All right. Good morning everybody. Please take your seats. I'm Matthew Kempler Head of Planning and Investor Relations for LivePerson. Thank you for joining us today.
LivePerson is very fortunate to be working with so many first companies that are leveraging the power of conversational commerce to transform the way they communicate with consumers. We thought it would be timely to hold our 1st Investor Day in many years because the pace of adoption for conversational commerce is accelerating. Is now entering the mainstream. This means that if you aren't currently engaging with your favorite brands through messaging and AI you will be shortly and soon enough it will be the primary way that you seek help and that you shop. So our goal for today is to have you walk away from this event with an understanding of how conversational commerce is transforming the landscape of brand to consumer communication and how LivePerson will stand to benefit as it drives this amazing shift.
Now if you look around you'll notice this is not your traditional Investor Day setup. That's because you're sitting in the exact same space with the exact same layout that we will be using tomorrow when we host our New York City customer summit where more than 100 executives from some of the world's leading brands will be in attendance. And we hold several of these summits each year and they're around different themes. It could be AI, conversation builder, voice to messaging deflection, Apple Business Chat, But the real highlights of these events are when our customers come up on stage and they showcase the successful outcomes that they're achieving with conversational commerce and how LivePerson through our data, through our technology and through our expertise are helping them to achieve their goals. These events have proven to be one of the most successful marketing programs for us to drive adoption of our solutions and to establish our leadership and the most frequent requests we get from investors and analysts can I attend one of them?
I haven't been able to make that happen. So I apologize. Today we're trying to do the next best thing and that's to bring the customer summit experience to you. So let me walk you through how this day will unfold. Hopefully you've all had a chance to walk among our demo stations, meet with our technology experts and see our solutions in action.
When I'm done Robert LoCascio, our CEO and Founder will come up on stage. He will walk you through LivePerson's vision for conversational commerce and help you understand how once again we're successfully looking around the corner to where technology is headed. We'll then have Miriam Reza, our Head of Enterprise Solutions come up and she will lead an interactive dialogue with several of our customers and partners. You'll all have the chance to ask questions. We'll break for Q and A after which Alex Spinelli, our CTO will join us.
He'll talk about our platform, our product roadmap and he'll help you understand how the future of brands consumer communication will be tied to understanding intents. We'll have a Q and A session with Rob and Alex after which Manliya Carelli and Avi Kedmi, the leaders of our enterprise and our commercial businesses will join us and they'll walk through what they're doing to accelerate momentum in their end markets and why we win there. Then Chris Greiner, our CFO will join us and he'll wrap it all up through the lens of this is how what you've heard today drives our long term model and here's what we're doing to accelerate growth and drive higher profitability over time as we capture a large share of this new emerging conversational economy. We'll have a Q and A session with all the leaders. Rob will provide some closing remarks and then we'll break for lunch.
And you'll have a chance to meet all the leaders in person as they rotate among your tables. So with that I just want to set a reminder please silence your phones if you haven't already this event is being webcast. If you do feel the need to take a call please head upstairs so you can have some privacy And then there are charging stations on each side of the room if you find yourself low on power. So I'm going to end the suspense now. I'm going to show you all the slide that I know everybody came here to see.
So disclaimer, no event would be complete without a safe harbor. So please soak that in. But with that, I'd like you to welcome Rob LoCascio, our CEO and Founder to the stage. We're all excited for this day and looking ready to get us started.
Welcome. Thanks for being here. I think the last time we did an investor conference was about 7 or 8 years ago. And I've sort of been waiting for this day because we've done a lot on the execution side to get here. Being first is not easy.
In 1997, I invented what is today web chat and didn't exist, but I had a clear vision. And founders are really funny people. We are singularly focused on something and we go at that something with VIM and Vigor. The something that I've always felt is important is in a digital world, in a world of websites and apps and all these other things, I thought back in 1997, the best way to communicate would be through a digital medium. At the time, there was phone calls.
And back in 'ninety seven actually, we had dial up modem. So literally, you'd be on a website and you needed help, you would actually have to close the dial up and call and I thought there's got to be a better way. So I thought of this idea of web chat and built a company around it. We took it public in 2000. And we strung together 52 quarters of growth.
But it really wasn't good enough. And when we look at the web and what has happened with the web, it really didn't get there for any of us. So this is Ferrari's website and this is Kia's website. And if you see, I'll go back and forth, they're quite similar and they produce similar results. And I'll explain what those are.
Today, about only 1% of the people who will go to website after searching on Google or Facebook, who end there, actively go to website will convert into a sale. So from a sales perspective, it hasn't really quite worked out unless you are Amazon. If you are Amazon, 50% of e commerce revenue is yours and everyone else gets the scraps. The second part of this is that we know now is 60% to 70% of the people who make a phone call to a contact center start here. So the vision was put all the information of customer care on a website and they won't call us.
The fact is they called more. And this generated more engagements through voice. Now, the second part was, well, we got apps. Like it went from web to apps and apps are going to solve all the problem. And what we know now is that we only use a few apps in our life.
It may be Uber, it may be Airbnb, it may be seamless, but you don't download a brand's app to do a transaction. And so we know that didn't quite get there. So what happened during the same period of time, and this is about 5 or 6 years ago, I started to realize that web chat would never get to the vision. Even in our best customers, 90% of the time a consumer would make a phone call and 10% of the time they would do a chat. And I realized this was not going to get there.
So what happened was, I started to realize that there was a change in our behavior. We were starting to message our friends and family using Facebook, SMS, WhatsApp, iMessage. And I start to think consumer behavior has changed. This is once again 5 or 6 years ago. And we're messaging our friends and family.
We're not calling them. So what if we could match that consumer behavior to the business? What if we could bring the 2 together? And that led us to build our platform called LiveEngage, which if you followed us through the journey, you would have heard for many years we're building this new platform, we're building a new platform, you probably would have got bored with that after a couple of quarters. But we were very singularly focused on getting this done.
And what happened was about 2.5 years ago, we reached out to T Mobile. And actually, I reached out to Mike Sievert and John Legere and said, you guys are the young carrier and but your care operations look like a carrier. When I call T Mobile, I go through this thing called the IVR, press 1, press 2, I'm on hold. I get to somebody, they don't know who I am. I said, and you guys said you're the uncarrier, but we have a new way to do this.
And we show them the future through LiveEngage. We show them how a consumer could message, how they could be have a different connected experience. So what happened was T Mobile very quickly said, that's it. We've been thinking about something. We want to change the game and care.
We want to work with you guys on this. So we basically started to build the platform. We're about 80% of the way done and we needed a customer to finish the 20%. So we worked with them for probably about 8 months. We launched and it was an amazing day.
As a leader of a business and an entrepreneur, there's nothing greater than a product launch. And I remember this day, T Mobile, we put a little messaging icon into their iPhone app, their Care app. And at 5 o'clock in the afternoon, they pushed that care app out and they said there's an update. They made no announcement of messaging. They didn't do any promotion.
We had 60 agents in the Wichita call center who were just focused on messaging on the LiveEngage platform and they were told, look, probably nobody's going to be messaging today. Okay. But we're going to push this app, this feature out. So they did. And within a minute, every one of those agents was swamped.
I remember we were on a call with the T Mobile team who's working on this and Rob Gary, who was the Head of Product, he's Head of Product now globally for T Mobile. He said, we scratched the niche. We did it. Like the consumers want this and we didn't even tell them about it. So I want to talk about what happened with T Mobile.
A couple of things happened. Very quickly we realized that in like it's important. So as we know, we call up, we don't want our time wasted. The agent usually has a metric like I can only talk for 6 minutes because if I don't, we get too much cost. And there's all this real time motion.
What we found with messaging is a consumer would message in, hey, I have an issue or I want to pay my bill and they would disappear. Maybe they go to lunch, maybe they went to the bathroom, whatever they were doing, they were basically it was on their time. And so what we found is the natural time of a consumer engaging with a care operation was about an hour and a half, about an hour and a half of time to get their question answered. But that was on their time, they drove it. So that was the first thing.
The second thing we realized was that the synchronous channels of both voice and chat created a stress for the agents. And so what we found is that the agents are normally in a contact center, if you don't know this, about 40% of the time, 40% of the agent population will quit each year. They get frustrated and a lot of times we think that's because they're temporary workers or they're just doing this because it's a low level job. It's not true. If you've been in care operations like T Mobile, they're the front line.
They care about customers, but voice, voice destroys them as individuals. And you'll see it. A consumer comes in, they've been put on hold. By the time they show up to an agent, you're angry, you're screaming at them and they're handling that and they get burnt out. In messaging, what we found is the attrition rate was less than 5%.
So think of the training. In T Mobile's cases, it's about 20,000 agents a year. Think about all that training you have to do if 40% or so disappear. So with messaging, it was a much better experience. And the other thing we found is cost.
Is that messaging would be half the cost of a voice call because the agent is handling more than 1 consumer simultaneously. And so these are the interesting things that came out. It was kind of a win, win, win as one of our customers used to say, from Sky, and you'll hear from Tom Scott later, it's a win win win for the customer, for us as a brand and for the agent. It was so successful that last August, T Mobile decided to build an ad campaign around this. They did something that we have been talking about for a while.
They pulled the IVR. They pulled that piece of technology that you press 1, 2 and be put on hold. They literally pulled it out and now you get connected to a team that is your team of the call a team of experts and it's your team, you can message with them, you can actually, you can voice call with them, but they own you as a consumer. They are owning you, you have a relationship with them. There's a whole model that we created with T Mobile.
And I want to show you the commercial that they launched in August to promote the things that we've done with them.
Okay, robot.
Press 1. I'm sorry, 0 is not
Good. Yes. Hello, Daniel.
Can you hold, please?
No, please. Calling customer service is the worst. So T Mobile
just made it better.
No bots, no bouncing. Real customer service takes real people.
I love you guys.
We get that a lot.
So the IVR and I've said this many times, the people who provide this technology, they are doing harm to customer care. They are creating a disconnected experience. And so we now have a solution that can change the game. In the first time in history, we are able to take 30%, 40% of voice calls and shift them to something different. That's never been done before.
When we were doing chat, at best it was 10%. Email never got there. But in the first time in history, we were able to shift voice calls out of the IVR and into messaging. That is a major, major accomplishment. Now when we started with T Mobile, we started as I mentioned in their app.
So we have a piece of technology that sits in their app and then the consumer can message the care folks and then they are connected to our servers and then all the interactions happen that way. What we found though was something interesting. About 8 months into the T Mobile implementation, Apple showed up and Facebook both around the same time and said, you know, we have this vision about opening up our front ends, our messaging front ends, Facebook Messenger and I message to brands. And you guys are the leader in chat and we'd love to talk to you about this. So it was interesting because we told them we don't want to do chat anymore.
We actually built a messaging platform that's going to align to your vision. So we ended up launching some of the first brands on each of these. And today, we have like an Apple Business Chat, we have the largest majority of brands are running through our platform today. So not only do we have those front ends, we have Imessage, WhatsApp, Line, which is in Japan. We have Alexa.
We have Google Home and even Google created a new ad unit called Ad Lingo that you can message from an advertisement on the web straight to an agent. So the world is now open to us. 5,000,000,000 consumers are using messaging. So every messaging front end is now available to be enabled for brands. And we are back ending all that.
The advantage to our platform is that the brand puts themselves on our platform and then they're federated out to all those front ends without having to do anything. They don't have to write code for each of these. We take care of that. Even each of these front ends have a different experience. We take care of that.
So the way an image and a selection of images or selection of products shows up on Apple Business Chat is very different than Facebook message. But you create it one way on our platform, we federated out. So the past is going away now. And that's this thing called omni channel. We've all heard about it.
The voice guys have sold this pile of whatever that there's this world of meet the consumer where they are and we've got these expansive platforms and the reality is they sell voice. 90% of what they sell is old crappy voice. And so the future and the present is what we call conversational commerce. We don't have to meet the consumer on different channels. We meet them in their mobile device.
We meet them where 80% of the time they are using that device, which is through messaging. And that was the interesting thing. When we signed T Mobile, we also signed Orange, BT, Singtel, Telstra right off the bat because every one of the telcos knows what is being used on their device and messaging is the number one app. So today we can be straight into the consumer behavior and you have a persistent pipe with that consumer. That's the other big part that's very interesting about this is that the brand is always connected now.
They're in the pocket of the consumer. If a week later they want to come by and give an offer, they can give an offer. It's not just about waiting there for someone to message in. They are being proactive with that consumer ahead of time. So behind T Mobile, a little over 200 other brands in the last 24 months on the enterprise side have on boarded and are now using this platform.
We've got some of the biggest like Citibank and HSBC and some of the biggest telcos as I just mentioned around the world. Delta Airlines we just announced recently. So we're going very heavy on the travel area and the airline industry. But I want to feature a couple of companies that you may or may not know, but I want to show them because outside of the care operations, we've seen other uses for this technology that I don't we even envisioned would happen. So there is a brand, a bank called Buddy Bank in Italy.
UniCredit is one of the largest banks in Europe. And they decided to create a division called Buddy Bank. And there is a CEO there who had a vision, has a vision about conversational commerce. And he felt that if he could connect up all of the ways in which a consumer is using his credit card, for instance, like he could help you find a reservation to a restaurant or help you book travel And he could create this really amazing care experience and concierge experience, he would get you to use his credit card. So he launched about 6 months ago.
They've signed about 30,000 consumers right off the bat. If you get a chance and you put in Buddy Bank, you will see the consumers are so crazy about the service and love it so much. There's people who get tattoos of the Buddy Bank logo. This is a bank. Okay.
This is I know. You have never heard of it. People who wear their T shirt all around the world and this bank is built 100% on the live engagement platform. That's what makes us unique. Literally, the whole entire bank has been built on our platform.
The next thing is Aramark. Aramark, as many of you know, provide a lot of the food and beverages for stadiums, hospitals and universities. They're one of the largest in the world. They came to us and said, we've got this great idea. Stadiums, actually they tried this about 4 years ago.
They tried building an app where they could get people to download an app in the stadium and order food and beverages and have it brought to the seat. Nobody download the app. Hard to have happen. What we did here was, you can see on the seat, this was at the Philadelphia game last year, there's QR codes and you literally pull out your iPhone, you take a picture of the QR code and instantly with not no downloads or anything, up pops this bot and you can now order food and beverage and then it gets delivered right to your seat. We're rolling out about 40 stadiums right now with them around the world.
The next one is we're going to have down in Houston. Houston Astros is we're rolling that stadium in a couple of weeks. But think the whole business will shift. If you're in your seat, you don't have to raise your hand to somebody or get up from your seat. Think of all the things you can do.
We've been thinking about gaming here. What other things can we put into this statistics? So the whole in stadium experience will radically shift because of what we are doing on our platform. And then this one's a really fun one. If any of you have been to the Cosmopolitan Hotel, they now have Rose.
And once again if you Google Rose, you'll see they made a wonderful video about her. And when you check-in, you get a message, you get the message and number and Rose stays connected with you through your whole hotel experience. And what they found is that normally someone checks in and then they're out the door. They're out gambling somewhere else, eating somewhere else and Rose literally keeps you engaged. She has a special cocktail at the bar that only Rose knows about.
She lets you cut the line at Marquis, the nightclub there. And she does all these things. Now, interesting enough, the statistics are like 70% of the people that connect with Rose, they stay engaged with her while they're in the property. And there's a high amount of people who come back, I think it's like 25%, 30% who then book their reservations again through Rose once they leave. You'll see the video, very she's very provocative, but really fits the brand.
So why do I want to bring this one up? You will never be able to construct a rose with a website. You will never be able to construct a rose with an app. Rose is a conversational user experience and this is what conversational commerce is about. And this is what's freeing up brands.
As I showed originally, there was Ferrari and Kia look the same, but Rose at Cosmopolitan will never look like we have Disney with their own bot will never look like Disney. So the conversational user experience is much more natural for us. We want to ask questions to our brand. We want to stay connected and that's the power of conversational commerce. This has been the growth in the company's usage on the platform since we launched with T Mobile.
It's been pretty extraordinary. It's much greater than I've ever seen even in the chat business. But what's more important is as we start to grow the conversations on the platform, we start to see the need for automation. And today, about 50% of conversations are automated. People usually ask me the question, at the end of all this, where do you think this ends up?
And I think about 80% of conversations will be automated and 20% will go to a human agent. Most use cases, most what we call intents can be automated. And the reason we're able to do the automation is because we have something that is our, I will call it our data moat. We have every month 60,000,000 transcripts that we're generating off of messaging. This is end to end on how our people are getting a credit card, how they're buying a car, how they're checking into a hotel.
And all of that data allows us to build the automation. We can take and automate a flow around, a care flow around paying your bill at a telco because we have millions of transcripts to do this. So that's what I call the data moat, the power of our company. But I want to shift to a little bit about AI and our belief. And I talk about democratizing AI.
I'll actually be back on Mad Money on Friday and I'll be talking about democratizing AI and how I think this is a different approach to AI than what we're hearing today. What does this really mean? Today, the majority and the view of AI as the guys on the West Coast say, is a threat to humanity. And this has been Elon Musk's words. This is an existential threat to humanity.
And from his perspective and what he sees, it's true. From our perspective as a company, it can be a liberator. If it stays in the hands of the engineer, it doesn't get liberated. But when we shift it to the hands of the people who work in the contact center, of the people who have conversations with customers every day, it becomes a liberator. It becomes democratized.
And one of the interesting things I've also seen is I was with 1 of the CEOs of 1 of the largest healthcare companies in the United States a couple months back and I asked him, who is your biggest competitive threat? And he said Amazon. So think of this, Amazon has Alexa. It is a powerful piece of technology. He can never use that.
Our goal as a company is to make sure we can put into his hands and millions of other companies like his that power. We want to give him his own Alexa. We want to give him the power to compete in the world against Amazon. We work with companies like Lowe's and Home Depot. And those stores have power.
They have asset value if you can power them up with AI. And these are the things that we are working on. Actually, Laura Morales, which I'm going to show you video in a second built a bot for Lowe's called Grill Master. And it sells $20,000 to $30,000 a day in grills. It sold 1,000,000 of dollars a day in grills.
And what's going to happen one day is you're going to walk into Lowe's and you're going to see the grills instead of trying to find someone who sort of knows about grills, you're going to be able to message that you can do that today. You can message and ask I'm looking for a grill, gas grill. And grill master tells you exactly what you need. And once you buy it, grill master, if you're not in the store, tells you how when it's going to arrive in your home, stays connected to you. But I want to show you a video Laura put together about her experiences using what is called conversational designer.
It's our AI technology. It's in the live engage platform.
I'm constantly moving from one place to another, college to work, to running errands and so forth. That's why when I try to get something done, I look for the most convenient channel of communication. And guess what? That has also changed. Messaging is not only the way people choose to connect with their family and friends.
