The Future of Contact Centers: Blending AI and Human Touch

0:00:07.9 Alex Levin: The goal is to treat each individual differently and think about how you're gonna drive the best experience for them and the best outcome and the most customer lifetime value for you as a brand. And that may not be treating everybody the same. It may be actually even when it's something very simple, giving them a high touch experience 'cause you think the outcome is gonna be better.

0:00:27.1 Kailey Raymond: Hello and welcome to Good Data, Better Marketing. I'm your host Kailey Raymond. In the world of contact centers true customer centricity can set you apart. We've all been there on the line with a robot that doesn't feel like it prioritizes you. And with the rise of AI, there's been significant shift from human to AI agents. But fear not, the days of automated impersonal recordings are now being replaced by superior and personalized customer experiences, powered by truly intelligent AI agents, who are armed with the right information to tailor the experience to you in your language, in your time zone, and more. With AI agents giving more time back to humans, we're also seeing a blended approach, where AIs work together with human agents to deliver high touch experiences for those scenarios where a human touch can make all the difference. Regal AI's, Alex Levin and I discuss strategies for maximizing customer centricity, the balance between AI and human-driven customer experiences, and the importance of alignment between organizational values and company culture.

0:02:14.7 Kailey Raymond: Today I am joined by Alex Levin, co-founder and CEO of Regal.AI, where he leads the go-to-market teams. Previously, Alex was a product manager at Personal and Thomson Reuters and then joined Handy, which was acquired by Angie in 2018 as an early employee where he led growth and marketing. Alex, welcome to the show.

0:02:33.5 Alex Levin: Thanks for having me.

0:02:35.4 Kailey Raymond: I am excited to talk to you today Alex, you have a ton of experience in a bunch of different areas across customer experience and customer engagement, but I wanna hear in your own words about how you got to where you are today as the co-founder at Regal.AI. Tell me about your career journey.

0:02:54.3 Alex Levin: Sure. I went to school for philosophy and psychology and you know, had a great time, loved studying that and actually thought about becoming an academic at one point if you can imagine and just decided academia was way too isolating. And the other thing I realized also is like in philosophy, there were 2000 years of writing and studying and thinking and it would take me a long time to get to the edge of what was known, before I could even start innovating and coming up with my own ideas, if I ever was lucky enough to do that. On the other side, I started reading about how software is eating the world, if you remember like those days and how every company is gonna be a technology company. And I said, oh, that sounds like the future that's maybe more interesting and I won't have to spend my whole career learning about the past, I can very quickly get to the edge of what's possible.

0:03:39.3 Alex Levin: So, I kind of jumped into product management roles and early stage startups. I had a great time really and then slowly took on more responsibility through the different organizations and ended up really focusing more on the business side, as an exec. And I think part of what's been fun in my career is like how often I've been wrong. You know, I'll go into a company and think, oh I know I've got it. I know exactly what to do to like grow this. And then you meet reality and you start sort of learning how to talk to customers, look at data, understand what's working, what's not working, trying different things till you figure out the right way of moving forward. And that's sort of I think given me a much more open mind about what you should be doing as a go-to-market leader. Ultimately our current company, Regal came out of a lot of our experience in the home service industry. So we ended up building what is now the largest home services company in the world that owns Angie's List, HomeAdvisor Handy, all these brands. And we did a lot of work to sort of improve the self-serve experience.

0:04:41.0 Alex Levin: So, you could go online and get home services and book a professional without ever talking to a human. And what we realized is actually the performance wasn't that good if you didn't have any personal touches in that sort of onboarding or in that sort of experience afterwards. And so we then started shifting to a world where marketing and the digital sort of site and the contact center all had to work hand in glove to make sure that customer experience was seamless. And that sort of gave us a lot of advantage over competition in that space. And so we ultimately left to start a software company, specifically built for contact centers to bring that sort of higher touch model, super aligned model to more companies. So, what we focus on Regal is those two pieces. One, how do you sort of connect your customer data into the contact center so that you know what marketing is doing, you know what the website is doing, you know what's happening everywhere else, so that the contact center can be doing the right thing. And two, how do you bring a lot of the concepts that traditionally marketing teams use into the contact center so you're doing personalization, A/B testing, more advanced AI things than perhaps contact centers traditionally did, in order to have a very high touch experience while maintaining cost efficiency. So that piece is critical.

