How fast-growth tech businesses can embed the customer and people experience for competitive advantage
Ourcontributors
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The customer and people experience
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How can fast-growth tech businesses embed the customer experience?
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How can businesses embed the people experience and use it for competitive advantage?
Taz Aldawoud - CEO, Doc Abode Ltd
Mo Aneese - Investment Director, Livingbridge Enterprise LLP
Elizabeth Burroughs - Head of Data, HACE
Emma-Louise Fusari - Founder/Clinical Director, In-House Health Ltd
Isaac Harmer - CEO and Co-Founder, Everlink
Ben Hookaway - CEO, Relative Insight
Saq Hussain - Founder, People-tech, FinancialEducation.co.uk, UK Care Guide
Javed Huq - Managing Director, GP.Bullhound
Martin Keelagher - CEO, Agile Automations
Tom Rowland - Head of Customer, Lokulus
Jonas Singer - COO, Vector Homes
Laura Wiggins - Investment Director, YFM Equity Partners
“Innovation has always been key to the region and we should embrace that especially in the fast moving sector that is tech. We have standout universities churning out a new generation of developers, designers and entrepreneurs and the focus should be on retaining those people here. Competition is seen as healthy as the more the community grows, the bigger the interest in the region and with that comes investment opportunity and that is what we saw at the event – more opportunity. Technology is also one of the main agendas set by the devolved government as a focus for growth and funding projects and this makes Manchester an exciting – if not the – place to be a tech entrepreneur.
This is not to say there aren’t challenges. But where Manchester and the North West set ourselves apart is not just our appetite to embrace challenge and innovation – with a focus on meeting client need and retaining and helping our people succeed - but fundamentally it is the people and the wider community. Creating connections and making this a place tech entrepreneurs want to be.”
Vicky Protano Corporate partner, Mills & Reeve
Thecustomerandpeople experience
The UK has long harboured ambitions in becoming a global technology superpower, and in many ways that ambition is being achieved. Whilst the UK may not yet have produced businesses with the global impact of Google, Amazon or Alphabet, its entrepreneurial fast-growth businesses lead the world in many fields from drug discovery, renewable energy, artificial intelligence and many more.
The success of UK technology businesses, as we have explored throughout the Fast Growth Secrets campaign, is varied. Our world-class academic institutions play a key role with the Golden Triangle of Oxford, Cambridge and London packing a global punch. The funding landscape is excellent in supporting early-stage and scale-up businesses, supported by a worldleading professional services environment.
But as we explore in this white paper, fast-growth businesses share one thing in common: an unending passion for delivering the best customer experience possible. And that, says participants in this roundtable discussion held in Manchester, starts with people.
Manchester is one of the top tech start-up hubs in the UK with a thriving fintech, blockchain, AI and cyber scene. This tech b the region's collaboration between the public, priva The region has done a lot to promote tech and tech just reclaimed its status as the UK's number one re
Our Manchester roundtable discussion followed successful events in Cambridge, Oxford and London. Our next Fast Growth Secrets roundtable will be held in Birmingham where we will showcase why it's one of the leading regional tech clusters with more than 65,000 people employed in tech roles at 12,500 businesses.
Howcanfast-growthtech businessesembedthe customerexperience?
The customer experience for fast-growth technology businesses is a fundamental part of their business strategy. It is what sets one business apart from its competitors. It keeps customers loyal and can in many instances enable a business to charge a premium for its service. It is also a powerful recruitment tool in a tight labour market.
But as a business grows from start-up to scale-up it is a challen costly thing to maintain.
The customer experience is “about making customers feel valu often sees businesses adopt a “partnership approach” with the turning to them for product development or prioritising new p features.
experience, working alongside customers in the co creation of technology platforms. The customer experience is built into the growth journey.
It builds longevity into client relationships and the opportunity to grow the value of those clients. It is, said one panellist, a “symbiotic relationship”. By building and delivering a good customer experience it allows “your customers to deliver a better experience to their own internal and external customers”.
TheunstoppableriseofAI
Artificial intelligence (AI) is changing the customer experience dramatically and will continue to do so in ways that businesses are only just beginning to understand.
It allows businesses to work and interrogate very large data sets that just two or three years ago would have been prohibitively time-consuming and costly. But, said panellists, businesses must first create “test environments to play around” with the data and “build products that work and genuinely improve the customer experience”.
The adoption of AI needs to be supported by clear and transparent policies for all to see. “There is a degree of customer education needed on how these new skill sets can be utilised,” said one panellist, with another adding “partnerships with customers can accelerate this process”.
Whilst AI has the potential to save costs, it is not without its risks. The challenge with large language AI models is “explainability”, said one panellist. “What do you say when your boss or a customer asks, ‘why did that model make that decision?’”.
“The answer is statistics – it repeats parrot fashion, in fine-grained detail, what it has been fed” he added. “It is in many respects much like a human employee, but until AI reaches the level of well-paid human employees you have to accept the risk is greater than having a person do it.”
