Driving Community Engagement Through Localization at Scale

Kailey Raymond: Building an authentic presence in your local market is tough. You wanna help advertisers deliver relevant messages to customers, but without the corporate rhetoric, Nextdoor's, Krish Sailam has figured out how national brands can engage with local communities. They're working with big-box retailers and mom-and-pop shops alike to create a trusted and high impact customer experience at the neighborhood level. In this episode, Krish and I discuss localization at scale, the concept of data pilates and killing off your systems.

Kailey Raymond: Welcome to Good Data, Better Marketing, the podcast where we speak with influential marketers and digital innovators and learn their tricks of the trade. They help us understand exactly what good data is and share stories about all of the different digital first customer experiences that they're creating. I am Kailey Raymond, and I lead enterprise marketing here at Twilio Segment, I'm your host. And with me today for a very special live session for CDP live, we have Krish Sailam, marketing technology and operations lead at Nextdoor. Welcome to the show, and thanks so much for being here.

Krish Sailam: Thanks, Kailey. I really appreciate you providing us with this opportunity, it's an honor to be on the show, and I'm literally looking forward to today's conversation.

Kailey Raymond: Me too. Usually the way that I like to kinda kick these off is just to get to know you and your career journey a little bit more deeply. I know that prior to Nextdoor, you have a ton of experience across a lot of different verticals, B2B, education, retail, health care, entertainment, about 20 years of experience. And you have a lot of expertise in mobile, paid search, social, email, display, programmatic, the list goes on. So, I definitely wanna make sure we're touching on the well-rounded experience that you're bringing from agency, in-house, product, marketing, and all of those ways that those are actually impacting the way that you think about driving customer engagement. But before we dive into some of those tactics and strategies, what was your first job, Krish?

Krish Sailam: Yeah, so my first real job was at a company called Digitas, as the agency, it was up in Boston, and the account I got put on was the AT&T account. And this was early 2000, and one of the projects that we were working on was actually helping AT&T create an online customer service portal. And so it was the first of its kind, and we were also helping them create the first of their portfolio of banner ads for online advertising. So, it was really a lot of digital transformation for them, but the very, very early stages of that. So, that really got me into learning about UX, UI design, web design and overall content management systems, and starting to actually understand how data is stored from an end customer perspective.

Kailey Raymond: That's so interesting. My grandfather worked at AT&T a long, long time ago, so whenever I hear somebody works at AT&T, I always think of, "Shout out, Leo," awesome. But dot bomb era, 2000 dawn on the Internet, you're working on a lot of completing edge stuff, web projects, digital UX, UI. What happened from there in your career, from Digitas to today, how would you describe that?

Krish Sailam: Yeah, so there's two big things that happened to me. One was, I found myself feeling very unfulfilled dealing with digital, I feel like it wasn't tangible enough for me. So, I made a decision to leave Digitas and a few weeks later, 9/11 happened, and that really destroyed the economy. And so that really kinda set me on a new path, I said, "Hey, why don't I take this an opportunity to explore things overseas?" So, I ended up going out to Singapore and was part of a biotech start-up out there.

Kailey Raymond: That's incredibly cool. So, you were working in Boston, then you go over into biotech, different industry. How did you end up in tech?

Krish Sailam: I started to realize going biotech, you needed to have a medical degree and you needed that sort of tashe to be in that industry to really progress. Then I started to realize I was okay at tech, I was the guy who read the manual, so I could explain it pretty well to other people as well. So, I came back and started to get back into tech, I actually went to a company in Bangkok, it was a large conglomerate out there. They were building the first online procurement system to help eradicate a lot of the bribery that was happening in their systems. You quickly find out that bribery is a very efficient system out there, [chuckle] so online procurement was not a thing that worked back in the early 2000s.

Kailey Raymond: That's funny. Cool, so you're going around Asia, you have a lot of different experiences, and I think you're back in the States now. So, walk me through coming from there to here.

Krish Sailam: Yeah, so I decided to get a master's degree and that kind of put me on a slightly different path and really felt like I wanted to get back into the Internet side of things. So, I came out to San Francisco, started off at an online advertising network, it was Tribal Fusion back then or Exponential. We were part of the performance group and really got into kind of performance-driven media, so we're running search and understanding how CPAs work, CPLs work, and really building a book of business that way. So, that got me into online media, I developed a good reputation there, but then I wanted to get deeper into programmatic. So, I joined a very strong agency and programmatic, and was really the main advocate for how mobile programmatic should be used in a brand strategy. When I started advocating for mobile, it started to push my boundaries in terms of how I should teach people about what the differences are, where the data comes from, and how the signals are used, and really what the customer experience should be. So, that really kind of expanded my career into getting into customer experience management.

Kailey Raymond: Wow, that's so cool. And I'm sure you're thinking about, we're getting all of this information from a mobile channel, we also have kind of web browsers now, how do we merge that data and make sure that all those things are kind of firing off? So, you're probably very early, CDP, DMP, DSP, all of the different ways to collect and store and share out data.

