I could have called this a blog or "reflections" or something like that. But I like rants better. So there.

Why I Joined Kiva

May 4, 2021

I've tried to live my life so that I don't find myself on my deathbed with a list of regrets. That's why I've tried to "scratch every itch". I had an itch to work outside of the US so I got my Greek passport and pursued a few avenues to secure a job in a privatising Eastern Europe. I had an itch to work in the Internet industry in 1996 so I moved to San Francisco to find a suitable role. I've never known exactly what I would do or where my life would ultimately take me, but I've always had a general sense of direction and a clear understanding of what's next.

After leaving Vivino at the end of 2019, I spent time looking inwards. I realized that I enjoyed working in technology generally and with online marketplaces specifically. But I had no passion to continue in the wine industry, or the ticketing and live entertainment industries that my previous role at StubHub represented. I wanted to find something more meaningful. By August of 2020, I wrote down this short list:

  • I want to make a positive impact on the world.

  • I want to be a positive role model for my sons.

  • That’s why I want my next role to be with an organization focused on improving people’s lives

A month later, my good friend and former eBay colleague, Andre Haddad, asked me if I might be interested in talking to Kiva about joining their board. I quickly said yes because of Kiva's mission, and its incredible CEO, Neville Crawley, and board of directors. I started talking to Julie Hanna, Kiva's board chair, and really liked what I heard.

By December, things changed when Andre asked if I would be interested in the Kiva CEO role because Neville wanted to move on. It took me a month of thought and conversation with my wife before I went back to the goals I stated in August and realized Kiva would be a perfect fit.

As I got to know Kiva better, I realized how much Kiva's mission to "expand financial access to help underserved communities thrive" resonates with me.

First, it improves people’s lives. My desire to do this partly comes from my religious upbringing. I grew up in a Greek household where our Greek Orthodox Church, Saints Constantine and Helen, was front and center. I went to Sunday School and later became an altar boy there. My grammar school was part of the Greek church, and I went on to a Catholic high school. While I'm not religious today, the teachings of my youth stay with me. Two lessons came back to me after George Floyd's death in May of 2020. The first is that we are all God's children; we are all connected. The second is from Matthew 25:40 where Jesus said ‘Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.’ In other words, anything we do to help another person is like helping God himself. Both lessons tell us that we need to help each other in any way we can. And I see clearly how Kiva is doing this every single day.

Second, Kiva's focus on financial access connects to my family and early work experience. My father was an electrician and had his own store in Greece. But when he moved to the United States, his Greek electrical license had no value so he had to start from scratch. After working in a steel mill as a laborer and maintenance worker, he found a role as an electrical apprentice, eventually becoming a journeyman electrician. After 7 years in the United States, he started his own electrical contracting firm. He used the profits from his firm along with loans from our local bank to develop small retail properties. He was successful enough that he paid for my brothers and me to finish college largely debt free. But he couldn't have done any of that without access to capital. My dad believes that "money makes the world go round" and "you need to spend money to make money." In other words, you need access to capital to succeed in business and this is what Kiva provides to entrepreneurs around the world. Entrepreneurs just like my father.

My early working experience reinforced this notion that access to capital is a fundamental component of financial success. In the early 90's, while working for the Moscow office of Bain & Company, I worked on a case for the Russian government. They wanted to know why their newly privatized small businesses were not thriving. My team and I spoke to dozens of entrepreneurs across Russia and found that many of them had struggling businesses. We concluded that lack of access to capital was a critical factor limiting the growth and success of these businesses.

I am incredibly fortunate to be joining an organization that not only has a resonant mission but one that has achieved an incredible amount of success in fulfilling that mission. Over the course of its 15 year history, Kiva has funded over $1.5 billion worth of loans to over 39 million borrowers in 77 countries. And those borrowers repay their loans at an over 96% rate. I am deeply humbled and grateful for the chance to lead Kiva. And I'm hugely excited about the positive social impact we will continue to make on the world.

Your Customers are Telling You How to Be More Successful. For God's Sake, Listen to Them

August 19, 2020.

This is a summary of a presentation I gave at The Marketplace Conference in May of 2020. The presentation was entitled How to Increase Customer Satisfaction and Lower Costs and I gave it as a sample of the work my consulting firm, Trefo, does. You can view a YouTube video of the presentation here and download a pdf version here.

