s degrees in mechanical engineering and economics from Rice University.
Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I’ve always loved building — taking things apart, putting them back together, building new things…it’s been a lifelong passion. That passion to build is what brought me to study engineering. My 20-year career has taken me through a number of different roles at companies like Zynga, Square, the Bay Citizen, and BCG Digital Ventures. In each role, I was fortunate to work with talented people and have the opportunity to develop and grow new products and businesses.
Formation got its start during my time as an entrepreneur in residence at BCG Digital Ventures. Formation’s founding team worked to build an enterprise software platform that could help companies connect to their customers as individuals through individualized offers at an enterprise scale. Early on in the development process, we worked with our first customer to move from concept to a functional solution in just a couple of months. And the results were so compelling, that we raised 30 million dollars in funding and spun out from Digital Ventures.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
As a startup, we’ve certainly made our fair share of mistakes. Too many to call out and too many retrospectively funny ones to pick a favorite. That said, the lesson I’ve learned is that no matter what, you will make mistakes and the most important thing to do is have comfort in openly discussing them, investing in retrospectives, and building processes to ensure the same mistake does not happen again.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I learned a tremendous amount from my first boss. He was extremely smart, very demanding, and at the same time, he was generous, a bit quirky, and an amazing storyteller. Best of all, when it came to problem-solving, he did not care at all about hierarchy. A good idea was a good idea.
During the very first deal we worked on, we were negotiating a merger of two companies and had just started the negotiation process. As we ended our first session, he immediately offered to provide a summary of the discussion points prior to the second session. I was a bit surprised that he did this when it seemed like clerical work. As we transitioned to another room to get to work on the docs, he turned to me and said, “Christian, never miss an opportunity to take the pen.” It was a simple, but an amazing lesson.
Thank you for that. Let’s now pivot to the main focus of our interview. This might be intuitive, but I think it’s helpful to specifically articulate it. In your words, can you share a few reasons why great customer service and a great customer experience is essential for success in business?
Today’s consumers seek personalized interactions and connected experiences across all channels. And the brands that deliver the best-personalized offers will be rewarded with long-term customer loyalty. To achieve the personalization customers are seeking, marketers can no longer send the same offers to everyone. They must find a way to engage and appeal to consumers with messaging that is uniquely tailored to them. The best way to break through this noise is to create highly relevant and engaging offers. The key is relevance. Brands that leverage individualization effectively can create experiences that cater to both customer preferences and company objectives. This creates a win-win situation for both customers and brands. When both parties walk away happy, that’s the ideal situation.
We have all had times either in a store, or online, when we’ve had a very poor experience as a customer or user. If the importance of a good customer experience is so intuitive, and apparent, where is the disconnect? How is it that so many companies do not make this a priority?
Again, it starts with knowing the customer and being able to act on insights that can improve the customer experience. It’s not that companies don’t consider it a priority, rather that they have substantial challenges accessing and subsequently taking quick action on their insights in customer-facing channels both digital and physical.
Do you think that more competition helps force companies to improve the customer experience they offer? Are there other external pressures that can force a company to improve the customer experience?
Today’s consumers have incredibly high expectations for a personalized experience. This presents a huge challenge for marketers who are trying to connect with their customers. And customers today have more options than ever for where to make a purchase, so those that prioritize customer experience will come out on top.
Can you share with us a story from your experience about a customer who was “Wowed” by the experience you provided?
Our customers have seen substantial increases in customer engagement and revenue lift from individualizing offers for their customers. By investing in truly personal offers, our customers “wow” their known customers. These experiences strengthen and deepen those relationships and ultimately increase customer lifetime value.
Did that Wow! experience have any long term ripple effects? Can you share the story?
Absolutely, increasing customer engagement via personal offers has an outsized impact on sales as engaged customers increase their frequency and range of categories of their purchases. By increasing lifetime value, customer acquisition also becomes more valuable. It’s a virtuous cycle.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a Wow! Customer Experience. Please share a story or an example for each.
1. Companies need to be able to identify customers wherever they engage. In the retail industry, for example, a brand needs to be able to identify a shopper whether they’re purchasing on mobile, desktop, or anywhere else. When a retailer has a large percentage of guest transactions, it becomes much more challenging to understand how best to engage with customers and create a great customer experience.
2. Individualization supercharges customer lifetime value. Once a company can identify its customers, it needs to focus on moving past segmentation and engaging with their customers as individuals. Customers now expect such a high degree of relevance that traditional personalization, such as segmentation, falls short of this expectation. For example, marketing messages and promotional offers built for a given segment often don’t seem relevant or engaging to members of the segment because they don’t address what motivates an individual consumer.
3. Improve the experience with constant testing. Companies should constantly analyze how their customers engage with and respond to different offers and experiences. They can then fine-tune and improve the relevance of the customer experience at an individual level based on this feedback. Within the example of a loyalty program, constant testing allows brands to uncover which offers and experiences bring the most engagement, encourage new behaviors, and build long-term loyalty.
4. Focus on value to your customer. When companies collect information about their customers but don’t build an experience that’s valuable to their customers, that’s a disconnect. If the rewards don’t have value to customers they will not improve lead to improved customer loyalty or lifetime value.
5. Build customer experiences that reinforce company goals. Truly great customer experience has benefits for both customers and the company. In the airline industry, companies can use offers to encourage behaviors like checking bags early that both improve the customer experience by supporting on-time departures and support business goals by decreasing costly delays.
Are there a few things that can be done so that when a customer or client has a Wow! experience, they inspire others to reach out to you as well?
Absolutely, when our customers have great experiences with our product, we encourage them to share those experiences by participating with us at conferences, contributing to white papers and case studies, and sharing their experience.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
With two young kids, I increasingly think about sustainability as the core challenge of our time. Starting a movement that creates real behavioral change and positively impacts the current trajectory would impact the earth and all of its people in a profoundly positive way.
How can our readers follow you on social media?
On Twitter @formation_ai
This was very inspiring. Thank you so much for joining us!