Krish Sailam: Yeah, pretty much every acronym have come across in my career.

Kailey Raymond: So, you're at Nextdoor, you're the marketing operations lead for them. Why don't you tell us a little bit about Nextdoor, for those who aren't familiar, I'm sure we have a couple of neighbors on the call today, but I wanna make sure that folks are up to speed.

Krish Sailam: Yeah, so we're gonna start out with a couple of neighbors on the call today, and hopefully by the end of the call and everyone's a neighbor. So, Nextdoor is a platform where neighbors really come to... Sort of become part of a community and really feel a sense of belonging in that community. There's a sense of engagement with other people and your neighbors and businesses in your area, local agencies that could be like a police department, fire department, things like that. But you're really coming there for trusted information from people around you that are like you. You're also coming there for a sense of safety in a lot of cases, so if there was a natural disaster, it becomes a huge source of information of where to get resources, so it's a huge platform for utility. Currently, we're in one in three households in the US, we have over 70 million neighbors globally, we're in 11 countries, we have over 60 million recommendations of different businesses on the platform as well, so it's a really engaged platform overall.

Kailey Raymond: That's unbelievable. I didn't realize the scale of Nextdoor. One in three households is just staggering in the actual size of that, and I appreciate that overview. So, that's kind of like the B2C side, and obviously, you work with a network of advertisers as well, so you're kind of like a little bit of a marketplace, right?

Krish Sailam: Exactly. Yeah, there's definitely two sides to Nextdoor, one is the B2C side, where the neighbors really come to share information about what's going on in their neighborhood, it's accessible to everyone. And our total addressable market is pretty much everyone, 'cause everyone's in the neighborhood of some sort or some sort of community. On the other side of the house is really kind of a B2B opportunity, so we have a platform for anything from SMB to a mid-market company to an enterprise brand to advertise on our platform. And this is really about delivering localization at scale, so they can really get into your neighborhood and have that authentic presence and really interact with neighbors on a local level, regardless of what type of brand it is. And then we also have the ability for those businesses to interact with their community and create posts about what's going on with their business, if they're hosting an event or something like that, they can create content themselves as well. So, it's a really good two-sided platform for both neighbors and businesses.

Kailey Raymond: That's really interesting and especially really built on trust. The foundation I think of Nextdoor is trust, and so that's a nice little virtual circle, I'm sure that a lot of advertisers are feeling because of that, we're gonna dig into that later.

Kailey Raymond: I wanna learn from you based off of a lot of the experiences that you've had right at the tip of the spear of a lot of technologies as they've been coming out. You've seen a lot of trends come, you've seen a lot of trends go, and I just wanna understand what you're seeing today. What are some of those trends related to customer engagement in the tech space that you're seeing and following?

Krish Sailam: Yeah, so this is the part where we turn it into a murder mystery podcast.

Kailey Raymond: Let's go.

Krish Sailam: Yeah, so your customer engagement strategy, I think I'm gonna prophesize here is gonna be murdered, and it's gonna be murdered in a way that you see it coming, but you're still not expecting it. So, I think one of the big trends I'm really seeing in the industry right now is the concept of AI and how that's influencing customer engagement. The cool thing about AI is that there's massive interest in it and there's massive applications for across the entire customer journey. So, from that top of funnel side of things and making the personalization stronger, creating email copy very quickly, creating imagery for your emails or paid units. But then also in the sales platform or sales tech stack, we're seeing AI kinda help sales reps summarize calls or update their contacts or records or opportunities in Salesforce. Then on the customer service side of things, I think that's a huge area for AI to influence what happens next, and if a person's in a support call scenario, should they stop receiving marketing and really focus on re-establishing that relationship before they get back into a marketing type across that opportunity. It's really a fundamental change in terms of how people are gonna expect to interact with brands, which I think is pretty interesting.

Kailey Raymond: Yeah, absolutely. And we're kind of at the dawn of this new era where old folks who have a lot of curiosity, they have a lot of fear, we're not quite sure exactly the use cases to your point, there's different use cases throughout the life cycle of a customer and where businesses might be able to insert it. There's a study that we just did that our state of personalization report, and there's a couple of stats related to AI, which I think are really relevant and kind of highlight a little bit of that discrepancy with this current moment that we're in. And the findings show that 90% of the businesses that we're talking to are using AI-driven personalization to drive growth, and so really big investments happening. But 36% of business leaders are citing security and compliance as things that are obstacles to this right now. And when we talk to the consumer side, only 41% of them are comfortable with AI being used to personalize their experiences. So, there's just interesting gap between what we think is really cool, what businesses are willing to do and to test on their consumers, but then what we as consumers are comfortable with being used on us, so... Yeah, very, very interesting time were in.

