INBOUND 2021 - Dharmesh Shah: We Need to Talk…about our customer relationships

Greetings and welcome to Inbound 2021. Thanks for joining and a special thanks to HubSpot customers and partners all over the world. Now, I had hoped we could be together in person this time, which is ironic because I'm not really an in person kind of guy. I follow the pajama principle. If an activity requires me to change out of my pajamas, I avoid it on principle. But even for an introvert like me, the pandemic has been challenging. We've spent a large amount of time with a small number of people, relationships have been tested, behaviors have been shaped, and in my case, a copious amount of pizza was consumed. This led to what I'll call some personal growth, about £11 worth. To offset this, I bought a standing desk. Well, in theory, it's a standing desk. In practice, I've never actually stood at it. I prefer sitting. But as it turns out, in order to get the benefits of a standing desk, one has to actually stand. Who knew? If only sickness tracking were a thing. On the other hand, there's my son, Sohan. This is a photo of him when he's two years old, beta testing the latest iOS. Sohan is geeky and endorsy, just like me. But Sohan's 10 years old now and he's been cooped up for months because of the pandemic. And so his indoorsy ness was overcome by by his desperation to get some time away from the parental units. So Sohan decided to try boating camp. This is where he learned kayaking and sailing with a bunch of other equally desperate kids. Sohan enjoyed boating camp much more than my wife and I thought he was going to, or that he thought he was going to. But then one day Sohan got back from camp and said the words that I found super scary. We need to talk, Daddy. Some of the older kids at camp have been using age inappropriate words. And yes, Sohan uses phrases like age inappropriate. So I sat him down, I said, sohan, you're going to hear these words your entire life. Everyone makes their own choices. Just because they're using these words doesn't mean that you have to use those words. So we had a good chat. Pretty good parenting. Now, the scariest form of we need to talk is when it's followed by about our relationship. We need to talk about our relationship. Have you ever gotten those words in a text or an email? Or even worse, in person? Usually when someone says that to you in person, they want to talk, like right now. In real life, talking about relationships can be uncomfortable. But as my Hero Ted Lasso would say, it's like riding a horse. If you're comfortable while doing it, you're probably doing it wrong. And speaking of doing things wrong, we have some work to do on our customer relationships and it's holding back our growth. In a recent study, it was found that 27% of people had a customer experience that was so frustrating that it ruined their day. And one out of ten had such a bad time that it made them cry or nearly cry. We're talking tears here. Last time I cried is when someone put black olives on my pizza. Who would do that? But there's good news. This is something we can work on and we can improve, but we all have to get on board and we have to start with a conversation. So I'm going to say on behalf of all customers everywhere, the four dreaded we need to talk. We need to talk about how this relationship is so one sided. The only time you reach out to me is when you want something. It's always about you and never about me. Now, it's understandable that customers feel this way. The CRM is usually just something the salespeople use. And making customers happy is a customer support team's problem. In many companies, customers sit at the periphery of the organization. Instead, they should be the center of focus for every team across the entire company. Now, one of the things that gets in the way of customer centricity is something I call funnel vision. It's like tunnel vision, but it cleverly uses the word funnel and it's even less fun. With funnel vision, customers become so myopically focused on converting prospects into leads and leads into customers, and then they stop there. There's a better model is called the flywheel. With the flywheel, instead of just doing a prospect to lead and lead to customer, it continues in a virtuous loop. And you convert customers into delighted advocates. People that are so happy with their experience that they will tell their friends and colleagues this leads to, well, more leads. Now some of you are probably thinking, wait a second. Didn't Brian introduce the idea of the Flywheel at inbound 2018? Yes, he did. So why am I bringing it up now? The reason is at HubSpot, we have embraced the flywheel in a big way. The largest team at HubSpot is the Flywheel team, and it consists of marketing, sales and customer service. And we hired our first chief customer officer to lead that team. And this has worked wonders for us in terms of aligning everyone around solving for the customer. So if you want productive Customer relationships. Stop forcing your customers into a funnel and think flywheel. And to get that flywheel really spinning, well, you have to delight customers. And it turns out a generic, impersonal experience just doesn't delight. So here's what non delighted customers have to say. We need to talk. We need to talk about how you don't even know me. I know you have other customers, but I want to feel special. I want to feel understood. I want to feel connected. So why do customers feel disconnected from us? The culprit is this insidious, sinister thing I call the underpants gnomes effect. Now, I can't take credit for this Harvard worthy, brilliant business concept. It's adapted from a South park episode, a source of so much business wisdom. The underpants gnomes are these little gnomes that go to great lengths to steal people's underpants. Not just new underpants, all underpants. Like no underpants left behind. Here's their grand master plan. Phase one, collect underpants. Phase two, question mark. Phase three, profit. So they accumulate this giant pile of underpants and they have no idea what to do with them. Companies have a similar problem, but instead of collecting underpants, they collect customer data. And of course, the goal shouldn't be to just collect customer data. The goal should be to use that data to deliver a more customized, more connected customer experience. So why do companies fall prey to the underpants gnomes