0:05:55.2 Alex Levin: A lot of teams in contact centers believe that the only way to be cost efficient is to treat customers very badly. And when I say believe, it's not that they like that, it's that they feel constrained by the software they have to lower costs and give people a bad experience. You know, use bots 'cause it's cheaper, use an IVR 'cause it's cheaper, deflect to SMS 'cause it's cheaper, deflect a self-serve. And the result is that everybody today, sort of dislikes interacting with contact centers, it doesn't have to be that way. So at Regal we really focus on how do you bring that high-touch experience and make customers feel like they're very special, while maintaining efficiency by using technology to do the personalization the high touch.

0:06:32.2 Kailey Raymond: That's great. It's like friends don't let friends buy a terrible contact center. [laughter]

0:06:36.4 Alex Levin: Yeah. Yeah. And it's, you know, again it depends who you talk to. When you talk to people who are close-minded about it, they go, no, no, no, the point of a contact center is to not talk to customers. [laughter] It is very hard to have that conversation, because of the irony involved in that statement, but when you talk to people who are open-minded and come from growth backgrounds, marketing backgrounds are newer to the contact center, are more interested in the new channels, they're sort of very interested in this, and they're trying to figure out how do we build the customer experience that's best for my company, not the one that was like used for yesteryear in retailers online.

0:07:13.1 Kailey Raymond: That's really interesting. I also love this like little idea that you brought into this, which is that you might have had some preconceived notions of how to solve a problem kind of coming into the different companies. It's like your little academic roots inserting themselves into your technology career. So I really like that through line. And it also kind of goes to this conversation that we're having right now, which is that you need to continually innovate in the market to make sure that you are actually following the consumer demands and building the right experiences for folks. This thought that you also kind of built it seemingly a lot or a decent amount of the functionality or kind of ideas behind what is now Regal in-house at Angie and then kind of brought it externally 'cause you saw so much value there, is a really interesting career journey. I guess off the back of this. I'm wondering like how you got so passionate about wearing the customer shoes, which as you know, is also a value that we share here at Twilio.

0:08:09.9 Alex Levin: Yeah. So, I'd say two sides to it. One is I think I've gone from zero to a million in revenue at a lot of different companies and a lot of different products from those companies. And by doing that you learn like you just have to be so close to the customer. So part is that, I think the other part is it's more fun. If you're that close to the customer, you're learning, you're getting feedback, you're iterating. Like when you sit, if you sit in an ivory tower and you go far away, I don't know, it's not that amusing like, you can convince yourself of anything if you're not talking to the customer and you're often wrong. It's more fun to get out there and mix it up and see if your hypothesis was right or not, by actually bringing it to customers. So, as a company within our values like really that sort of customer first mentality is a big part of what we do. And we try to hire for people who like that attitude and wanna spend time with customers. Like often I'll meet very smart consultants, who maybe want to go into startups and one of the things I ask them is like, how much do you want to be customer facing? Because if the answer is nah, you kind of want to go back and be smart in the background, it's not gonna work out.

0:09:15.9 Kailey Raymond: No, it's one of the things throughout my career that I think has allowed me to execute is being able to be close to the customers. I used to be in sales and I worked in customer marketing and field marketing, and a lot of my ideas came directly from conversations I had with customers every day. It's so true. But being able to scale that up and make sure that it's an organization-wide ethos and initiative is certainly harder to do. I'm wondering how do you do that? How do you make sure that you're bringing in customer insights, customer conversations and distilling that back out throughout the company, even in people that might be in more back office roles? 

0:09:54.7 Alex Levin: Yeah. I'd say the first part of it is, my co-founder and I believe in that being an important thing and we act as such, meaning we promote or reward people who are doing it in a way that is good for customers and don't for those who aren't. And so that is ultimately what values are. It's how are you making decisions internally. It's not ping pong tables and parties, it's how you make decisions internally. As you scale up, obviously you have to create processes around that. So we have processes in hiring to evaluate it. We have processes in onboarding to teach people about it. We have sort of consistent re-education or enablement around it. And then day-to-day we hope that we can model the behavior. And so we hope that as founders and as executives and as managers, like we're modeling that behavior. My favorite is when there's, and this is a weird thing to say, but when sort of the OG people at Regal identify somebody who maybe doesn't have the right value or the right decision making and there's like organ rejection, it's not because that's a stupid person or not that they're not gonna be doing very well somewhere else, but it means that they're not gonna do well here. And they either need to get on board with the way we like to do things or go somewhere else to be more successful. And you want that in companies, especially early stage. You want that organ rejection when it's not the right alignment.

0:11:05.6 Kailey Raymond: Yeah. It's like the mentality of fire fast in many ways. And I like that concept of, you know, you're building it into processes. I'm hoping that we're kind of past the days of the wall of candy equals your company culture, but I certainly think that some of that ethos still exists. So, making sure you can codify it and showcase it and all of your different kind of meetings or even within your review cycles is certainly something that's incredibly.