Krish Sailam: Yeah, no, I think it's a really interesting time, but it feels very similar to the early 2000s, again. Where if you went to a bunch of people and ask them, "Do you feel comfortable buying something online and using your credit card online?" A whole bunch of people that were like, "No, no, I'm not gonna do it," but today it's like, "Yeah, why wouldn't I do it?" Right?

Kailey Raymond: Of course.

Krish Sailam: And sometimes I feel a little bit more unsafe using my credit card at a store if they have a credit card scanner or things like this. So, I do think there's gonna just be a natural adjustment, I do think one of the big benefits of AI in personalization and the customer experience, is that it's understandable by a very large group of people and I think the hype behind AI is a very strong bandwagon to jump on. And the reason why I say this is like if you compare it to crypto just two years ago.

Kailey Raymond: I love this comparison, let's go. Let's infuriate some folks in Miami right now.

Krish Sailam: Yeah, crypto, it's a valid concept, but it was really, really hard to explain to your parents. And even today, I'd say the vast majority of people can't explain how crypto works or what it does, but if I said. "Hey, would you like to chat to this system and it gives you an answer real quickly?" They're like, "Yeah, I get it." Do I need to know how it works? No, not really, but it gives me a valuable answer, so it's immediately accessible by a much, much larger group of people.

Kailey Raymond: It definitely makes sense, yeah. I also think that Sam Altman and an OpenAI over the past few months, truly, it just changed the entire dynamic and gaming, and now it really does feel as though there's a race to have all of these different AI applications in your business. And what I think is interesting too is this pause that people are suggesting, like Elon and Steve Wozniak and what a 1000 other people are signing this document saying that we should have a six-month pause, which I understand because of the D&I lens that we think we probably do need to start thinking about applying to AI, and kind of the ethics behind it and what are the guard rails. So, a lot of questions still need to be explored there, but yeah, we'll see where it goes.

Krish Sailam: Yeah, I mean, that particular letter, I think everyone who signed it realized that... And this is a personal view here. But they realized the cat is already out of the bag, there's no way you're stopping this machine from going fully. I do think it's an interesting letter to put out because I think the guys who are inventing this stuff and when creating this stuff realize the potential, and I think they're giving the government an opportunity to say, "Hey look, you probably need to put some regulation in place, otherwise, this is gonna get out of hand very quickly." The unfortunate part is that governments are very slow to react or to even understand what's going on, they're still questioning how a tweet works or a [laughter] TikTok video works, and this is after well over a decade of these things being out in the space. So, it would be interesting to see how the regulation evolves, and I think the concept of ethics in AI is gonna be a huge thing. And it'll ultimately be a new practice in companies like PwC or Accenture for AI compliance, and they'll make a ton of money off of just auditing your AI stack, gonna be a lot of new revenue models there.

Kailey Raymond: Wow, I didn't even think about how the big four are gonna come in and make this a massive part of their business, but you're so right, that is so spot on. Okay, so AI, definitely this massive movement that we're in right now, a lot of momentum behind that trend. Any other things that you're spotting that you're looking at thinking about?

Krish Sailam: There are a few things that I'm thinking about. One of them is, how do you expand the customer experience across different channels? So, I think a lot of the lead forms that we come across in our day-to-day life, they ask for our phone and email. The fact is most people don't wanna talk to you and they don't wanna have a human conversation. They can say they're resistant to talking to the bot and the AI system, all they want, but they will do everything possible to avoid having a human conversation at the same time. And so that's one area I think concepts like mobile text-based support are gonna be interesting and seeing how that evolves gets much quicker, lower friction, and it's a modality that I think a lot of people understand.

Krish Sailam: The other thing is really just understanding the concept of measurement and attribution, so understanding how multi-touch attribution is gonna evolve over time, and understanding where that's gonna play within the customer journey, and if the data singles for that are gonna be sufficient, or if it's just gonna continue to be a guessing game.

Kailey Raymond: That's really interesting. Yeah, I mean, even in the past decade or so that I've been in marketing though, first touch, last touch, multi-touch, it's different everywhere you go in terms of how exactly they start to think about and calculating this. But the number of touches before you're actually converting people are only increasing over time as the channels have a proliferation of channels, so you're right, it's gonna be a really tough thing to solve. Are there any things that you're thinking about related to that right now, what's your hot take?

Krish Sailam: For me the thing I wanna keep an eye on is really how those AI-based conversations become part of your funnel and your journey. I think it's gonna be a massive step in that consideration layer where instead of asking your friend or industry colleague of like, "Hey, what do you think about this platform?" You're gonna ask the AI tool and they're gonna supersede your research on a particular blog or a company website or going to YouTube to find a demo of the product. It's gonna give you as a quick and dirty summary, and I think that needs to be taken into account in terms of how you measure this new customer journey. It's a channel you can't necessarily control or influence, but you know it's gonna be present.

