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Producer:
Hello, everyone. Chris Higgins here with just a quick note on this episode: we interviewed our guest, Nancy Flowers, back in November of 2022 when she was still the VP for insights and loyalty at Hagerty. Nancy sent us a nice note a couple of weeks ago to let us know she's since accepted a position as director of customer experience at Voya Financial. And while she currently no longer speaks officially for Hagerty, we can still air this podcast since she was with the company at that time. And that's it. We just wanted to make you aware. And now, enjoy the show.

Steve:
With all the metrics we typically discuss. Emotion is an indicator that can be complicated, but it's usually in the context of B2B or B2C, a single level relationship. But what happens when we complicate things a little bit?

Nancy:
I think sometimes as practitioners we forget in the business to business world that businesses are made up of people and people are emotional. Recently, Stanford just did a new study on how much of our decisions are driven by emotion, and so did Deloitte, and it's like upwards of 80%. We think we're rational and logical. We're not.

Steve:
How emotion plays a role no matter what the channel, on this episode of The CX Leader Podcast.

Announcer:
The CX Leader Podcast with Steve Walker is produced by Walker, an experience management firm that helps our clients accelerate their XM success. You can find out more at walkerinfo.com.

Steve:
Hello everyone. I'm Steve Walker, host of The CX Leader Podcast and I'm glad you're listening. It's never been a better time to be a CX leader, and we explore the topics and themes to help leaders like you deliver amazing experiences for your customers. There are a lot of different ways to measure what a customer thinks about your company, but customer emotions can be pretty tricky. How a customer feels can affect other metrics. Someone who's happy with their service will likely provide a high NPS rating. Someone who is angry or frustrated will likely choose very unsatisfied in the CSAT survey. So it's important to understand the emotions of a customer as context for the other metrics. But what about a more complicated relationship? Like when there is a B2B and a B2C thing going on? Well, we couldn't have a better guest on this episode to help us dive into this. Nancy Flowers is the vice president of insights and loyalty at Hagerty, an automotive lifestyle firm. Actually, I'm excited about this podcast because people that listen to the podcast knows I'm a car guy, and I think probably people that have high end cars are probably pretty particular about their customer experience. I also want to mention that Nancy is featured in Jim Tincher's new book, "Do B2B Better." Nancy writes one of the articles Jim's been on the podcast. Anyway, with all that as background, Nancy, welcome to The CX Leader Podcast.

Nancy:
Thank you. I'm really happy to be here, Steve.

Steve:
Well, I kind of teased Hagerty a little bit. I'm familiar with it. I'm not sure all of our listeners are. So give us a quick overview of what Hagerty is a really cool business, and I bet being the leader of customer insights and loyalty is a fun job there.

Nancy:
Yeah, it really is. So Hagerty started out as a specialty insurance company. So for those really special vehicles, we call them collector vehicles. So think of your classics like Sixties Mustangs, Camaros, Model T's, Model A's all the way up to Lamborghini's today, or Porsche's. So we started out as as that kind of niche specialty insurance company. But since then, we have really branched into a lot of things to support that automotive lifestyle. It is a lifestyle. Steve It's interesting you said to me earlier, I'm a car guy. Well, that's how people think of themselves when they're into these cars. It's a passion, it's a hobby. And so now we have things like a marketplace where people can buy and sell cars. We put on events where people can come and commune and have coffee and donuts around their cars. We have drive share where you can actually, for a special occasion, rent one of these cool cars. And we also have a very robust flagship membership program. So we do a lot more than insurance today, but insurance is still at our core.

Steve:
Yeah.

Nancy:
But I started out running the marketing department for Hagerty and we were pretty small back then. And about four years into my tenure there, the CEO, McKeel Hagerty, still the CEO, tapped me on the shoulder and said, You know, I've been reading about this Net Promoter score, and I really think our customers like us, and I'd love to kind of look into that. And that was the catalyst for me to start in to see CX and was given the privilege of building a practice there from the ground up and iterating and changing the practice over the years as the business expands and scales and, and yeah, so that's, that's how I fell into it.