It's how they want to communicate with brands. That's why brands are now messaging with consumers at scale with a combination of AI, automation and live agents. I went from working as a voice agent to a messaging agent. Now, I'm building and tuning bots. Hello, everyone.
I'm Lara Morales, and I'm going to show you what is it that we do with the bot tutors. We work with chatbots, which are now helping replace phone calls and dead end web searches. We are able to design, test, live monitor, measure, and customize the content of these chatbots through conversation builder, which is very user friendly by the way. This new solution from LivePerson helped me understand how our ways of communication are changing for the better, and I'm glad I can be part of the conversational commerce revolution.
Salary has now doubled because she is a bot creator and manager. The people who do conversations and there's millions of these people sitting in contact centers they're going to need to craft the box. If you're a tech person, you're normally in a room in the back of the office. You don't communicate well probably with people compared to Laura. And so we put in her hands the power to use the tool and that's what technology is about.
We unleashed her knowledge and we're able to scale it. To take it one step further, we created an organization called Equal AI with Arianna Huffington, Jimmy Wales, Justin Cassell, who's over at Carnegie Mellon. We put together a group of people to basically create these frameworks and take the knowledge that we have and put it out to brands and other people in the world. It's the number one thing I hear from brands. How are you going to power the right people in an organization?
How are you going to avoid how does your technology help us avoid data bias? So we are basically putting an investment in. We hired Marion Vogel who is under President Obama. She ran all diversity training programs for the federal law enforcement agencies. She is the executive director of it.
And our customers love it. And more and more people are joining because we once again think AI should be out there for everybody. The last part I'd like to talk about is studios. Studios, is something interesting we created because not only do brands want to use AI, but we found there are people who have a lot of knowledge like Deepak Chopra. Guy has written almost 100 books.
He's got podcasts. He's out there. But how are you going to have a conversation with Deepak every day? You cannot do that. So we were thinking once again, how do we scale Deepak's knowledge and the ability to have a conversation with him.
So we created an Alexa skill and every day Deepak wakes up in the morning and he provides a conversation, uploads it into LiveEngage and we connect it to Alexa. And I want to show a video that he put together about his experiences in working with our technology.
Well, every morning when I wake up, I set out certain intentions for myself like a joyful energetic body or love and compassion in my heart or clear reflective mind or just lightness of being, and I've done that for 40 years or so. My flash briefing is what my intention is for myself every day. It so happens that if you share it with others, you create kind of a collective intention, which then ultimately becomes a collective reality. Here's what I do every morning after I wake up and after I've done a little bit of yoga and breathing. I have this little microphone attached to this little phone, and I just speak out to what I'm thinking and what my intention for the day is and then it's recorded here and it goes to live person and then it's on Alexa.
It's all done very efficiently and smoothly and it's part of my daily routine now. We can create an ecosystem for a more peaceful, just, sustainable, healthier and joyful world. That's why I'm doing this project with LivePerson. I want to see us move as a collective consciousness away from extinction into life affirming joy and creativity and a world that is much more peaceful and just and sustainable and healthy.
So you can see some of the things we are doing and there is other people like Deepak. The conversational commerce revolution is not just about getting rid of voice calls. It's greater than that. It's the ability for all knowledge to be put into a framework that you can engage with a question and answer. And once again, this is a natural way in which we learn.
This is a natural way in which we engage with content. It's a big opportunity. We've defined it as a $60,000,000,000 a market opportunity and what we see today with our current customer base and the current and the basic customers in front of us or the future in front of us. I think it's greater than that. We made a very big bet as a company to go after this.
We were growing above 20%. We were doing great as a chat company, but I didn't think it was good enough. And so what we are looking at today is a couple of things. Conversational commerce is going to replace voice calls. We will not be calling care centers.
My daughter who is 2 years old will never know about voice calls. I can tell you that. But in the next 5 years, the majority of interactions will be through messaging or a voice interface like Alexa to an agent. This is one piece. The other piece is websites.
Websites for most companies have failed. A lot of this is going to get assumed in the conversational commerce. If you look at T Mobile's website today, they have a messaging button that you click and it opens Apple Business Chat. They see higher conversion rates there than they see on any other channel. So we know it works.
The last part is obviously apps. Apple Business Chat interesting enough is when they launched, they launched a app extension. So that if you have an app, you can extend some of the functionality right into Apple Business Chat so that you don't have to rewrite the functionality. And they envision a world in which you just go into your messenger and you write, I want to buy a car and you buy a car not download a car app, a car dealer app. I want to go ahead and I want to take a vacation.
You don't have to then download some vacation app or a flight app. So the world of digital is in the middle of a radical shift. If you were listening to Mark Zuckerberg a couple of weeks ago, he defined his strategy and he talked about betting into Messenger. They want to put everything down into Messenger. He believes this will solve some of the issues that he has with privacy.
So the future is going there. The largest technology companies are going there. And so our company is powering all of that and that future with AI and with a system and a platform that enables these large brands to take advantage of all this change. So with that, I want to thank everyone for coming. I'm going to bring up Mariam Razor right now, who will work talk to some of our customers and partners about some of the great work we're doing with them.
So thank you.
Thank you, Rob. I have the pleasure of bringing up a number of partners and customers next. And you'll be hearing from Aramark first. So we've got the Chief AI Officer of Aramark here. He's actually the 1st AI Officer in the Fortune 500, Pavan Arora.
And as you heard from Rob, we've done some amazing things with Aramark. They have completely revolutionized the way fans in stadiums are actually able to get beverages straight to their seats, not having to move, not having to miss a minute of their game. And this was done through Apple Business Chat and Bots. And it's one of the many ways that we're seeing conversational commerce give us use cases we haven't even thought about. So with that, I'd love to have you up on stage, Bhavan.
Thank you very much.
Thanks. I'll just get started in the meantime. Thanks, Mariam, and thanks everybody for taking the time to hear about some of the fun stuff that we're doing at Aramark. Who is Aramark? Aramark is the people you meet and the food you eat when you go to a food hall at work, at school, at college, even in jail and at a ballgame or at a national park?
Thanks. And as a Fortune 200 company with 270,000 employees, we're feeding about we're serving about 2,000,000,000 meals per day 2,000,000,000 meals per year, sorry. And the complexity operationally is pretty vast. I mean we serve meals a mile underground in Chilean mines. We serve meals in the middle of the ocean on an oil rig.
We feed criminals in jail and perhaps even more dangerous Philadelphia fans. We it's all it gets very complicated and I hate complexity, right? I'm a big fan of the frictionless when it comes to operations, but more so as a consumer, I find friction to be really, really painful. So as an example, we're going to walk through today what happens when you as Rob mentioned, when you order a beer at a stadium. You've all been through this.
Hey, you call the hawker, you're trying to yell the hawker is the guy who's saying Bud Light, Bud Light, You're yelling, hey, hey, over here. And then you're hoping the guy they see you and then will stop 3 times on the way there and then you got to hand over the credit card, it goes down. Those people then back and then they hand you the beer and hey, do you want to add a tip? Like just it's a painful experience. We serve the Super Bowl.
Super Bowl tickets go from $5,000 to $2.50 You're paying $1,000 a minute to see a Hawker right in front of your vision. I mean it's a painful experience. So yes, as Rob mentioned, we tried an app. The problem with apps are stadiums are not phenomenal when it comes to connectivity. And really it feels like especially among millennials that you're investing when you're downloading an app, right?
You're are you really going to download an app to order a beer for a 3 hour experience? Probably not. I'll just wait for the Bud Light guy. So that didn't really pan out either. The other thing about apps are it's not cheap.
We've got 30 business apps in the market. You got to deal with payment gateways, PCI compliance, you got to deal with the infrastructure and new form factors. So it can get pretty complicated. So, I tasked the team with how do we kill this friction? Let's reimagine ordering a beer the same way Uber reimagined human transport.
Put yourself in the I told my team to put themselves in the shoes of that consumer buying that beer where the KPI don't worry about the dollars, just think about the KPI being convenience. What is the easiest and most fun experience? Well, a few days later someone on my team, Peter, Peter is driving from Austin to a client meeting in Dallas. Hungry. And he calls me up and he says, I'm not I can't stop to eat.
I can't all I really want to do is talk to somebody. Talk to somebody, talk to my car, talk to Alexa to say, hey, have this food waiting for me when I get there. I just want to talk to somebody. That's what our consumers perhaps want, just to talk to us. So we thought about that and we reached out to Apple.
Apple connected us with LivePerson and literally weeks later at the home of the Philadelphia Phillies, we launched this, if you could keep the video. So let me take you through the experience for me. I was at the game testing making sure that the tech went off well and that's the first step. It all worked. Great.
Now I went in to check it out. I ordered 2 Goose Islands. It took me about a minute to order and the 2 beers were to me within 3 minutes. And I didn't miss a moment of the game, right? I didn't get up to go to the back and stand in the line and that's when the homers hit.
I was just it just all was seamless. But that's not the best part. The best part and I'm a data guy, I'm a geek. I can talk all day to you guys about natural language programming and such, but I'll just say this, an app gives you bought or not bought. They went to the menu, you could click this.
That's great. But the best part about this experience was what natural language gives us is it gives us more context. So, the example I'll give you is the first game on launch, we started to get a lot of orders in but there were some people who were saying, hey, do you have any Goose Island IPA? And it wasn't on the menu. Within Imessage in the menu Goose Island wasn't there.
And so guess what? By the 5th inning what do we have available on the menu? Goose Island IPA. Guess what accounted for 30% of our sales for the entire POC, Goose Island IPA. Guess how many experts told me people don't order Goose Island IPA in their seats and that's why we shouldn't put it in the menu, all of them.
All of our experts internally told us not to do it. We were wrong. The experts were wrong. The customers were right and it accounted for 30%. So what happened was we wanted to talk to our customers and they talked back.
We built a relationship with our customer and that's great. So the data story played out. The intelligence played out and the relationship played out. It also went viral. So tweets from celebrities, the news media within 8 hours it was national.
That fanatic video that you just saw, that's the Philly fanatic for those who don't know famous mascot for the Philadelphia Phillies, was watched 2,000,000 times. Rob was featured on Mad Money about it and Kramer loves it because he's a Philly guy. And to me what was most exciting is Tim Cook and Luca Maestri on their earnings call where they hit the $1,000,000,000,000 valuation, spent some time talking about Aramark and our coordination with Apple Pay to build this out within the stadium. So that was pretty exciting. So it's great.
It went what do we do now? Well, we got to go further, right? So this is the idea that Peter had. We call Apple, Apple connects us to LivePerson, we launched at the Philly Stadium. And then what we did was we went to Cleveland and we launched it at the Cavaliers.
Also a hockey there's a hockey league AHL hockey team called the Monsters. We launched it there as well. And next as Rob mentioned, we're looking at doing at the Astros. Next perhaps after that is going to be the NFL with the Broncos and then it will continue from there. So we have a plan to grow this because I want exponentially to understand my customer better.
But so I get the data and have that relationship. I get the branding and the marketing and the PR which was fantastic. But what about the dollars? And this is what kind of shocked me. I mean quite frankly when we started this thing we didn't know how this was going to play out.
But if the KPI are dollars and most mobile apps get you about 2.5% conversion, these numbers are insane. This is just from these are day to day from the cavaliers and monsters and I'll say these are slightly probably slightly inflated because it's a new cool thing, but 2.5% versus these numbers is pretty impactful. And what I'll tell you is kind of funny is and very telling is the 11% there and the 10% there for that Monster Hockey League team, Those were days when they had specials on beer for $2 back in the stands. But on the app it was still $10 meaning 11% of people were willing to pay $8 more not to get out of their seat. That's pretty telling to me.
So convenience pays in the end and LivePerson powered that for us. So what's next for us? Well, the question becomes why can't I also build that relationship in other industries where Aramark is? Why not at hospitals where a patient might want a Jell O or a way for me who sings next to my grandmother's bedside, I don't want to leave her for that one day surgery that she needs. I can order it right from there and pick it up downstairs.
What about at concerts, same experience? I don't have to get up and go in the back just like in stadiums. Since 1968 Aramark has been feeding the athletes and media at the Summer Olympics. It's a very complex and friction full experience. But we can reduce that experience now with a more and create a conversation with those athletes.
What about at work? I mean I used to be a trader on the floor. I would love to have this food either delivered to me or just order it here, go pick it up quickly and come right back. And to me, the one that is really interesting is millennials scare me I want to make sure that we're millennial proof, millennial first, if you will. This becomes a millennial first experience because the college kid is not likely to they pick up their phone 200 times a day, they open their laptops twice a day.
They only they want to message, they don't want to go through an app and hit menus and give us their credit card, they just want to use a thumb and they're done. So this starts to get us to a millennial first conversation. And we're going to also take it internationally, right? LivePerson is going to help us localize this and we're going to take it abroad. And finally, as we start to talk about what's in the future, automation is coming.
Automation is coming to Aramark, right? We're exploring some opportunities there. Well, this plays really well into that experience as we're starting to see in some of our conversations with the LivePerson team. So it starts to all come together where LivePerson is not just empowering us in today, but we're looking at how we can expand this into the future. And it goes we're starting today with conversational commerce, but like I mentioned earlier, there's also operational needs and we're hoping conversation is going to help us find operational efficiencies as well.
Anyway, that's my time. I know we wanted to leave a couple of minutes for questions. Is that right? Yes.
So if there
are any questions. Yes. Not a whole lot, and part of the reason is when we called Apple, they said call live person. That's pretty good start right there and then hell if it gets me 30 seconds on the earnings call, I'll take it. But we did have it's not that we didn't, we did have a couple of conversations.
I have the reason for me at least was risk. You want to go with a brand name that's been in the business for a long time and you want to go with somebody who's going to know how to manage your data and not fall down. So and a lot of the other companies that were looking at this at the time and have those relationships with Apple and Google were earlier stage that we did a little bit of work and we tested it with 1, it was nimble, it's just the enterprise wasn't there. The enterprise offering wasn't there for us.
Yes, we can take one more question.
Sure. Alex Siekin with Piper Jaffray. What were some of the difficulties deploying the solution, rolling it out to your kind of constituents? What were some of the issues that you dealt with and how did you overcome them?
I'm sorry, issues we ran into?
Yes. And how did you overcome them?
Some of the issues I would say had to do mostly with the friction of people not wanting to sign up for say Apple Pay. And we're moving past those by doing a little bit more of education before they come to the game. We're trying to have those conversations beforehand to sign up and that's one. The other is really making sure that they know that this exists. And while before we weren't looking to push it out, it was more making it available to people and now the stadiums are so excited about it that we're talking to them about co marketing and putting it up on the banner.
So it wasn't really the issue wasn't was less about the technology and more about getting people on the getting used to this new way of communicating. But once they're on it, they're on it. Then they start wanting to chat with you and ask for things and it's that's the part that gets really exciting and that we're hoping to leverage some of the AI that the team is building to help us automate some of that some of those conversations even further.
Great.
All right. Thank you very much, Pavan.
Thank you.
Thank you. That was amazing. Thank you. So now I'd love to call on stage Jeff Kim and Bob Beatty from 2 very prestigious financial institutions. Bob Beatty is the Executive Vice President of Customer Service at GM Financial and we've got Jeff Kim, who's Vice President Product at Goldman Sachs.
We thought it would be very good to share with you about financial, please have a seat, financial institutions itself because the investment that these institutions have in care and sales and the millions of consumers they're reaching every day make them a prime for conversational commerce. And in saying that, they are also one of the fastest to adopt conversational commerce today. And hearing from both Jeff and Bob in what they're doing in the conversational space. Thank you so much for joining us. I was actually going to sit on the side, but get to be in the middle.
So I'll start with you, Bob. Sure. So what pain point or business initiative led you down the path of conversational commerce at GM?
So GM Financial, we're the captive finance company for General Motors. And I think the best way that we can add value to the overall enterprise is by promoting loyalty. And we felt that by providing a remarkable customer experience that that was the best way that we could contribute to that brand loyalty. And we were at the time really just a voice operation and the friction that Rob talked about earlier on was very prevalent And we needed to somehow differentiate ourselves so that we could provide an experience that customers would recognize as a great experience throughout the whole life cycle of their vehicle ownership. And conversational commerce really hits that mark for many of our consumers.
We have 2,500,000 customers. Many of them are just like all of us. I mean, I've been sitting in the back. I see a lot of people looking at their phones. It's the same as so many of our consumers.
That's how they want to converse and that's how they want to do business. So it's not necessarily being where they want to be and how they want to do it, but really setting the stage for them to go about their lives while being serviced and getting the service they need but not interrupting their life. And we feel that that adds a significant amount of value in the ownership experience.
Great. And Jeff, what about yourself at Goldman?
For us, it has been that the conversation of commerce is becoming the primary channel for conversations to interact with the customers. And we do find the customers do call and asking about how do I chat with you, which is kind of like our earnings, I can't find it, so how do I chat with you directly? Again, our business is still relatively young, so we don't have the mass volume to customers, but it is something that we're seeing and that we're probably driving more towards that.
Great. So what is the current state, if I can continue with you, the current state of messaging and conversational commerce right now at Goldman?
It is still in infancy, very new, a lot of new business verticals that we're actually tackling. At the same time, what we want to do is create a platform that we could actually capture data and that's one of the things that we're really heavily investing into, figuring out what the customer voice is and what the next thing that we actually need to build upon from the customers and at the same time providing exceptional customer service.
Great. And Bob, you've been a customer for a while. What is the current give us a bit of the journey itself?
We started off with chat and I agree we saw very quickly the limiting factor of that because there's not just the customer experience aspect of it, but the economics works very well for us as well. With chat with phone I need 1 agent per customer. With chat a really good agent could handle 2 or 3. You get up to more customers with a chat agent, the experience starts to suffer. With messaging, when we introduced messaging, first we introduced that on our web browser and it was more of a chat experience.
People were sitting at their computer and they were conversing with our agents. So we didn't really realize that the efficiencies there. But when we introduced that and launched iOS and Android app with messaging, we started to see the asynchronous nature of messaging where people would send us a message in the middle of the night or early in the morning and go take a shower and come back and our answer was there and then they ask a follow-up question and their breakfast and they'd look at their phone and the answer was there. In that asynchronous nature I can have one agent handling 15, 20, 25 customers simultaneously. So the experience is great.
That customer, their total all in time was probably less than a minute for them to take their question and then go about their life. And so the experience for them was great and the economics for me was great. One other thing that the challenge that we face right now is our customers But they still are Googling GM Financial to get the 800 number. So we think our next phase and we're implementing it right now is that what we call IVR deflection that Rob alluded to where customers will call in and our automated system will offer them the opportunity to conduct their business via text rather than the phone. And we're excited for that.
