Don’t Optimize for the Short-Term with Gusto’s Cole Schofield


On this episode of Operations, Sean interviews a post-sale ops pro focused on customer operations. Together they talk about the direct impact operations can have on the customer experience.

A lot of hypergrowth companies focus on short term wins versus long term gains. But for Cole Schofield, Gusto’s Head of Customer Experience, that just won’t cut it. Because short term wins never justify the long term sacrifice. It’s better to invest in the future. So Cole and his team avoid taking shortcuts at all costs and take ownership of the customer journey from the very beginning – from implementation, into servicing, and all the way through renewal or upsell. Cole says it’s his job to have the best understanding and the best analysis of that customer experience. To learn how Cole and his team solve for the long term, create target personas, and bring a data driven approach to prioritization and decision making, listen to the full episode.

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Full Transcript

Sean Lane: Hey there, welcome back for another episode of Operations, the show where we look under the hood of companies in hyper Growth. My name is Sean Lane. So far on the show we’ve covered a wide spectrum of topics related to operations, and folks in operational roles. We’ve hit very broad topics like where operations sits in an organization, and what good looks like for an ops team. We’ve gone really deep on specific topics like inbound lead generation, RET productivity, and win rates.

Just about everything we’ve covered though, has been viewed through a sales or a marketing lens, or sales and marketing operations. Today, that’s going to change. Today we’re going post sale, into the world of customer operations. Some people call it customer success operations, others support operations, or customer experience. It goes by many names, and so we’re going to spend some time today, also in future episode by the way, exploring this important and growing component of the ops world.

Our guest today is Cole Schofield. He’s the Head of Customer Experience at Gusto, where he is charged with taking care of the company’s more than 60,000 end customers. If you’re not familiar with Gusto, the company was founded in 2011 for the purpose of bringing order to the chaotic worlds of payroll, benefits, and HR. Today they’ve got over 500 employees, and 175 million dollars in funding. You’re going to quickly realize that Cole is someone with a very clear passion for customer experience, and really customer advocacy brands in general. He took over his team at Gusto in early 2017, but since this is our first time in this post sale world, I needed him to level set with me about what being the head of customer experience actually means, and how he thinks about his teams role in the organization. By the way, you’re going to hear him reference someone named Jessica, which is an important part of the customer persona at Gusto. Hang tight, we’ll get more into that later.

Cole Schofield: Here, the way I think about customer experience is, taking ownership for the customer journey from the moment that they recognize they have a need, all the way through implementation, into servicing, and all the way through renewal, or upsell, or up-spend. I view it as my job to have the best understanding, and the best analysis of that customer experience. Where are we doing really well, and we should amplify? Where are we struggling, what’s the next wave of innovations and things that Gusto should do for customers? And, communicating that, so I should have a really tight narrative for our product leaders, for our development specialists, for our customer care teams of this is where we’re doing well, this is what we aspire to be, and these are the things that we need to do to bridge that gap. That’s part one.

There’s also at Gusto, and most places, an execution component of that where I am leading the customer care teams, and the implementation teams, learning and development teams, and just making sure that we’re living up to the promise that we’re making to customers who join Gusto. I view it as partly being the voice of Jessica in our case, who can understand and dissect the needs as well as or better than anyone in the company, and helping others establish their priorities based on what we know. Intervening where we know we have problems in the customer journey, and then leading the team that executes to make sure that we’re consistently doing what we say we’re going to do.

Sean: That’s a lot. To recap, Cole is covering the entire customer journey, the analysis of that customer experience, where product innovation gaps are, and then oh by the way, he’s in charge of the teams that are actually executing that customer implementation, education, and support. Cole told me that when he came to Gusto he was hired to help them quote, “Scale smart.” I wanted to learn more about what that meant. How did he approach such a broad swath of the business with a customer base that was growing at such a fast pace, while keeping in mind this concept of scaling smart?

Cole: What makes it workable, Sean, without having an army of people, is getting your voice of customer listening posts, and data organized so that the effort that it takes to see what our themes are and how those trends are changing in terms of our customers’ satisfaction, are easy to find. Then, having great, what we call insight and operations partners who can join us in really digging into the second level, third level layer of feedback that customers are giving to convert this rich bank of data that is colorful, but otherwise useful if you don’t have great analytics. To pull out of that, what are the insights for this month, or the insights for this quarter? If we were going to take all of this feedback, and outline two or three things that we are going to get this whole company behind in resolving, or amplifying, or advancing, that makes it very doable.