Steve:
When was that approximately that the CEO, Mr. Hagerty, came to you about?

Nancy:
I believe that was around 2010.

Steve:
Okay. Yeah. So yeah, you've been doing this for 12 years. Do you still have responsibility for marketing as well, or is this now a separate function?

Nancy:
It's funny, so it's only been separate now about 16 months in terms of I held on to the aspect of marketing called engagement. So we always had the member and client engagement team. So acquisition fell off from my responsibilities, but then I had sort of retention and loyalty. And so I actually had that team until about 14 months ago when I stepped into the insights and loyalty role, which is that more of a strategic level now. Yeah. And so not as much execution.

Steve:
Yeah, I mean, it's a classic, I think one of the classic patterns that we've seen. It's about retention of customers. And there are certain businesses where it's very difficult to sort of separate what the customer experience is from the images that you're creating with your marketing messages. So if the experience doesn't fit kind of what the expectations are, you might have an even bigger problem. So customer experience is very much, I think, particularly in complicated business models, very much related to the marketing aspect of it. It was interesting that you held on to the retention because that's probably the the, the most key aspect in retaining customers, I would imagine.

Nancy:
Yeah, It's really it's funny, in my new role, Steve, I have all of the insight practices of Hagerty now, so not just voice of the client or voice of the partner, but we have brand and so we do brand measurement, brand awareness, brand perceptions. It is so closely linked, right? Like brand and the experience you deliver. And when those are disjointed, you have trouble.

Steve:
So you wrote this chapter in Jim's book and really talking about emotion at a very complex level. But, you know, let's just talk generally about this concept of emotion, because I think it's really critical, particularly for for those of us that are a little more used to being in the B2B space. So just talk generally about emotion and how you were thinking about that.

Nancy:
Yeah, well, to be honest, Steve, we weren't thinking about it and it's one of those things that we fell into, and I'll share that because we first we first discovered it on our consumer side and I'll get into the business to business side in a few minutes. But we as part of our membership program, we provide roadside assistance and it's very specialized roadside assistance because it's for these collector vehicles, it's kind of a white glove experience. What's commonplace today was not 15 years ago in terms of getting a flatbed, you know, that sort of thing. So in 2013, we had to switch providers for that roadside roadside experience and we had to switch for really good reasons. We needed sort of a more modern technology. We also needed to scale and the provider we were with, although they were doing a great job, just couldn't scale with us. We were growing very rapidly and so we did this. We launched with this new provider and we were meeting all of our KPIs. So, you know, average call to answer time, average handle time when the truck was arriving. So all of our operational metrics were spot on, maybe even better than prior to prior to switching carriers. But our NPS went down.

Steve:
Yeah, anywhere you were going here.

Nancy:
So and it went down significantly. And so they called in the CX team, my team, to do some root cause analysis and we listened to lots of phone calls and we talked to lots of customers who had recently had the experience. And it turns out it was a very emotional experience to break down in your collector car. And so, you know, we all know that that that's a that's a sort of really irritating and a pain in the rear end, right when you're in your regular car. But it's even more emotional when you're in a collector car. So we don't like to talk about this a lot, but collecting cars, there's some ego involved, right? You're proud of it. We talk about the thumbs up. And so when you're on the side of the road, you know what the really special hot Porsche, you know, there's some embarrassment. You're you're a little embarrassed. Plus plus you're typically out for pleasure. So then you've ruined your pleasure day, you've embarrassed me. And so emotions are high. And what this call center we had not trained the call center to was empathy. They really wanted to feel cared for and understood in this in this moment. And so that's how we stumbled upon that emotion really matters. We also had we had the the insight that when a client within their first year with Hagerty, if they had a poor roadside experience, it was the kiss of death. We didn't keep them as customers. So we immediately had some, oh, emotion does matter and it ties to business results.