0:11:33.0 Alex Levin: Yeah. Look, when I was starting out of companies, I couldn't understand why people were talking about culture all the time, and that when you're haven't been in a few different companies, like it's hard to understand. But at some point you go work for different people and you realize that whether or not you agree with the company's mission put that to the side. Some people go places and if they agree with the mission they forget the rest. But whether or not agree with the mission day to day, what matters is there are people making decisions, especially more senior people. Do you agree with the way the decision was made? Look, you don't have to agree 100%. With the founders I worked for before, it's not that I agreed all the time, but I agreed the majority of the time and when I didn't agree I could get behind it 'cause I understood how they were making the decision. And if you can do that, I think everything flows well in a company. If you're going to a company you structurally disagree with the way the executives are making decisions, that's where it's just not a good fit. Doesn't matter how much you like the mission of the company, you shouldn't be there.

0:12:26.6 Alex Levin: So, I guess I'll use like a very broad example, but Google is famous for decision making by a committee, which is strange 'cause you think of it as a very sort of data-driven culture. They may use data, but ultimately they don't really have managers making decisions. They have the whole group trying to cohesively agree on a direction which slows things down. And there's some sort of other companies that I've sort of spent time with where they're very emotional in decision making. They like to bring in individual customer examples rather than using data. They like to look at imagery and think through the emotion of the decision more than the data. Those are ways of making decisions, which I'm not gonna say are right or wrong, but are not the way we make decisions that Regal, right? We are much more data-based, much more focused on moving quickly. And so if you agree with our way of making decisions, you're gonna have fun here. If you don't, yeah, you're really gonna struggle.

0:13:17.1 Kailey Raymond: I love the conversation about culture as somebody who's worked in startups and tech companies my entire career. I wanna pivot us a little bit more towards trends. So, you've been in this industry for quite a while now and now obviously leading a company that's really innovating as it relates to customer engagement. And so I'm wondering if you can talk to me about some of the trends that you're seeing that are impacting customer engagement today.

0:13:42.8 Alex Levin: Yeah, sure. Very high level what happened is sort of online retailers came on first and now everybody shops online, expects the rest of their life to be online. And that's just happening shockingly fast, right? So it's not that businesses are coming online. All the time, you see these new startups about, "Oh, I'm an online business." That's actually not the story. The story's that consumers are pushing businesses to come online at lightning speed, whether or not the businesses are ready. And what's fascinating is businesses are making all kinds of mistakes as that happen, either in trying to duplicate exactly the offline experience online, which doesn't work, or by going fully self-serve online, when maybe that's not the best experience, where maybe you do wanna maintain some personal touches even in a digital experience. So, take a bank, when I was a kid, I banked at some local M&T Bank and there was Bob the banker. He made mistakes, but I didn't leave because I knew Bob the banker and he'd fix it and it was whatever.

0:14:32.4 Alex Levin: When you go and look at Varo or Chime, their churn rates are very high because people don't build those same relationships. They come in and if there's any mistakes, they turn just to the next one. So, part of the future of online banking is about adding that personal touch back in and building the mechanisms to maintain that relationship, which is impossible if you're only a digital experience. So, I think that shift online is bringing a lot of interesting sort of side effects. I say in the context and world specifically, it's one of the clearest examples where AI is just gonna have a transformative effect. It's sort of interesting, software has obviously for a long time helped lower cost in contact center, but largely it's done so in a way that's hurt the customer experience, right? Like we talked about before, deflection or bots or self-serve, like it's really hurt the customer experience.

0:15:19.8 Alex Levin: The promise of generative AI is either on the agent side to make the agents sort of super agents, but more efficiently or on the AI agent side enable these very high quality AI agents at a very low cost. Both of those are trends that can improve the experience for the customer while not raising the cost for business. So over the next 10 years, it's one of those industries where wholesale, it's gonna switch from human agents to AI agents, and the human agents that do stay will be sort of super agents backed by AI. Our bet is we think 90% of the agents will move to AI agents over the next 10 years. But you can decide for yourself how fast you think it's gonna happen. I think there's just enormous willingness to invest and test and try in that area more so than pretty much any other job in the company.

0:16:10.1 Kailey Raymond: That's really interesting. I also, I like that you're positioning this in a way that makes sure that, there are some places in which it seems as though you think that there might have been a little bit of an over automation and then there are some places in which you think that automation is going to, there's gonna be a really great rise in automation in the future. I imagine that some of this is also kind of catalyzed by consumer behaviors that you're seeing. I'm wondering if there are any things that you can point to that have shifted your GTM strategy, your product strategy or just the way that you engage customers overall. It just feels like the speed and the human experience, those are kind of two elements here. Anything you wanna expound upon there? 