Cole: It’s not biting off more than we can chew in a single cycle, being really outcome oriented with the analytics, and then having obviously an awesome, talented, execution leadership team who can make sure that every day we are at scale, at increasing scale, delighting our customers in customer care, getting customers off on the right foot in onboarding and fulfillment, and escalating and raising issues that they have there. My short answer would be, it’s a big scale, but it’s a massive team effort.

Sean: Okay, let’s pause there because I feel like this is usually the part of a company’s story where all the wheels are supposed to come off the car, and fly out of control. At this part of hyper growth it’s most often the stuff that happens after the sale, that customer experience that suffers, right? But, you heard Cole talking about handling things at scale, or increasing scale as he called it.

If you’re sitting there thinking, “Okay, I get this. This guys seen this movie before, he’s helped build some other startup’s customer operations in the past.” You’re actually wrong, because Cole worked in an entirely different stratosphere of scale before this. He worked for brands like Merrill Lynch, Sony, the Virgin Group, and then for 12 years as the Vice President of Client Services, Support, and later, Business Transformation at Charles Schwab. So, 12 years at Charles Schwab. I had to know, what was it like to make the jump from those huge brands, to Gusto. Was it different?

Cole: Different for sure. I think it was easy in the sense that Gusto was the first company that I’d not really heard of before we started talking about working together. But for me, it was such a strong values match it just became now, a year and a quarter later, just a no brainer. Gusto’s a company with a large addressable market, it’s got a product that resonates, and I feel like it’s in an under served segment. A great reputation for service, right from the beginning. I was hearing about this incredible net promoter score in the upper 60’s-

Sean: Wow.

Cole: … It was fueled by founders, and a COO who really understand the importance of investing in long term customer success. And so, from a values and shared mission perspective it was easy. In some ways it wasn’t that different. You can say that Gusto is like a younger version of Schwab in some ways. Very different in others, but what we have in common is both are companies that understand that loyalty and word of mouth referrals particularly, power the growth of the company. This is how we’ve defined the fly wheel, the growth fly wheel that we use at Gusto. Both spend a lot of time listening to customers, building processes, and building, and reinforcing a culture that makes them successful.

Then, in other ways Sean, it was very different. When you have a 40 year history of focus on customers like Schwab does, and you’ve got a large war chest, I felt like it was mostly about finding those kind of one percent, or three percent improvements, and then managing this huge staff to just stay consistently awesome and true to the heritage. Where at Gusto by contrast, it’s a CX that’s transforming basically every year, when we see double digit growth rates and have hit the customer numbers like you were describing in the intro, and we’re obsessed with growing our customer love despite the strain that kind of growth puts on the systems with hiring, training automation.

At this stage at Gusto it’s not hard to find the improvements.

Sean: Mm-hmm (affirmative).

Cole: You know, the science is in sequencing those improvements in a way that really maximizes customer loyalty, and does that without blowing up the cost to serve. I feel like I’m learning a whole ‘nother level of discipline just being willing to live with manual processes in some areas of the business for a cycle or two longer than I’d prefer to, because you can’t modernize everywhere at one time. It’s about prioritization, not identification of the issues, and that’s very different at Gusto, and I imagine a lot of startups like us.

Sean: You kind of took the word right out of my mouth when you said discipline, right? I can imagine that, that shift from those one to three percent improvements to, hey every time I turn the corner there’s seven different opportunities for improvement that I can throw a stick at. And, actually having that discipline to sit down and prioritize those is a really interesting exercise. What have you found to be helpful in kind of making those prioritizations? Because, I mean that’s something that I struggle with every day.

Cole: Yeah. I think the first answer I’d give is probably the most obvious, which is we try to be data driven.

Sean: Mm-hmm (affirmative).

Cole: Being an activator, I tend to show up every planning cycle with a big list of stuff I feel like would be right for us to do next, and the discipline for me has been in the direct connection to our customers. We know all of these are important, that’s the easy part at Gusto. It’s which are going to move the dial the most?

Sean: Right.

Cole: Where do we find small levers that are going to drive big, positive change for our customers? I think balancing that data driven business case type of approach, with the other side, which is just as important, which is we have a lot of employees out here who are doing great, heroic things to jump into gaps where we don’t have automation. And, they’re waving their arms and saying, “I need help here.” And so, communication with our staff is really important, to let them know that we can’t invest in everything at one time. It’s not that we don’t hear you, it’s not that we don’t understand how difficult your process is, and it’s certainly not that we don’t care. It’s that we’ve got this pretty big list of priorities, we’re trying to do it through the eyes of our customers, and you’re doing a great job in there now. We need you to do that for another couple of cycles. Those are the disciplines, Sean-

Sean: Mm-hmm (affirmative).