effect? To understand this phenomenon better, we take a look at the evolution of CRM. Way back in 1993, a software company called Siebel launched the first legit CRM, or customer relationship management system. They took every customer and made it a record in the database. So now the entire company had this shared system of record. Super useful. The problem was that you had to buy your own hardware and then install the Siebel software on it like a caveman. Seven years later, Salesforce came along and they had a brilliant insight. There was this thing called the Internet and all the computers were connected to it and you could use the Internet to deliver software better. Hence came the first cloud CRM. Subsequently, all CRMs, or most CRMs, are on the cloud now. Seven years after that, HubSpot came along and we had a novel insight ourselves. There's this thing called the Internet, and not only are computers connected to it, but people are connected to it too, including customers. And we could use the Internet not just to deliver software better, but to deliver a more connected customer experience. Now, what do I mean by a more connected customer experience? Well, number one, the CRM should connect Teams within your company, marketing, sales and service should all be on one unified system. 2. It's not enough just to connect teams within your company. You should connect your company to its customers. Customers want to have a window into their relationship with you. They want to be able to log in and view their data and interact with it. They want to be able to self service when appropriate. Customers don't want to just have an emotional connection with you. They want to actually have a real digital connection. And third, it's not enough just to connect teams within your company and your company to its customers. You also need to connect customers to each other. This builds trust because customers gain confidence when they can talk to other customers. But more importantly, by connecting customers to each other, they can get the most out of your product or service because they can learn from other customers. HubSpot's investing in this in a big way with something we call the HubSpot network. The HubSpot network connects the millions of people in the HubSpot ecosystem so they can discover each other, learn together, and help each other grow better. So some of you are thinking, okay, that all sounds awesome, but we just are not able to do this at my company. Now, the issue may be the systems. We need to talk. We need to talk about the FN systems. And no, I'm not using a word from Sohan's expanded voting camp vocabulary. I'm talking about the Franken system. The Franken system is a CRM monstrosity cobbled together with software parts, applications built by different people in different, different companies with different design goals. It's the result of decades of mergers and acquisitions. And frankly, it's a disjointed, bolted together mess. Too many databases and too many core applications that all do things their own way. There's no consistency, there's no cohesion. And ultimately, there's no control. No control. Now, it's fine. Companies tell themselves late at night and it is fine. If you're a Fortune 1000 company with tens of thousands of employees and you have an army of CRM consultants with pitchforks and process diagrams, it's fine. But for the rest of us, it's not fine. Because a Franken system causes us to spend all of our time trying to tame the monster instead of taking care of our customers. Now, if you have a Franken system, let me say it's not your fault. I'm giving you a virtual hug right now. It's not your fault. Nobody intentionally unleashes a Franken system in their company. It just sort of sneaks in and it grows and then it makes it much harder for your company to grow. And the result of a Franken system is a frustrating disjointed experience and very, very annoyed customers. Customers like me. So recently I leased a Volvo sight unseen over the web. Now you know I'm a parent not because I got a Volvo, but because I was excited to get a Volvo. And honestly, the purchasing experience was awesome. I didn't have to talk to a single carbon based life form. And then it came time to make my first monthly payment. Instinctually, I pulled up the Volvo app. No dice. The app can beam signals into space and unlock my car from three continents away. But it won't let me send Volvo money. So I go back to the website where I leased the Volvo. Strike out there too. Evidently it a marketing and sales website, not a send Volvo money website. Pro tip. Commerce and payments are a big part of the connected customer experience. And commerce is all about convenience. So I google it up. Evidently there's another website for payments called Volvo Financial Services dot com. Yep, that's the actual super catchy website name. So I try to register. It asks me for an account number. I have no idea what that is or where to find it. And Volvo's online knowledge base was not helpful, primarily because of its complete absence. So out of desperation, I contact Volvo. To their credit, they respond promptly. The account number is in the letter that we mailed you. The letter that you mailed me. I responded, I have no such letter. Is there another way? What I should have said was the 1900s called on their rotary phone and they want their fountain pen and parchment paper back. Volvo responded, no problem. You can call our customer service department with your vehicle identification number. They can use the VIN to then look up your account number. And you can use your account number to then register for the website. And then you can use the website to then submit a payment. Now, I'm going to spare you the details of what happened after that because it might make me cry or nearly cry. This is a ridiculous but true example of what happens when you have a Franken system in place. Your teams are disconnected and your customers are disconnected from the company. The dream is to have a single, unified, cohesive, uncomplicated CRM. A CRM that was built for creating a customer centric, connected and customized experience. A CRM that was built by people that care with consistent design goals. One of the primary goals being easy to use by actual humans. That's the dream. And speaking of dreams, we need to talk we need to talk about the future. It's fun to dream and to imagine where the world could go. So