0:16:50.0 Alex Levin: Yeah. If it's okay, I'll talk more about how our customers engage their end users in a B2C motion rather than our B2B motion 'cause it's a bit different. But consumer expectations are that as a brand, like they're gonna have a relationship with you. And brands that are coming out saying, "Oh, customers don't wanna talk with us." That's wrong. That's just that you're giving them such a shitty experience that they're pissed off when you try to talk, you're spamming them on the call or when they call and you're not answering, they're pissed off at customer group. But at the core, when you go talk to a customer, they want relationships with the brands that matter to them. The school that they go to, the financial institution that they use, the doctor that they're going to, the pet care if you don't have kids, those brands they want a relationship with.

0:17:35.7 Alex Levin: And so this thesis, this sort of byline you hear all the time, oh the younger people in the world don't wanna talk. They don't want SMS, they just wanna sell. It's wrong, it's patently wrong. Sure there are things that are like retail where you don't need it, but if that person at 18 is trying to choose what schools they're gonna go to or whether they're gonna go into a different career, they desperately want somebody to engage with. So, I think like get out of your head the idea that like the digital and self-serve is the way of the future, that's only part of the story. I think the brands that are really succeeding are really starting to try to figure out how to meet customer expectations. And so they're bringing in new channels like text message, video, they're bringing in new ways of trying to surprise and delight. Sure, maybe we don't do high touch in these five situations. Like where is your package? Well you don't need to talk to a person for that. But now something happens and you know you really can't put it together. Maybe we go way out of our way to show up and help you put together the new cabinet, because that really demonstrates how much we care about you as a consumer.

0:18:40.8 Alex Levin: So, I think the brands that are shifting to those sort of surprise and delight moments are doing very well. You're seeing also these days, I'd say on the consumer side, a willingness, especially in the United States to give information or first party customer data in my sort of marketing terms, in exchange for better experiences. The same is not true in Europe, but in the United States, that debate is over. There are not gonna be huge privacy sort of limitations because consumers don't want them. Consumers are very willing to say, "I will tell you all kinds of things, but I expect you to then personalize the experience for me." So if I'm walking into a dealership and I say, I like those three cars, when I go back online, I wanna see those three cars. I want you to tell me when that car that I thought was interesting, the price drops. I want you to tell me that there was a recall on one of the cars and I shouldn't buy it. By actually caring about what the customer is indicating and the intent, the signals the customer is giving us, it massively changes the way we treat them. And so that expectation, especially in the United States, is an important one for brands to think through.

0:19:47.1 Kailey Raymond: Yeah, I think this value exchange, to your point is really the ante has been upped recently. I think that perhaps it used to be once you're filling out a form, you expect a good e-book or something at the end of the day. And now one of the things that I'm really seeing is this entirely new, almost editorial style, branded content experience where you'll be able to log into a company's, their center of content and self-serve everything. And they'll leverage all of that customer data for you to be able to serve back the things that they know that you're most interested in. It's almost like a media model for B2B marketing in this case. And so you're right. I do think that the value exchange is incredibly important. And perhaps the consumer is driving the companies to invest more and more and more and making sure it's as personalized as humanly possible because of the Amazon effect. I mean, everybody is just used to it.

0:20:44.6 Alex Levin: If I'm gonna tell you, like if you're gonna ask me my address, you better do something with it, right? 'Cause one, I've taken the time to put it in. Two, I'm worried a little bit about what you're gonna do with it.

0:20:53.8 Kailey Raymond: What are you going to do with it? 

0:20:54.8 Alex Levin: Yeah.

0:20:54.8 Kailey Raymond: Totally.

0:20:54.9 Alex Levin: But if you're gonna ask for it and I'm gonna give it to you, do something valuable. So one of our customers, for instance, in the insurance space, instead of asking 20 questions about your home so that they can know how much you insured for, what is it made out of? Is there a fire station nearby? When you give them your address, they use it to automatically generate all that information. That's a great value exchange, right? Or perhaps it's, if you're looking for a new healthcare provider, the ability to sort of give them a little bit of information and have them come back and show up and say, "Well, based on what you gave us, we're gonna sort of give you the right doctor and we're gonna talk about the right drugs from the beginning." Rather than having to, what we've all experienced. Oh, we forgot all the data you filled out in advance. We're gonna ask you the same 20 questions again. Like, guys, if I'm gonna give you information, you have to show me that you're gonna care about the information I gave you.