Steve:
That is a great story. And I love stories like this because, you know, the more personal something is to somebody, the more meaningful the customer experience is. Like, I love to use the example of like when you go out to eat, particularly like in a relative sense to an expensive restaurant, people are pretty particular about that experience. So actually, like people that have have worked as servers in restaurants because they know how to handle a customer that's particular. But you know, this is a great example and I had not thought about the embarrassment factor, but that's a whole nother layer on this because actually the roadside, you know, when you're broke down on the side of the road it's kind of a hopeless feeling. I mean, that driver that comes to, they're like a first responder to you. Really?

Nancy:
Yeah. Yeah. And there can be safety issues. I mean, there's all sorts of things that play into it. And we did you know, one of the things we did then, we were able to develop a training. And I think this is important too, because we certainly infuse the training with empathy models and things like that. But I think the real key was we had collectors, some of our customers come to those call centers and bring their cars and let those reps ride in the cars, meet the owners and realize how special this is to them. And it's funny, Steve, one of the things that people there is this myth that collector like collecting cars is sort of a rich man's sport and it really isn't.

Steve:
No.

Nancy:
It's it really isn't. I mean, a lot it's it's about sort of tinkering. It's about the nostalgia. It's about connecting with people. And, you know, somebody may have a vehicle that's worth $10,000 that's been in their family forever and very special or something they always wanted to own when they were in high school versus like even a $300,000 car. You know, it makes no difference. It's a common sort of experience.

Steve:
No, actually, that relates a friend of mine, successful guy, but not not uber rich or anything. But his dad worked at a Chrysler plant his whole life. And my friend Mark got to go to college, but his hobby was to collect the cars that they built at the plant where his dad worked. So, yeah, it is. That's that's a cool that's a cool angle, too. So let's talk a little more about this training. I love the fact that you brought him in and I can almost see the contagious part of the, you know, with a rep gets to ride with a, you know, a person that loves their car and just sort of that feeds off that energy. But did you actually come up with scripts or what how detailed did the training go to try to reach this level of empathy?

Nancy:
Yeah, we don't do a ton of scripting at Hagerty, but these are this is a third party. We don't own this experience like we do in our call centers. Okay. So there was definitely some scripting in terms of just acknowledging, wow, that's really stinks, you know, are you safe? You know, that kind of thing. So there was there was some suggested language and more of a framework for an approach to handling the call.

Steve:
So without the scripts and a third party, did you do any sort of incentives or did you report the scores back to them?

Nancy:
We do, yeah. So with yeah, with our partners and and we have great we have great roadside partners both here and in Canada, you know, that we're willing to let us put their employees through these trainings and, and they're really proud of the scores. Hagerty's, one of their highest rated programs, and I think they're proud of that partnership.

Steve:
Yeah.

Announcer:
Are you looking for a little recognition for your hard work? Well, here's just the opportunity. Applications are now being accepted for the US Customer Experience Awards. Finalists and winners will be named in 18 different CX categories, and you can submit an entry in multiple categories. This could be the chance for your team to finally get the recognition it deserves. To find out more and submit your entry, go to usacxa.com.

Steve:
Hey, my guest on the podcast this week is Nancy Flowers. She's the vice president of Insights and Loyalty at Hagerty, which is a fascinating automotive lifestyle business. I encourage you to check out their website if you haven't already, while you're listening to this, especially if you like me, you love cars, but well, let's turn this now. So we've really been talking about the the B2C part of that, the experience of the person on the roadside. But let's expand that and complicate that a little bit and talk about the B2B side of that. And I assume this is the third party vendor that we're talking about or are there other players in that?

Nancy:
Yeah, this is actually an another player. So one thing to understand about Hagerty is that we market our products direct to consumer, but we also market through agents and partners. So for example, Allstate sells Hagerty's product. So when an Allstate agent has a collector vehicle that they need to ensure they are actually selling Hagerty.

Steve:
Right.