The economics obviously is very intriguing. But the experience that we're going to be able to deliver to the customers we think will be sticky and help promote that loyalty that we're searching for.
Thank you. No, it's very exciting, the next phase of IVR deflection with GM. And if I can switch to you, what about you, the current state and what we're doing right now and what we can talk about in terms of the experiences you're looking to drive?
I think current experience I mean, conversation design is hard. It's not easy. Conversation commerce is hard. And I think everybody and I, you know, when I first started doing working on messaging was that I know how to chat, I know how to talk to people. It's not that easy.
It's just like being at the customers, it's end of it and for us to actually really measure how long that conversation takes and be clear about how you want to direct the customer is something that we're really readily looking into and definitely building out a platform to actually making sure that we have enough knowledge to actually tackle that.
Right. And if I could just switch it now, when you were evaluating the platform, what capabilities and outcomes were you actually looking for and were important to you when you were selecting a technology partner?
Important thing was that because we are in a regulated industry that we adhere to all the regulations rules that we set ourselves as well as within the banks. Goldman actually is one of the most restrictive banks that I've probably been tired with because for importance of customer privacy and data structure and then everything that comes along with that. And ability to actually partner that could actually kind of listen and hear our pain points, actually work with us on that, but at the same time building out custom vendor who actually could be, it's their core value proposition, not just kind of like as a side offering, but also be able to deploy quickly and also able to at the same time be able to customize as per our what our needs are.
Great. And for you, Bob, similarly a while ago when you evaluated.
Yeah, I'll echo that. The speed of deployment is really, really important. I think we've all witnessed just the pace of change in the technology areas has steepened so much over the past 5, 10 years. So we really wanted a partner that was very forward leaning. I wish that we could keep up with LivePerson or could have kept up better over the last 5 years with LivePerson.
When we deployed chat we were patting ourselves on the back thinking how forward thinking we were and it was within a year that I went to a conference like this or like one that's going to be here tomorrow and saw a messaging and realizes how far behind we were. And so I'm excited about what's to come in the next 5 years. And I think having a partner like LivePerson and being able to now because they are part of our DNA, part of our infrastructure with our IT group, my IT people know their IT people very well. We can deploy much faster. So that was very key in our decision and why we continue to do business with LivePerson is that forward leaning innovative atmosphere.
Great. And now just to reflect on the actual programs that are live today with messaging and conversational, how has this transformation actually affected the employees in your contact center, all the way from agents to your team leaders and so forth?
Sure. We have something similar to the video that we saw. We're creating new positions with our chatbot. We deployed a chatbot last year and we're deploying an AI enabled conversation bot this year. So these are new jobs, new positions, new skills, very exciting for many of our team members to be able to move into that to actually train and teach and supervise a bot.
That's been very exciting. Our call center Rob talked about the attrition of 40%. That's pretty spot on. I have multiple call centers that range from 60% to 30% attrition. It is a job that wears on people, the phone job.
And I have probably I think it's 12 or 13 different functions within our call centers. And I try to move people around to get more diversity. And we found it very difficult to move people away from messaging. They really enjoy it. It's the way they communicate with their family and friends.
They They're comfortable doing it. They feel that they can make a connection better with the customer. It's good for their overall balance at work. So it's been an exciting journey in that regard. That's where I'm very much looking forward to the IVR deflection.
If we can move 30% of these people from phone to messaging and introduce them to this better way of communicating with us, at so much more. I have so many more really highly sought after jobs in my call center there.
And happy employees. That's great. Thank you. And Jeff, while you're not directly working in the contact center space or with care as heading up product, what are you seeing or hearing?
I mean, we interact with agents and their managers all the time because they're they are the source of our requirements, so to speak. There are to a certain level, our customers actually figure out what they want to say. So the feedback we get is that agents are empowered
by
the tools that they're given. They want to be better at their jobs, but at the same time, they are part of the conversational design. They're kind of leads to conversation design, how the conversation should be. And then we've taken their their pain points and structure it and then design the conversation around that.
That's great. So they're finding they're able to do that in more
Yes, definitely. I mean, it has to be because if I'm sitting at my desk and thinking that this is how the conversation should be, it's not really correct. It's not serving to the customer nor to the agents. An agent really should be driving that change, driving how the conversation should be and really figuring out how do we actually customize the conversation for the customer as well as agents themselves.
That's fantastic. So both of you are really experiencing very similar things in terms of new skills and roles that these agents can be in. So just want to close off my questions with how do you see the transformation over the next 5 years within Financial Services and just within your business in conversational commerce?
Obviously more automation, more just in time conversation, meaning I just want to know my balance, which is not the best example, but that is what's going to happen. And also having the automation with the customer, but also with the agents themselves. So rather than full automation, but more of a extended intelligence about having that extended knowledge base that you could actually promote to the agents. If the agent, if the customer, if the, the bot understands that this is what the customer is asking for, you should preempt this, you should show them that. So that kind of things that we're going to do or just agent being able to transfer to bot.
That's what we're actually working on right now.
Fantastic. So finding having automation to empower and make the agents even more effective and efficient. Great. And for yourself, Bob, what's the vision in 5 years?
So far, we're really just deploying this technology in the care space. I think my organization includes marketing, communications and remarketing. So the selling of our off lease vehicles we're selling over 500,000 vehicles this year. And so it's a whole another consumer base there with the dealer body. And I think we'll be looking for ways to deploy that in that space.
Looking over the entire customer's journey in the car buying and leasing process, we have online credit applications where we'd like to start engaging the dealer or the customer a little bit earlier, pass those off to our franchise dealer partners so that we can assist them with their profitability models as well. GM CEO said that the car buying process or the auto industry is going to realize more changes in the next 5 years than it has over the last 50 years. And I think the way that we can communicate and the way consumers engage in with various aspects of the car buying process is going to be part of that fundamental change. And we really want to be as far out ahead of that as we can.
Well, it's very exciting to be working with both of you. Thank you so much. I'd like to take a couple of questions. We've got time for that. So if you could just say your name and keep it to one question, that would be great.
Okay, great. Hi, thanks for the presentation. Jonathan Key Summit Insights. I have a question more for Jeff. You talked about the regulation, the restrictions that you have.
I'm just curious if we can dig deeper here in terms of how LivePerson has helped you meet the regulatory demands, the compliance with what you do, including stuff like record of transactions, as well as the data privacy, even though it's hosted off their data centers, their cloud? Thank you.
It has been to that, it's part of the thing. One thing was that how can you go to market faster with being regulated? I mean, everybody who works in a bank knows that when you have a new vendor, there's extensive due diligence that actually has to be done through tech risk versus legal compliance privacy. We actually had we did able to provide with an API that could actually connect directly into our, more call e com, like to actually regulatory, like scrubbing up all of our conversations and then actually have that really connected really fast. That was one of the key things that we actually looked into.
That was one of the reasons that we actually looked into LivePerson for that reason. The easiness of actually transitioning from the market all the way down to commerce and B, actually the compliance team actually being satisfied with all the fees that were actually coming in.
Thank you. There are any more questions? We've got a couple here. Hi, I'm Elena Berger. I'm with Guilter, Gaggen and Howe.
And this is for Jeff. I know it's still early days in the Goldman Consumer Bank, but are you
Actually one thing that I was actually surprised about is that some of the older demographics were actually asking for chat, which I thought was really surprising, because we expected all the demographics to actually really call in, but they actually prefer to pass through interactions with us, which is actually really a good thing. But at the same time, that's one of the things that actually I found it interesting. Then you look at all the demographics of customers who are just chatting, that really ranges from now everybody. It used to be just on the skewer no longer. That's the profile we built out.
But then again, it's now pretty much everybody who actually wants to talk with us.
We can take one last question. Great.
Hi, it's Bob Johnston with Herald Investment Management. Pavan from Aramark talked about potentially looking at operational efficiencies while using LivePerson. Have either of you started thinking about that? I mean, obviously, you're still fairly early, particularly at Goldman Sachs in terms of looking at conversational commerce. But how about looking out in the future, what broader uses can you see?
Sure.
The efficiencies are real as far as the workload per agent. And we're also trying to parlay that a little bit because there is a I believe there still is a subset of customer that absolutely wants to have a live voice and speak to an agent. It's very interesting for us. And a lot of those are millennials. I think because it's the first time they bought a car.
They want to hear a voice tell them that they're doing everything the right way. So the way we're looking at that is I think we agree with Rob that call centers have been managed the same way for decades decades. And so we're looking to parlay some of our savings, if you will, into kind of reinventing our staffing model in our call centers as well for our voice interaction so that we can give the agents more time to have more of an experiential call and realize benefits there. So part of our economic savings is not just going to be in cost reduction, but where we think that we can be a lot more effective. On the sales side, the online credit application, the percent of customers that don't fill out the entire online credit application that stop halfway through or after a couple of lines is quite staggeringly high.
And we think that if we can introduce a conversation there and continue that process, we'll be able to pass more and more leads to our dealers so that we can generate more business in that regard. And then again on the back end of selling of the used vehicles, leveraging positioning that along with big data where I know what dealers need, what vehicles, what vehicles sell in their markets quickly, where I compare them up with the right inventory. And I think I can best do that then through a conversation.
Great. Did you want to comment?
No. Okay.
All right. Thank you so much, Jeff and Bob. And with that, I will call upon our next speaker. So thanks again. Thank you very much.
So I want to move straight on to Mark Sherwin. Mark Sherwin is the Managing Director of Customer Experience at Accenture Interactive. And Accenture Interactive is one of the leading, I'd say, advisories in digital transformation to enterprise, and they're a partner of LivePerson. And Mark here with us, very happy to have him. He's one of the thought leaders and definitely very aware of the trends in the customer service space.
And we thought it would be good to hear from Mark about how these trends in customer experience, in consumer behavior are intersecting with conversational commerce. And with that, Mark, thank you.
Thank you very much.
I would love to hear
a bit more about you. So first, I'd like to start with congratulating you 4 years in a row, the leading or largest digital agency as voted by Ad Age. So congratulations on that. So just tell me a little bit about the Accenture Interactive's philosophy.
Thank you. Hi. Nice to be here. Thank you very much for inviting me to join. So within Accenture Interactive, we are the experience agency within Accenture.
We really focus on how to create new experiences for customers, grown very fast over the last 7 years and done that through a combination of building organically and also a large number of acquisitions in the agency and experience space. And we believe in building the best experiences on the planet and we believe that that's quite challenging now because the experiences customers have are quite liquid. And what we mean by that is that as soon as they experience a great experience in any sector or in any particular brand, they expect that from all brands very quickly. So it means that you can no longer benchmark yourself against your competitors, your typical competitors, but you have to benchmark yourself against the last great experience a customer had. Right.
But we believe that experience can create differentiation and build loyalty, build advocacy, but it only really works when you think of an experience holistically. Often it used to be sort of in the domain of the marketing officer, but what we are seeing now is great experiences only work when you stitch together marketing, sales and service into a single experience or conversation. For businesses because we believe that creates sustainable growth and also impacts the way people work, play and live. We talk about this concept of the triple bottom line. As investors, you will get the first one, which is commercial value, clearly, but also customer value and actually cultural value.
And if brands can create great experiences, we think they can deliver to that those three very important parts of experience.
Great. And just with that, what are the trends you're seeing right now?
So we spend a lot of time looking at trends. We have Fyodor, our service design agency spends a lot of time looking at consumer behaviors and our tech businesses spend a lot of time looking at technical trends. I'm just going to pick out 3 that I spend quite a lot of time talking about when I do keynotes. The first one is this concept of micro moments. If I was doing a full keynote, at this point, you'd have on screen a picture of someone sitting on the toilet with their mobile phone.
I've spared you that today. But the 70% of people have admitted to buying something whilst on the toilet on their mobile phone. I believe the other 30% are lying, but that's your call whether you believe that or not. What it means is that people are fitting their interactions with brands into the micro moments in their lives. If you imagine all the interactions you've already had today whilst you're waiting for a taxi, whilst you're hanging on for a coffee, in a break, when you are in an airport lounge, that's where people want to do their business.
And so what we are seeing is, if you can provide a service and experience that fits into those micro moments and doesn't ask too much of the consumer, then you are going to be very successful. The second one is human plus machine and actually Paul Docherty, our CTO, has written a called Human Plus Machine, which is this whole concept that Rob talked about a little bit earlier is that actually if you put the 2 together, they can create a better experience of both. So we don't think it's about replacing humans with machines. It's about how you get them to work in tandem. I like the idea of tango, which is something that LivePerson talks about, of how do you bring the bot and the human into the conversation at the right time.
It's quite interesting because actually chatbots have had a bit of a bashing recently. I mean, we have seen Forrester's report that says customers don't want to talk to a bot only. And I think that's because in the past, there's been this focus on just trying to contain them away from the human. And what we are seeing is this trend that people are realizing that great experiences need to be a combination of the 2. There are things that machines do better.
Are things that humans do better. Empathy is very hard for a machine to do. Transactions is very easy for a machine to do. So if you can get the 2 working together in a really effective way, that's great. And the third one, which we have talked a little bit about already, is this concept of liquid expectations.
So just seeing how quickly the adoption of a new approach, we have seen messaging in the consumer to consumer space, how quickly that gets adopted and becomes the norm. And so we're seeing that the brands have to work much faster and be much more responsive to the changes in customer expectation because the adoption is so fast.
Right. I'm glad you mentioned that. So with that, I think what are the considerations? You lead the customer service
is, is to try and avoid the typical silo mentality. So you cannot have a good conversation with your customer if you have a separate marketing conversation, a separate sales conversation and a separate service conversation. And yet that's how most businesses are set up to operate. And so I think for me in digital customer service, finding something that can transcend those barriers and sure, the organizations will have those silos within them. But if you can project a single conversation to the customer, I think that's hugely successful.
What humans are looking for when we do research, when we look at what they like and don't like in experiences is they are looking for a natural and personalized dialogue. And dialogue is a word that comes up a lot, dialogue, conversation. And so obviously, messaging fits very neatly into that. When I'm looking at service, we tend to look at a number of steps in the service lifecycle. So listening to the consumer, finding out that they actually want to speak to you in the 1st place, brokering them, which is moving them to the right channel or helping them to the right channel, which is going to be most effective at solving their problem.
Diagnosis, so being able to quickly understand their intent and make sure you can get the right information to them. And then solution and solution has a couple of pieces. It's important that it's not just a traditional sort of voice or even chat conversation, but you actually can bring content in that serves the consumer. 2 parts to that. 1 is integrating with your technology systems in the background to be able to know the context of that consumer and serve up the content that's relevant to them, serve up information that is pertinent or specific to them.
And the second part is that consumers are wanting increasingly multimedia content. So they are wanting video. They are wanting rich media. They are wanting infographics to support their inquiries. They don't want just text.
So you need to find a way of doing that. You need to capture feedback and feedback is always a challenge because people quickly log off or stop their interaction once they have had their problem solved. But if you can politely ask for feedback at an appropriate time, that makes sense. Then you want to close that loop so that you can continue the dialogue afterwards. Now what's interesting about that is that I like Rob's observations on omnichannel is that typically the design process has been that you have to kind of design across multiple channels and then actually it's very difficult on most channels like websites, email, voice to solve all those different points.
That's why I think messaging is exciting because it actually allows you to serve all those different points in that service journey through a single interface, through a single environment for the consumer. So that's why we're excited by messaging.
Really glad you said that. So with that, so why do you think conversational commerce is so relevant right now?
Well, I'm really glad that Marz Zuckerberg has obviously caught up with Rob and Accenture Interactive, etcetera and agreed that messaging is the new social. It's something we have been talking about both companies for quite a long time. I think if we look back 10 years at social and it was first adopted for consumer to consumer interactions And then you look at now where it is, the expectation for every single brand couldn't expect not to be on Twitter, on Facebook, on Instagram, etcetera. But more importantly, it's not just that they have to have a presence on there, which was kind of the early days, but actually they need to be able to drive marketing sales and service conversations through social. And I think this is exactly the same as we are seeing in messaging.
For me, the reason why messaging is the new social is that if you think about it and we go back to those trends I talked about, it absolutely removes friction for the consumer. I think the example of the ordering the beers in the stadium is the fact that you don't have to download an app. It doesn't put any barriers in the way. Secondly, it fits into those micro moments because it's asynchronous. You don't have to do the whole conversation.
You don't have to carve out 30 minutes of your day to get on the call as we saw with the T Mobile advert. It allows you to blend human and machine really effectively. It's very hard to do that on a voice because if you move from an automated voice to a human and back again, it feels like a fragmented conversation. In messaging, it's much easier to orchestrate not just the bot and the human, but actually multiple humans. So in one dialogue with the consumer, you might have multiple humans with multiple expertise in the team being part of that conversation.
It allows you to transcend the silos. So it's actually a bit of a hack because you can put messaging across all the silos you have in your organization and present a single experience to the consumer. So I think it's actually quite easy way of not necessarily solving all the organizational challenges that you need to drive the experience, but actually to hack that and get in front of it finally. And I also think the other thing about messaging is this idea of channel choice. What I love about what LivePerson is doing is they are not picking a particular channel for messaging.
We are saying messaging is the right answer. But what we are saying is that you can have that dialogue wherever you want. So you can have it on WhatsApp. You can have it on Apple Business Chat, etcetera. And actually between those channels, you can should you want to move between them.
So I think that's some of the reasons why messaging is conversational commerce is very relevant in the consumer experience space.
So with that, why has Accenture Interactive chosen to partner with LivePerson?
Well, we constantly look at the leading technologies out there that can drive the right experiences. And our Quest, Brian, our CEO, Brian Whipple, is always saying, in so much as it drives the best experiences on the planet, we need to partner with the right suppliers, technology vendors, business partners. And so for us, if we believe that strongly that messaging is going to be the new social and there's going to be driving experiences, we need to work with the best partners in that space. When we started talking with LivePerson now 2 or 3 years ago, one of the first things we realized is there was a huge amount of client synergy. So actually even this morning, we were discovering more and more clients where we were actually already working in the same places, particularly within utilities, telcos, financial services.
And the opportunity for us is we are often having a top of the house conversation with the CEO, the CFO, the COO about how to drive cost and growth. And what's interesting is in many cases, LiveEngage is already embedded as a platform in those partners and those clients, but often not being fully utilized for everything it could do. So that gives us a really good opportunity to have a shared conversation. Secondly, a shared philosophy. I think it's easy to focus purely on messaging as a cost out play.
But actually, I think we all believe that it's about sustainable growth. So it's about certainly reducing the cost of some of the legacy interactions. But importantly, it can drive growth and loyalty. If you have really superior conversations, it can do that. The other bit I really like is the focus that LivePerson has put on to the optimization of the agent experience.