0:21:48.0 Kailey Raymond: Absolutely. I also wonder if you could dig a little bit deeper. You've been mentioning this desire for folks to have a more of a high-touch experience, that high-touch model. First of all, I guess off the back of that, I'm wondering how you know when you need to deliver a high-touch experience. That's one. And then the second would be any great examples of these high-touch experiences that you're seeing out in the wild right now.

0:22:11.1 Alex Levin: Sure. So again, the reason why people shied away from these is largely that it was seen as too expensive. The two sort of frameworks for understanding why it's not so expensive. One is, if you're out there doing consumer marketing for, I don't know, storage, you're trying to get people to put things into storage. As the cost of digital marketing goes up, even if digital marketing is easy, it makes actually human touches or highly personalized touches look much more affordable, right? If the incremental CAC to acquire a user on Google Ads is $800, well, definitely talking with a human is cheaper than that. On average, I'd say that the CAC, so to speak, of having a human actually engage is probably close to $50-$100. So if you're a product that makes at least $200 or $300 back in revenue, it makes sense to have that human touch, fully human. The CAC of a like, call it semi-human touch or AI touch is probably closer to, I don't know, call it $25, $20. And in that case, again, as long as you're a product that makes $50 or $75 a year, it probably makes sense to do it. Now, if you're selling pencils for $1, I don't know, maybe none of these touches make sense. But as long as you're making distinct revenue, like a lot of these touches do really make sense.

0:23:26.0 Alex Levin: When you're designing this stuff, I mean, what's a good example? Think about in retail, what was called abandoned cart. So everytime you went to Amazon, it puts in your cart, you got an email saying, "You forgot this in your cart." That was a very high value email because they knew it was one of the highest intent points. And if they emailed you, they could get you to buy it. So now think about something like signing up for life insurance. There's a similar concept, right? People who go through, sign up, talk to you, do all this stuff, but then don't buy it are very high intent. And classically, the first thing everybody thought about was, "Oh, let's do the abandoned cart email." And they sent that. An abandoned cart email, it's not actually free, it costs a fraction of a penny, but there's a real cost. So you're sending all these out and the cost per conversion of email is probably, I don't know, call it $0.10 per conversion or $0.20 per conversion all in. Because not all of them convert, obviously.

0:24:17.9 Alex Levin: But you're making from that conversion, I don't know, $1,000. So the question is not, is the cheapest way to do an email? The question is, if I add a personal touch with AI agents, which let's say cost me $25 per conversion, or with humans, which cost me $50 or $75 per human, does it pay back? That's ultimately the question. So as a business, you need to decide, are you optimizing for just the lowest possible cost, in which case you would never do any human touches, but you're not gonna maximize your revenue? Or are you optimizing for out of 100 people that are coming and looking for life insurance, maybe one converts because of the email you sent them afterwards. But three more would convert if you did the high touch human thing. And so if those three more convert, and it's at a tactile TV that's good, meaning you spent $50 and you got $1,000, well, you would do it all day long.

0:25:09.8 Alex Levin: So, what we encourage people to do is actually look at their entire customer life cycle. And at each point where they thought about sending an email, where they're sending an email, to think about it in dollars and cents and say, "If I had a $X human conversation or $Y AI conversation, does it pay back?" So for their $50 per on the human conversation or $20 per on the AI conversation, is it ROI positive? And as long as it's ROI positive, do it. And that could be acquisition. It could be cross-sell. It could be win back. It could be retention. There's all kinds of different key moments in a customer life cycle where that could happen. So whatever the industry, I think it's a shift in mindset from, oh, personal touches are too expensive, to, no, how do I use data to identify what is an ROI positive interaction.

0:25:58.7 Kailey Raymond: Incredibly smart. Incredibly smart too because what you're talking about also is making sure that you are mapping the really intentional points of your customer journey. And so I think that that can often be the first step, which folks might use.

0:26:14.2 Alex Levin: Yeah, and let's be honest. If an email is just as effective as the personal touch, you're not gonna do the personal touch 'cause there was no incremental value. But it's relatively rare that that happens. What I've seen broadly is as long as it's worth it financially to add a personal touch, that works much better than just sending an email, partly or for two reasons. One, people's instinct is that calls and texts are spam. However, it's not really the case. Email open rates are so low on most of these emails and click rates are so low on most of these emails that actually email is the spam. A text gets like maybe 10% or 20% click rate. A call, we can get calls to 30% answer rate. So as a CMO, you should be asking yourself, "Hey, do I wanna send emails where I get a 3% click rate, which is the spam, or text where I'm gonna get 10%-20% are calls where I get a third of the people I wanna engage with to talk with me." So it's not just about the actual efficacy of what happens once you're engaged with the person, just some of these higher touch channels actually lead to much higher engagement than you would suspect.