Nancy:
And so we have very large partners that are responsible for our big portion of our business who we also compete against in some ways. And this is an important note as we get into the emotions that we that we have captured being very important to our partners. So I think sometimes that's practitioners. We forget in the business to business world that businesses are made up of people and people are emotional. And I remember I don't know what year it was, but I remember attending a Forrester conference and seeing this first kind of presentation that talked about how much emotions played into our decisions. And I think it was like 60%. I mean, for a number of years we thought like I heard 60% of our decisions are made based on emotion, not logic, not rationale. And I thought that was a lot. Well, recently, Stanford just did a new study on how much of our decisions are driven by emotion, and so did Deloitte. And it's like upwards of 80%. We think we're rational and logical. We're not.

Steve:
No, no. And actually we were talking a little bit just off the air before we started doing the show. But, you know, our our B2B experiences are informed by our B2C experiences. You know, again, historically, you know, in 2013 you could order on Amazon, you could you could call for an Uber. And people immediately said, well, if I can see where my Uber's at, why can't I see where my my delivery is? Or, you know, if I can buy on Amazon and they can track the package, how come my supplier that's feeding our inventory can't show me that. So you're right. And it does come back. And I think as the stakes get higher, it will only be more emotionally driven. So and I think your your references show that.

Nancy:
Yeah. And especially, you know, with commoditized products, you know, you really the only differentiation you have is how they feel when they're done working with you. And so we discovered so after that roadside incident, we did quite a lot of research to understand the emotions that consumers wanted to feel. And then in terms of our partners and so the emotions that we came up with in our partners that were most critical in terms of driving loyalty and satisfaction were really trust and confidence. And trust is a little unique to our business model. As I said, they could see us as a competitor because we do direct to consumer business as well as we sell through these partners and agents. And so they have to trust that we aren't going to take their business and they have to have confidence because this is an accommodation, an area that they aren't experts in, they have to have confidence that we will take care of their customer, that it's the right product, that in the event of a claim that we're going to be there for them. And so when we identified these two sort of driving emotions that they need to feel when dealing with Hagerty, it really unlocked a strategy for us that's been quite successful.

Steve:
Yeah. So your strategy revolves around this differentiated customer experience, which…

Nancy:
Yeah.

Steve:
…that's why we say on the podcast, it's a great time to be a CX leader, isn't it?

Nancy:
Yeah, it's been really fun, you know, in the B2B world, you know, we sort of have this, it's trust, confidence and support. And that's our strategy with agents. And I mean, we've done things and I have to give Hagerty kudos for this. But one of the things that, again, a concern of theirs is that anybody that comes to our website was sort of being funneled through our direct process and they were like, hey, you know, I'm a partner. Like, why aren't you funneling them to me? So we took a big risk and. We built an agent locator, which we were nervous about. We were afraid that we'd be cannibalizing our direct business. Right. But it's been hugely successful. It gets over 70,000 hits in, like six months. And it turns out that there are consumers that like to deal with insurance companies directly, and there are consumers that like agents. And we didn't cannibalize at all. And we made the agents very happy and they trust us more now. So we really have developed ground up solutions just based on building that trust with agents and that confidence.

Steve:
That's a great application of what the customer is telling you. And how do you turn that back into strategy and actually execution that that the customers and the other parties can see. Without giving away any trade secrets, Nancy, how about a little bit of how this has impacted the business from an ROI or a financial or just kind of how you talked earlier on about linking this and the fact that you're trying to tie in all these metrics. But, you know, I think it's always beneficial when we can talk to a practitioner that's taking it all the way and is actually demonstrated that kind of that business impact.

Nancy:
Yeah, well, I'm going to turn it back to the consumer side because quite honestly, we haven't cracked the nut on the agent side with the direct linkage to business results. It's a little more complicated, as you said, right, because it's business to business to consumer in that in that model. And so what what we have been able to do on the consumer side, whether they come through the broker channel or through the direct channel is connect to the emotions we measure there to business results. And the way that we've done that is we've built a measurement framework. And it's funny, lots of CX practitioners: what's your most important metric? What's your what one are you, an NPS or CSAT or the index? And we use we use multiple metrics, but at the transactional level, for example, we use an emotion. So let's just use roadside as an example again. So we know that when there they feel a lack of care, a lack of empathy, that those scores go down. And we know that when an NPS score goes down, that correlates with growth and retention of our business. And so at the base level, we're measuring operational metrics and ease and effort and that emotion. And then at the relationship level where we're measuring NPS, which layers up or ladders up to our business results. So we are we are gifted to have that insight. I will tell you, it takes a lot of data and a lot of time. And, you know, to make those linkages with any sort of statistical relevance.

