You're in for a treat. One of our speakers in this next session is Sumit Singh, the CEO of Chewy, the online pet goods retailer. And Sumit will be joined by Sarah Robb O'Hagan, who's the CEO of a high-performance fitness and corporate wellness company, Exos. She was also formerly ran Equinox, Gatorade, Flywheel Sports. She's on the board of JetBlue and she is a pet owner. So please join me in welcoming Sumit Singh and Sarah Robb O'Hagan.
Great to have you guys here.
Great to be here. What we're going to talk about today is building loyalty from your team, from your customers, from your investors. Our pets are our best friends because they are so loyal. But Sumit, I wanted to start with you. Listening to Brett talk about the future of customer service, Chewy has distinguished itself often by doing things that are very human and bespoke, these moments of surprise and delight for customers like pet portraits and birthday cards. And I know that your healthcare business in pet sort of came from human interaction from your salespeople. So I'm curious how you think about surprise and delight, building customer loyalty, and the ROI of it relative to keeping everything you know, keep those numbers good.
Yeah, it's great to be here. Thank you. I'm here to postulate or appeal. So one, I think what's well understood is good service, good experience costs less over the long term. So if you start from that mentality, what I'm here to appeal to you is ultimately it's good experience that builds loyalty. And if you agree with the postulate on the purpose of a brand is to acquire and retain customers, then retention and loyalty building is the closest correlation, in fact you'd argue whether it's correlation or causation, to building loyalty. So you can buy dog food from anywhere. It's not... we're in the business of selling dog food, but that's not what makes the job fun. What makes the job fun is to recognize how empathetic this category is and how customers in this particular category treat their fur members as family, and how do you build that empathetic connection. So it is unfortunate that over the last many years, customer service has become so bad that we're actually excited by the prospect of talking to an AI chat agent. That seems like an improvement. And I'm not saying that doesn't have a place, it does, and I'm going to come to that. It's in a mentality, it's in your culture. And as you build companies, I want to appeal to you that customer experience or customer service can build loyalty that can build a defensive and offensive moat around your brand that allows you to compete against the large stalwarts of the world, which we've been competing for the last many years. So when I joined Chewy, it was a billion dollar brand. This was 7 years ago. Today, 25% of North American households shop at Chewy, and we're a 12 billion brand. This is top line only, not market cap.
And how much of that is about humans?
It's all about humans in my opinion, because the concentric circle of what's the mission that we go to market with: to be the most trusted, convenient destination for pet parents and partners everywhere. So what you should hear there is trust and convenience is important, building a marketplace for customers but also partners that serve in the pet space is important, and then the brand extensibility is super important. But alongside that, what we're really standing for is delivering the scale and convenience of e-commerce which you would get from large companies like Amazon, but at the personalized care and service that you would expect at a local neighborhood pet store. So we use this word surprise and delight, and you're led by pet portraits. That is going beyond the ordinary. But customer service today is so poor that we have to first start with making the ordinary extraordinary. How do you do that? One, courtesy is more important than process or efficiency. Number two, we pick up the phone. Brett was talking about the metric contacts per cost per contact. It's a real metric. At the same time, maybe you would be surprised to know that that is not a metric that is prevalent in the Chewy customer call center. We do not measure our agents on any metrics like these. We measure by the amount of resolutions that you conducted, no matter how long you were able to talk to the customer. We measure statistically accurate results on how quickly we picked up the phone. He was talking about IVRs. He's exactly right. Hate IVRs. We're likely one of the only companies in North America, maybe in the world, that has 24/7 live human customer service, and we pick up the phone in 4 seconds or less. That is two rings or less. So that itself, when customers call with an issue, disarms them because they're not expecting it. They're expecting to call an airline company or cable company or any other normal company that wants to provide good service but has been brought up in this culture of IVR or cost cutting. Customer service doesn't have to be a cost center.
I just want to note that not everyone may know this. During the pandemic when things were really tight and it was hard to get folks and you were under a lot of pressure, like maybe you use more bots. He was like no, we're going with the humans. And they brought him insights that said hey, maybe we should start veterinary care for pets, and it spawned a whole new business. The things that humans bring to you sometimes are not what you expect.
Let me finish one thought. So what do you do when you go beyond the ordinary? We're picking up the phone in 2 seconds. The crowd's like wow, that's amazing. You guys don't have IVRs. Wow, that's amazing. But that should be the basic expectation. Why do you want to talk through an IVR and figure out for the first one minute and wait 5 minutes and then get queued for us to call you back? So that's the ordinary. We've gotten our arms around that. Now, a customer calls and in the conversation, the agent essentially says, how did you name your dog Becky? And the customer says, well it goes back to the Beyoncé song 'Becky with the good hair.' So the call progresses normally, and a few days later the customer receives a custom painted Beyoncé CD with her pet's portrait painted on it. That is going above and beyond. What does that do? It creates conversations. You'll talk about this story. That story got talked about at dinner reservations, it got posted on social media, got 250,000 reposts, 700,000 likes, etc. So this traditional science of customer relationship marketing starts with doing the basics right. And the basic was courtesy over process and efficiency, then the ordinary extraordinary in the ordinary, and then truly going above and beyond what customers are expecting. It's time to raise the bar because it's just dog food.
Sarah, you've worked with brands that engender a lot of loyalty at Exos, at Equinox, at JetBlue where you're on the board, you also worked at Nike. I'm curious about how the relationship you have and loyalty among your staff, your team, impacts how your loyalty builds with your customers.
No, I love this question, Bob, because I think it's so important. In my early days in my career, I actually started at Virgin, the early Richard Branson days, and then Nike, where we were just bleeding the swoosh. People had tattoos who worked there, and we would shame anyone who worked with us who didn't wear the product. I remember when I began leading Gatorade globally, which was part of PepsiCo at the time when it was financially struggling, and there were tons of new employees coming on board, and you were given a shopping list of stuff that you had to buy that were PepsiCo products, and people hated it because they felt forced to do something as opposed to passionately believing they want to. So I think there's a huge correlation. When a team is so fired up about the culture you've built at Chewy, they're going to have those moments that they want to delight the customer. It's massive. The business I'm in now, Exos, we are a human performance coaching company. We coach people just like you. It's interesting going through the last years of the pandemic. Everyone has been suffering with burnout and all these sorts of things. We spend as much time tracking how well our coaches are rated by their client as we do how they're feeling, how's their well-being, are they feeling like they are up for the job today. Because if they're feeling awesome and they're feeling great about the company, they are going to want to deliver a really great experience. They're your coaches, they spend hours a week with their clients almost like therapists. But there's only so much influence you can have. You're not in that room. So how do you make sure that they're having the right engagement and that relationship works the right way? And that's where I bet it's the same at Chewy. We spent a lot of time early in the pandemic going through a really tough experience of furlough and layoffs and then new people joining the company. So we spent tons of time on really reinvigorating the company's values. Because if we are all really clear that we're living by the values, then there's a much better shot when they're in the room with the client that they are going to deliver on that expectation. Some of our values aren't for everyone. One of our values is actually 'we savor the struggle.' Part of being at Exos is that it's going to be hard, and your client is going to have a hard day. Do you feel comfortable that that's part of the culture? You got to push them, which means you got to push yourself. Not everybody wants to push themselves.