It's quite easy to focus entirely on the consumer and actually the experience for the agent can actually be non sync. It's a very synchronous, not asynchronous at all and feel very old world? And I think the focus that LivePerson has done that and then the continued innovation we see around Conversation Builder the way they are democratizing AI, I think they are all interesting themes that make it a great partnership to work together on.
Fantastic. So now let's talk a little bit about how we are working together at some customers. So what excites you most? Share a few use cases.
So I think what's really exciting is when we work with a customer who may have already started on the journey of messaging, but maybe it's in one part of their business or it was in one dimension. And I think when you can start to have a conversation about how it could really drive a different experience, it gets really exciting. So the early places that we've worked together are the places you'd expect, the telcos, the technology vendors, utilities, etcetera, and financial services. But I think there are some really interesting places that we're going to see more interactions. I think I heard today about some work we're working together in both airlines, which I think is really interesting, and airports.
So anywhere where there needs to be a lot of information exchange in a quite timely fashion, I think that's very exciting. We are seeing a lot in a lot of conversations around the hotel and travel industry generally. We saw Rose earlier, but I think the whole idea of a concierge level of service from travel providers is going to be a really important differentiator. It's quite hard to do at scale concierge well through traditional channels. So it tends to be kind of reserved for the top end luxury providers.
I think what messaging does, particularly when you start to bring automation in, is actually bring that luxury experience, that concierge experience to a much wider customer base and can scale much more effectively. So I think there's going to be a lot there. I think in Financial Services, obviously, it's a key ground that LivePerson operates in. I think the exciting challenge in terms of the best experience is when you can take it from deflection of sort of standard inquiries and relatively simple transactions into something really sophisticated. So for example, the whole mortgage application process, when you can apply and complete a mortgage application completely through messaging, I think that's going to be very exciting.
And I see no reason why that couldn't be achieved down the line. It actually makes a lot of sense. You are having a long term asynchronous conversation over potentially weeks or months and actually having a single record of that, a single way of interacting and being able to come back to it with either human or bot depending on the point in the process, I think is really interesting. The final one that I think there's a lot of trapped value that we haven't really explored together yet is in health. I think having the interesting thing is health, often the conversations that need to happen don't happen.
So it's not kind of a let's replace the contact center with messaging. I think it's how can we have a new dialogue with patients. And I think that's really exciting because so often the dialogue that you have in an interaction around a chronic disease can be really challenging. It often just doesn't happen. And I think messaging could be a really interesting way of opening on that dialogue and providing more support, maybe even multi agency collaborating on a single conversation.
We are exploring all sorts of things around the next wave of how you do clinical trials, how do you make clinical trials more digital, get a better understanding of what's happening with the patients. And again, I think those are some really ripe areas for further exploration. So I mean, watch this space. We are not doing that now together, but I think it would be really exciting if we could.
It goes back to we don't even know we are scratching the top of the iceberg. Thank you very much, Mark. I would love to take a couple of questions. Just put your hand up.
Jonathan Half with Ion. Just wondering about all the applications that you're describing. How much customization has to be done between them? And how much can you leverage when you move from one different client or one industry to another? Thank you.
So are you thinking sorry, just before, are you sort of between in one industry how much customization between brands or between different industries?
No. More between different industries. I can understand how you have one airline and you have to launch another airline, which is quite similar. But when you move from an airline to another industry, how much work is involved in customizing?
So I think there's 2 things. In between brands, there's quite a lot of customization in terms of the tone of voice because people expect a different kind of interaction depending on the brand. Between industries, I think there is a lot of customization, but I think what we are seeing is that there's a lot of learning you can apply. For instance, how you ask a question. Do you ask an AB question or do you ask an open question?
When do you use a graphic and allow someone to make a choice using a graphic? When is it good to serve a video into a conversation? That's honestly, it's an emerging science. I mean, there are a couple of books written on conversation design, but to be honest, it's emerging. I don't think anybody has cracked all the answers.
But I think those I mean, if you think about it with the early websites, the first when we started on websites, we had to every single website was designed from scratch and then we started to build really standard pattern libraries, the things we knew worked. And if you look at it now, they are very it always amazes me when someone says, I would like to build a new interface for my website. I am like, why? You want to work with the human interactions people are used to. There are thousands of books that are experts on that human user interaction in that space.
And I think that pattern library is not necessarily established for conversational commerce as of yet. So I think we are kind of reinventing the wheel unnecessarily at the moment, but that's probably because we just haven't codified what really works. So I see I mean this is for me building a conversational commerce practice. And the bit that we want to support LivePerson is whilst LivePerson delivers the most amazing technology and capability to serve those conversations. It's actually how do you create the right structure flow.
And I think that's something that Accenture Interactive can start to build as a discipline and start to codify and I think we will see that across the industry over the next few years.
Thank you. Do we have any others?
There was
one of them.
There you go.
Mohit Gogia with Barclays. My question is around you mentioned that the one friction there might be is that you're trying to get rid of is the silos between customer service versus sales versus marketing and conversational commerce will get these people there. So just curious as to do you think the friction in terms of removing those silos is right now technology friction or is that a mindset friction?
I think it's mainly mindset and organization. I mean there is obviously under the hood plumbing of your CRM systems, having one view of the customer from a data perspective. So there are some technological barriers that often organizations need to tackle. But I honestly think in building a single conversation and in a single experience through messaging, the biggest challenge is breaking down the silo mentality that often exists. So someone will say, I just look after service, I just want to have the service conversation and someone will say, I just want to have the marketing and sales conversation.
Now there are 2 ways of tackling that. One way is that you really go for the big picture and you paint the picture of an end to end experience and you work with an organization to do that. I think in reality and I think this is what we have seen most of the time is actually it's better just to work in one of those silos to begin with and not necessarily try and crack the end to end conversation. And if you start to deliver care in a new way or drive sales of GrillMaster through the conversations, then other people sit up and take notice. And I think when people start to take notice and go, I want a bit of that too, I want to be part of that conversation, what's exciting is because this is actually a relatively thin layer of interaction over the top of the core systems of the organization, you don't need to fundamentally change organizational structure to make that happen.
We are actually just seeing things like teams sitting together where typically you would have had debt in one team, technical support in another team, sales and marketing in another team and lots of uncomfortable handoffs through voice. Actually in a messaging contact center, you can array them all around the table and they can ask each other questions and help each other. So actually, I say, it's almost like a hack over the top to create that single messaging experience. But you do have to change the mindset and the best way is prove by doing, find points of proof in an organization and quickly other people get on board.
Yes. We call that the neighborhoods concept. That's pretty cool. Thank you so much, Marc. Thank you for the question.
And yes, really Thank
you very much.
Forward to a lot more with you.
Thank you.
Thank you. Thank you. So our last and final, I'd love to call on stage Tom Scott. Tom was the former Managing Director of Customer Service Group at Sky. Sky is one of the leading telecommunications in Europe.
And as you know, we thought that it would be very good for you to get a perspective of the telco vertical as well because it is also one of our fastest growing. Now Tom brings a very unique perspective. Sky used to be a chat customer of ours and they left us. And in 2017, with Tom, he brought LivePerson back to follow the vision of Conversational Commerce. So great to hear from him as to what he did with Conversational at Sky.
And one thing I'll leave with is, Tom is such a believer in this concept that he is currently consulting with leading brands all over the world on conversational commerce itself. So with that, Tom, love to have you up. Do you have a clicker? Go ahead.
Seems very quiet. Normally, I have walk on music, which is which I'm kind of missing a little bit. Normally, I go with a bit of Guns N' Roses. Thank you very much for the opportunity. I'm going to try and inject a little bit of energy into the room because this is something that I passionately believe in.
I'm the practical guy. So I haven't heard I'm going to put myself in the spot. I haven't had any tough questions yet that tell me, yes, that's great, a buy that customers use messaging all the time, that's fantastic. How do you do it at scale? So I'm hopefully going to be that practical guy who has done it and has rolled out at scale.
And for a little bit of a 101 on contact centers, for those that don't know, notwithstanding the differences between verticals and different sectors, etcetera, you need one full time equivalent human being to look after 1,000 customers, 10 for 10,000, 100 for 100,000, 1,000 agents to look after a 1000000 customers, okay? Organizing that in an entirely different way is doesn't come without its challenges. So I'm going to talk a little bit about the opportunity. I'm going to talk a little bit about how I deployed it when I was with Sky, but then I'm going to hopefully give you some of the lessons learned as being a kind of pioneer in this space as to what you have to consider when you do this at scale and to get to some of those huge opportunities that are out there. It is a it can be a fantastically detailed subject.
When you talk about organizing all those sorts of numbers and all those millions upon millions of interactions and queries that your customers have, it can become quite difficult. The key thing about LivePerson and the LiveEngage platform is about the some challenging questions at the end. So we've already heard that customers use this in their everyday lives. This is their preferred mode of conversation. So how do we use this to differentiate the customer experience in such a way that your brand, their brand becomes the leading light in interacting and speaking with our customers.
The key thing when you talk about large scale operations and the cost to run them is how do you better align that cost to the outcomes that you're trying to achieve, be it share of wallet, be it sales as an overall volume, be it NPS scores. Whatever the metric it is, you are using all those thousands of people to interact with millions of customers. And at the moment, a lot of that time is wasted in non value added interaction, non value added interaction for the business and non value added interaction for the customer themselves. And that's a really important part of that engagement process. Aligning your people resources to those benefit outcomes becomes the sort of magic moment in what you can do in terms of running your organization.
The key thing about messaging for me is that it is a spectrum. You have a choice of where to put it. It has incredible flexibility. I want you to think of LiveEngage as that being the core of this interaction model. It's the engine room in the middle.
But your people, the company's people who use that engine sit right in the middle as well. And then you have the choice of all those channels that you currently have or you want to have in the future interacting with that center core. And that efficiency and that flexibility is really, really fundamental. On one basic level, with no imagination, you can just replace live chat with messaging too model. In fact, when I speak at the customer conference tomorrow for the live person clients and prospects, I will be boringly going on saying, shame yourself if you're still thinking about using live chat.
It is an outmoded way of interaction. It is all about asynchronous and the ability to use different channels going forward. So if that's all you want to achieve, gain huge, huge operational efficiency savings by swapping those two things out and limit your imagination at that point. Perhaps there's other ways. What about low value interactions that cause your business a whole lot of pain?
Think of the travel industry. Think of a big weather event and disruption to all those airline flights. And think of the inundation that contact centers in the travel industry receive from disgruntled customers who are lost out on their travels. The best thing in the world is to intercept that with a little bit of automation, keep them informed and keep them away from having to interact with human beings where there is no value add that can be provided. And when you're ready to go again, you can off and go.
So if it's for force majeure events, then it's an amazingly powerful thing. Value add focus. We all get very excited when we have a huge self-service capability on websites and apps, etcetera, because we think, wow, I've saved a whole lot of operational cost in interacting with those customers. Some of those interactions, you are leaving on the table a vast amount of benefit, upsell opportunity, engagement opportunity because you didn't want to interact with that customer because you thought it would save you a little bit of operational cost. So there's an element of you've got to think a little bit differently speaking with your customers, now you're speaking in quotes, speaking with your customers is a good thing because it allows you to engage, allows you to deal with issues, but more importantly, it allows you to move that relationship forward.
And that's all about providing whatever is the service that you provide in the best possible way of the sales number you're trying to hit. So actually hiding from your customers is bad. Engaging with your customers is good. Obviously, you have to work out how to manage the volumes involved. And the ultimate for me and reason I work in this space is trying to get encouraged people to think about transformational customer experience.
Let's you heard Rob at this start talking about what's happened with voice. Let's change all that. Let's make it an entirely different way of interacting with your customers. The LiveEngage platform does that. Of course, it does.
But the key thing is it's about building the capability. So again, when I speak to customers tomorrow or more importantly, prospects tomorrow, the thing that I want to try and get across to them is you have to start now even if your ambitions are just swapping out live chat because how to organize your staff and your company to be able to use this capability when it does start to exponentially grow is really, really important. You cannot take 10,000 people in a contact center environment and overnight put them on to messaging. You have to work out a fundamental different way of doing business. And the only way you'll do that is to practice and get experience as quickly as possible.
So to all those guys and girls tomorrow, I was saying, please do not wait because your lunch will be eaten by someone else if you do not get on the front foot with preparing yourself for this capability and to say and that is not driven by where their ambition currently sits. If it's Apple Business Chart, if it's Google RCS, if it's WhatsApp, those billions of users, particularly in APAC, then you have got to be ready and know how to organize yourself to get a march on the competition. So moving to if I can, can it switch? I'm not going to talk about the volume of thing. I want to talk about the deployment considerations.
Context determines the approach that a company should take when thinking about messaging. Is it cost saving? Is it customer experience? Is it channel swap? I talked about, say, getting rid of live chat.
Is it care? And within care, there's a whole spectrum of different things. Is it the immediacy of response? My cable, my broadband has dropped out and I need to get back online as soon as possible. Is it a more routine thing about how I pay my bill?
Whatever it is, understanding that context is hugely important. Is it in sales? Is it lead development? Is it closing of those sales? We talked about GM earlier and the ability.
I don't buy a car on a whim, I build up to it, I research, I go back and forth, I have an asynchronous experience in the broadest context. What if the brand that I'm dealing with stays connected to me all the time and all the way through that journey? And when I've fallen away and disappeared, it's able to come back to me and give a little gentle nudge, decide if you want to offer a particular incentive to that customer to close the deal. Huge, huge importance and powerful things at your fingertips. One of the key things that people have been talking about as well is this kind of concept of cost reductions that popped up, yes, cost reduction.
Okay. So when I deployed the capability at Sky, I went into the IVR, so the push button thing that Rob referred to at the start. Why did I go in there? We were very successful in that we had about 50% of self-service capability customer care when I was at Sky. But that meant if you flip it on its head and all you guys are analysts and are much better in numbers than probably I am, that there was 50% of opportunity potentially being left on the table.
So those people, those hadn't decided to do that. They didn't know about it. So what if I could point them and introduce them into that capability? So actually, what I went after was simple high volume tasks as a way of tackling some of that inefficiency in my operation. Without doing anything spectacular, I was able to generate 30% natural latent interest in that by just offering the capability.
At the top of an IVR, hey, why are you calling? We had the natural language IVR. Say in your own words why you're calling. Customer says what they want. And then if the capability existed in messaging, be able to say, hey, brilliant, we've just introduced a brand new service which allows you to get on with your day, do things in your own time, why don't you use our new messaging service?
So that was the limit of the pushing of it. Latent demand, 30%. That got me very excited. That confirms all this hypothesis that you've seen this morning around how potentially there is a demand for this type of conversational interaction. So cost reduction in that simple example, and I'm not forgetting what I said about aligning resources for better outcomes.
So I don't want to just lose customers if I'm missing an upsell opportunity. But that confirmed to me that I could deliver a double the efficiency in terms of costs, just simple costs, double the efficiency. And I could bore you to death about how that all plays out in terms of concurrency and how dormancy works, etcetera, etcetera. But that's the little tweaking of the piece. But I talked about differentiation has been key.
So it's not just about doing things efficiently, it's about making a customer's experience wow. And that is again really, really important. So one of the things that you must do is to make that a fantastic experience because if you do not, and this is one of the things you just come down to operationalizing it, a customer has a messaging interaction, it's not going well or they're not getting what it is they want, they will pick up one of your other channels and try and contact you that at the same time. So they'll pick up the phone, they'll go online. If you've still got live chat, they might start there.
Then suddenly you've got multiple contacts from the same customer about the same subject and the whole thing quickly gets a little bit out of control. So the experience that you must deliver is absolutely, absolutely vital. Channel replacement, I won't go on about that. It's a simple thing to do. Complexity in operations comes from having multiple touch points.
The beauty of the LiveEngage platform is it's right at the center and allows one coordinated view, one view of the data, one view of the interaction. If I was starting a startup, pardon the pun, tomorrow, I would not have any other channel other than conversational commerce. I would only have a messaging channel and I would make it appear in all those other areas, be it it and that the root into that might be Apple Business Chat, for example. I wouldn't bother with the phone. I don't need it.
I can outbound in a phone call if I have to. But the key thing is get rid of other channels where appropriate. I've talked about sales, lead generation, etcetera, huge opportunity. Realigning resources, having thousands of advisers speaking to customers about non value added things is terrible. What about if I didn't even save any operational money, I retain those advisers and I use them for leads that my interactions generated.
I have automation dealing with the simple routine and I use my human beings to actually add the value to the customer base, a massive, massive thing. Care is so important. It's one of the areas where in messaging people have gone after. It's one of the most difficult things to do because all those processes don't necessarily lend themselves to close questioning, etcetera, that it does. So there's a design process that you have to go through.
And I talked about force majeure. So let me turn to some lessons, lessons learned through doing this at scale again and this is the kind of key point. There is a huge latent demand out there. I talked about just offering it to customers they want it. I put it into the app that we had at Sky and it went crazy in terms of people using the app.
There's some big lessons there around the cannibalization of self-service volume, which I'll touch on in a little minute. Response time. So yes, it is asynchronous, but asynchronous shouldn't be interpreted as a literal thing. The customer actually behaves in an asynchronous way. They contact when it suits them, what stage in the sales journey, what stage in the care process, how important it is to them, what time they have available.
For the receiving company who is servicing that, their responsibility is to respond as quickly as possible and let the customer choose when to pull and use that information. So one of the things that people must remember when implementing messaging is that don't think that you get to be lazy as well, otherwise you get this spin across different channels. Customer expectations. One of the biggest mistakes I probably made initially when I deployed it was I would enter into a conversation with to when they should expect the next thing to happen, what is the next thing, when will it be, there's my SLA, if you like, in terms of that interaction. So setting an expectation with the customer at every touch point is hugely, hugely important.
You have to design that service. So the reality of all this great stuff is that big companies have big IT stacks. They have big legacy systems. Everything just can't be called on an API and programmed into a bot straight away. There are breaks in the process.
So actually, you have to choose which processes this is suited to and retain people for doing the things that potentially swivel chair have to be done to keep the things moving. But back to my earlier point, as long as the front looks fantastically seamless to the customer, then that starts to build you the benefit case going forward. So a very, very important thing. It's not like for like and this is the point around getting ready for the arrival of messaging. When I say that the shift process that companies used in contact centers doesn't necessarily work because you've suddenly changed how the demand arrives and when you manage that demand.
It allows you where the efficiency comes from, allows you to occupy your staff far in a far steadier way rather than peaks and troughs of inter day demand, peaks and troughs of inter week demand, of seasonal demand, depending on your sector that you operate in. So it allows you to do things differently. It means you have to redesign how you run your operations as well. There will be incremental volume. I guarantee if you came tomorrow and you saw some of the prospects who are worried or thinking about the introduction brand?