Why Care About Customer Satisfaction

A really important part of growing both StubHub and Vivino - two companies I previously ran - was using customer feedback to improve the company and build a long term sustainable business. At both companies, we measured our progress by looking at 3 key metrics:

  1. Employee Engagement

  2. Customer Satisfaction

  3. Financial Results

And we looked at them in this order because each metric drives the next one. Engaged employees go the extra mile to satisfy customers. Satisfied customers tell their friends and make repeat purchases and that drives financial results. And a company that's doing well financially usually has higher employee engagement, all other things being equal.

At least that's the way I always explained it. But there is an additional dynamic here. Customer satisfaction also drives employee engagement. The better your company is at satisfying customers, the more engaged your employees are. Employees want to work at a place where the company is doing the right thing for customers. Every employee you want to retain wants your customers to be satisfied. So customer satisfaction is a driver of both financial results and employee engagement.

When Customer Satisfaction Matters Most

Many companies go through stages as they grow. This is especially true of marketplace technology companies. I think about 3 basic stages of growth:

  1. Early

  2. Golden Age

  3. Mature

In the early stage of a company, you're just struggling to find product market fit. There is a lot of effort spent on figuring out what your customers want and how to make money giving it to them.

At the later stage of a company is the mature stage when you have figured out how to deliver what your customers want and have achieved significant revenue. The issue at this stage is finding ways to increase revenue growth through new geographies or new products and services tied to your original business.

In between the early and mature stages is what I call the golden age of marketplace businesses. In this stage, you have found product market fit and your revenues are growing rapidly, but you have many opportunities to improve your business and most of them improve profits AND customer satisfaction. And this is the stage that StubHub and Vivino were in when the examples below took place.

Measure Customer Satisfaction with Net Promoter Score

Before you can improve customer satisfaction, you need to measure it by asking your customers how well you are doing. There are many ways to measure customer satisfaction, but we used net promoter score (NPS) pretty extensively at StubHub and Vivino. There are some really good explanations of NPS on the internet, but I will give you a basic one here in case you're unfamiliar.

NPS starts with asking your customers one key question: "How likely are you to recommend Company X to a friend or colleague?" Respondents are given the option of choosing a number from 0 to 10 where 0 means not at all likely and 10 means very likely. The people who respond with a 9 or 10 to this question are called promoters. Those that answer 0, 1, 2, 3, 4, 5 or 6 are called detractors. And the folks that respond with a 7 or 8 are called passives. The net promoter score is simply the percentage of respondents who are promoters MINUS the percentage that are detractors. Said another way, the net promoter score is the percent of responses that are 9 or 10 MINUS the percent of responses that are 0 - 6. Based on this calculation, the net promoter score or NPS can be anywhere from -100 to +100. So this is unlike other customer satisfaction scores which usually range from a low of 0 to a high of 100. It is possible to have a negative NPS. I've seen it, and it's not pretty.

Focus on Customer Service Issues Not Wages

The main way to increase profitability with customer feedback is to use that feedback to reduce customer service costs. Customer service costs are often thought of as the dollar cost per order and that can be further broken down as follows:

Cost per order = Cost per minute * Minutes per contact * Contacts per issue * Issues per order

A lot of companies attempt to reduce their customer service costs by reducing their cost per minute or cost per hour by moving customer service to lower wage locations. Others focus on reducing minutes per contact by timing customer service reps and training them to spend as little time as possible on any customer interaction. These 2 moves do little to improve customer satisfaction, however,

Reducing contacts per issue so that issues get resolved with 1 contact (aka first call resolution) reduces customer service costs and improves customer satisfaction. But the biggest way to increase customer satisfaction while reducing costs is reducing issues per order. This means really understanding what issues are making your customers unhappy and follows the maxim that the best customer service is one you don't need because everything went smoothly.

To reduce customer service issues, you need to find out what they are and what is causing them. That starts by tracking and categorizing all issues. Once you do that, you can track the root causes of those issues and start to address them. To make this more clear, I've laid out some examples from StubHub and Vivino.

