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Intouch Insight |
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July 29, 2019 Issue |
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CEOCFO MAGAZINE |
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Intouch Insight is Uniquely Positioned to Provide Customer Experience Management Solutions to Retail and Hospitality Businesses |
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President & CEO Intouch Insight (TSXV: INX)
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – July 29, 2019
CEOCFO: Mr. Watt, what is the focus at Intouch Insight today? Mr. Watt: To understand our focus, you always need to start with things like the company vision and mission. For many years, our vision has been to provide perfect information instantly. Our mission is to create shareholder value by designing, building and delivering solutions that collect data for customers and provide information that improves business outcomes.
Our recent focus has been around creating new and innovative software to complement our existing product offerings for our target customers, which are location-based industries. This focus has allowed us to create world-class software which is differentiated. In fact, we’ve actually filed for a couple of provisional patents. One of those filings is for our Action Campaign™ technology, which allows our customers to not only see where they can make customer experience and operational improvements, but actually launch activities within the organization to resolve issues and improve business metrics. All of that is done through the software. Incorporating that into our software system has really been our focus.
CEOCFO: What is special about your software? Mr. Watt: Our target market is location-based industries which includes big restaurant, retail, hotel and gas and convenience chains. We’ve built our software for those groups. The patent that I mentioned earlier on Action Campaigns, allows these groups to launch an activity across a network of ten to tens of thousands of locations. They can then track who did it and who did not do it, and whether or not those activities made an impact on things like Net Promoter Score® or other measurements such as financial metrics.
We have taken our customer experience management (CEM) software and we have made it a hub for data about a company’s locations. Traditional CEM software looks mostly at things like call center data and survey data. We have said, “Let’s look at audit data, mystery shop data and internal data, and let’s see how that data relates to individual locations. Who is compliant with customer service and operational standards and who is not compliant?”. Once they have that information, we give them a tool – in the same system as they collect and analyze the data – to actually work with those locations to make the necessary improvements. We have multiple products and services that help our customers achieve this – which is unique to our focus on location-based metrics.
CEOCFO: When did you recognize this was the way to go? Mr. Watt: We launched our checklist and forms automation product roughly four years ago. We built that product because our customers were telling us that they wanted something like that that they could use. Prior to that, we already did customer satisfaction surveys, mystery shopping and operational audits – and now we had this checklist product. The more we worked with our customers, the more we realized that they were taking this customer experience and operational data from all of those different sources and they were having to combine it. Our customers had all this data overload. They were looking for a way to distill, analyze and produce effective business outcomes as opposed to just having data. We probably came to that realization a little over two years ago. We spent a little over a year building the software solution to this problem, and then the last year launching and refining. We are really in a great spot today.
CEOCFO: How do you make it easy for your clients to find the answers they are looking for? Mr. Watt: If you go back in time a little bit, it was the best dashboard wins – just because people had something they could look at that was pretty. Really strong custom dashboard capabilities should be table stakes for good vendors. What we have done is also include an artificial intelligence (AI) component into our software because we do not hear people saying “I wish I had more information, I need more data, I need more columns in my spreadsheet.” We are just not hearing that. What we are hearing is that they have all the information, but they want to get something from it that is going to positively impact their business. We have turned not only to a centralized, modern software that can combine data from our own programs, but we actually take data in from our customers’ other vendors like their call centers or hotlines, as well as their financial data.
We can take that external data and our own data, and create a whole different picture by combing it. Then we layer on AI like text analytics and sentiment analysis. In the old days it used to take individuals days to go through open text fields to determine common themes or whether people were happy or unhappy. But now, with text analytics, our software can run through open text and unstructured data from audio and video, and rapidly analyze it to determine nuanced emotions like gratitude, frustration, and that kind of thing. And that information is then shown in easy-to-understand word clouds, and our customers can take action it.