Cole: … That I find myself and my team working with most often.

Sean: I want to tease out a concept that Cole and I talked about for a second here. I think we often hear about companies like Gusto that are trying to bring this data driven approach to their prioritization and their decision making. What we often skip over, are the people who are in the trenches every day dealing with the not so perfect systems and processes around them in the meantime. Cole talks about his colleagues doing heroic things to jump into the gaps where there isn’t automation. That’s a huge part of living inside of a hyper growth company. That’s where the hacks, and the shortcuts, and the band aid’s can start. I’ve found that actually the people who are so good at filling those system gaps, struggle later when it comes time to actually fix those problems for real.

Now, the task of providing a stellar customer experience can be a pretty broad one when you’re serving 60,000 plus customers. Cole’s right, you could spend your whole day being quote/unquote, “Busy,” fixing problems. But, whether you’re talking about internal customers, or a companies actual customers, you have to make sure that you’re fixing the right problems. For the customer experience team at Gusto, in order to get everyone on the same page, they had to define who they were trying to be uniquely great for, and who they weren’t.

Cole: The first thing that I did, even before I joined was, went out and saw what is everybody in the universe of customer feedback saying about Gusto? I was looking in Twitter, and Yelp, and everywhere to see number one, what are they saying? And number two, who is saying it? At least to the degree that I could find that out. It did feel very broad, but I’ll tell you when I joined Gusto, the company was just kicking off an effort to get much more specific about who the target customer is. I feel like, and my experience has been that one of the most difficult things for a company to do is to get super specific about who it is they’re going to serve, and what is the need we’re solving for, and who do we want to be uniquely great for? At Gusto, we talk about who we’re willing to be bad for in this service of being remarkable for our target customer.

We went through a kind of cross functional, company wide exercise and coming out of that we defined this target customer as a persona that we call Jessica. Jessica is a digital native, non HR pro who wants to use great technology to make payroll and benefits easier for her and her employees.

Sean: Help me understand what that means. That’s the center of the center of the target for you. What do those characteristics mean?

Cole: That’s right. Two components, one is she kind of grew up with technology-

Sean: Okay.

Cole: … So, used to self serving, being able to find her own answers. She is used to platforms that are remarkably easy to use, and being able to accomplish a lot of things at scale using great tech. That’s the digital native piece. The second piece is non HR pro, meaning this isn’t your typical payroll professional, somebody whose been doing that for a lot of years using some of the incumbent applications, ADP and others.

Sean: Okay.

Cole: It’s somebody who probably has another job. It might be the COO, it might be the founder, it might be an operation’s leader, but they’re also doing payroll. For us, that target distinguishes Jessica from the professional who is more concerned with other features around reporting, and things than we’re targeting in the way that we build the application.

Sean: Something that you said in the midst of that description, which really caught my attention is that, you also in addition to identifying Jessica and building out this persona. You also said like, we’re not going to be for everyone. We’re not going to be for everything. I feel like when you’re in these hyper growth stages, and you’ve got these crazy goals, and you’re trying to knock them down every month. It is human nature, and instinct to want to go, “Okay, maybe I’ll just let this one in.” Right? “This is not going to be an ideal fit for this person, but you know what? I’ve got a goal to hit, I’ve got a quota to meet. I’m going to be okay with that.” How do you instill in your team that discipline to say, “Okay, not only did we do this exercise about who Jessica is. But, we’ve also decided who we’re not going to be good for.”

Cole: Yeah, it is hard. We want to be great for people, right? We’re CX professionals, and the idea that anybody isn’t completely delighted with our product-

Sean: Right.

Cole: … Is tough. I kind of think of it in concentric circles, Sean. At the center of it is Jessica, this persona, right? That we are designing for, and targeting. That’s a large future customer base for us. Then, there’s a next ring around that where customers maybe are not exactly the target customer, but the product at Gusto is better than the alternatives. The customers are happy, and they’re not overly costly to serve. And so, we’re designing for Jessica, but we’re naturally bringing in some of those customers like her, and they’re delighted, and we’re happy to serve them.

Then, where I think the courage comes in is that outer circle where customers might want something very different. Often for us this is larger companies for example, who have hundreds of employees and want different types of reporting and other things in a platform. Our decision is that we’re not going to get distracted by designing for them. If they’re happy with a product we build for Jessica, that’s awesome, and we want to delight them. But, we’re not building for them because we can’t be all things to all people. To be honest, there’s a freedom and a focus in designing for a specific target.