Kailey Raymond: Wow. Okay. I'm learning a lot. I love this. This is so cool. And I think that a couple of the trends that you were talking about earlier as well, the number of channels, where do you wanna meet people, is it a mobile text, it's channel of choice, and making sure that you are understanding somebody, that you're personalizing that experience specifically to that human. Which is really just this, I think, this mega trend that we've been seeing over the past five years of digital personalization, omnichannel personalization, making sure that that experience blends across any different channel that you would be able to touch somebody. A couple of more interesting stats from our personalization report that kind of talked about that is that over half... 56% of consumers say that they're gonna become repeat customers after these personalized experiences.

Kailey Raymond: So, if they have that AI chatbot experience and that is personal to them then they say that hopefully they're gonna become customers of that business again, and what's interesting is this time the data on the other side backs it up. So, for businesses, 80% are saying that consumers actually spend more with them when they're personalizing experiences, and that more that number that they're spending is 30% more on average. So, that's all to just say that understanding your customer and making sure that you really are figuring out their channels, where they are, how they wanna be talked to, is going to increase your revenue ultimately and build efficiencies in the places that you're finding people and talking to people. There are a lot of changes in consumer behavior.

Krish Sailam: I think that there are, there are a lot of changes in consumer behavior, and I think the metrics are always from the business perspective is like, "Did this help me drive more revenue?" I think that's something that's undervalued is that, we don't necessarily look at like, "Did this experience or personalization make me feel good as a customer?"

Kailey Raymond: I love that.

Krish Sailam: And ultimately, one of the things where I think customer experience management needs to focus on is, "Did I make that person feel like they were my only customer? And if I did, there's a really high chance that they're just gonna keep coming back and we have a long-term relationship at that point." They don't need to know that I serve as 10 million people or things like this, they need to feel like they're the only customer. They're getting the attention when they need it and they need to be feel valued, and that's a really hard metric to find.

Kailey Raymond: It is. Our CEO, Jeff Lawson, has talked about this a couple of different times, but it seems like with the proliferation of digital channels for a really long time, things became less personal, it felt like you were talking to a robot, but a robot that wasn't actually good, the chatbots were really bad for a really long time. And now with tech becoming so much better, the experience is kind of mimicking more of what you actually see out when you're talking to a human in the world, you expect that back online, but you're craving that kind of in-person, individualized, actually talked to me like I am Kailey and I'm a woman who lives in Brooklyn. I don't wanna be a demographic, I wanna be me, so I think that that's spot on. Any other changes in consumer behavior that you've seen in the past couple of years that you're taken out of?

Krish Sailam: I would say people were looking for very quick experiences in low friction type things. More in the areas where I'm constantly watching as I take a look at my kids and what their expectations are of consumer experiences. So, when I show my nine-year-old kid like regular broadcast TV, he's like, "Hey, can you just fast-forward to the next episode?" I'm just like, "No, it doesn't work like that." And then I see them swipe across the TV and there's fingerprints across the lower third on my TV all the time, but they think it's an iPad. So, their choice of interface, their choice of content on demand, things like that, it's all setting the pace for where our businesses need to be. It's kind of interesting that the kids are gonna be setting the tone of expectations very quickly.

Kailey Raymond: That's really interesting. My dad similarly touches the screen, whenever screen he's on, he touches the... 'Cause he has an iPad, and so whenever he has a computer now he's trying to swipe the computer screen, I'm like, "It should be like that."

Krish Sailam: It should, right?

Kailey Raymond: But apparently he's ahead of his time.

Krish Sailam: The main thing about technology is that, the experiences that feel natural and intuitive, are the ones that are gonna stick and really drive the expansion of relationships revenue or whatever it might be. But if you make it kind of clunky, you design the experience based on what the tech can do versus what the customer wants, then that's where you start to lose ground, I think.

Kailey Raymond: That's interesting. One thing that I would point to as well is, a lot of people are just demanding transparency, you just wanna know to your point of like, you can probably figure it out. If you're looking for something to purchase, you can probably find information online, you don't wanna talk to a human, you wanna talk to a chatbot or anything else, there's just so much more information available today, than there ever has been, review sites, transfer in pricing, YouTube demos, you name it, there's going to be a way for you to figure out damn near 90%-100% of what you need by poking around yourself so that self-serve, try it yourself. That's something that actually I think today, more than ever is with the current economic environment, really interesting to think about, because they don't wanna talk to sellers. If I'm purchasing a new sofa right now, I probably wanna try it myself to figure out what use cases I have before I actually talk to a seller, so less desire to speak to reps immediately. With the lens of this current economic environment, what's different in 2023? How is the economic climate changing some of your tactics and strategies?