Panellists agreed that there is a “race to exploit the advantages AI has to offer” with businesses believing “they need AI now”. But it was also agreed many businesses can probably achieve what they really want without AI. “You will be surprised how far a ‘rules-based’ technology platform can get you,” said one CEO panellist.
Fromstart-uptoscale-up
The hardest challenge for a business to address when scaling up is to deliver the right level of customer experience profitably.
“The old model – hiring lots of bodies with large numbers of junior employees told to ‘delight the customer’ – no longer works” explains one panellist. “The ‘user buyer’ may be happy for you to spend two days resolving a problem but not the ‘economic buyer’.”
As businesses scale-up, the customer experience conversation changes. “It is less about providing great customer service and more about profitable customer service.”
Take, for example, businesses that develop software as a service (SaaS). They face a near-unique customer experience challenge. Customer feedback is invaluable, and suggestions are sought and welcomed. “But it can all too quickly mushroom” explains the CEO of a software company, leaving a business over-exposed. “You can get pulled in every direction apart from the one you want to go. Beware the favourite userbuyer.”
Businesses need to understand the concerns, and the feedback, from users. “But ultimately, it’s the economic buyers that really matter.”
“Yourcallisimportanttous”
Enhancingthecustomerexperience
The personal touch brings loyalty and remains important as we want to be listened to and understood. But with four generations in the workplace alongside an ageing population, the use of technology in the customer experience needs careful consideration.
Broadly, those over 50 value the human touch with those under 30 less so.
But we can all share examples of waiting online or on the phone to speak to a customer service representative to resolve a trivial problem.
Chatbots are getting better every year, and the use of natural language processing can help filter or triage customer and user enquiries. “But they too can cause frustrations. Where a customer knows what the problem is, they know they need to speak to a person and have no way to bypass that initial level of automation, tensions rise.”
The answer is unsurprisingly obvious – a channel mix that allows different customers to engage with a business in the way they wish. That does not necessarily mean large and expensive call centres - research has repeatedly found that large call centres do not directly result in a better customer experience. A blended approach that combines chatbots, web chat, social media, email, WhatsApp and telephone is needed.
“Building and understanding customer personas will help better understand what they want and need,” explained one panellist. “We have increasing amounts of data on our customers, and we need to use that to improve the customer experience. Triaging those that need support now and those that can wait is often the only way.”
It is, however, important to remember, that not all businesses can differentiate on customer experience. For many, it is simply a hygiene factor.
“You need to understand what is acceptable for your sector and if you want to differentiate by customer experience, make that investment” warned one panellist. “That will represent a significant cost per customer, and businesses need to ask whether that investment is genuinely improving retention rates and helping them win new work.”
“It was fascinating to explore the importance of profitable customer service to tech businesses during our roundtable discussion. Investors indicated their due diligence may include discussion with lost customers when considering investment opportunities, so customer retention is important, but not at all costs. Experienced leaders in the room illustrated how efforts to take on board feedback from all users can divert tech businesses from the straightest growth path.
Technology itself has a role to play to help with customer support including education to address “user error” or “user ignorance” but implementing that technology in a way that minimises intellectual property infringement and data protection risks is highly advisable to protect the value of the business.”
Paul Knight Commercial law partner, Mills & Reeve
Howcanbusinessesembed thepeopleexperienceanduse itforcompetitiveadvantage?
It will sound obvious, but people are essential to growing a business both in delivering on its mission and in the customer experience. No matter how good the idea, without the talent it will remain nothing more than just an idea.
Yet, in Manchester as across much of the UK, the talent pool is tight and what people want from the workplace is changing. The role of the business owner and founder is, panellists agreed, to inspire their workforce, show them what the business could be, creating an environment where success is celebrated and where teams can fail fast and learn from failures without fear of sanction.
But tensions do exist. Founders are “on a mission” to make their idea and business a success – and that passion for the mission is not always shared. It raised the question of how do you motivate employees to share and commit to that passion.
“We are not designed to manage stress over long periods of time” explained one panellist discussing the challenges facing high-performing teams. “Mistakes will creep in, and fast-growth businesses cannot afford to make those mistakes.”
Businesses need to ask whether their “people have the right skills to do the job. Are they taking on too much? Do they have the right resources to do their job effectively, and know how to use them?”
“Businesses tend to be very good talking about sustainability in terms of the environment but less so about sustaining people” agreed panellists. Asking teams to work harder for longer is asking for failure. Good operational frameworks are essential to create the building blocks for growth and are needed to maintain high-performing teams.
Founders are by their own admission not always best placed to create the operational frameworks needed, turning to HR or talent specialists. As our previous Fast Growth Secrets white papers discuss, HR leads are often the first management function appointment. Where businesses cannot afford a full-time HR or talent director, they are using fractional HR directors for the support they need when it is needed.
“Marrying up the challenges of retaining good talent and improving your workforce while facing the tests and opportunities that developments in technology are creating, is something that every business faces regardless of your sector and size.
Continuing to navigate that as the landscape in relation to employee experience, expectations and needs to evolve while coupling those with the desire to provide leading output as your business grows is something that we are all encountering. And good to see those around the table are embracing that!