You do drive incremental volume. You do do some substitutional volume. So calls that you were taking now disappear and become self-service, and that's cool. You have to think of it as what will I do with that incremental volume. If it's just query based stuff that you've got a set of FAQs, then you're designing an AI and interaction a bot, which just provides that information far more efficiently than the customer can find it and far more efficiently than your agent can deliver as well.
So you have to then think, right, I need to use you heard Accenture talking about it. I need to do this thing in tandem. I need to find the things that bots are well suited for and automation is suited for. And those rich opportunities that are engaging with me and my staff become the things that I go after and I realign that resource in order to be able to do that. And that is a key kind of benefit as well.
Integrated automation, I've talked about it. One of the first things that we introduced when I introduced this when I was at Sky was because of that expectation, I needed a Concierge bot. I needed a bot that set that expectation, job that I created, you heard of all these sexy new jobs everyone is getting, I made a human bot. So we had to deploy people to actually replicate the function that we'd eventually build the bot for, which is essentially to say, hey, thanks for contacting us. We've got your query.
We understand it. This is when you're going to hear back and the next stage is going to happen. So that integrated automation is fantastic. We also looked at processes where you have to do something quite boring. If it's a diagnostic and a technical fault, there's no point in the customer sitting on a phone call waiting for that.
Send them away, run the diagnostic, do the fix and then let them know that their service is back up and running. So lots of opportunities to tango, you've heard the word this morning already, tango between those different processes and huge use human beings when it's necessary. And that again, a brilliant thing to think about. Net workload, again, where does the efficiency come from? It comes to thinking about the workload that your operation carries in a different way.
It is not about the overall number of volume contacts because you're going to answer that with some integrated automation. And then finally, from that lessons perspective, staff engagement, you had a figure of 40% for standard contact center attrition rate. You'll see that range, that's an average. You can see that from probably in house contact centers, self branded ones be at 20%, outsourced where a lot of companies operate, having attrition rates, annual attrition rates of 100%. So they swap out their staff every single year.
The optimal for a staff member to earn that to learn their trade is about 18 months when they're at peak The engagement that messaging offers those members of staff is fantastic. And that empowerment, that engagement is why the retention figures change overnight. So let me just pick up in the final few sort of summary points, if I may. I believe I passionately believe and that's why I'm now doing this more in a consultancy space that this is the future of customer interaction and engagement. There's a whole brilliant volume of demand of brands that live person are engaged with.
But as consumers ourselves, we're not feeling it enough when we engage with the brands that we interact with on a daily basis. This is the opportunity now to develop and expand that space. I think it is a game changer for the brands that go after it at scale quickly. Now you can try and blend it onto an existing touch point or an existing channels Or again, if I was doing it tomorrow, I would pick a product and I would only have messaging on that product. I would potentially pick a segment of customers.
They may be my high value customers or this is this is how you interact with me. I would then market it, celebrate it and get above the line and start to build that momentum. Huge, huge opportunity to be different than whoever your competitor actually is. The natural demand we've heard about all morning, it is a reflection of how customers do their normal day to day business and interact with their friends and family, why not provide the same conversational interface with what they do with their business life or their consumer life, an opportunity to make that customer experience entirely different and entirely rather than dreading having to speak to my telecoms provider, what if I actually enjoyed the opportunity? It's not something you wake up in the morning and say, brilliant, I get to speak to my broadband provider, but it is something you wake up and dread speaking to your broadband provider if you've got a problem.
So why not make that easy and seamless throughout the day? We're in an early adoption phase, I believe, because of that pervasiveness or lack of pervasiveness. I put that point up there because this is an investors conference. So this is the opportunity, I think, to recognize that we're on the cusp of something, which will come. The debate is how long it takes to come.
I can't stress this point enough. You've got to build that capability. You have to reorientate your internal teams to be able to operate messaging at scale differently and not tied to that early adoption phase that means to me that anyone that switches on to that starts building the capability will be ready to actually either lead the transformation or at least beyond those early waves once it starts building up. You need it underneath, as I said before, underneath Apple Business Chart, you need it under WhatsApp. It's the same thing, but you've got to get ready for the capability.
Why LivePerson? So there's lots of providers out there who can deliver our messaging capability. What LivePerson have stolen the march on? And this is a personal belief, so they're not paying me to say this specifically, is that they have built a great piece of capability, a technical solution, but that's okay. Everyone can build technical solutions, just get some good programmers.
What they have managed to achieve in stealing that kind of lead into the marketplace is working with companies and you've seen the number of there and learning how to operationalize it and how to do it at scale. I genuinely believe you could take any of the leading competitors and say, right, hey, give me a messaging capability and they could put it in and it would work and you could message with customers. Of course, you could. What you need to realize is that making this work and getting to the benefits that I've alluded to, you need to understand and you need to have put those hours, those days. When I did it at Sky, I had a direct line to Rob LoCascio, and he threw every resource he could at me to try and help us work through the live problems that we've had.
They've now had 2 years' experience of that with huge brands, and therefore, that is their USP. Their USP is not necessarily the platform, although that is by definition at the core of what they do. Their USP is doing this at scale and operationalizing it. And that's why I have decided to throw my kind of weight for what and sizable weight behind what they're trying to do. So that's me.
I think it's the future. You can do it at scale. It's not easy, but these are the guys I think that can deliver on it and I would be taking a very positive message back to the companies that you represent. So I'm open to questions now. You can hopefully put me under pressure.
Yes. We've got time for one question right here. Thank you.
Thanks. Justin Furby with William Blair. Tom, it sounds like in your role, you're sort of an advocate, you're meeting with a lot of prospective customers. What are the reasons why this isn't what are some of the biggest areas of pushback in terms of why this isn't bigger already today for a company? Why aren't they going to roll out LiveEngage?
And how has that evolved? And then just completely separately, how do you see the CRM vendors, Salesforce and Oracle? How do they fit into this whole ecosystem? And how do you think that evolves over time? Thanks.
So why is it not picked up? I think a lot of the people that run operations run contact centers, etcetera. And its presence within the brand and within the company is not well understood. It's just a necessary evil. It's a cost of doing business, etcetera.
Those companies where it really picks up and I think T Mobile are probably the best example of this is because at the very top level of the organization, the CEO got behind it and got excited by it. Once Apple, ABC, Google, RCS, once they start to develop and it becomes an evolution, I think once you get to the C level of an organization and they understand what this is about, that's when the volume will kick off. I think it's probably at the moment been driven at the wrong it's been passionately engaged with, but been driven at the wrong level in the organization. And that's the that only needs 2 or 3 brands to get this right and then the floodgates will be open and every CEO worth his or her salt will be hassling the operation to get the program, hence why you have got to have thought about this and started working on it. With regards to kind of technology stack or CRM stack, essentially and all the programmers or any programmers in the room would shoot me down for saying this, essentially a CRM is just a data is a data store.
It's where you hold your customer records. What you're doing is interacting with that data store. The more efficient that you can do that, the more automation you can put in, fantastic. But at the end of the day, what do companies do at the moment? They have contact center agents who swivel their chair and they open up 1, 2, 3, 4 different systems and they do that merging of the stuff.
The C2O of any organization should obviously be thinking about trying to make that a cloud based solution for CRM going forward and make that access to and the tie up of all that data much, much easier. While SAT is going on and that takes a long time depending on which company you're talking about and where the investment sits, While that's going on, it is still the same live engaged platform that will interact with whichever vendors provides that CRM or that cloud based service. So actually, the 2 things can sit in parallel. The ones that will gain the biggest benefit and the biggest steal in the market will be the ones that do the efficient thing straight away. The key thing, as I say, is how you organize to use it.
Irrespective of the channel that a customer comes in on, they bang into live engage, which coordinates the experience, you use your people around that one bubble and that one bubble interacts either manually or automatically with the back end CRM system. So it's a continuous universe and every different every company will be at a stage in their journey, but the things can exist in perfect harmony with each other. It's just how efficient they actually become. Great.
Thank you so much, Tom. And with that, I'd like to wrap up our customer and partners segment. Thank you, everyone. And I'll hand over to Matt. Thank you, Tom.
Thanks Tom.
All right. Let's give everybody a chance to stretch their legs and get refreshed. Please take a break. We'll try to keep it to about 5 minutes to get back some time, but there's refreshments and have a chance to check-in. Thanks.
All right, everybody. Would you please take your seats? Okay. Please help me welcome Alex Spinelli, LivePerson's Chief Technology Officer to the stage. Thank you.
Hello. Hello. I am Alex Spinelli, I'm the Chief Technology Officer of LivePerson. I've been with the company for about a year. Prior to LivePerson, I was at Amazon for about 5 years where I ran search.
So if anyone's bought or browsed for anything at Amazon, I was responsible for that. One of the really interesting things that I discovered while working on search was people started to have conversations with search. People actually wanted to have dialogues with search. We ran hundreds of experiments to continuously improve the product discovery experience, always looking for ways to engage and understand more about what consumers wanted. And it's difficult, it's hard.
We actually really struggled with this interface. We saw people asking full on questions. Is this product compatible with this product? How do I do this? How do I use that?
And we started to really try to build out conversational experiences in search. It didn't work. It really didn't work. So when Alexa offered me a role to lead their core software platform, I took the opportunity because I really started to find some of the core challenges and the experiences that we build both mobile and web really limited. And Alexa was just totally eye opening.
People want to have conversations. They want to have dialogues. They want to be able to tell you what they want, what their wants, needs and desires are. And that's really what Alexa and the whole explosion of AI and personal assistance is unleashing. So when Rob called me a little over a year and a half ago, I was pretty happy at Alexa.
I said, no, I'm good. Said, Alex, there's something really interesting here to explore. And he talked about 20 years of data that we have here, conversational data. He talked about the connectedness to our customers that customers really love LivePerson. And he talked about the opportunity to not only do what I was doing for Amazon in terms of ushering in this conversational interface, this conversational paradigm of how we interact with our digital lives, but to actually do it for all of the brands and the services that we use in our lives every day, our banks, our telcos, all the retailers.
And I dug in, I talked to some customers and it was a very simple decision to jump on board. So I couldn't be happier. So what I want to do is tell you a bit about why we talk about messaging, talk about intents, talk about conversations and why this is not a feature. It's not just a new feature. It's not just some evolution of technology.
It's a pretty big change. So I'm going to go back all the way to the Industrial Revolution. So Industrial Revolution, we started humans started to create machines. We started to screw things together, bolt things together and create machinery. And there's been several Industrial Revolutions throughout our history.
We started to create an assembly line where quality increased, safety increased, we could reproduce things at a much more rapid rate. Then the digital revolution referred to often as the 3rd industrial revolution occurred where we went from analog machines to digital machines. We all have these supercomputers in our pocket that we walk around with. And it's interesting because the digital revolution had tremendous change in our lives obviously, we are all connected the internet, can communicate collapse distances, but it really was driven and focused on the consumerization of technology. It's fascinating if you think about the advances in technology, they really happen to us out in the consumer world.
Companies today in many ways are a little bit behind where we are with our consumer technology. I remember I was in the we all, I'm sure, have faced this, you go to the video conference room and you try to start the video conference and it takes you 10 minutes, you got to call the tech guy, I have to do it too. Why can't we just video conference? At Amazon, I used to often joke, we're building talking robots and flying robots and we can't just have a basic video conference. When I went for a trip in the Wadi Rum Desert in Jordan and I whipped out my phone and I was video conferencing my mom with a click of a button showing the pink sand.
So what's happening now though is this is a big change. So I talk about the 4th Industrial Revolution. So I'm not making this up. This is stuff from the World Economic Forum. It's actually really compelling interesting stuff.
So what's happening here, this is where we start to really blend AI, machine learning, the virtual world and the physical world. We start to bring these things together. So as you see robotics, autonomous driving and the changes that are happening are actually happening on the supply side. So technology is actually moving back into the enterprise at a very rapid rate. We're going to have some massive changes.
So really what we're talking about and what LivePerson is doing is we are ushering in helping to usher in that 4th revolution. We're bringing the virtual world in AI to the enterprise at scale on the supply side and blending that in the physical world with the consumer. And that's really what we're talking about. So what is AI? I think unpacking that is important.
So I'm just going to try to have a little diversion here. So does anyone know what this is? If you just show hands if you know what this is. I really make you raise your hand if you know what it is. It's an orange, right?
When I put this up, everyone knew it was an orange instantly. I would wager most of us have not actually seen an orange like this. I often do this, someone always says, I have. Maybe if you left it on your counter, went on vacation, you came back, you may have. Most of us haven't, but we knew immediately it's an orange.
That's what AI is doing. It's actually the same process. So you've seen 1,000 if not more examples of an orange in your life. You've featurized it machine learning term, you know that it has dimpled skin, it's orange, it doesn't have to be, it could be green, it's generally around and in your brain is an archetype of an orange and when the image popped up you've matched it. That's what AI and machine learning at scale does.
You give lots of examples and then it makes a prediction. And the ability to do that at massive scale where we have essentially unlimited compute power today and the world is fully interconnected is what's unlocking that 4th industrial revolution and that's where we sit and what we're doing. So how do brands manage their digital business today? This is super problematic. We've talked a bit about how websites don't work, why messaging is the future, what are we doing today?
So we would argue that today, and we're all doing this, we look at the page views, we look at click stream, we're looking at the Google Analytics. We're using these proxies that websites and apps develop. They're completely artificial to actually and trying to understand that someone likes something, did they not like something, is this what they want. It's all a proxy. It's because that interface, we've become obsessed with the screen, the screens in our pockets and we've built businesses in accordance to those screens and those businesses don't work.
If you look at the adoption of just e commerce in the U. S, the share of retail that's online is still under 16% and Amazon owns half of that. And then you have eBay and a few others and then you have a couple of percentage points that everyone else is fighting over. They don't work. It's interesting, I was just in Australia last week and Australia share of retail that's online is 6%.
Amazon isn't there. They actually just entered the market for physical goods. So I would actually argue that it is evident there that the web and the apps aren't working there at all. And Amazon success is not because they have the best website. I like to think I built a great search experience, a great website.
It's because they really understand the consumer end to end, it's convenience, it's selection, it's not the web, it's not the app, it's in some ways in spite of it. So we think there's a better way. There's a better way to understand what consumers want. And I think we're now just starting to understand consumer behavior. So I'll just throw some numbers for you.
We want to be connected all the time. So 100,000,000,000 messages sent on WhatsApp and Facebook and Instagram every day, 100,000,000,000. There's 13,000,000, nearly 13,000,000 texts sent every minute. This number I find fascinating. Talk about market growth.
The next few years, 470,000,000 new people are going to come into Messenger. That's the U. S, U. K. And France combined.
Talk about new people walking into the store. So this is not a feature. This is fundamentally the way people want to communicate. People also want to oh, sorry, 90% of 1,000,000,000 people in WeChat have made purchases. So in China where you don't have that legacy, we actually see 36% of retail sales online.
And this is all conversational commerce, powerful. So you also want personalization. So we all want things the way we want them. 40% people say they'll spend more or they plan to spend more money when their service is personalized and 80% are more likely to do business with you if they believe the experience would be personalized. So this is where things start to come together.
You have messaging, you have AI, can actually start to understand intent. And this is what the concept of what we're doing really is. We're using messaging as the vehicle and it's the paradigm shift in terms of the experience, but fundamentally it's to understand intent. This is why when Rob mentioned omni channel is kind of a failure, it's not a focus on the channel, It's actually a focus on the intent, what a consumer wants. So what's an intent?
Here's an example of some intents. I need an inflatable unicorn. So I live in Seattle. This is all the rage last year, these big giant inflatable unicorns out on
the lake. I want spelunking gear.
I need a new coat for my labrador. These are not things that you can easily build a search browse navigation experience around. These are desires, needs, their intents. AI conversations allow us to understand them and recognize them. So there are kind of a few kinds of intent the way we think about it at the live person.
It's a logical intent, which is what, where, when I want to buy a plane ticket to Hawaii for Monday 15th. And then there's also an emotional intent. So it's for who? Who is this for and why? What's the driver?
And we think about those things separately and we try to understand both of them. So why is it important? I think we can start to understand why is it important to understand intent? Why is it important to shift from page views and click streams and ref tags and all those proxies to actually understanding intent, because this is the consumer. The consumer is an incredibly diverse mix of people and you actually want to understand the individual wants, needs and desires.
And intense AI and messaging allow us to listen to them at unprecedented levels. So we didn't come here and open a laptop and say great, we built a microsite because websites work so well. We built a microsite for the Investor Day. It's got a great search, great navigation. We've put all the content in, have at it, give you 40 laptops to go and click away at.
You came here to hear us, to talk, to have conversations. Right now you're listening but at lunch we're going to have conversations. It's a better way to do business. It's actually how you want to do business. Messaging is where the action is at right now.
I showed you all those numbers. Messaging, it's in your pocket, It's personal. It's how we're communicating. It's how we want to get it's rude to call someone. Call my daughter, why are you calling me?
Just text me, right? This is where and how we want to communicate today. But it's not the only place. So we're not a messaging company, we're an intent company, we're an AI company, we're a conversational commerce company. In the future, this will include changes in display, ambient experiences, gestures And this is not so far away.
If you start to think about, if you went to CES, it was AI and digital assistants and smart speakers were the rage. If you kind of made a right and you went and looked at what's happening in display technology, you'd have seen a tremendous explosion in the ability to have ambient real time displays. So this is going to accelerate. We're going to be able to sit in our offices, our living room and our cars and have very natural experiences. But underlying them all is understanding intent, being able to have a dialogue.
And that's what we're enabling and what we're building. And what it does is it lets you develop a highly personalized experience for your consumer. So this is the promise when LivePerson was started, when Rob Law and he talked about the history, looked at websites like this doesn't work, this is not one to one marketing. The store is not in my living room. I can't really it's not for me.
And he started a conversational. He invented web chat and started the conversation. It's taken a while to get here. Technology has had to catch up with that vision, the ability to actually recognize intent at scale. But it really is all about creating these personalized experiences and allowing differentiation of your business.
So Rob flipped through some websites. They look the same. I use 5 banks today. There's one that's hit the 1st bank account I opened, have some 401s, my stock plan here at Live Persons on E*TRADE, so I moved a bunch of stuff there. I don't care.
They're all the same, same fees, same service, pay my bills, they look the same. There's really very little differentiation. The way to differentiate today in a globalized world is by being able to connect with your consumers and have an understanding of the values that you share. And the only way to do that in our view is through a conversation. So what at LivePerson, obviously we start from the intent and what we're doing is we actually look at those intents and break them down into different parts of the consumer journey.
