Honk if you love CX.
The cupholder is an often-overlooked feature of a vehicle. But what else will willingly hold a drink, your phone, garbage, a perfectly-sized burrito, or your wallet? That’s right, your local cupholder. Now taken for granted, it was once a novel idea that came directly from customers. When CX leaders at Sears realized the weight of their customers’ opinions mattered a bit more than the C-Suite, they changed the cupholder game forever.
Our guest today, Dakota Semler, Co-Founder and CEO of Xos Trucks, dives deep into the importance of weighing customer feedback. He and his team have completely revolutionized the trucking industry, and it’s because they put the customer first.
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“You don't need to make engineering, product decisions, or customer experience decisions by committee, but you need a committee to listen to that feedback and incorporate it back into your processes.” - Dakota Semler
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Time Stamps
* (0:00) How cupholders changed the world
* (5:49) What is Xos Trucks?
* (7:38) The modern-day fleet operator experience
* (10:54) Decarbonizing transportation
* (12:35) Designing CX for your end user
* (13:52) Approaching weighted feedback
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Sponsor
This podcast is presented by Oracle CX.
Hear more executive perspectives on CX transformation at Oracle.com/cx/perspectives
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Links
Connect with Dakota on LinkedIn
Narrator: The letters started by coming in gradually.
SFX: An envelope dropping into a mailbox.
Then suddenly.
SFX: More envelopes.
And now, furiously.
SFX: A flurry of letters.
Often, their ink was smudged with sweat. Others still retained the smell of gasoline. But all shared the same message: cup holders. We want…cup holders.
For Christine and the rest of her product support team, it was all they could do to keep up. She worked in the Lawn & Home Care division at Sears corporate. You remember Sears, right? Department store, famous for their catalogs. Well, back in 1995 their Craftsman riding mowers were top of the heap. King of the manicured hill. And there wasn’t a Sears executive who didn’t believe they had a superior product on their hands.
Except for Christine. Not that she thought they were inferior. She just knew what the customer really wanted. It was right there in their letters. More than a v-twin engine or some fancy leather seat, what the American public was thirsting for was to not be parched when they mowed the lawn.
SFX: A lawn mower starting up.
Now, I shouldn’t have to explain the lasting bond between beer and mowing the lawn, but let’s just say they’re complementary goods. Like peanut butter and jelly. And if you’re anything like me, the smell of fresh cut grass is matched by only the reward of a frosty cold one. Sears executives weren’t oblivious to this, of course. It just didn’t take precedence in their minds. They had their own viewpoints and frames of reference for adding value to the product.
“I think our focus needs to be on cost,” said the CFO. “Cheaper tractors means happier customers.”
“What if we did an ad campaign with Tom Hanks as his Forrest Gump character?” added the CMO. “We could have him riding a Craftsman mower.” Did I mention this was 1995?
To be sure, these were fine ideas. But to Christine, there was a disconnect. Her colleagues weren’t giving the same amount of focus to their customers’ input as their own. They simply didn’t see the benefit of adding a cheap, plastic cup holder to the dashboards of their tractors. Not when there were bigger, more expensive matters to address. Out of sight, out of mind, the end user came second.
But sometimes, as CX leaders, we need to get out of the lab and into the field - or onto the lawn - to put our customers' considerations above our own. Because at the end of the long, hot day, they’re the ones who are using our product the most.
So open up that shed and pull out the riding mower your father-in-law bought you. It’s time we pour one out for the customer.
Welcome to Often Imitated, a podcast about remarkable experiences from the past, and how they inspire people to create great customer experiences today.
This episode is all about weighing customer feedback. Why every stakeholder’s opinion matters, but not all feedback is created equal. Today we’ll hear from Dakota Semler, CEO & Co-founder of Xos Trucks, the leading services provider for battery-electric fleets. He’ll discuss how they are working to decarbonize last-mile and regional transportation, while putting their drivers’ satisfaction front and center. But first, a word from our sponsors.
Often Imitated is brought to you by the generous support of our friends at Oracle. Make every interaction matter with Oracle Advertising and CX. Connect all your data and empower your entire business to deliver exceptional customer experiences from acquisition…to retention…and everything in between. Hear more executive perspectives on CX transformation at oracle.com/cx.
Narrator: Today, cup holders are ubiquitous. In our cars, our riding mowers, golf carts. But at the time, they were still a relative novelty. Chrysler popularized the accessory when they added it to their ‘84 Plymouth Voyager minivan. Then in 1992, a 72 year-old woman made them a practical necessity after she sued McDonalds for $2.7 million. The cause? Nowhere to put her hot coffee, which she subsequently split onto her lap, giving her third-degree burns. Companies took notice.