0:27:18.8 Kailey Raymond: It's so, so smart. And you are also talking about really building an experience that is across multiple channels as well. Of course, there's a bit of a trade-off. In some moments, you're gonna use one or the other. But in some moments, you might use multiple channels to make sure that you can talk to the customer. You might also start to catalog which are their preferred channels so that over time, yeah, you're right. Maybe somebody does actually prefer a text message over an email. There might be some people that prefer email still. And so over time, if you understand that about your customer, you should be able on an individual level to be able to deliver that back to them in the way that they expect.

0:27:56.0 Alex Levin: Yeah. And part of what you learn is it's an interesting combination of customer preferences and what you know works better. So somebody inbounds looking for package tracking, use an extreme example. Today, most contact centers, their playbook is, God, we don't wanna touch that with a 10-foot pole. It's got to either be self-serve or something else like a chatbot. We don't wanna deal with that. Well, maybe think about it differently and say, "Do we wanna have a customer conversation with this person?" 'Cause if the answer is, look, you've been trying to reach them about cross-selling or whatever with emails nonstop, or your marketing team has identified they're a high-value customer, and so they're trying to show them a new plan. Now, that inbound, instead of thinking of it as like, "Hey, get rid of the person." Go, well, we should look at it individual by individual and decide what to do.

0:28:45.2 Alex Levin: 'Cause what we've actually seen is that individual that you know is high-value, you're better off handling that silly inbound, which isn't that complicated with super high touch, because then you can have the person on the phone and say, "Oh, by the way, now that I've answered your question about package tracking, let's get you on a different plan." And you know that you're gonna convert a very high percentage of those. So I think the point is, when I walk into contact centers, a lot of them, especially on inbound, go, "Oh, I treat everybody the same, and I'm so good at it, and it's really efficient." I go, "Well, why?" That's not the goal. The goal is to treat each individually differently and think about how you're gonna drive the best experience for them and the best outcome and the most customer lifetime value for you as a brand. And that may not be treating everybody the same. It may be actually, even when it's something very simple, giving them a high touch experience 'cause you think the outcome is gonna be better.

0:29:39.2 Kailey Raymond: We're talking a lot about high touch. And earlier in the conversation, you did mention you believe that in the next few years or whatever the timeline is, that about 90% of these agent calls or kind of different interactions that you're having will be taken over by AI. And so that obviously begs some of the questions related to how you're thinking about leveraging AI at Regal and just what the general future that you believe of AI and contact center is. It seems as though we talked about maybe the 10%. Let's talk about the 90%.

0:30:13.2 Alex Levin: Yeah, it's true. Six months ago, I wouldn't have said the same thing. I remember like a year ago, I was talking with a friend of mine who used to go to market for OpenAI. And he was saying, "Look, Alex, the only thing that's gonna slow this down is regulation." It is shocking how good these. And I was sort of making fun of him. But I started seeing it about six months ago what he had already seen a year ago. And it's shocking how good these AI agents are. It is not low touch. These are not deterministic bots that are crappy experience for customer where you're sort of whatever. It is human. It is personal. It is a nice experience for the end user, something much sort of better for them than a self-serve or just like a text or whatever. So shifting your mindset from AI agents as cheap, bad experiences, to AI agents as an experience that could be better even than a human agent because they're omnipotent and they're always available and some of these other sort of it can mirror human emotion and tonality, whatever, they can actually be much better than human agents. And you go, wow, like if today is the worst those agents are ever gonna be and they're already quite good, like it's shocking what they could be in the future.

0:31:19.7 Alex Levin: So for us, we're starting to work with our customers on what that looks like. Internally, we've already started making enormous investments, not just on AI tools for human agents. That's actually a minority of our investments, but we've just skipped ahead and said, "Hey, we're gonna invest in AI agents proper." I think of it like when I visited Kenya and in Kenya, there's no phone lines anywhere. They just skipped that whole generation and they went straight to cell phones that are much more advanced than we have in the state. So the businesses that I think are gonna do the best over the next five years are the ones skipping the phone lines that are going straight to this new way of using AI agents to engage their customers as much as possible. Today, I'd say our customers on average are moving 10%-20% of calls into AI, 10%-20% of text interactions into AI. And those are the interactions that are the simplest. Most road don't require big knowledge bases, don't require as much complexity on selling or positioning. And the agents are doing very well.