Krish Sailam: I think the economic climate is... It's tumultuous, I think it's probably the best way, where people don't know how it's gonna pan out. They see things getting more expensive, there's a lot of fear on the horizon in terms of stability of different economic factors, things like that, so I think people are generally bracing for rougher seas. So from an advertiser perspective, it's no secret that advertisers are kind of holding back or being conservative with their spend approach. So, for I think a lot of businesses today, the name of the game in a very short term, is not necessarily raw new growth acquisition, but it's about fixing the leaky bucket and making sure you're doing everything possible to reduce churn and retain customers and keep them happy. So, there's still a ton of value and there's a ton of efficiency in terms of generating revenue from your existing customers versus always saying, "Hey look, I need to get this new customer, new customer, new customer," and you're forgetting about the ones that you already have. So, I think having that more balanced approach is, I think a huge change that's happening right now.

Kailey Raymond: I hear you. The economy is so interesting right now, because it's doing well, jobs are growing, but your word bracing, I think is probably the perfect way to state it, is there's caution and folks are thinking about ways to dive back into the base. Absolutely, we're seeing that a lot, and we're thinking a lot about conversion as opposed to filling the top of this funnel. Of course, that's always gonna be something that we're doing, but digging into each of these different handovers and figuring out where you can optimize each of them, I think is what a lot of people are thinking about right now. What are some of the biggest challenges related to customer engagement, that you're facing at Nextdoor?

Krish Sailam: It's really easy to get excited about different technology that's in the market. You start to come up with a utopian vision of what the customer experience could be. And I think this is not something that's isolated to Nextdoor, I think it's an industry-wide issue, is creating that vision and architecture is important, being able to distribute that across the organization is important. But then you quickly realize, is your organization actually set up to deliver that vision? And do you have the right skills in-house to deliver that vision? So, I think that's really gonna be the biggest challenge over the next few years for a lot of organizations. It's like with the spectre of AI coming down the pipe, A, do we have enough people in the organization that understand that? B, can we get those people?

Krish Sailam: And then can we then re-structure how everything is done to then service that? 'Cause I think there's a fundamental change coming down the pipe around data, and AI is, we used to think about building data for end customers, and we thought we needed a ton of it. But I think the change coming is that we're gonna need to build data for the AI systems and let them handle the customer experience at that point. So, the balance and control is gonna start to shift, and I think the way we deliver that data is also gonna be dramatically changed as well.

Kailey Raymond: That's interesting. And the way that I think about it too is, you need to know what data to collect, but you also need to collect clean data or have a mechanism to be able to clean that data so that you have the ability to feed that out into your AI systems or whatever else, to actually be able to make those decisions. And we're talking to a partner of our state of bricks, and they did a study where they were talking about really understanding what engineers are doing, where they're spending their time. And they found that the really hard manual work of cleaning and preparing data, was taking them 60% of their time versus actually manipulating it and analyzing it, which was taking about 20% of their time. So, I don't have to tell you as a Segment user, but it just kinda breaks my heart that all of these engineers are sitting there spending a lot of time doing this really hard manual work of cleaning this data when CDPs act as those powerful filters to make sure, that they have that. I guess what I'm curious about it is we're talking about AI, we're talking about feeding these systems, I think that we need to clean data to be able to do that in the best way to deliver the best experience. How do you get to clean data, what is good data for you?

Krish Sailam: Yeah, it's an interesting question here. So, when you talk to... There's the image that comes to my head is like, you have the concept of a data warehouse, you have the data lake, but I think in reality, a lot of companies are dealing with data sets cesspools at this point. If you're an analytics engineer or data engineer, you're cautious about going in there, 'cause you know, there's a lot of stuff and a lot of duplicates and a lot of stuff that's misnamed and things like that. And what I was thinking about last night was, a lot of companies don't really have a great way of organizing data. And I think the example I would give here is that if you walked into any library in the US, they all have books, tons and tons of information, but it's organized in a very standardized way, the Dewey Decimal System made libraries completely accessible and regardless of which library you go into, you know how to access stuff. But there isn't that same standard in creating data lakes, and that standard doesn't exist across companies by any means. We have a tendency to be enterprise data hoarders, you just wanna gather as much data as possible. But ultimately, what good data is, is the data that you actually use.

Krish Sailam: And the example I give here is go to the grocery store, buy some oranges. I put a few on the counter 'cause I know I'm gonna eat them that day, right after lunch, I put a few in the refrigerator. My partner has a tendency to pack in a lot of stuff in that same drawer in the refrigerator. And I quickly forget that I bought those oranges and they're still good oranges, but I'm not using it, there's no value coming from them. So, is that still good? No. Not really, it's just storage at that point.

Kailey Raymond: I have the same exact problem, by the way, what you're saying is resonating with me deeply as somebody who probably asked that they're allowed a half a bag of tangerine every other week.

Krish Sailam: Yeah, yeah. It's always the tangerines, they just get mold and green, however this happen.

Kailey Raymond: It's always the tangerine.

Krish Sailam: Yeah. So, knowing, A, that you have it, B, it's successful, you've gathered it in an ethical and compliant way and you're able to use it. And when you do use it, it makes that customer feel like you're their only customer, that's what becomes good data at the end of the day.