let's geek out a bit on the evolution of the web and how we got here. Way back in the 1990s, when Volvo first started mailing letters with account numbers, we got the first generation of the web. And the potential was mind blowing. It made me giddy with excitement and gave me goosebumps. That early web was read only in order to put content on the web. You had to know HTML and FTP and other acronyms or you had to have a distant cousin that worked at Best Buy and New Dreamweaver. With this early web, businesses could take their marketing brochures and turn them into websites. And sure, some of these early websites had ugly colors and blinking text, but they were an important first step towards creating a connection with the customer in a way that brochures never could. Fast forward 15 years. It's 2005. Brian and I are classmates in graduate school. This was the time that Web 2.0 came on the scene. Web 2.0 was the new, new thing. It was read, write. You didn't have to be a technical wizard in order to get content on the web. Even mere Muggles could do it. This made me giddy with excitement. Goosebumps again. And Brian was excited too. And that's what led us to start HubSpot. Now, some have speculated that we started HubSpot just so we'd have a place to play ping pong. It wasn't that. Well, it wasn't just that. With Web two came this massive shift in buyer behavior. And change equals opportunity. And what we saw was that businesses could now create a blog, they could engage in social media, and they could otherwise add value to customers before they tried to extract it. We called this process inbound marketing. And it was a game changer. So over the past 15 years, I haven't really felt that same level of giddy excitement, no goosebumps like I had with Web one and Web two. Until now. Now I'm feeling this massive shift that feels even bigger than a shift from Web one to Web two. But before we jump in, a quick cautionary note. This segment is rated FP future predicting. I'm going to give you a peek into what I think the future might look like. It's not a peek into the HubSpot product roadmap. You'll see some of the amazing progress the HubSpot product team has made on our CRM platform in just a few minutes. Okay, so what has Me giddy with excitement. What's giving me goosebumps now, 15 years later, it's what some are calling, wait for it, Web three. Shocking. I know. We techies are super awesome at creatively naming things. Here's what has me excited about Web three. Web one was about information. Web two was about interaction. Web three is about decentralization. It's about putting power back in the hands of the people. It's the way the web was always linked, meant to be. Now, some of you probably have a few questions. One, what the heck is he talking about? Two, why should I care? And three, what should I do? Great questions. In the current Web2 model, your data is split up and fragmented and owned and controlled by a handful of massive tech companies running massive networks. In a decentralized web3world, you own and control your data. Data like your purchase history, your preferences, your connections, your credentials. You own and control all this data, so you get to decide which companies that data gets shared with. And if anyone's getting paid for access to that data, it's you. Now, some of you are wondering, okay, that sounds fine. Why should I care? How does this matter to my business? The reason we should all care is because this new Web3 model will provide us a new, direct way to forge connections with our customers and our prospective customers. Instead of advertising to the masses that we know little about, over these big networks, we can forge direct connections with prospective customers, and we can give them a customized experience based based on data they willingly share with us. It's a much more efficient and much more trustworthy model. Now, this feature is still years away, but the pieces are already starting to fall into place. We have cryptocurrencies like Bitcoin, decentralized application platforms like Ethereum, and decentralized social networks like BitCloud. These all give us a glimpse into the future that's coming. So what should you be doing? Don't worry. I'm not going to suggest that you start moving all your data to the blockchain or that you start buying Bitcoin. What I am going to suggest is you embrace the idea that we're in the age of the customer. Embrace the idea that over time, customers are going to have more and more power and they're going to be equal partners in their relationship with us. That's what the future looks like now. The future is awesome, but it's still the future. And chances are you're kind of thinking about how to grow today. So let's come back from the future, get out of our time traveling deloreans and let's recap what we talked about in terms of customer relationships. Here are things no customer has ever said. You know, I'd love to introduce myself to you for the 43rd time. I've been meaning to get to know as many people in your company as possible. Transfer me to whoever you want. You know what this relationship needs is more management. Customers don't want more management. They want more magic. They want to experience a moment that makes them smile. They want to tweet about a company, not at a company. They want to feel connected. And our businesses want that too. Your growth over the long term is a function of how much customers love the experience you give them. So give them an experience that makes them stand up from their sitting desks, brush aside their pizza, and to gush with friends over coffee about how awesome the experience was. It's time to abandon funnel vision, put to rest the Franken systems, and put aside the frustrating underpants gnomes effect. Your CRM platform should help you deliver a better, connected, more customized experience that's focused on the customer. The CRM should put the customer first in the design, not just in the acronym, because better customer relationships lead to delighted customers, and that's what fuels all of our flywheels. That's how we grow better. And with that, I'd like to introduce members of the HubSpot product leadership team. They'll be talking about the HubSpot CRM platform and the development that's happened this year. I could not be more thrilled with the progress they've made in helping you deliver on the dream of customer relationship magic. Thank you.