Sean: If you’re in operations of any flavor, chances are you have a laundry list of things that people want, people need, people are asking you for. For me, these are often my internal customers, but there are a lot of transferrable lessons in Cole’s approach to Gusto’s actual customers. In theory, his idea that there’s a freedom, and a focus in designing for a specific target sounds amazing. But, what I wanted to know was in the practical day to day, how does he set up gates to stop the requests and the distractions outside of that specific target from getting through?

Cole: Everybody errs on the side of doing everything for everyone. I think what happens is, you get these escalations or requests and you think, “If we could just do this one little thing for this type of customer, it seems so easy.” But, in aggregate it’s a lot of dilution of resources over time. You get 10, hundreds of those things. At Gusto, the gates I would say to your question are, everyone in the company is set on Jessica. You could catch anybody out here in the hallway that is a member of our team and ask them who we’re targeting and they would say Jessica, and tell you a bit about her. Which, I think is really important. We have a product team, a CX team. Everybody knows who we’re building for and why.

Then secondly, we’re getting better at how we listen to customers. Our voice of customer program isn’t just aggregate anymore. It tells us what Jessica’s raving about, and why she’s raving about it. It tells us where Jessica gets frustrated. We build the product roadmap and the CX roadmap based on the premise of, will this make Jessica more successful because of her relationship with Gusto? If no, or not in a material way, we deprioritize it.

Sean: Right.

Cole: It’s really tough to do some times, but this is the mechanism that we have. I think with practice we’re developing habit, and that’s becoming much more natural.

Sean: It’s really interesting how different companies approach these problems, how they align around them, and then how that approach can become ingrained in the behavior of their employees, and even in the culture of their organization. Gusto is a prime example of this. I want to read you something I found on their website. Like a bunch of tech companies these days, they have a values page. But, number two on their list caught my eye. It says quote, “Don’t optimize for the short term. Short term gains never justify long term sacrifice. Invest in the future.”

Sean: I thought that this kind of flies in the face of some of the other startup-y phrases you hear, right? Like, “Done is better than imperfect.” Or, “Just ship it.” I was curious how a company growing as fast as Gusto, lives up to this value of not optimizing for the short term.

Cole: We’re after really the inverse of that value, which is we want to optimize for the long term.

Sean: Right.

Cole: You see some version of this in a lot of corporate missions, and I think most people believe it’s important and generally do pretty well. What you see less though is, companies that have the discipline to live by it, especially when the choices get hard. To be specific, it’s really tempting, I’ve noticed at this stage, to invest in growth almost entirely, right?

Sean: Sure.

Cole: It’s a [inaudible 00:19:57] other things. We have to reinforce this value of not optimizing for the short term all the time, to avoid short cutting. For example, when we sit down with a limited burn and budget for the year, and have to invest in things like compliance, and risk mitigation. When there are features that we want to add that our customers are asking for, that’s really tough to do. Investing in customer experience in general, right? Taking a big chunk of the revenue that you earn and reinvesting it back in the experience of customers, and especially when net promoter score and satisfaction is already high. It’s really tough to keep doing that when there are things on the product roadmap you know would unlock returns in the short term, that would help sales and hurry and get features to the market.

But, we know that making those kinds of trade offs for the short term would have consequences over the long term in terms of our customer experience, and this isn’t a nice to have for us. It’s a matter of life and death, right? We depend on a great customer experience and strong referrals to fuel our growth. Then also, the value of our brand. It’s easy to read about companies who have realized some short term gains and cost reduction especially by doing some things that are not always compliant. And so, we know the value of our brand being trustworthy, and providing peace of mind for our customers is uncompromisable. That’s important.

Cole: Sean, the one thing I would add though about shipping it quickly and being fast to market is, we’re trying to develop, and I think of it as almost a two speed process.

Sean: Okay.

Cole: We are optimizing for the long term in our strategic decisions, and this is a value we hold dear and talk about in every planning session. At the same time, we need to have sort of a fast lane, or an HOV lane that does help us operate more agile. And, this idea that sometimes it’s improvement over perfection, or launching a minimum viable product to get a feature out there and improve it over time, is still okay. It’s not that we’re never willing to test, and experiment, and innovate over the short term. It’s only that we need to have a long term view on the ultimate objective for what you doing. We’re not willing to make the kinds of trade offs that would be short term at the cost of long.