Kailey Raymond: I think what you're talking about a little bit too, is something that we actually just released recently here, is these golden customer profiles. So, it's good, it's clean, it's complete, and it's portable, you can actually use it across all the different systems. So, I think freeing the customer profile and having it be able to move between the systems that you wanted to from your warehouse to your business applications across the enterprise, that is how people actually want to use data, and so you should be able to do it that way. What are some of the programs that you're using, some of this good data at Nextdoor? Any ones that you wanna share?

Krish Sailam: Yeah, so on the B2B side of things, we use it a lot of our data to help our customers before they become a customer, and then quickly after they sign up and register an account, they purchase their first campaign and things like that. We have an amazing life cycle marketing team that really starts to act more like a concierge for each customer. They say, "Hey, Kailey, you just signed up, here are the best next steps of what you should do on your campaign," and that might go out in a form of an email or something else. But they really know where each person is in the customer journey, and they have time journeys to go out and are triggered based on different actions.

Krish Sailam: So, having those real-time actions is really important for us, and also having the ability to augment those profiles from our data lake is also really important. So, we have a full view, we can personalize that message, but we know when to send it, and we know what the next message you should see is as well. So, all those together really, I think provide a pretty powerful customer experience for Nextdoor. And ultimately our goal for an online advertising system is to be the easiest system to buy from, for our customers, regardless if you're a mom-and-pop pizza shop in downtown or you're a large brand.

Kailey Raymond: It's all about decreasing that friction, what I think you're talking about is just behavioral data leveraging that to be able to create these personalized pads for people and to provide them with education at the right time, that's based off of exactly what they've told you they're doing within your platform so far, so interesting. Anything else that you're working on at Nextdoor?

Krish Sailam: We're always working on new staff, I think from the neighbor side of things, we're trying to make sure that the neighbor experience is as valuable as possible. So, we're working on ways to actually help people discover new things in their community, or if you're visiting an area, you can also see the content and sort of start to interact with the local recommendations. So, we have this concept of a treat map, which goes out around Halloween time, it's a great way to understand which houses are decorated, which houses are decorated Plus F candy, and it helps you just establish that little walking route that you have with your kids during Halloween.

Krish Sailam: So, all these things are really valuable in terms of just driving engagement and retention with our customers to make sure that they understand what the new features are and how they can be part of their community and really find that trust and value from that community.

Kailey Raymond: That's so interesting. I love the idea of a treat map, that's something that I definitely want just in my day-to-day life, like Halloween aside, day-to-day, if I can follow my treat map, that sounds like a delightful day to me. I used to work in a marketplace, it was a talent marketplace that had engineers in one side and talent acquisition folks on the other. And so to us doing localization right was really important, we had way less communities than you, I think we had 12 North American markets and a handful of international markets. But it's so rewarding for those people in your communities, if you can do it right because when it feels right, it feels like you're in on something that you kind of know what's going on. But when you get it wrong, it feels like somebody at corporate designed this campaign and you can just tell and that just kinda gives you the ick. Anything that you wanna know when you're thinking about localization at scale for Nextdoor?

Krish Sailam: That's exactly what I wanted to touch on is, Nextdoor's real forte is the ability to deliver that localization at scale. So, we can have a brand like Home Depot advertise on our platform, but deliver very relevant ads to each neighborhood. So, they really feel like they're part of the community kinda helping you with projects around your house, things like that. Versus just that corporate monster type saying, "Hey, come to Home Depot, everything's on sale," it's like, "Hey, we realized that it might be weeding season in your area, or planting season, and here's a prep guide for storm readiness, if there's tornados coming through your area and stuff like that," so, it really does feel very local, but it's very easy to execute at scale for them. For the mom-and-pop side of things, I think that the localization for them is at the scale of the neighborhood that they wanna be involved in. So, their definition of scale is a little bit different, but they still have the same ability to easily deliver that message. So, they can say, "Hey look, we're supporting the local little league team, here's a sale or a coupon for pizza," things like this come in. And it's a great way to just really engage with the owners of those businesses and you start to build that relationship where that was really valuable, like 50, 60 years ago, and something that was lost, and I think that really needs to come back.

Kailey Raymond: I love that, and I think it kind of ties to the virtuous cycle like we're talking about earlier, is you're building communities based off of trust for your advertisers and your neighbors, and they have the ability to build some inspiration for somebody, have them discover something that they hadn't necessarily discovered before is something interesting, something delicious, and on the advertiser side, they're getting a new customer, that's an amazing way to be able to drive value it's kind of on the acquisition side, right? So people are coming into the new business, you're driving them with advertisements, what about retention strategies? We talked a little bit about diving into your base and kinda making sure that this time you're thinking about stickiness, any programs you would wanna highlight on that side of the spectrum?