We started really in care and support, but we're starting to expand out quite a bit. So it's the entire journey. It's discovery, consideration, transaction, support and then re engagement. And we tell people you can shut down your website, you can shut down your app. It's kind of interesting to have a conversation with business leaders, heads of digital, like how can I not have a website?
What do you mean? Websites are 20 years old in effect. You built amazing businesses before websites. People came into your store, people called you. You had dialogues, you had conversations.
We're re enabling that. You don't need a website. They don't work. The ROI is just not there. So I'll tell you a story.
I kind of hammered home. I'll tell you 2 stories. So I travel a lot. I use a lot of different airlines. I'm on the way to a flight.
This is about 3 months ago and I realized my known traveler number because I don't have the little TSA pre on my boarding pass. So I want to add it. So I won't say the airline. I go to the app. I would start searching in the app.
I can't find navigating, searching. I can't find it. It's not in the settings. I literally go to the web and I type add known traveler number, can't find it. I end up on the website.
I click, I click, I search, I finally find a link that says go to the desktop HTML website to add your known traveler number. It's just crazy. I'm actually commuting. I'm on the road. So I call and I get on hold for 50 minutes, 50.
It's just a disaster. So this is the experience we're building for the same airline now. It's a conversation. Done. It's an Imessage on Apple Business Chat.
It's authenticated. It's my phone number. You know who I am. It's end to end encryption. There's no app to download.
There's no password to forget. There's no app to update. We all look at your phones now, you must have 65 apps that need updating. Done. 6 seconds.
That's the power of recognizing intent. And intent is a deep link to the thing that you want. So at Amazon, we struggled often to build complex shopping missions is what we call them. So shopping for a gift is very hard. I'm sure we all do this.
You go, most people, many people start with Amazon, gift for mom, you get basically a vomit of stuff from mugs to who knows what in the world you want because this is what it's the long tail. It's what people are shopping for across the board. And you might go to jewelry website and try to search and try to browse a conversation. This is what you'd have. You'd call your sister, your brother.
I want a gift for mom. How do I buy? We're building something that looks like this. This is what a retailer can do with conversations. Looking for a gift for my mother-in-law.
Here's my budget. And then you end up in a selection that's personalized for you. It's simple. It's a conversation. This is what you would have done 20 years ago.
And your mom, you wouldn't have, I'm sure we all have the collection of mugs on our counters somewhere or on our desks. So these results are astounding. So when we look at the results of what we're delivering, CSAT is higher, NPS is higher, agent satisfaction is higher, agent attrition is lower. This is one of the things that won me over. Rob, we're talking about me jumping on board, he said, Alex, we lower cost, increase CSAT, increase NPS and agents stay at their jobs long.
And I said, no, they don't. You can't do all those things at the same time. He said, go talk to customers. Go talk to some of them. And I did.
These are real. I just spent a week in Australia talking to 12 customers and we see these results. They're pretty reliable at this point. So the only way to do this at scale though is with AI in conversations. You can't do this at scale.
You can't linearly add agents and add stores. You have to embrace the AI, the 4th industrial revolution. You have to start to understand what it is. So we actually spend a lot of time educating and coaching companies and brands on what is AI, how do you use it. We see companies building new roles.
We have here, Chief AI Officer. Our banking customers have Head VP, SVP of Conversational Banking. We didn't tell them to do that. They discovered on their own. They understand that banking has to be a conversation.
And we're now participating helping them actually figure out what it means. So we talked a bit about this. This is one of our key entry points and we see the latent demand for conversations is tremendous. So when we deploy typically go to an IVR to messaging release, we see within 30 5 within 30 to 45 days, we start to hit 30%. This is without trying.
IVR Deflection is one of our newer offerings in the last 8 months or so. This is you launch it and this is what people want today with little encouragement. A company in Japan, large retailer there in 30 days went to 30%. They're now at 35% deflection. Poof, calls are gone and CSAT is up, agent SAT is up, agent attrition is down, MPS is up.
A lot of folks ask, well, how do I do that? Are you just talking about text? Just we're going to text each other. That seems a little boring. It's not just text.
The web doesn't die. We talk about websites dying. It is conversational design is the new web design. And it has to be thought of as a design process. Designing a dialogue, designing a conversation is a skill.
There's talent. You actually have to bring expertise to bear just the way visual design, just the way folks have spent a lot of time and energy thinking about the layout of their website, their navigation of their app, you have to spend the same amount of time to do that to design great conversations. And this is one of the things we do. We bring experts to bear to help design conversations and our tools help you do that. And really where the rubber hits the road like where this all comes together is we're starting to see mass adoption of automation.
So this is a prediction. I often look at it and I kind of wince at the 2020. So I'm always checking our adoption of automation. And right now in our conversations, in the 100 of millions of conversations that move through our system, we're at over 50% with automation. So this is not far away.
I think we will hit 85% with automation in 2020. It's the only way to scale. Websites don't work. So we've talked a lot about the platform. What is the platform?
So what you're seeing here is like what I call the market texture of our platform. And so the meat is in the center. On the bookends, we have a lot of connectors to all of the major systems. So on my left I'm sorry, my right, there's the consumer experiences. So we connect to all of the major messaging front ends from SMS to Alexa to Google Home, WeChat, LINE, WhatsApp, there is about 15 of these and we are continually adding new ones, custom ones, even businesses who have their own connectors.
So we have an in app connector. So in your app, we can actually we just give you an SDK, you drop it into your app and then you're up and running on messaging. On the other side, the other bookend is integrations with CRMs. So we're not trying to replace all of your business systems, we're trying to facilitate them. So we integrate with your e commerce systems and your sales forces of the world and we bring all that in together.
So you actually have all the data you need make the right decisions. And then in the center is really our tool set. So there's something we call conversation builder and I'll show you a quick screenshot of it. That is the tool where you build the bot. We like to call them automations.
They're much more sophisticated than a basic bot, But it is a tool that allows designers, conversational designers, machine learning and data scientists and then engineers to work independently. We've separated those concerns. I spent a lot of time thinking about this. I built the tool at Alexa that allows you to build skills. We've bought 2 companies that were building companies and we looked at probably 40 or 50.
We thought deeply about this. I've hired the team that built our dialogue manager and conversational designer from Amazon to work with me as well. So this is something we feel is an to work with me as well. So this is something we feel is an incredibly powerful differentiator for us. Conversation Manager, that is the tool that agents use to manage conversations every day.
Conversations flowing and they can manage up to 12, 13, 14 conversations at the same time. Conversations are asynchronous. Some are happening in real time, some are an hour, some might be over days because it's on the consumer's time. That's the really important thing about messaging. We talked about asynchronous.
We're giving the time back to the consumer. And then we have a suite of conversational intelligence tools. I showed you a screen I'll show you a screen in a minute. These are tools that allow you to understand how conversations are working, how intents are working. It's a replacement, full replacement of all those page views and click streams and all those kinds of things and allow you to actually manage your business based on consumer intent.
And the entire platform is underpinned by an AI engine that we refer to as Maven. And it's an open platform. So it's a whole suite of APIs and services. Pretty much anything you see in our platform has an API attached to it. So this is conversation builder.
We actually saw it in the Dominican Republic. Agents are using this. This is a tool that's deployed. This is the screen where a conversational designer interacts what style this is, I'm looking for a pair of shoes and then you actually put the examples, you actually have a dialogue and we actually connect the dialogue to intents that have been defined and APIs that have been defined. And you go through and create your dialogue.
All this is powered by machine learning. So this is not the inputs can be varied. So we can accept anything that a consumer wants around shoes and understand that their intent is actually the desire to buy a shoe, detect that and then drive that dialogue. And And there are different tabs here that allow us, like I said, to separate the concerns so that data scientists can work as data scientists and engineers can work as engineers. And we have a series of analytics all based on intent.
So intent by sentiment, by cost, by agent, by line of business. So those web reports, analytics, page views, click streams, bounce rates are gone. Those are proxies. They're terrible proxies. It's just what someone's doing on a page or a screen.
We actually now can look at when a consumer wants this, x. When a consumer wants a pair of shoes, how are we performing? What agents are best? What bots are best? What areas of the business are best?
What are the in real time, what are the trending differences in how people are asking for Colors, are they asking questions that we've not thought about? Are there trending intents that we can't identify? We have telcos using our intent detector to actually find outages before their infrastructure detects them because people are messaging saying, I think there's a problem with the service. And we actually have an emerging trend intent system that can actually find those things in real time. So Maven is the AI engine, it's a collection of services, it's continuously learning.
So every interaction on our platform is analyzed, We understand the intent, we understand the performance of that intent, we can route based on this and we can actually recommend the next what we call the next best action. We can make those recommendations to the agent. Hey, this is happening. We recommend this. Hey, I have an automation that can take over for you.
Something that we call the tango is actually a fundamental part of the platform where agents can escalate to a bot, a bot can escalate back to an agent and it's this very fluid experience. We never allow a consumer to get stuck. We at whole cost we avoid that death spiral where you want to say representative, representative, representative. So we'll always get you an answer. And if we can't through automation, we'll get you to a human.
And then that human can get a conversation back on track, we'll detect that and we'll allow you to go back to an automation. So that the agents and this is why agent satisfaction goes so high, agents are handling the hard complex problems and things like purchases and password reset and order status and bill payments and all those things, those are all handed by an automation and the agents actually working on hard so the agent is more satisfied. They're actually helping solve people's problems. So why do we win? What do we think of as sort of big differentiators for us?
So 20 years of data, real human to human conversational data. I can tell you when I was at Amazon, we would have killed for that. It took us years to collect the data to improve Alexa and it's still a problem. 20 years of data, you cannot replace that. And we use that data to create our models and build our intelligence.
We've hired experts that I believe are world class. The Chief Scientist who helped me when I was running Amazon search has joined my team. The person who built speaker recognition, biometric identification in Alexa has joined the team. People love to come and solve these problems because they're not working for a behemoth, they're actually working for all of us, for all the services we use every day in our lives. So we've actually been able to attract some amazing talent.
We have a very unique way of thinking about AI and intents and how AI needs to work and collaborate with humans. It's not we're going to replace the humans. We actually have a very unique novel approach and the science that we're building is novel as well. Oops, sorry. We understand messaging at scale.
So to adopt messaging, I think Tom really hit it. This is not just a feature, it's not just drop in chat, you actually have to change your operation to get the benefits. It's a transformation process. We understand what that takes. We're experts in that.
So we really understand the enterprise and we can help a customer move through that journey. And we are fundamentally enterprise ready. This is not a start up. We have high SLAs, security, our operational excellence is, in my opinion, second to none and it's a core, core focus. So what's coming up?
So I'm happy to talk about this over lunch with folks. These are the key areas that we're doubling down on over the next 18 months. So we're building more and more muscle and tools and technology to conversational commerce paradigm. This concept of leaning into automation first, but also empowering humans. So again, additional tools and technologies.
Maven will actually begin to make more and more recommendations to agents in real time. We'll actually detect full responses that are the best possible response, an agent can select those and then every time an positively selects 1, we actually learn that that was the right response and then we can automatically create an automation. So even the bot building becomes automated. The full customer journey, so again, we come out of that care and support world. We are building tools and technologies to enable proactive messaging, the sales and marketing use cases to drive reengagement.
So not just Caremark, but the full customer lifecycle. Sorry. One of the things that's super important for us is this is not a black box solution. So we don't want to just deploy here's a tool and use a tool as is. We actually really believe this is a platform for development.
So a lot more tools, guides, best practices, APIs for the developer community. We really look at this as in fact in some ways kind of a conversational cloud and AI cloud that enables you to extend. So there's going to be things like function as a service, things that allow you to detect and trigger on events. These are the things that allow people to extend the platform and do more. Conversational design is a muscle we really believe we've exercised well over the last number of years.
Again help you design that conversation. How do you think about a dialogue in a way that gets the consumer to what they want in the best possible manner. And then operational excellence, and I touched on that before, we have to be second to none. Our service is becoming a Tier 1 service. It's becoming a mission critical service to our customers.
When it was 10% and it was web chat, it was important not to minimize it. But today, for a lot of our businesses, if we're down, they're down. So we're investing heavily here to make sure we have the right infrastructure, the right monitoring, the right security. And we're doing in my opinion, we are the market leader there. So that's the talk I have for you.
And I think we're going to do a Q and A. We're going to do Q and A? We're going to do Q and A later, okay.
So, thank you.
And, I'm glad you all came. I would like to I'm introducing Neely O'Curelli who runs our enterprise business.
Thanks
Alex. Hey everyone. I'm Manlio Corelli. I lead the enterprise business at LivePerson. So what we believe, we believe you should be able to type into your phone or shout out in your living room what you want from a brand and get it back.
Boom. Magic. No waiting on hold. No hard websites to use. Now our job, our job in enterprise is to distribute that future to the world's consumers through our work with the big brands.
And my intention today is to show you how we're winning and how we're helping LivePerson grow even faster. First a story, see some faces out there. Do not judge the hair. I have 3 kids. There was a lot happening that morning.
Now, 3 years ago, before I joined LivePerson, we were in the middle of selling my last company, a voice and messaging company. And I was starting to think about what I wanted to do next. And one morning, one Saturday morning, my son and I were downstairs in the house and we were doing Legos together as we do many Saturday. And there was a missing piece at a critical point in the construction journey. Looked everywhere, couldn't find it, was it in the packaging, went to Lego's website, my son and I, to figure out what to do.
Few minutes go by as I'm fumbling around with this mobile site, figuring out who to contact, how to get this little missing engine for that very expensive Lego set. I'm emailing them. Finally, I'm about to call them and my son is watching my face and then I feel this little hand on my shoulder and he says, dad, dad, just text them. Just text them. And I said that's a pretty good idea Nicholas.
I think I want to work on that. So that profoundly simple concept, that's what we're delivering at LivePerson successfully to some of the biggest, most complex operating environments on earth. I'm talking about the big telcos, the big banks, the big travel firms, large high-tech firms. These verticals, they are targets because within them, they have tens of thousands of agents at these brands. They are handling millions and millions of phone calls.
They run some of the largest and most complex digital commerce operations on earth. And they're under intense pressure from their peers, from new disruptive entrants. Their customer care and marketing budgets are each measured Now within those verticals at enterprise, how we think about the named accounts we target, we use employee size as a proxy. So 5,000 employees and up, I am targeting those businesses within those industry. Underneath that, you'll hear from my colleague shortly Avi Kedmi that's handled within our commercial group.
The TAM, the bottoms up go to market opportunity in enterprise. Inside that named account list is $37,000,000,000 Now, the first big advantage we have in winning that $37,000,000,000 is the massive top line and bottom line value we consistently deliver to our enterprise customers. 1st, sales impact. Conversion, You guys heard it earlier today. Conversion is consistently higher in messaging than over the web.
Period. Case closed. Just want to tell a quick story about a major telco. They launched the ability to purchase and upgrade handsets over Facebook Messenger with us and they called me a couple weeks after the launch and they said you know a funny thing we've worked on our website for 12 years. 12 years.
In a few weeks with Facebook Messenger and automation we are beating the conversion rate on our website. 12 years of effort trumped in a few weeks through the conversational commerce interface. 2nd, it is vastly cheaper to run a messaging operation versus a voice operation. For all those reasons Alex described earlier, This is a massive opportunity for cost takeout in businesses that spend upwards of $1,000,000,000 a year running these voice operations. And like all great solutions, this adds value up and down the value chain.
Consumers, 20% more satisfied with messaging interactions than voice consistently across our customer base. This is where they prefer to communicate. Agents, agents who use messaging quit less as you heard. They also get sick less, show up for work more often. Now that top in line, bottom line value proposition that I described earlier, that drives relationships for us across the C suite, across digital, care, marketing, IT, all the constituencies that come together to make things happen in care and sales and marketing.
This creates high expansion opportunity for our enterprise business. It also makes us incredibly tough to dislodge once we're in there. Now the second big reason, the second big reason we win is that we're uniquely positioned to deliver that value I talked about earlier. Think about what's needed for this, for conversational commerce, this rich experience that Alex showed you earlier. You've got to wire in to all of these different messaging endpoints.
You've got to be able to develop and run automation across all of these messaging endpoints. You've got to connect into the myriad back end systems that are necessary for people to actually complete transactions and get what they want done. You've got to have a console for human agents to supervise, monitor and jump in to make things better where AI can't. This is a lot of stuff. The good news is this is exactly what we have built over the last few years at LivePerson.
We're far ahead of the competition on this and the hundreds of brands we've been running on conversational commerce are creating this virtuous cycle that are keeping us a step ahead. We've got more data, more know how, more data, more know how. For our competition in one corner, we've got an aging set of voice incumbents just figuring out their migration from on premise to the cloud. They have not made the leap to conversational. That wasn't the path that they chose.
They're missing huge critical pieces to do what we do like an open platform you can wire all those systems into or even the ability for an agent to handle multiple messaging conversations at the same time. These are 20 year old systems in many cases. They just assumed you talk to 1 person at a time. Huge difference. In the other corner, we also have a set of startups and AI players and they're working to solve this problem primarily through automation.
They aren't set up to address the fact that the way to scale automation is through the contact center and in fact turning the agents in the contact center to bot managers. All that complexity and the tough operational requirements we've built over the years are not part of their picture today. Let's do some customer stories. I think that's a good way to bring this to life. 1st, take our work at one of the largest banks in North America.
Now what I love about this bank is in 1 year, less than 1 year actually, they got to the scale that took our generation 1 conversational commerce customers 2 years to reach. They're running at scale in their banking application. They're running at scale on their website. They're working with customers over SMS. They're about to launch Apple Business Chat and most recently they launched Google's answer to Apple Business Chat, Google Rich Business Messenger.
And they did that, that launch in 12 weeks. That is the headline. That is why I share this story with you In a traditionally slow moving industry like banking, we are seeing major players take to market these solutions in 12 weeks. They are looking to move fast to capture this opportunity and they are looking for partners with the know how and the tech that can keep up. 2nd story I want to share.
This is about a European telco who launched conversational commerce over WhatsApp. Now what's cool about this, they're over in Europe. 90 something percent of their customer base already has WhatsApp and is a heavy user of That's where they spend their life. On day 1 of their launch, day 1, they shifted 10% of their contact volume over to WhatsApp where it can be handled more effectively. It just woke up that day.
Boom. It happened. How? How? So here's how.
Telcos can pre install their phone numbers on folks' phones. So it's easy to reach them. That phone number is also their WhatsApp ID. So when this telco joined WhatsApp, its consumers around Europe woke up and got an alert that their phone company is now on WhatsApp. Now what do you think they do the next time they need to reach that telco for service or to make a purchase.
It's right there in the application they use more than any other application on their phone. The headline here is the incredible scale that's possible on day 1 with some of these new rich messaging experiences that Alex showed you earlier. It's super important to have a partner like a live person that can keep up and manage that scale. 3rd we've got a top 10 retailer that really shows the scale we can operate at with automation. We've been a longtime partner of this retailer.