Steve:
That is a very elegant approach you have there. And obviously, since you've been doing this for going on a decade or so, you know, I can tell right away how mature your program is. But just a message to all of our listeners is that what she said there at the end, This is a worthy activity and you get there by iteration. And, you know, we all believe, I think logically that, you know, creating great experiences for our customers should result in some business outcomes. But, you know, actually finding those improving, that is, you know, it's it's a journey, not not something you're just going to do on one afternoon when you got a little time to think about it, you really have to commit to it.

Nancy:
Yeah. And it's funny when when we talk about maturity models, one of my little soap boxes is like. You know, I don't think a maturity model of a program goes like this because, you know, your business is always changing. Methods are always I mean, we are up and down, right? We've had some years where we've rocked it and we've had some years where we're like, What are we doing? You know? And so I never like to, you know, I'm learning just like everybody else. And, you know, we are, in the measurement standpoint, mature. There's some other areas we're not,

Steve:
Nancy, we've reached that point in the podcast where I ask every guest to give us their take home value. That's one thing that the listener might be able to take from this. Go back to the office tomorrow or Monday or whenever, actually make a difference in and improve their own program based on on what you've shared here today. So, Nancy, Flowers take home value time.

Nancy:
Sure. Well, I think, you know, just to try and start to understand what emotions drive the behavior of your customers so you know, what feelings connect them to a brand, what feelings connect them to a good experience in your particular business? And, you know, a simple way to just get started in that is interview 5 to 8 customers and just talk to them about it, you know, and not even necessarily, you know, not terribly formal because sometimes it's hard for people to to understand emotions, right, that are behind things. But I think if you just start to talk to some customers about, again, what are the feelings that help them choose and stay with brands, you can you can start that work to identify the emotions that connect to results.

Steve:
I think that's a great take home value and it demonstrates sort of the art. You know, a lot of our CX people get pretty heavy into the analytics and the science part of it, but sometimes there's a little more art to it and, you know, just talking to customers and doing the qualitative part is, is a really a great tip and and probably pushes to some of our folks out of their comfort zone. So, so great tip. Nancy, in case anybody would want to continue the dialog, I know they can find you on LinkedIn because I found you on LinkedIn. But any any other contact information or you want to just make sure.

Nancy:
Sure. And I am pretty active on LinkedIn in terms of, you know, I pay attention to it and I connect with people on LinkedIn. So that's a great place to find me and love to connect with other practitioners.

Steve:
Nancy Flowers is a vice president of Insights and loyalty at Hagerty, a fascinating automotive lifestyle company. Check out their website. She's also a contributor to Jim Tincher's new book, "Do B2B Better". Encourage everybody, Jim is a friend of the show and a great practitioner and somebody that we love to reference. So if you want to check out the book, you can probably find it by going to Jim Tincher, but you can also find it at the cxleaderpodcast.com. Nancy, thanks for being such a great guest on The CX Leader Podcast. I hope you'll come back sometime.

Nancy:
Thank you so much for having me.

Steve:
If you want to talk about anything you heard on this podcast or about how Walker can help your business customer experience, feel free to email me at podcast@walkerinfo.com. Remember to give The CX Leader Podcast a rating through your podcast service and give us a review. Your feedback will help us improve the show and deliver the best possible value to you, our listener. Check out our website cxleaderpodcast.com to subscribe to the show and find all our previous episodes, podcast series and contact information so you can let us know how we're doing. The CX Leader Podcast is a production of Walker. We're an experience management firm that helps companies accelerate their XM success. You can read more about us at Walkerinfo.com. Thank you for listening. And remember, it's a great time to be a CX leader. So go out there and learn more about the emotions of your customers and we will see you again next time.

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