Krish Sailam: So we have this concept of FAFS or recommendations for the businesses, and there's over 60 million recommendations currently for different small businesses across the platform, but I think one of the things that really helps us from a personalization perspective is being able to kinda send the message to each of these businesses saying, "Hey look, a lot of your neighbors are already talking about you on the platform, they've already recommended you." This gives them a really strong hook to say, "Hey, maybe I should be advertising on this platform and really engage with my local community and not forget about them." So that personalization of sending them an exact say like, "Hey, Kyle's pizza shop, you have 15 recommendations in the last 20 days from these neighbors, and by the way, there's 3000 neighbors in your one mile radius," so helping them understand, there's activity, there's engagement, and there's that scale and understanding what the size of that scale is, it becomes a really easy win for them to say, "Hey look, I'll put some advertising budget in there."

Kailey Raymond: That's great. Very, very cool. And making sure that, again, you're drawing visibility as to SMBs, the mom pop across the corner that wouldn't necessarily be able to amplify their message on the scale that a large brand might be able to, so it's really cool that you have the ability to kind of bridge the gap from everybody that is the local tailor to some very large business. I'm wondering if you've ever dug into your data and found something that might have surprised you.

Krish Sailam: We were looking at the data this week, and some of the things that were really interesting for us is that when we added a layer of personalization to our campaigns, it... Obviously, improves a click-through rate, we saw between 8% and 10% lift in terms of the clickthrough rate, but what we saw, which was really surprising is that it improved the click-to conversion ratio by 40%.

Kailey Raymond: Wow. That's huge.

Krish Sailam: So we saw more people coming in through the front door with the clicks, but once they're in there, they're way more ready to buy just with that little bit of personalization, if that was imagery, if it was copy or segmentation, so there were massive jumps in terms of that personalization and that really helps us build a business case internally and say, "Hey look, let's get these data signals in, let's make sure that they're clean and accurate to your point from earlier, and then let's make them automated so we can do these campaigns at scale for multiple verticals."

Kailey Raymond: Cool. Do you wanna give away your secrets? What was personalized by your emails?

Krish Sailam: We can't give away all of the secrets here, but yeah.

Kailey Raymond: That's okay. It's okay. I won't you slip up on that one, but that's really, really interesting, figuring out how to actually have CTRs go up is one thing, incredible, 40% increase.

Krish Sailam: One of the examples I think about that goes through my head quite often is that recently we hired a plumber, let's put a new water heater in her house. The way I found this plumper was actually going to next door and seeing what other people are recommending. But then I also found one guy that was actually commenting on the other people's plumbing issues, and he was just being part of the community, and he's like, "Hey, this is how you should do it," and he was a plumber. So I started engaging with him and then I quickly realized for him as a small business owner, it's really difficult to run his business, changing people's water heaters, installing a toilet, and then still run online advertising campaign on the side from his truck. Right?

Kailey Raymond: Impossible.

Krish Sailam: So that personalization is really important because it helps them understand, "Hey, this is a platform that's relevant to me, I can drive more business for my plumbing business, and it's super easy." So that quickness is important.

Kailey Raymond: That's so interesting. Yeah, the speed is very important. I love the idea of just a plumber commenting on everybody's plumbing issues, just like, he knows a lot of things about the neighborhood Krish. He knows a lot of things about the neighborhood. Very cool.

Krish Sailam: Well, he lives in the neighborhood. Which is great. So it was a level of trust. The second thing is, he probably saved people hundreds of dollars in diagnosing costs by just being a good neighbor. There's a lot of good people on the platform, which is... It's always refreshing and assuring to see.

Kailey Raymond: Very cool. And huge engagement. You said that there's, what? 60 million engaged user like unbelievable still.

Krish Sailam: 60 million recommendations.

Kailey Raymond: Yeah, 60 million recommendations. Really, really interesting.

Kailey Raymond: We talked about trends with AI at the very beginning, I wanna go back to that, but I wanna understand what's on the horizon for you in terms of customer engagement, and we'll keep it short. Six to 12 months.

Krish Sailam: I think there's a few things around just understanding what the level of messaging should be when people are dealing with an uncertain economic environment. It's how much do you wanna push them to buy versus how much do you wanna push them to know that you're there as a resource, and you'll be there when they're ready as well. So I think kind of the tone and being respectful of what's going on with people's personal lives is gonna be important. I think AI is gonna be a huge change, and I think companies are gonna have to make a distinct decision around how they wanna approach AI. Do they want to embrace it? Do they wanna be on the cutting edge. Do they wanna wait and see how things pan out, or do they wanna deny it exists or it works.

Krish Sailam: And I think that AI is gonna impact your overall data structure as well. So there's these crazy concept coming out there like zero ETL and the concept of having one big table where all your data sets and you just let the large language model come in and figure out what's going on. And those are conversations, I think you still need to have.

Krish Sailam: And I think you're gonna see a pretty drastic change in terms of how engineering product teams interact with their finance teams for 2024 planning, just trying to figure out what's the level of investment that we put into AI, and that's gonna be a net new conversation that a lot of companies didn't have last year. So a lot of interesting things happened in the second half of this year.