Set and Clear Expectations

StubHub is an online ticket marketplace where sellers list their tickets for sale and buyers choose from those tickets on the StubHub platform. At StubHub, we used extensive customer surveys to track customer satisfaction. Analyzing the results, we found that buyers gave us the highest NPS score if their seats met their expectations and their tickets arrived on time. We called this "the happy path."

We then looked at survey responses that did not follow the happy path and searched for those situations that greatly decreased NPS. The first thing we found is that if tickets didn't arrive on time, NPS went down by a whopping 52 points. "On time" in this context was when buyers expected the tickets to arrive, not just before the event they planned to attend.

The next thing we found was more surprising. If tickets arrived on time, but the seats associated with those tickets did NOT meet expectations, the NPS score was 73 points lower than the happy path and 20 points lower than a situation where tickets didn't arrive on time.

The analysis made it clear that we could improve customer satisfaction by getting tickets to people when they expected them and giving them seats that met their expectations. In both cases, we could be more clear in setting expectations.

At the time of the initial NPS analysis, most tickets sold on StubHub were sold with 2 day delivery via FedEx. So the expectation of the customer was that they would get their tickets 2 days after their order. The problem was that tickets were not always available to ship at the time of order and we didn't tell our customers that. We corrected that by adding information on the checkout page that provided a date when a customer could expect to receive their tickets. Over time, we added the ability for buyers to download their tickets after purchase and that all but eliminated the dissatisfaction around getting tickets on time.

While we worked on improving delivery, we also worked on improving seat expectations. At the time of the analysis, the only information we provided on seats was where they were located on a static 2D seat map that showed a section of a stadium in relation to the field or stage. What we added to that was more clear information if the seat had an obstructed or partial view. We then added a simulated view from each seat. Those 2 moves set more clear expectations and, as a result, we got less complaints.

Customer satisfaction was more than just one of 3 key metrics I used to run StubHub. It was something you couldn't get away from if you were a StubHub employee. We posted actual vs. expected NPS results everywhere at StubHub including in the bathrooms. It was that important.

Based on that focus, we were able to improve buyer NPS by 35% over a 5 year time period. And while we did that, we grew our gross sales by 300% and our operating income by 800%. In other words, the focus on customer satisfaction was successful.

Small Changes Can Have Big Impact

Vivino is a wine app that allows users to scan a wine label and get or give a rating of that wine. Vivino is also a wine marketplace where licensed retailers of wine make wines available to Vivino buyers.

We started using customer satisfaction surveys to capture NPS soon after I started at Vivino. Those surveys provided limited data so instead we tracked issues that were raised in emails coming into customer service. That data showed us that the number one issue was "vintage changes." To understand what that meant, we dug into customer comments and saw a lot of people who were unhappy about one small detail on the checkout page. That detail was a line that said "Allow vintage substitution" that was pre-checked for each and every buyer. This box meant that the buyer was OK with the seller sending them a different vintage or year of the wine they just ordered. The only problem with that is that we imposed this OK on buyers and most of them didn't see it during the checkout process because the "Allow vintage substitution" line was in a tiny font and, therefore, easy to miss.

The solution to this was simple. Get rid of the "Allow vintage substitution" line and don't allow sellers to switch vintages. The concern was that doing that would create a bunch of work for customer service if the seller did not have the exact vintage ordered. In the end, we decided to make the change and automate the vintage substitution process. The net result is that we increased buyer NPS by 69% in JUST 2 MONTHS with that change and others.

Commit to Excellence

Using customer feedback to improve your business is not rocket science. It's the kind of thing that's easy to do when you run a small store and see and talk to your customers every day, and hard to do when you run an online business with millions of transactions. But the steps are the same no matter what size or type of business:

  • Capture the data

  • Analyze the data

  • Make changes

It sounds simple, but it takes a commitment to customer satisfaction that is based on the steadfast belief that customer satisfaction improves your financial results and employee engagement. It's also just the right thing to do.

And commitment means having a consistent focus. You can't just talk to your customers once, fix their problems and move on. Customer service issues evolve over time and there will never be a time when 100% of your customers are satisfied. That would be perfection and that doesn't exist in any business. But, to paraphrase Vince Lombardi. while perfection is not attainable, chasing it will allow your business to be excellent. And that's what all CEO's and customers want.