0:32:17.2 Alex Levin: Every month, we're getting improvements in the AI agent that allow us to serve more and more of these use cases. And so it'll keep taking over. The piece that I think is critical is we're not treating this as sort of investment just in like the voice or the SMS. A lot of our investment is in the tools that human managers need to use to manage AI agents. Because it's a whole endeavor, right? You need to train them and test them and get them into production and figure out what metric you're tracking and then coach them in the same way you might coach humans. So that's a big part of the investment today. And obviously, we're lucky. We already have a lot of this infrastructure because we have all the first party data from customers. We have all the tools for managers to manage human agents and so we can use a lot of it again. But we continue to invest in sort of things that are like the new way of operating. So as an example, human agents, it's common to change the script, I don't know, once every year, once every six months, because you literally have to take them off the floor, completely train them.

0:33:18.0 Alex Levin: Remember when Starbucks shut down for a day because they had to retrain agents on how to make coffee? It was like a material decision for the business to close. It's similar in a contact center. You're really taking people off the floor. Now with AI, there's no downtime. You have to think in a new way, in a new process. How do I constantly iterate on whether it's a male or female voice? What kind of tonality I'm using? What is the script? What questions am I asking? How am I handling certain objections or certain issues? And it's possible to just constantly be doing it. And that's a new mindset for contact center managers. And so we're trying to build the tools to enable them to do that now. And it's exciting that we don't have to be stuck in the old contact center software. We can actually just completely bypass it. Like I was saying, skip the phone lines.

0:34:05.5 Kailey Raymond: This is incredibly cool that you're really going all in on an AI strategy here. And you said, what, 20%, 30% of calls right now that you're seeing your customers are actually routing over into AI agents. I'm wondering if you have any thoughts around some of these practical steps that leaders can take in building an AI strategy moving forward. What's the one, two, three for them to follow to get started? 

0:34:32.6 Alex Levin: I think a few things. So one, as a founder of a new startup, I definitely would do it differently than when I started a company four years ago. I think AI can help you accelerate what you're doing in marketing, in engineering, in customer support in ways that weren't possible four years ago. And so that gives you a huge advantage over bigger companies. If you're a bigger company, it's gonna be a much slower transition to get all those tools for marketing, engineering, whatever, whatever. I suspect, again, to what I said before, that contact centers are one of the areas that people are gonna be able to move faster. Why? Well, I think the way contact centers work today already lend themselves to AI. We have very good reporting and tracking of every interaction. They're already being manually tagged. So literally, the job of a CX agent is to tag what happens in every conversation. What is the disposition? What is the next action? 

0:35:26.7 Alex Levin: So that's really great data that we can use to train AI agents to do that job next. That's very different than sort of marketers or engineers where it's not so clear. What did a marketer do today? What was the input? What was the output? Did it succeed or not? There's a little bit of it, but nowhere near as well-structured as the job of a contact center agent. So that's one. Two, in my experience, companies see contact centers as very separated from their core employee base. So while they'll have one career track for their core employees, they'll have a very different career track for their contact center agents. And so I think it's the change is gonna happen much faster in contact centers where the career track isn't as much into management and theres more about, can you serve customers well? With every sort of innovation like this, if you think about the washing machine or internet or whatever that everyone thought was gonna eliminate a million jobs, yes, it will eliminate some jobs, but it will create all new ones, right? They're gonna be people whose jobs are prompt engineers. And what is a prompt engineer? That is the person that sits there and actually works through what the AI agent is doing. And there's a lot of, there's some science to it. There's a lot of art to it. So I think that's gonna be a whole new job.

0:36:40.1 Alex Levin: They're gonna be coaches. They're gonna be A/B testing. They're gonna be all sorts of jobs to create things in this new AI world in the contact center that didn't exist before. So, I'm excited to see what happens and sort of how people that came out of the contact center environment take on these new roles 'cause they're actually very well suited to doing. The last way I think about it, which I think maybe is useful to people is in my opinion, this is a period of enormous change over the next 10 years. And so when I see that enormous change in AI, I bet on startups 'cause startups are going to move fastest to constantly, not one time, but every day improve it, every day use the new thing, every day take customer feedback and improve it. And actually, even if they have smaller teams, they're much better at doing that. And so if I am a mid-market business an enterprise business, I bet on startups to help me get AI into my business as fast as possible.