When Sears began adding cup holders to their Craftsman tractors, the impact was immediate. Finally, customers could mow the lawn and sip beer. It seemed so inconsequential to the Sears executives at first. How could such a small add-on have such a big impact? What about all the measures they were taking to make their tractors more affordable? And the culturally relevant ad campaigns they were coming up with?
But as a guru of customer psychology, Christine knew the importance of customer satisfaction and the outsized role it plays. A good idea can come from anywhere, yes. But not all feedback should be weighed the same.
Dakota: If you can keep that driver's satisfaction up. And you can actually improve the experience of operating the vehicle. You generally can find that a lot of the other stakeholders actually follow in.
Narrator: That’s Dakota Semler, Co-Founder and CEO of Xos Trucks. They’re focused on a different type of driver.
Dakota: We're really a service provider for fleets. We help them manage their, their trucks. We build their electric vehicles, we build charging infrastructure and we provide support services to manage and maintain all of that infrastructure and, and the associated fleet.
Narrator: As a truck driver at heart, Dakota knows the importance of putting your end-user front and center.
Dakota: We started XOS a little more than, than five years ago. And we were actually fleet operators ourselves. So we ran diesel trucks and manage those trucks and drivers, and we saw how challenging it was becoming. Actually operate those vehicles, keep them on the road day in and day out and manage the operational environment of, of running a fleet.
And so we really began the business to focus on how can we improve that experience and how can we make it better for fleets like ourselves.
So you look at most of the infrastructure that fleets are operating today, whether it's a logistics company, like a ups or FedEx, Or it's a not for hire fleet, like a food and beverage delivery company, like an Anheuser-Busch. They have all of the software systems, the warehouse management systems, all of these connected systems outside of their fleet.
But then when it comes to their fleet, they're like disconnected tools out in the field that are just roaming out there. We now offer the ability to actually connect those systems. So that you can make sure there's not surplus. There's not waste, there's not spoilage or inefficiencies in that system and give fleets the ability to manage it proactively as opposed to realizing it after the fact, when a truck goes down or a truck's out of charge or there's a maintenance issue or a driver.
Narrator: And that’s just the beginning. Ready for a crash course on the challenges fleet operators face today? Take it away, Dakota.
Dakota: First, they start by operating diesel trucks and modern day diesel vehicles have incredibly complex systems for managing the emissions on those trucks. From the diesel particulate filters to the selective catalytic reduction systems to your engine and transmission systems. They become. Really complex problems and machines to fix and repair in the field.
And the emission systems have become so complex that when we were operating our fleet or many of our fleet customers, they're pulling trucks out of service once a week, just to be able to maintain them, repair them and get them back into the field
They also have to manage drivers and drivers, staffing, driver retention, and driver safety monitoring, which is one of the leading concerns for this industry.
Because as of right now, there's a massive driver driver shortage. Trying to retain, hire and be able to keep drivers in your company and in your fleet is one of the biggest issues that these fleets deal with. So by building vehicles that are actually safer, that they can operate and manage more effectively.
We get fleet operators, the ability to actually focus more time on employee development on employee training, employee recruitment, and actually keep those drivers around for the longer.
And then the last part is, has really fuel and managing the cost of operating these vehicles. So when we're refueling a diesel truck or subject to the volatility of pricing of diesel and the fuel markets, and that's continually going up as we've seen in recent history, but with electricity prices, we're actually able to provide customers with a stable price.
That enables them to purchase fuel. So even as diesel fuel prices increase, they can actually predictably scale and grow their business and monitor their performance without having to worry about all of the volatility that they can't control. So it becomes an incredibly effective tool to be able to manage all of these things and not have to deal with the traditional challenge that diesel fleet operators have to deal with today.
Narrator: Which is not to say there aren’t new challenges for electric vehicles. Like installing infrastructure. Or overcoming preconceived notions.
Dakota: A lot of the drivers are a little bit skeptical. They're concerned. It's not going to have a rough range or it's not going to be powerful enough. And they liken it to a golf cart or a hybrid vehicle, but immediately after a day or two days or a few days of driving the vehicle, you start finding that your drivers actually prefer the electric vehicle over the diesel's.
And they'll start to fight over who gets to utilize that truck. So we actually have customers. That are saying that we have specific dedicated trucks to dedicated drivers that are either employee of the month or they've been performing really well or they're our safest drivers. And that's what they preserve the electric vehicles for.
Narrator: For fleet managers, this is good news. In a time when talent is hard to come by, being able to hire and retain drivers while keeping them motivated is a huge bonus. It’s one of the many solutions Xos provides. The biggest perhaps being the move to decarbonize transportation.
Dakota: So our stakeholders are not just fleet managers and fleet operators and drivers, which are the typical stakeholders we deal with on a day-to-day basis. It's communities. It's cities that are regulating emissions from commercial vehicles.