We now have years data that show us when their consumers experience the conversational commerce interface. They buy at 2 times the rate they do on their traditional website. It's incredible. So the obvious question is, let's give this to everybody. Let's make that our website.
Now one of the holdbacks classically on that is that's tough to manage with humans only. The capacity, the scale, etcetera. And it really shows particularly if you want to attack the sales and marketing use case why automation is so important. So this is what we solved for the brand. And here you see one example of this.
This is a bot that was designed to sell barbecues that contains fully resolves 75% of the conversations that people have with it and sells a boatload of barbecues, more barbecues than the website alone ever sold. There is no limiter now on how this brand can use conversational commerce for barbecue sales. It can attach it to its sales, its marketing, its ad units. The headline here is that scale is not possible without agents supervising the automation, without that agents to bot managers operating model that Rob and Alex talked about. It's crucial that we take these stories out to the world so that we can grow our company even faster.
2 main growth pillars that I want to talk to you about. 1 pillar is the outbound sales machine and the second pillar is how we scale conversational commerce in our customer base through our transformation model. So first the outbound selling model. So here we believe large enterprises pretty much all of them over the next 12 to 18 months are going to make some decisions about their conversational commerce partners. We want to be in every one of those conversations.
We are using a combination of SDRs, channel partners, new logo hunters and our marketing events like we're going to have in this room tomorrow to go out and cover that market right away. Now the growth hack here, the growth hack is the unique marketing events that we're funneling all of these prospects into. Every one of these global events we've done has resulted in a landmark transformational deal for LivePerson. 40% of the folks that come make a purchase for conversational commerce. These are not marketing events.
In fact, LivePerson's total airtime at these events is probably about half an hour to 40 minutes of the day. These are our customers sharing their stories about what they built, of what they built first with our software with conversational commerce. These are our customers forming their own peer support group for their journey to conversational commerce. There is nothing else out there like it for them to participate in and it is a real competitive advantage for LivePerson. 2nd, this transformation model.
So for the customers we have on board, our goal is to make them wildly successful, wildly successful with conversational commerce. And the headline here is that we've built a transformation model based on what is now 100 of deployments, 100 of deployments and we've created best practices and templates using our data and experience for each vertical that we This is a very important piece of special sauce for LivePerson as well as the partners that we go to market with. And it's another example of how our market and technology leadership combined to keep us a step ahead that virtuous cycle I talked about earlier. We are building on these advantages and creating pipeline at a rate that is unprecedented for LivePerson. This is the biggest sales pipeline the company has ever generated.
And we have implemented rigorous, rigorous, rigorous, rigorous daily and weekly structures to make sure that this pipeline is of high quality and that is progressing at the appropriate rate.
Sorry here.
Sorry, little slide issue. So here you can see the impact of our transformation model on our business, ARPU, revenue retention, all moving in the right direction quickly. Conversational commerce consistently grows, retains our customer base and we are just getting started. With that kind of opportunity and the repeatable model that I talked about, you invest. So we've begun adding capacity to drive growth across our business both for new logos and for our existing customers.
It's already paying off. Now, a story that I think brings these numbers to life is my favorite Q1 deal. This is a deal with a major airline, 3 year deal upwards of $5,000,000 that we signed start to finish in less than 90 days. And the way it happened is these pipeline generators are SDRs reached out cold to this airline, got them to a marketing event in Dallas where they heard from their peers in travel telecommunications quick service restaurants about how they are innovating in the consumer experience and they said this sounds amazing. And we sat with them and we showed them that transformation model how we can move them from A to B and they had the confidence to move forward in less than 90 days start to finish with that contract that I described earlier.
That was one of 2 deals we did like that in Q1 and I think it's really emblematic of how this machine is coming together. The momentum is accelerating on all the key measures that we use to manage enterprise. We are only just getting started. Just look at some of the amazing brands that we work with. Just look out.
A quick family story. My sister is a doctor and for years years years I've heard to no end from my parents about all the amazing stuff that my sister has done. Angela is curing osteoporosis. What have you done? I've never understood really what I've done with my parents And now I am the golden boy because mom and dad don't have to call their phone company or their bank anymore because of the work we're doing.
The biggest, most valuable, most popular brands on earth, that is the customer base that we are building here. To sum it all up, to sum it all up, we believe over the next 12 to 18 months, large enterprises are going to make crucial buying decisions about conversational commerce. We aim to meet those brands by covering the market with our SDRs, our channel partners and our new logo hunters, bringing them to our events that are proven to accelerate deals and expand deals. We have the leading platform that uniquely brings together all those myriad endpoints you saw earlier, all of the back end systems, all of the automation, the human agents, the tools for them necessary to make all of that work. And we are prepared with a proven operating model to transform our customers' business.
Thank you. Before I go, I want to introduce my colleague, Avi Kedni, who runs our amazing commercial business. Thank you, everyone. See you at lunch.
Sure. So few words about
me, I see some faces that I think are I'm familiar with. So 7 years at LivePerson. My first job was to build LiveEngage. I was the VP product for the big team that was building LiveEngage. My second job was to convince all our clients to move to LiveEngage.
A lot of you know that that was quite of a journey. And a year ago, I took a new journey which is how can we make the world of small midsized businesses as successful as our enterprise business and it's been quite of a journey and love to share a bit about it. So, first, Maglio talked about anything that's 5,000 employee businesses and below globally is part of the commercial business unit and in order to handle these types of clients well, we split them to 3 segments, high touch, low touch and small businesses. Our key success today and our key focus is on the high touch area. Our TAM, 5,000,000,000 for small business and you can see the 18,000,000,000 for mid market.
So how do we calculate, How do we get to these numbers? We basically use systems that provide us a list of all brands that have minimum budgets or minimum spend in each of these segments and we filter them only to the verticals where we are mostly focused and we just multiply by the ARPU we have on these segments. So this is how we got to these numbers. We operate differently in each of these segments. Small business is more transactional and high touch is more around consultative sales and account based marketing and all of the, I would call it basic marketing tricks to get clients to come in and be interested.
There's something very interesting in working with a company that the software is the software we're using while connecting with our clients. So for years, you're familiar, if you're interested in buying a software, you go through the web, you search, they try to catch you, bring you to their website, then they show you collateral of content, you fill out a form, if you're lucky and you can find the chat, you chat with them and then someone will get back to you, take them a day, take them 3 days. As part of the commercial team, in the last year what we've done is we really transformed how prospects can connect with us. If you go today and I encourage you later all just go to liveperson.com and you would see that we don't push you towards chatting with us over the website. We're moving you to a mobile experience.
We'll take you from your web page. If you're an iPhone, we'll take you to an Apple Business Chat experience. If we know you also have a WhatsApp on your phone, during that conversation, we will flip you to move that conversation to WhatsApp and all of these channels you will experience the same bot and automation that will help you learn more about the product and eventually what we want prospects to say is I want that in my business and that's what's happening. So the bottom line, we're seeing 20% increase in our conversion rate and 30% decrease in the sales cycle because reaching out to people over e mail is something that's very hard to do versus a push notification into their SMS or phone. Just like the enterprise team, we're growing from SDRs that are the pipeline generators to quota carrying.
The demand has increased in a way that we are every month or 2 we got to add more capacity. We have seen in Q1 this year double the amount of leads versus q1 last year. This means that on a daily basis, there are a lot of brands that are coming in and are interested in what we're doing and want to talk to us of how we can influence their business. And this is a machine that you have to have ready for them to help them go through the stage. It's very different than enterprise.
Some numbers in our world, you can see the ARPU between the segments. I'm proud on all the retention rates. The big thing immediately we've done when we grab this group to be together and to fuel it for growth is as you all know in SaaS, it's great when you're selling but if the bucket is leaking, it's not a great business. And so we're having better and better retention rate across the board every quarter and we are set well for high growth. This is what drives the ARPU.
When I try to explain to people what's the difference between chat and messaging, I take 2 circles. The small circle is chat. You got to go to a website and you got to find a chat and only if you need help, you will chat, right? That's the volume of opportunities we have as LivePerson. On messaging, all these messaging channels are available 20 fourseven.
The floodgates are open. You all now can go to Facebook Messenger and just send a message to a live person or all of you now can go to Apple Business Chat on your iPhone, search Verizon or Home Depot or Lowe's or Amex and many many others and just send a message to them. It means that the circle of the volume of interaction massively increased. And when it's massively increased, this is where we'll see the growth with these channels and the clients. And as part of that growth is also when the floodgate is open, they need AI because just like everyone coming to your website can't be greeted by personal by human, same goes for all these messaging channels.
Someone comes in the middle of the night, there's an automation that can take care of some of the stuff and in many cases like Alex talked, 85% -ninety percent eventually can take care of by automation. The world of go on back. Sorry. So we're gearing up towards a great 2019. My goal is that the commercial team will be as impactful as the enterprise.
So we have an updated focus on it. We are seeing great results as someone asked on the last investor call, how is the mid market doing and Rob answered back very, very, very, very, if anyone reads it very, very, very well. So we are really seeing great results and these numbers are just the start. One piece that I want to put out there that is very interesting in the commercial business are partners. There are many businesses around the globe that are trying to find how can they increase their revenues and the services that they are providing their clients whether it's BPOs, digital agencies, VARs, you name it.
We are getting between 5 to 10 partners signed up every week to start reselling us. So although we are increasing our quota carrying, all of these partners are really sales rep that we don't pay for and are out there selling and it's across the world like you name a country, we have a partner that's reselling us. And these numbers are again just to start. We've launched also about a month ago a new system for our partners to log in, to find all the information they need, how to sell our products, how to implement them and it's exciting. Those almost every day or 2 a deal that's coming just throughout these partners reselling.
Last, I think on enterprise it's clear there is no competition, right? But in the commercial world, there are more competitors and some of them are even in a hyper growth mode. So we are 1st and foremost trying we will try to understand who they are and what's their unique play and tackle it. What we're seeing is we're seeing low cost providers, someone selling just SMS, turning your 1800 to SMS enabled, some are just let's enable you on WhatsApp, some are bot startup that's just saying who needs a human, let's just focus on automation, we'll solve all your problems. And the middle one is the suite providers.
These are the CRMs that's been out there for a long time and they're adding these channels. We win when someone takes conversational commerce seriously. And if they don't take it seriously at the first time and select someone else, they come back and we see it a lot. We win because we have all the channels and it's not easy to get access to all the channels with all the features that it works well with the regulation across the globe. We win because eventually the conversation builder that you've seen a bit in the demo and Alex talked about is the best tool to build automation in the world today.
We had a client, a prospect about 2 months ago. They picked a competitor and they came back a month after saying it was a great toy but we really need to move our business to be conversational. We thought we can just do it through a few drag and drop and everything will be easy. Now we understand there's more heavy lifting around it and they came back actually 3 days ago, they signed with us 2.5x larger deal than what they pay the competitor. So they understand the value.
Sometimes it takes time but they understand the value. Security is a big aspect when someone has personal information that their customers are having inside. The last piece is our expertise. If you ask me a lot of the people that are I don't know if they're new to the world of conversation commerce, this is not yet another channel. This is a transformation just like 10, 20 years ago, a business said, wow, I need a website but not only some few nice pages, I need to connect it to all my systems.
And this is a journey. Our expertise allow them very quickly to have the path to do it the right way and to scale with it correctly while their whole org is in agreement to do it versus it's just a pocket and some messages going back and forth. So I'll leave you with that. The commercial focus is fairly new, it's about a year. We are seeing tremendous results.
We feel we're just starting. This is a machine we're building from the lead towards all the way to signing and implementing these clients. And I believe that already this year the commercial financially will be another growth engine just like enterprise. So I hope it was relevant for you and I'm asking Chris to come. I think Chris has all the slides with the data that you were waiting for.
I'm struck even as an employee when you get to sit through the presentations that we've gone through and like Alex, I've been here now for about a year. Just reflecting on how much has been accomplished in such a shorter time, but even more exciting when you look at some of the slides that have been discussed and you heard from our customers what's ahead. And then at the same time over that period, there are so many new faces in this room that I've come to know and then the ones that we've been working with even longer that have been influential in making today happen I want to thank you for that now. You heard from Rob today our vision that helped to create the conversational commerce industry. Now let's look at what we've achieved over those past 2 years.
We landed bellwether customers in each industry and in each region of the globe that as you heard now serve as our references. We built out broad technology ecosystems of capabilities. As you've seen today, we've attracted the brightest AI talent in the industry. We forged relationships with literally the world's largest technology and messaging companies. And we've partnered with expert systems integrators for go to market scale and even more credibility and the results have been nothing short of astounding.
From 0% Enterprise Messaging Adoption on our platform in 2016 to over 45% exiting the Q1 of 2019. And from 0% automation integrations on the platform to as you heard from Alex, over 50% at the end of the Q1 of 2019. And as this chart depicts and many others will show, that pace of innovation and partnership and customer adoption continues to accelerate. You can directly see the impact of our progress through our messaging volumes. Since going live early on the platform in 2016, our platform 1,000,000 conversations In the next 12 months, it processed over 20,000,000 conversations, a 10x increase.
And we've continued to see that rate of growth extend over time, which is also a testament to the inherent leverage of the platform. This combination of rapid ecosystem development and customer adoption and messaging growth just reinforces the massive opportunity that we have, an opportunity that we've conservatively sized at $60,000,000,000 We calculated the opportunity by actually starting with our own opportunity database and you heard from Manlio and Avi, we segmented that customer set by size of customer, by industry vertical and by geography. You heard from Alex today how the products and the technologies that we're building will serve as the foundation for this new industry. A foundation that we see won't just sustain our competitive lead but will actually extend it. You heard from our customers and our partners that validated the transformations that we're driving.
And as Avi and Manlio shared we're focused on building the right go to market capacity so that we can capitalize on this significant opportunity. And the interest in LivePerson is rising sharply as you saw from many of the pipeline leading indicators. But it's not our goal to just participate in this massive market. It's our goal to own it, to be the very largest company in this new conversational commerce economy. So now let's dig in to look at what it takes to earn 10%, 30%, maybe even 50% of this market.
We have 4 core growth strategies that we've identified as a company and they span across enterprise, mid market and SMB and they leverage the strengths of the company. First, we'll go deep with existing customers in care. 2nd, we'll aggressively go after new customers in care. 3rd, we'll expand beyond customer care use cases into sales and marketing use cases, brick and mortar use cases and new categories. And 4th, we'll continue to introduce new products.
Our first beachhead as many of you are aware was actually in customer care And care has proven to be a very valuable starting point because there are over 270,000,000,000 phone calls each year made to 1-eight hundred numbers that we're actively working to transition into messaging on our platform. We see this as a $2,000,000,000 opportunity in and of itself just on our existing base. And as this cohort performance demonstrates, we've seen Care be a powerful launching off point with our customers. We captured volume trends for all of our messaging customers on our platform and then we broke them out into cohorts by quarter based upon when they went live onto the is that both the mean and the median compounded quarterly growth rate have exceeded 80% each in growth and we're focused on continuing that trend line up and to the right. So how do we do that?
Welcome to our Golden Grid. As many of you aware, one of our strategies is to continue to bring endpoints to our brands to be able to connect where anywhere their consumers are today. And once we're successful in doing that, once we're successful in bringing an endpoint to one of our brands, we then roll out adoption programs to drive usage. One of the ways that we measure our own success and our own progress on that front is through this grid. The y axis axis is representative of all of our customers.
In this case, they're arranged by industry vertical. And then along the x axis are all of the endpoints that are available to them on the platform, all 13 of them. And as you look at the chart, you'll see the likes of Apple Business Chat and Google Rich Business Messenger, WhatsApp, SMS, in app, Alexa and many others. And then the boxes and the relative fill within the boxes demonstrates our penetration of endpoints within that industry vertical. Our focus is on filling each and every one of these boxes completely Because when we do, that will drive dramatic revenue growth because as you know, the majority of our revenue model is based upon interactions.
The takeaway here is that the opportunity just this opportunity alone is massive. How big? By our measurements, it's $1,000,000,000 opportunity just by converting our enterprise customers. Our enterprise customers to 5 out of the 13 endpoints. And as we highlight each quarter with our ARPU trends and the fact that we've been growing greater than 20% over the last 4 quarters, this is what's happening behind the scenes.
So let's walk up from left to right and go through some of the dynamics. 1st, we still have a large number of customers, too many, we'd argue, still not on messaging. And as a baseline, their average ARPU is $300,000 Now when we're successful and we take one of those customers and we bring them on to messaging, we activate an endpoint, we see their ARPU go from $300,000 to $900,000 a 3x increase. Once we're successful in demonstrating value and we've proven it out through outcomes, we then add an additional endpoint. And when we do that, we see the ARPU climb by another 75% to 1,600,000 when there are 2 endpoints activated on the platform.
We have customers with 3 endpoints whose average ARPU is 1,700,000. Further, we have customers with 4 endpoints activated on the platform. Their ARPU is 2 times that of those with 2 endpoints at 3,300,000 And finally, we have customers with 5 endpoints activated on the platform whose average ARPU is $5,500,000 In short, we have an opportunity to increase our ARPU by over 18 times and that's just by taking our existing enterprise customers to 5 out of the 13 endpoints. But we'll also help our customers and partners promote messaging as an alternative to voice. We know that most consumers today, majority of us even probably in the room, weren't even aware that this was really an option at scale.
But what we've proven, as you heard from Tom earlier today, that when you demonstrate it's an option, messaging volumes soar. In fact, when customers place messaging as an option inside their IVR that interactive voice response system or they advertise or promote it as an option, we see on average a 30% increase in messaging volumes. And now we're adding significant sales and technical delivery capacity to go after these opportunities. What you see here is where we'll be devoting the investments in our anticipated surge in client partners and technical delivery experts. We'll go from 141 to 197, a 40% increase.
And our plan that we've continued to execute on well is to complete that hiring by the end of the first half of this year to maximize in year yield, but more importantly, to set ourselves up for strong productivity entering 2020. And although we could achieve hyper growth rates just by successfully selling into the existing base, that wouldn't win us the market. So the second part of our sales strategy as I mentioned is to go after new customers. And that part of the sales motion is actually already been well underway. You recall that how we ended 2018, we increased the number of new customers that we're doing business with by 50% year over year.
And then exiting the Q1 of 2019, we accelerated that growth rate to 90% year over year growth in the number of new customers that we're working with. And as you heard, that's been on the back of investments in sales development reps, SDRs, hunters and channel partner managers. Now based upon our TAM analysis, we think we've penetrated less than 5% of the market. But what we know is that our opportunity pipelines are outpacing our sales capacity. So it's become very necessary for us to grow the new customer sales team.