0:37:29.1 Alex Levin: I do not bet on incumbents, right? The incumbent contact center players, NICE, Five9, Genesys, or CRM Salesforce, whoever. Sure, do they have massive teams that they're putting into the AI? Fine. But as long as there is a lot of change, they're always gonna be a year or two behind 'cause they're never gonna be on the bleeding edge 'cause they're too slow at that process. So the day that the change stops, so that if all of a sudden there's no more improvement in the LMS and we figured it all out, the incumbents will catch up and their distribution gives them a huge advantage because they have better processes and better go-to-market. But as long as you believe there's gonna be a lot of change, like that's betting on Salesforce or betting on Oracle. It's the wrong bet. It truly is 'cause you're going to always find yourself a year or two behind in this thing that is truly an arms race.

0:38:17.0 Kailey Raymond: You got to stay on the bleeding edge with the people that are most agile. And it's always been that the most agile is within the startup community. You're exactly right.

0:39:24.3 Kailey Raymond: What I want to learn from you is how would you define good data? Because good data, it seems as though is underpinning your entire strategy.

0:39:34.3 Alex Levin: Yeah, look, good data is data you can use. But I look at it as an end user of this data. So when I ultimately see that it's well-structured, well-tagged, in a system that I can use it, I'm happy. If you have the best data in the world, but it's not structured and tagged in a system that I can use, what do I care? It's not that useful to me. So I think about it very much from an action orientation as a marketer in my background and as a contact center manager in my background. What's sort of fascinating to your point now is, obviously, in contact center, you made the point like the individual agents are tagging stuff. But then we use AI to add metadata on top of it and transcription and conversation intelligence. And then we're using that to have a script, right? That the agent is actually, the AI agent is doing.

0:40:21.3 Alex Levin: But then we're using AI to QA AI. So we use a different AI that basically is instead of having a human manually tag this the second time, the AI checks, did the AI do it right? And that is a feedback loop. So it's sort of a fascinating situation where the, I don't know if you wanted to go to extreme, the wolves are guarding the hen house or something. Like there's some risk to this, I suppose. But we're getting huge advantages in every piece of this chain to make sure that we're improving the quality of the experience for the customer faster than a human could ever do. I remember when I managed people in the contact center, their lives are busy, just like making sure people show up and making sure they don't do anything silly. And if they get five minutes to do a bit of analysis, they're thrilled. Now you can take all that out and you can focus your time on the improvement instead of just the day-to-day management.

0:41:14.7 Kailey Raymond: Yeah, it's a totally different world. Transitioning from a manager of humans to a manager of agents is an unbelievable leap in terms of a skill set. So I'm glad that you're providing a lot of the resources to folks to be able to make that transition more cleanly. Because you're right, it's a lot more time kind of sitting down and looking at the breakdowns between AI to AI handoffs and the efficiency gains and prompt engineering. And that's really interesting. Last question for you today, Alex, is if there were any steps or recommendations that you would give somebody that's looking to up-level those customer experience strategies, what would they be? 

0:41:55.0 Alex Levin: Yeah, I think the first thing is to break down walls between the product team, the marketing team, and the contact center team. You have very, very smart people. And what they're limited by is the fact that you're giving them different incentives. You're telling the contact center team, lower cost. You're telling the marketing team, drive more revenue, right? You're telling the product team, have nobody contact... Because they have these different goals, they're working kind of at loggerheads. So instead, if you can give everybody the ability to engage together on one cohesive goal, which may be drive the most new customers and revenue or best patient outcomes in healthcare, as long as we're spending under this amount per customer. Now together, they can start deciding what to do and sharing data and sharing strategies and aligning what they're doing. So first, break down those walls.

0:42:43.3 Alex Levin: I think second, don't assume that the way things were done were right. Like, if anything, it's changing faster than ever. It used to be, something new and context and it rolled out. You had a year or two to roll it out and you were fine. Now, if you don't roll out that new technique, that new strategy in six months, you're really behind and you're gonna be losing customers to somebody who is. So I think thinking through how you're gonna create a team, a technology stack that enables you to more quickly adapt to customer needs is critical. And in the contact center where people are very afraid to move off their legacy software, it's important to have a vendor who's very good at migrating you on to new technology that gives you more of that adaptability. So being stuck on that old one, it's not a cost savings. It's actually hurting you every day that you're not doing the new things that were possible on your systems.

0:43:34.3 Kailey Raymond: Great advice. I think that this concept of this flexible, composable enterprise kind of keeps coming up and being able to move and adapt who is fastest, the market's gonna to move faster than you. But if you can try to move as quick as it, you're gonna be in a better place. Alex, a lot of really great insights today. I really appreciate you time.

0:43:52.0 Alex Levin: Thank you for having me.