Similarly, you have the concept of predictive analytics. Which is essentially not only reporting on what the current result is, but looking at a predictive model so a company can determine what the return on investment might be for various action plans they might be considering. For example, the system might tell you that by improving the score of a specific standard measured on your mystery shop, you can expect to see an increase of a certain percentage in your Net Promoter Score® from your customer satisfaction survey. Essentially, AI helps companies uncover insights faster and better understand how to drive improvement to important metrics such as NPS, CSAT and revenue. With our software, we enhance the capabilities of our predictive analytics with our patent-pending Action Campaign technology. The customer can see what needs to be improved, the impact an action plan will have on a specific metric, and they can make adjustments and track the actual results as well. That is how we are looking at it.
CEOCFO: When does gut-feeling come in when people are assessing a campaign or results? Mr. Watt: I would like to tell you that replacing gut-feeling is just around the corner, but it’s not. My background is actually in operations for restaurants and retail. I think the concept of gut-feeling still exists today, but it’s place and value are when you are using it in way that I would call “taking a lens of experience” and putting it on top of actual data. That’s because you have to be careful when you’re running an operations company that you don’t get information and say, “This is it, I am going to use this, this is clearly right.”
You need to put a layer of operational expertise and experience on top of the data because sometimes, you might be led down a garden path. There could be lots of reasons why the data tells you to do something. The data might be real but sometimes somebody with a little bit of experience needs to listen to that data and interpret that data. I would say that the need for gut-feeling probably does not have much place anymore, but the need for an experienced lens to look at and qualify the data, and to make sure that the actions taken based on the data all make sense. I do not think that is going away anytime soon. Predictive analytics will help refine that and at the end of the day those roles will be necessary for a while.
CEOCFO: Would you tell us about mystery shoppers? Mr. Watt: Mystery shopping has been around for many decades, but it went through a bit of a change for a period of time back at the turn of the century. Because of the wide adoption of the Internet and the ability to do customer satisfaction surveys, a lot of people turned away from things like mystery shopping because they felt they did not need it anymore because they could now listen to their real customer. That was a trend for a little bit. Now, what has happened over the last decade or so is that you have seen companies returning back to mystery shopping. A lot of smart companies realized that they were not getting all the information they needed to drive effective change and results through just listening to customer feedback from surveys and social media.
The truth is you need to use multiple programs together. For example, let’s say you’re a restaurant chain and all of your customer feedback indicates that your customers are unhappy with your washroom cleanliness - and that is a fact, the data tells you that. Unfortunately, you cannot take action on that data alone. I know that sounds strange because right now you are thinking, “what do you mean you cannot take action? The washrooms are dirty, so go clean the washrooms.” Everyone thinks that is an obvious thing, and that of course you can take action. The problem, however, when you are running a chain is that until you determine if your employees are currently adhering to your internal standards for washroom cleanliness, you do not know whether or not you need to change your corporate standards or if you need to simply enforce the ones that you have. Those are very different courses of action.
If, for example, your people are out there doing exactly what you told them to do and you come down on them and tell them they are not doing their job and start telling them to do more, you are going to create frustration! Which, by the way, will hurt your customer satisfaction and not improve it. This is because disgruntled employees will hurt your customer satisfaction much more than dirty washrooms. You really need to understand how to attack the real issue at hand. The washroom example is just a simple example. But everyone thinks they know how to attack the problem and the truth is you do not, unless you have the data points you are missing. And getting that data can really only be collected through mystery shopping and audits.
Many companies are now realizing that they need to have multiple programs and data points that truly work together to gain real insights. That way, when they do create actions and next steps from the data, they are doing the right thing, they can make an impact on the business, and can measure the effects of those actions. Because of that, we are receiving a bit of resurgence of the mystery shoppers.
CEOCFO: Are many of your customers onboard with the new offerings and have you been able to bring in new customers with your new solutions? Mr. Watt: The truth is that historically most of our customers only purchased one or two products from us because we had our product lines in silos like anybody else. However, since launching our new customer experience management (CEM) software last year, we are seeing a trend towards our current customers taking advantage of our central software and combining multiple product lines.
We are also seeing our customers bring data from other vendors and their internal data into our software, so that they can take advantage of our reporting and analytics. We have also acquired a number of new customers; both customers who are looking at the software side, as well as customers who are looking for mystery shopping. However, the ones looking for mystery shopping really like the fact that it comes with all this technology, reporting and analytics capabilities. We have actually seen a resurgence of both expanding our product lines with current customers, as well as some new customers coming in.