Watching this play out over the next few years and learning how to adapt to these changes will be an interesting and at times challenging concept for everyone in business. Those who manage to do that successfully will continue to grow and prosper. Let’s hope everyone that was sat at the table does that and we look forward to helping them where we can as this journey continues.”
Tom Shorten Corporate partner, Mills & Reeve
Thegenerationgame
Panellists recognise that culture and values are important and can create competitive advantage, but questions were asked whether businesses truly understand what employees value most. Culture, values and benefits are all too often misconstrued.
“Many of the benefits companies offer to build or maintain culture are pointless,” said one panellist. “Businesses have historically added more benefits only to find they make no difference to talent retention. Just how many ping pong and foosball tables do you need?”
Older more experienced employees will often value the benefits a company offers and its culture fostering greater loyalty, yet younger employees can be openly dismissive of company culture, treating their employment as a stepping stone. “They are building their careers and will stay for a few years before moving on - and they are unapologetic about that.”
Panellists in this roundtable, however, take a strong position on the values their businesses hold true and take swift action when individuals do not live up to those values.
The graduate market in Manchester echoes much of the UK – peoplehungry employers chasing a diminishing number of quality graduates. It is a picture that has worsened since the global pandemic and Brexit.
“It sometimes feels that you are not making a selection out of a pool of talent who are the best for the job,” said one panellist, “just from the two or three you can get in for interview”. It feels very much “like the roll of the dice” added another.
It is, panellists agreed, the “difference between founders who are on a mission and employees who just want a job”. In response, businesses are adopting the American approach of ‘hire fast, fire fast’, with those who do not “fit into the culture” quickly dismissed.
It raised the question of whether businesses and graduates misunderstand happiness and success in the workplace. Early-stage and scale-up businesses need to understand that “when people need a job, it is our job to make them successful. If they are successful, they will be happy, so stop trying to make people happy, make them successful.”
Investment,exitandpeoplestrategies
The question was asked whether investors take into consideration the people strategies of the businesses they invest in or acquire.
Participants would like to believe they do but recognise the reality is perhaps a little more hard-nosed. “They tend not to be fussed about whether a team is made up of this or that, just that they have the qualities to do the job” explained one panellist.
Investors do, however, take a keen interest in the employment and retention strategies that enable a business to delive revenue and profit. “Investors do see the cost to a b churn rate,” explained one panellist, with research s 150% of a salary to fire and replace an employee.
Investors are, understandably, concerned about the knowledge when key members of the team leave. T succession plan for the potential exit of a key emplo panellist “is all too often overlooked”.
Unnaturally high retention rates in scale-up busines flags with investors, suggesting “that a company is n managed” or that “founders are not seeing what is o
It was suggested that investors are, however, missing a trick by not extending their due diligence to “tangible health measurements to ensure key staff are not burning out”. It is not uncommon for a business to fail when staff burn out and that hits investors hard.
Fast-growth and scale-up businesses are alive to the opportunities and threats that the customer and talent experience offer. It is part of the daily challenges founders face and work constantly to find improvements
“Businesses operating in this fast-growth environment face unique pressures when planning their staffing levels. In a rapidly changing market, it is a challenge to ensure that they have sufficient numbers of staff with the right blend of skills and the optimal mix between permanent staff and temporary workers. Rushing the recruitment process can lead to lurching between oversupply and retrenchment, creating a “hire fast and fire fast” culture which is not conducive to sustainable growth.
Careful planning and steady adjustments to staffing levels is normally the best way forward, however tempting it can be to rush the process. With a new Labour government committed to enhancing workers’ rights – including abolishing the two year qualifying period for unfair dismissal rights – there is an added incentive to get recruitment decisions right first time.”
Sara Barrett Employment law partner, Mills & Reeve
Thankyou!
Mills & Reeve was incredibly grateful to our guests on the evening which sparked some frank and challenging conversations from tech entrepreneurs at various levels of growth. We were also joined by investors with experience in the sector and various members of the team who work within the fast-growth tech eco-system.
What echoed through the discussions was that Manchester has a large and thriving tech community. This is the birthplace of the computer and innovation has always been key to the region and we should embrace that especially in the fast moving sector that is tech. We have standout universities churning out a new generation of developers, designers and entrepreneurs and the focus should be on retaining those key people here. There is a strong eco-system where people actively create connections with others to support growth.
Howwecanhelp
We’re centred on achieving more for our clients, their businesses and the wider communities we serve. Mills & Reeve, a full-service law firm, is the legal adviser behind some of the UK’s most successful technology businesses. We act for entrepreneurs leading fast-growth technology start-ups and spin-outs through to IPO, and work closely with global technology giants and their investors. With seven offices across the UK, our specialist team provide the full range of legal services that you need, always with a focus on your objectives.
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Sara Barrett
Employment law partner sara.barrett@mills-reeve.com
Vicky Protano
Corporate partner vicky.protano@mills-reeve.com
Paul Knight
Commercial law partner paul.knight@mills-reeve.com
Tom Shorten
Corporate partner tom.shorten@mills-reeve.com