Commercial vehicles is actually the largest segment of emissions generation in the United States. And that's a huge problem because commercial vehicles are less than 10% of the vehicles actually on.
But because they're operating day in, day out, anywhere from eight hours, all the way up to dual shifts, up to 20, 22 hours a day, they're generating emissions constantly as they're driving has they're idling as they're parking and stopping and going on streets, delivering packages, they're the most disproportionate contributor based upon the size of their.
And so that's really why it becomes the biggest problem to focus on is we need to solve the emissions problem and we need to solve the criteria pollutant problem. That's creating health issues in our cities. And by focusing on commercial vehicles, we can have the most disproportionate impact to our air quality and to reducing greenhouse gas.
And we've even selected a segment of the commercial vehicle market. That's going to go electric first, we focused on last mile and regional haul trucks, not on the long haul vehicles that are going state to state, but on the vehicles that are operating in cities, driving from distribution centers to your house or your business returning to that same location every night, because that's where pollution is the worst.
Narrator: Once you’re inside the cab of an Xos Truck, however, it’s all about the driver.
Dakota: it's about designing it in a purpose-built way for the drivers and for the commercial vehicle landscape and the industry that expects something. Much more durable than a passenger car, but has the same level of comfort, the same level of driver experience as has a passenger car.
And we've been able to do that. I think uniquely by actually talking to customers and starting with that ideation phase, asking them exactly what they want.
And so if we can actually improve the experience and make driver satisfaction go up because of us paying attention to their needs, paying attention to the designs, paying attention to their workplace and their environment that they're spending a good portion of their life inside this vehicle that actually ultimately.
Drives additional success with growth and customers with growth and fleet sales and ultimately a, a long-term customer that's gonna of be loyal to the access plan.
Narrator: As a former fleet operator, Dakota knows firsthand the importance of driver satisfaction. But as he explains, Xos’s customer-centric approach did not come fully-formed. Learning the importance of weighted feedback took time.
Dakota: when we started Xos, we were focusing a lot on. Incorporating feedback from all areas of the organization, from the fleet managers, from the drivers, from the finance organization, executive teams. And what we realized is all of that feedback is relevant in the process of building the business. But it's also important as we get into engineering and we get into product support and deploying vehicles and maintaining and servicing those vehicles in the field to focus that feedback on the people that are actually going to directly interact with that.
Who's going to be driving it day in and day out and make sure that that feedback is weighted above and beyond some of the other points of feedback that you get at the end of the day, a CFO is not going to be operating the truck.
They're going to be purchasing that truck and making a purchasing decision.
I still remember going to Memphis and going to FedEx and actually turning over its prototype that we built after six months and letting them operate the vehicle and drive the vehicle and going to other customers and letting them tow freight and pull cargo with it. And it was a daunting experience to turn over this prototype to your customers that you were trying to convince, knowing that it wasn't the perfect product, but through those conversations, We received some of the best feedback, uh, and the history of the company, where we were able to get direct feedback on the product from the people that were going to be utilizing it day in, day out, that informed where we are today and the vehicles that we've built
Narrator: Point being: don’t be afraid to get out of the lab and into the field. Or onto the road. Or the lawn. Because that’s where your primary end users are, and their insight is invaluable.
Dakota: You don't necessarily need to make engineering decisions or product decisions or. It's customer experience decisions by committee, but you need a committee to, to listen to that feedback and to incorporate it back into your processes, because sometimes it can get too tunnel oriented and my feedback, or my interpretation of, of customer feedback makes its way into the product.
And that wasn't necessarily the direct interpretation. I think, as a CEO's, we need to constantly remember that surrounding ourselves with that, that diverse team and diverse skill sets internally. Can help support and build a better customer experience.
Narrator: Internally, and externally as well. The customer wants to be heard.
So this week, try to find a way to make your customers more involved in your process. Give them a seat at the table. Better yet, give them the floor. They may not be in the room, but they’re out using your product, and that’s worth it’s weight in gold.
Or at least a golden lager. .
Alright, I’m spent. Who wants a beer?
This podcast is brought to you by the generous support of our friends at Oracle. Make every interaction matter with Oracle Advertising and CX. Connect all your data and empower your entire business to deliver exceptional customer experiences from acquisition…to retention…and everything in between. Hear more executive perspectives on CX transformation at oracle.com/cx.
This is your host, Ian Faison, CEO of Caspian Studios. Thank you for listening to another episode of Often Imitated. If you like what you’re hearing, tell one friend. This podcast was narrated by me, Ian Faison, written by Ben Oddo, and produced and edited by Mackey Wilson, Callen Turnbull, and Jon Libbey. You can learn more about our team at CaspianStudios.com.