Specifically, we'll increase that team by about 140% adding 76 Hunters and new pipeline generators. Here too, you can see the proportionality of where we'll add those resources, where the majority will be directed to Enterprise, North America, EMEA and mid market. Part of this investment though will also allow us to go after new regions where we see large market opportunities. And up to this point, we've been very successful selling into what I'll call the major markets and can continue to be quite successful. Major markets being North America, Central and Western Europe, Australia and Japan.
But now this will give us an extended reach into the emerging markets. We'll be investing in Latin America, in Eastern Europe, in Southeast Asia and in India. And these are markets where there's a rapid acceleration of social and buying ecosystems that plays perfectly into our product offering. And as mentioned, this will also allow us to go deeper into the existing verticals where we have strengths but more importantly to build a presence in new ones. We'll continue to have heavy focus in those areas that were strongest, Financial Services, Telcos and Consumer and Retail.
But now this will bring a focus to be able to build share in healthcare, in hospitality and in travel just to name a few. We see this as a massive opportunity as well. As I mentioned, we'll also be investing in channel partners to be able to complement the investment we have in our direct sales force. Today, about 1 third of our global bookings are influenced by channel partners. We're quite happy with the balance that we've struck in Europe.
So the majority of our investments will be going towards North America and Asia Pacific. In North America, we've modeled channel influence sales to go from 16% to 41% by the end of 2021. And then in Asia Pacific, we've modeled the increase to go from 17% to 54%. And to support these customers, we've rolled out LivePerson Institute, which are tailored programs and curriculums specific to conversational commerce and the transformation model that you've heard Manlio speak to earlier. And this is to build and ramp their productivity.
Moving to our 3rd growth strategy, as you heard from many of the presenters today, we're seeing new and exciting use cases emerge on the platform that we hadn't even envisioned. We think that could be a $24,000,000,000 opportunity. And we expect that these new use cases will actually come to parity with those on care today both growing at a dynamic rate. And in addition to traditional sales and marketing use cases, we see opportunities to take conversational experiences to brick and mortar operations and not just for retail, but for telcos, financial services and hospitality as well. Use cases that we haven't even seen before are emerging like those you heard from Aramark and Brew to You.
And that's important because that's where the big budgets are. That allows us to break out of the mold of while doing good work and helping optimize the bottom line to now participate in how we drive their top line growth. LivePerson has been our product led company since its early days and will continue to be. We have a history of creating and leading through innovation in markets. And as you heard from Alex, this new shift toward intent driven businesses where the powering of humans and AI working in tandem that's linked to our product roadmap now.
It's totally aligned to where this opportunity will unlock a $10,000,000,000 market for us. Some of the areas that we'll be innovating in will be leveraging our machine learning expertise to build best in class automations for end users. We'll identify new revenue opportunities by building out more outcome based use cases. And we'll continue to bring new endpoints onto the platform. And we'll complement our organic investment in these strategies with our capital allocation plan.
As many of you know, in the Q1 of 2019 we successfully completed our convertible debt offering adding $230,000,000 of financial flexibility. We will continue to invest both organically and inorganically in the areas that advance the core platform and allow us to access new markets more rapidly. The three areas of focus will be in automations, expanding the number of use cases and acquiring skills in new industries that we are deep in today. Now bringing this all together, we see multiple paths to accelerate our growth rates well beyond 20% while continuing to run at long term profitability, the combination of which will achieve the rule of 40. On the back of a second half accelerated growth rate, we're modeling for 2020 to be at least 20% revenue growth with 300 to 500 basis points of adjusted EBITDA margin expansion.
And with that momentum, we see that the markets, our capabilities and our capacity could support a longer term growth model of greater than 25% with adjusted EBITDA margins in excess of 15%. Now achieving just 1% of the $60,000,000,000 TAM would have us well beyond these growth rates. But what I can tell you is that the leaders that you've heard from today and the employees behind us, we're not here for a 1% TAM capture. Let me just drill a bit deeper into the model itself and we'll have time for this during Q and A and lunch. But as I mentioned, during 2020, we're modeling for 300 to 500 basis points of adjusted EBITDA margin expansion.
We see the efficiencies in 2020 coming from sales and marketing and G and A while continuing to invest in product. And then over the longer term, our leverage will come from a continued ramping of sales reps, our reach being found from a channel perspective, massive automations in the back office and scale from our globalized footprint. Now, we're acutely aware that this could be nothing more than a spreadsheet exercise. If you didn't have a management system and a management team to back it up with execution. In late 2018, we embarked on a process as a company to align every single employee's goals to the long term priorities of our company.
And every one of those goals are underpinned by a set of metrics. We call them the 12 diamonds. And every day our management system is measuring the performance of those predictive metrics, those diamonds, relative to our short, mid and long term goals. And we take it down to the very lowest common denominator, down to the employee and down to the customer outcome. And we report on it every single week through an automated management system.
It's actually text based and it's conversational. Now before we wrap up to take your Q and A, let me do my best to wrap up with I think some of the key themes for today that we'd want you to walk away with. First, the opportunity itself is massive. It's growing but it's poised for transformation as you heard from our customers. 2nd, we have a leading platform that's able to capitalize on this opportunity right now, not just with existing customers but with new customers as well.
And as you heard from Alex, this is not a technology group that's content to sit on our technological lead. We're investing to extend it. We have multiple paths to be able to achieve well beyond 20% growth with powerful leverage attributes that allow us to continue to invest for growth but also show margin expansion. And that as we last talked about and I think most importantly, we've aligned the management system so that the achievement of our long term model isn't just the exercise from the speakers that you heard up here on stage today. It's actually owned by every single employee in our company right now.
They could tell you what our momentum score is in the company. And that's pretty powerful. So we'll bring some stools on stage. We'll do some Q and A for about 15 minutes then we'll head upstairs for some lunch. But I want to thank you for your time and the devotion you've had to this company.
Thank you very much.
All right. I know you guys are all hungry. So we'll keep this limited to a few questions now and then we'll have plenty of time over lunch to continue the conversation. All right. So please keep yourselves limited for one question.
State your name and your company.
We
have a first question over there.
Sorry, Jackson Ader at JPMorgan.
Quick couple of questions from
our side while you guys get situated. Just 5 minutes. I guess the first would be, how specifically on the sales and marketing or really the headcount hiring in sales. What have you done on the sales structure side like training, ramping, retaining to make sure that you've mechanized this process because you've never done this kind of hiring in the past. So what gives you the confidence that you're going to be able to do this and make it a true sales engine
in 2019? Yes. Maybe I'll start with the numbers and then you can go into the training and stuff. So Jackson, it's good. First of all, great to have JPMorgan here.
One of the things that we spent quite a bit of time discussing in our Q1 earnings call because it was part of what we shared in February as part of our plan that would drive the ramp was our focus on building a recruiting engine. We hired more people in the Q1 than we did all of 2018. The vast majority of those were quota carriers hunters and then engineers in Alex's area. So the focus of the company during the Q1 was on hiring. We saw a ramp from January to February to March where actually March hiring was twice as big as both January February combined.
So that ramp really kicked in. But the focus is on how do we onboard them successfully And we've been able to reduce the amount of time to onboard an employee from 10 days to 5 days, which is pretty meaningful in just a quarter's worth of time. And now we're in high gear of the enabling side, which Manlio can go into
in detail. Yes. So one note as well on the recruiting front, something that I think has had a profound impact on our recruiting is we've created based on who has been successful in the past at Live Person, a very data driven profile that we are hiring against in the market quickly. From an enablement perspective, actually would love Miriam to speak to it. Miriam actually runs that program for us, but we've put in place a structure to rapidly board them, to rapidly certify them in some of the key areas that you've heard about today, conversational design, conversational operations and dependent on their role, the necessary technical services for them to do their job.
You want to put some color on that, Miriam?
Yes. Definitely want to add one big thing and it's one of our principles around being experts. And one thing we do, which is very unique with the enablement is it's not academic. The people who are out there with our customers every single day are the ones bringing back and certifying and enabling our sales force. And this is going to be the game changer for us in terms of the speed to ramp.
We have immediate and most up to date expertise being passed on to our sales force. It's not only the first time enablement that happens right after they start. It is a continuous ongoing development. And very importantly, we're constantly looking at the leading indicators of whether the enablement is actually having an impact and how much it is being applied out in the field.
Great. Thank you. And then just a quick follow-up for Avi on the commercial side. You mentioned that there are a number of startups that are and competitors that are in a hyper growth phase. So they must be doing something right.
And your business is relatively young itself. So how are you what are the competitors doing right and what do you think that your commercial business is going to be able to do better?
Yes, good question. So first, a lot of these questions now that you're asking are on our end, at least on my end, we're less on the creative mode. What I mean by that is this is now an execution play. The demand is already coming. So it's an execution play.
Can we work each piece of the machine and make it every day better in order for that engine to work well. So a lot of my day to day is taking every week some other piece of the machine and redo it from scratch. For example, all of our reps now are using a new tool to quote customers when they want to know the pricing and everything. And instead of 2, 3 days to get a quote in your hand and sending it today in a fraction of 10, 15 seconds, it's in their hand, it's already in their email of the client. So these are the pieces that we're busy and we're AI first in all of these pricing.
Related to the competition, when you have a very good competitor, I look at it, they have 2 pieces that has to work well. 1, the machine, do they know to generate leads to take them to close the deals to implement them to upsell them, etcetera. And the second is their product has competitive advantage, the product is good. Their edge today is on the mid market and small business. They've done a good job on the machine.
But their strategy around the product is a different strategy of us. They're still heavy on web. They're still selling things like getting your knowledge base on a website which is still needed but it's a different strategy than we have. And I think that this is where clients want to go conversational commerce. They come to us when they want, look at it as a channel, another great chat or even messaging over the web then we see more competition.
But we haven't been out there with that updated focus for quite a bit of time and I think now they're seeing that hit coming more and more towards their side.
Thank you, Avi. We'll take our next question.
Thank you. Jonathan with Ion. Can you talk about CapEx plans, when you expect to see leverage from your investments and connected to that when you expect to see the free cash flow turn positive?
Yes, it's a great question. I would expect free cash flow leverage in the second half of twenty twenty.
Okay.
Hi, Koji Keta from Oppenheimer. Thanks for taking my question. Great event. Thank you for having this. This question is for Alex.
You had a slide with it was titled Conversational Commerce Platform. It had some messaging providers on one side and CRM providers and other application providers on the other side. Just thinking 3 to 5 years from now, conversational commerce is going to become really strategic, I think, for a lot of these players within that slide. How do you think or what's the right way to think about how LivePerson will continue its differentiation gap between the messaging providers out there and the other application providers out there that are going to try and take a piece of this conversational pie? So
I don't think there's a gap per se, right? I don't think we don't compete against the messaging providers and we don't compete against the enterprise CRMs. We the whole goal for us is, it is the platform that drives your conversation. It is the place where you build your dialogue, manage your dialogue and then understand how those conversations are impacting your business, how effective they are. So in effect, it is the sort of subsystem that powers the connection between those two sides that you saw on that slide, right?
We are channel agnostic. So wherever a consumer wants to start a conversation, we'll be there. And that's why we've went out and built connectors to 'fifteen, 'sixteen, there's actually others coming in terms of any interface, any way you want to start a natural conversation, a natural experience, natural language conversation. And again, as I said before, even moving beyond messaging into more ambient experiences in the future, 3 5 years out, we will support that. And we will allow those conversations to be fully connected and integrated to your enterprise system.
So if you have a product purchase history in your e commerce, we want to be able to have that exposed as part of the conversation, so you can have a very personalized experience. So it is the place where you drive that consumer Thank you, Alex. Hi, guys.
Thank you, Alex.
Hi, guys. Lucy Tame from Gilder, Guggenheim. I love the chart with the different endpoints running from 0 to 5. So I'm just wondering, how long does it take from a customer to adopt more than one endpoint? And what do they usually adopt first versus second versus third?
And maybe what keeps a client from adopting more than one endpoint? Thank you.
I can start with that. One thing I will say is customers can take different journeys, but we know and they know that their biggest pain point, especially from a service perspective, is in their phone channel, right? So that is generally the best place and where we're seeing a lot of our enterprise customers start. We're also starting to see a lot of commercial go down that path. Now when it comes to the time it takes, there we have gotten to a place where it can be anywhere from days to about 4 to 6 weeks.
And if you think about getting to that 1 to 5, once you get the first one going and you operationalize messaging and conversational commerce, adding the second one and the third one becomes a lot more natural. It's now you're just taking it and expanding it to more channels that your consumers are not conversational on, whether it's the app or their email channels. So once that engine is going and we've operationalized, that's when everything just moves a lot faster. And once you layer in automation, it really starts to scale within a customer. So we've seen brands get to 2, 3, 4 within the year, right?
And there are some that might move a little bit slower. But once we get that first going, it really does roll after that. Any other comments?
I think WhatsApp is big. So if you think about if someone is not doing messaging anywhere in the world that's not North America, they're all trying to go to WhatsApp Live now. And when they go live compared to other channels, it's like that overnight. So they're trying to find the way to jump on the messaging in the right channel to start. Outside of U.
S, WhatsApp clearly is dominating and then once they're there, we're working with them. So just instead of your website chat, just put messaging there, you already have a Facebook page and you're doing here and there a few conversation, just connect it and it goes back. But the acceleration is I think going faster and faster as the market is moving from early adopters to the early majority.
All right. We have time for 1 or 2 more.
Alex Zukin with Piper Jaffray. So I have sort of a 2 part question. First, when I think about the vision that you're laying out for conversational commerce, it makes tremendous sense. When you think about the sunk cost that a lot of the large brands and customers that you're addressing have on their digital strategies today, they're pretty meaningful and have real scale. From a sales cycle perspective, how long does it take?
Because to some extent, you're coming in and you're saying to some of your customers, what you're doing is not working, here's the better thing to do. How long does that process take? And I guess when you think about what you're looking at from a pipeline perspective, there's the confidence that you're seeing to give you that 3 to 5 year kind of accelerating growth trajectory and how much of that's going to be inorganic?
So I think that was a couple of questions. 1, how long does it take? And then 2, how does that how does the incumbent systems that they have, those investments, etcetera, impact the sales cycle? So classically, classically, right, the B2B sales cycle 6 to 9 months, 1 year, etcetera, etcetera. We're at the lower end of that spectrum now.
And in markets like North America, where our investments in that new logo machine I described earlier are fairly mature, we're already down to about 150 day sales cycle in that market. So it's moving pretty quick and I would say poised to go even faster as we start to really crack the code about how to unlock value for brands during the sales cycle. Relative to the incumbent investments, just a quick story I'll share about going out to a major bank that's not a customer yet that is renowned for its customer experience and they are truly great at it. And what really woke their eyes up like a lot of companies they have this huge, huge legacy infrastructure just as you described. They spent 100 of 1,000,000 of dollars over the last decades on this voice system.
And they're about to make a decision like a lot of brands are around migrating this to the cloud, who they're going to go with. There's a very large expense associated with it and what really opened their eyes we actually went out and surveyed their customer base for them and we said something like 70 something percent of your customers without really knowing that much context even of what it is to text the bank know that they would much rather do that than call your bank. Now here you are about to spend $100,000,000 on upgrading this legacy infrastructure and your budget right now for conversational commerce is 0. You're a customer centric bank. You've told us.
Does this make sense? The answer of course is no. So we're talking to that bank now. So there's a real opportunity around those systems particularly with their cycle, their shift to the cloud for us to change that investment dynamic that you talked about earlier.
And just for clarity, Alex, the model is 100% organic.
Yes. We'll take our next question.
Great. Jonathan Keyes, some insights. Super event. Thanks for having it. And I'll follow the instructions just limit my question to one This question is more strategic.
It's for Robert. You experienced from radical transformation from voice to web chat to now messaging. I guess in the nature of 4th Industrial Revolution here and also that sounds like a lot of this conversational commerce will take place in the near to midterm. What do you see long term that could be disruptive to which you have now, especially since you've experienced that yourself with what you've offered? Thanks.
So I mean, if I go out all the way to the end of where I see this play out is every endpoint, although they're available today, still a small group of us, like many people in this room have used Apple Business Chat? Probably a very few people. So there is some things that are missing right now that we are actually building with Maven like discovery engines. How can you go into an Apple business chat and discover a brand and get the brands. And so the end goal of this is I think we're hoping that Maven becomes more like an Alexa and it sits across these endpoints and enables consumers to engage with that conversational user experience and then also connect with brands and other things.
So the thing is here, what we have on our side right now is we're just getting going. And yet there's a lot of demand in the market. Like I said, very few of us have even messaged through Apple Business Chat or Facebook yet, but that's all moving in a very quick order. Apple, Google, Facebook are betting big on making sure that those front ends become very, very vibrant. And there is things we can't talk about, but that they are going to be promoting those front ends so brands will come in.
Every brand in the world will have to be on Apple Business Chat. No way are you going to let your competitor be there and you are not on Apple Business Chat. Now you are going to need a platform to get there. And that's what we provide and the experience to do AI and human interaction. So the end goal is 5,000,000,000 endpoints, which is what's out there on mobile devices, will become enabled for conversational commerce.
We believe we're the best platform to power that. We have a vision and we have a great team to deliver it. And in the end you'll be doing most of your interactions there. But we also want to be known I think by the consumer as the things that we're working on.
Thanks, Rob. All right. We're going to take our last question.
Okay. Thanks. Justin Furby with William Blair. Maybe for Rob or Chris, either of you. Can you just remind us in terms of mix, the enterprise business where it is today as a percentage of the overall business?
And when you model out 25% growth, what your assumption is there? Does it become a bigger part, smaller part, kind of hold steady? And then on the sales investment, I guess I had in my head that was going to be more 2 thirds international, 1 third North America, when you first talked about a few quarters ago. And I looked like it was going to be more North America driven based on the slide. So can you just clarify if that's changed or if I got the slides wrong?
Thank you. Sure. Let me take the second one first. During the call that you referenced, the February call, we talked about the mix of investments. North America was where we tested and learned, one of our principles where we put our first hunters, our first sales pipeline generators and our channel partner managers build out.
So there was an investment in the second half of 2018 made in North America. So the dollar proportionality is actually going to be pretty equal. But it was just more emphasized early on in North appendix. One of the new items of disclosure on how big each one of our business units are. I think your question was, give me a sense for how each grows or what outpaces the other.
I love the competition, the healthy competition between these guys wanting to grow at similar rates to be the same size. That would be wonderful. We modeled it a bit differently. I think enterprise will continue to lead overall growth although they're getting a run for their money with commercial right now.
All right. Thank you very much for your questions. We're going to have plenty of time to continue the dialogue upstairs. Hopefully you can all join us for lunch.