Sean: Before we go, at the end of each show we’re going to ask each guest the same lightning round of questions. Ready? Here we go. Best book you’ve read in the last six months?

Cole: Just Put Me Back On My Bike. It’s a book about a British Tour de France rider who rode himself past exhaustion, literally to death, climbing a mountain in France in the tour. And, the story leading up to that, and some of the story and learnings coming out of that. Amazing book of spirit and choices.

Sean: Oh, that sounds awesome. I’m going to have to check that out. Second one, favorite part about working in operations, or customer experience?

Cole: The ability to see instantly, the benefits of your work. It doesn’t take multiple cycles, it’s not real far downstream, you’re not waiting for a survey or a vote most of the time. You have a customer and their voice telling you what you’re doing well, and what you’re not doing well. For me with my relatively short attention span, I feel like that instant feedback, and that ongoing narrative and conversation with customers is critical. It’s definitely my favorite piece. Working with people who see it the same way, I feel like CX and operations people are an amazing group and I love the chance to work with them.

Sean: Yeah. Someone I just spoke with on a different episode said their favorite was that they had this like minded group that they could very similarly nerd out with on seven different ways to slice the same process, or statistic, or metric, or whatever. That’s a common thread. Least favorite part about working in operations or customer experience?

Cole: I think it’s the topic that we were talking about, not being able to solve every issue.

Sean: Mm-hmm (affirmative).

Cole: Not just every issue, not the edge cases. But, the ones that you know are material to a customers experience, and I’d never been at a company where you could just instantly resolve all of them. But, if there’s anything I take home with in a negative sense, it’s that customer who ran into something clumsy in our process or our product that I would love to do something better for instantly, and just the patience it requires to do that. I think it’s the dual edge of loving customers when things are going well, and having empathy for customers when they’re not.

Sean: It’s always both. Somebody who impacted you getting the job you have today?

Cole: Sherri Kroonenberg. She’s a former leader of mine who has always given me advice about being where you have an impact, and an impact that you appreciate. I felt like it took for me, quite a bit of courage to make a change from a career I felt so secure and impactful in. But, the coach that I had about get out of your comfort zone, she would talk a lot about gigs, and doing things that are going to build your skillset, and give you a chance to make the impact you’ve been trained to make, and are wired to make. I wouldn’t have made the leap without that voice in my ear, so my answer is it’s a former leader that I worked with at Schwab.

Sean: Last one, one piece of advice for somebody who wants to have your job some day?

Cole: I would say for this particular job, learn how to and practice ways of moving the crowd. Often it’s not about the idea. Lots of people are smart, and lots of people have ideas. This is a people business, and getting customers to share your vision, and getting large teams of operations professionals to share your vision, and to actually engage around it, and help push things forward I think is where the magic is in a role like this. So, understanding people in leadership, and understanding the voice of the customer are all important. But, I think if you can find a way to be a leader who can move the crowd and build followership, that’s more impactful than anything.

Sean: We might have to do a whole separate episode on just that concept of moving the crowd. I think that we could very easily fill 30 minutes with that one.

Thanks to Cole Schofield from Gusto for taking us on our deep dive into the world of customer operations, or customer experience. Before we go, in our last episode I told you that referrals from other folks in operations have led to some great guests and some great conversations for the podcast. But, I want to tell you really quickly about something I’ve been challenging myself to do for the show, and that’s just to cold email people who I have no connection to whatsoever. This conversation with Cole came from a cold email that I sent to the COO of Gusto, Lexi Reese, and she immediately told me, “You have to talk to Cole.”

What I have challenged some of the people on my team here at Drift to do is, start to do the same. Give yourself a target. Maybe it’s once a month, maybe it’s once a quarter. Whose someone who you don’t have any connection to, but you look up to, or at a company you look up to that you want to learn from? And, try to connect with that person. Send them an email, send them a LinkedIn message, send them a video asking for either some of their time, or some advice on a topic that’s relevant to you at your job right now. We’re doing that across the team at Drift right now, and it’s been an awesome experience. My challenge to all of you is to do the same. Challenge someone on your team, challenge yourself, and let me know how it goes.

Shoot me an email, tweet at me, message me on LinkedIn, I would love to hear about some of the conversations you all are having, and some of the lessons you’re learning. That’s going to do it for this episode, thank you so much for listening. If you are enjoying the show please, please, please leave us one of those coveted six star reviews on Apple Podcasts, six star reviews only. That’s it, we’ll see you next time.