Kailey Raymond: On the investment side of things, we already have data to back that up, which I know we were kind of joking about the PwCs of the world kind of filling their pipelines for the next year or so, but nearly 70% of businesses are already saying that they're investing in AI for our state of personalization report. So it's already starting to do build right now. But you're right, for 2024. I feel like if it's not within your budget items then... I don't know if you miss the boat. Have you listed the boat?

Krish Sailam: That's a good one. Have you missed the boat? I think there's a good chance that you're gonna have to wait for the second boat tho come around, but that may not come round. I do think this is a race in a lot of cases, but I think it's a race that a lot of people in the industry I've been part of before of like, "Hey look, there's a new opportunity, we're gonna have to digest it. We're gonna have to plan for it and we're gonna have to execute against it." So if you have a strong organization, a strong leadership team. I think it makes it a lot easier to do this. Nextdoor has, I think, one of the best CEOs I've ever worked for in my career. The first female CEO I've worked for is normally a different way of approaching management. So I think you're gonna start to see that leadership really come into play this year, and in terms of navigating these tough decisions.

Kailey Raymond: I love that answer. Good leadership is going to navigate us through. Speaking of that, who do you think is doing it right in terms of customer engagement. Anybody that you look to for inspiration?

Krish Sailam: I was talking my partner the other day, and she was texting with customer service, I was like, "Hey, what company is allowing you to text with them instead of emailing back and forth?" And she's like, "Oh, it's this company called Little Spoon, they deliver pre-made meals for toddlers and infants and so forth." So I started digging into their website a little bit and I was like, "Hey, this is actually pretty well done personalization, they have a nice flow, they're gathering information in different steps, and then you quickly realize the way that they're doing it is from an Omnichannel perspective, so they have an online presence, they have their social ads, they have a tax-base support, they have email, and then they also have direct mail, all sort of being triggered off engagement from the website, so really strong set of signals. And then they have a series of ChatBots as well, but what I think their guiding north star is, don't piss off a new mom.

Kailey Raymond: You don't wanna mess with a new mom.

Krish Sailam: No, they're tired. They got a lot of stuff on their plate, and it's like, do anything possible to not piss them all, 'cause if you piss them off, they're gone forever, and they will not only be pissed off and gone forever, they will rant to their mother's group on WhatsApp to say, "Do not use the service," so there's tremendous downside involved with just getting it wrong. So I think a company like Little Spoon does a great job and they're really customer service-oriented, but they know that they need to keep the mom's happy, and I think they're very respectful of the mom's time and sort of mental state at any given point.

Krish Sailam: I think companies like Spotify always do a great job. I think the difference with Spotify is that make you feel like you're part of their data journey. They let you peek into the hood as to how you're seeing in their systems, and that's something that a lot of companies don't do. So I think there's great studies around their end of year wrapped series, just knowing what you should be listening to on the weekend based on your weekly habits and things like that. So they really do a very strong job in terms of execution.

Kailey Raymond: I've talked about that Rap campaign on this show before, it is such an amazing way to highlight customer data and to show it back to the user, but in a way that isn't creepy, it's delightful. And you want it... You wanna be able to share it. I also love your little spin example because I think it really just shows that they know their customer, and I think that's really what all of this is about, is listening to your customer, knowing your customer and being able to innovate for your customer. We're gonna leave it with this one last question, Krish. If you had a piece of advice that you would give to somebody who's trying to up-level their customer engagement strategies, what would it be?

Krish Sailam: That's a good one. I think when we were thinking about uplevelling customer engagement strategies, you really wanna think a little bit more forward in terms of like who you're building for. I think having more people in the room that are reflective of your customer base is going to make your customer engagement strategy more impactful. So let's say if a company like Little Spoon was started by a bunch of moms who needed to solve a problem, but they also knew how to build data architecture and customer experience systems, that system is gonna be purpose-built with the concept of joy and speed and convenience versus a system that was designed by a bunch of guys who had never had kids, and it's gonna be a totally different approach.

Krish Sailam: So I think knowing who your customer is and having those people in the room when you're designing these systems, it's gonna be super important and then the second thing is, don't be afraid to kill off your systems and the spirit of AI coming down the pipe and need to rebuild these things, the way I see it is you really need to kind of practice this sort of concept like data pilates or data yoga where it's like, come up with a really strong core, but make sure it's really flexible and it's able to do a lot of things.

Kailey Raymond: Love that. Taking that. Putting it everywhere, I love that.

Krish Sailam: Yeah. So it's not about World Strongman competition where you have the most powerful thing around, you want it to be flexible, modular, sustainable, and I think it's gonna be a mindset change and its adaptability, it's kind of the name of the game that's gonna be the next few years.

Kailey Raymond: Data Pilates, strong at the core and flexible. I think we need to make t-shirts. Krish, thank you so much, this was really, really fun. I learned a ton for you today, thanks so much for being here.

Krish Sailam: Thanks so much. I really enjoyed this conversation.

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