CEOCFO: You mentioned shareholder value; is the investment community paying attention to what you have created? Mr. Watt: We are a publicly traded company, so it is not hard to tell whether people pay attention; it is on the web. To be honest, my answer would have to be not at this time. We are traded today at less than half times our revenue. Even though CEM software companies have sold for over 20 times revenue recently. Even service companies typically sell for more than one times, but we are trading for less than half.
Why do I think that is? We transitioned from a pure services company to as Software as a Service (SaaS) company. And to do that software piece and layer it in, it required a large investment over a decent period of years, which impacts your short-term financial results. The investment community did not seem to follow along with that story, in terms of why you went from making money to losing money even though you are a much bigger company now. We posted our Q1 results for 2019 and it showed very strong growth and also showed a strong swing in our profitability. I have publicly stated that we are going to continue to improve our cash flow and that we are going to continue with the growth. We believe once we start to get close to more positive financial results, as we grow our revenue and our cash flow, investors will start to take notice again.
CEOCFO: What should we expect from Intouch Insight in the next year? Mr. Watt: I think that if you take a look around, people are experiencing more and more surveys than ever before. There is a term “frictionless retail” and the term used to be used to mean removing the conflict from the customer experience. But today, that term has expanded to mean providing better and more unique experiences. I do not think these trends are stopping, and I think for people to fill out surveys and long surveys, even to win a prize, is starting to get a little tiring.
For example, look at the grocery stores. If twenty years ago I said to you, “One day we are not going to need places to carry food. We will not need physical locations for groceries.” At that time, people would have told me that I was crazy and that there will always be a need for food in a grocery store. However, today, there are a number of companies competing to bring not just groceries to my house, but bring them in boxes out of a warehouse, bundled into meal kits with recipes attached.
As customer experiences evolve and as the omnichannel world expands, this frictionless retail concept and the ability to interact with brands across all these different channels is only going to increase. Companies are going to have to figure out how they fit into that world because people do not want to get Amazon’d – which is a verb now. Nobody wants to get taken out of business because somebody can get it online easier. What we are going to see in the customer experience measurement side of things is we are going to have to measure not just the traditional things you used to measure. You are going to have to measure new things, you are going to have to measure things you never even thought you had to worry about. You might even want to pay attention to some of the competition out there by measuring them as well. As a result, you are going to need places to bring all this data in, analyze it, take actions and be iterative. In addition, it is going to have to be much quicker than it ever was before for customers to provide that feedback. The use of video for example is going to become much more prominent because people do not want to fill out surveys. I think everything is going to continue to change and strong retailers will find their way.
CEOCFO: Why is Intouch Insight a company to watch? Mr. Watt: We are in a unique situation. We virtually do not have any competitors that do everything that we do. Most companies we compete with fit into the customer experience management software space such as Medallia, or they are mystery shopping companies such as Market Force Information LLC. However, the software vendors do not offer the services side and the mystery shopping companies – even the largest ones – do not have modern CEM software. They do not have software like Medallia has, but we do.
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“We think we are uniquely positioned within our target industries to do
things that simply no one else can. Not even the largest competitors can do
the broad range of things we do for location-based industries in terms of
helping them manage their customer experience.”
Intouch Insight (TSXV: INX)
Contact: Lindsay Sykes 613-270-7922
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Improve Customer Experience, Intouch Insight Inc., Customer Satisfaction Surveys, TSXV: INX, Cameron Watt, Cameron Watt, Intouch Insight is Uniquely Positioned to Provide Customer Experience Management Solutions to Retail and Hospitality Businesses, CEO Interviews 2019, Business Services Companies, Industrial Companies, Canadian Company, customer experience management, customer experience management solutions, cem, cx management, cxm, mystery shopping, improve business outcomes, forms automation software, mobile checklist software, customer feedback, Intouch Insight Inc. Press Releases, News |
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Cameron
Watt