Ujjwal Dhoot: You’re innovative today, but the definition of innovative is at a point in time. If you don’t change to the changing habits or preferences of the customer, what’s innovative today might not be innovative tomorrow.
Chris Goward: This is Insights for Growth, the show where we hear insights from intrapreneurs who drive change within large organizations. I’m Chris Goward, founder of Widerfunnel. Widerfunnel helps create companies design digital experiences that work, proven through rigorous experimentation systems. Today on the show, we have a great conversation lined up.
Ujjwal Dhoot: My name’s Ujjwal Dhoot. I’m the Chief Digital Officer at DXL Group.
Chris Goward: Great. Let’s start and talk about DXL Group. Why don’t you tell our listeners a little bit about that and what your mandate is there?
Ujjwal Dhoot: DXL Group’s the largest retailer for all men big and tall. It’s shopping at the end of the rack in most department stores, which is not easy. We make it a holistic solution for that big and tall customer where they can come to our store and feel comfortable, whether it’s about the size of the fitting rooms, or it’s about the selection that we have in each and every big and tall size, or it’s about the hundreds of brands we carry or the amazing customer service. It’s really the destination for if you’re big and tall in America and you have trouble fitting in the clothes that are sold at department stores.
Chris Goward: You’ve joined there fairly recently?
Ujjwal Dhoot: Yes. I’ve been here six months now, so I have been at DXL, I started in December and I’ve been here for six months now. Actually, coming up on six months this week.
Chris Goward: And so before that, I mean, you’ve got a long history of leading eCommerce programs and running experimentation programs as well for, actually, almost as long as I have. You’re a veteran in the industry. I’m curious, thinking about that, all of those experiences you’ve had, what accomplishments you’re most proud of?
Ujjwal Dhoot: Actually, I have been testing since 2007. I remember the year. And Chris, when I was looking for… and you don’t know this, but when I was looking in my Gmail, I was looking for one of your emails from the recent past to go over the subjects out here. I actually have an email exchange with you from 2007.
Chris Goward: Oh, really?
Ujjwal Dhoot: 2007 or 2008. I had asked a question somewhere about A/B testing on something. I do have an exchange that we’ve had back in 2007 or ’08, so that’s just a funny story. But I think the accomplishments that I’m most proud of, I could say that I have been part of an exit within eCommerce. I have been part of fast growth where I’ve been part of organizations that have gone from 5, 10, 15 million dollars to over 50 million dollars in one case and over 150 million dollars in another case. And in other cases, I have also been part of an organization that’s been like that and like that.
So I think what I have been most, I would say, lucky with and am proud of is the fact that I was given the opportunity to work with a very different set of entrepreneurs and a very different set of founders and CEOs early in my career. The opportunity to work on many different projects and many different things early on exposed me to various things, whereas if I was at a big corporation, 100,000 employees, I’d be doing a very small piece of something and mastering it, but I would never have the level of ambidexterity that I have been able to gain being at these smaller organizations.
Chris Goward: So that’s really interesting. You touch on a couple things there. One is to me a combination of what you’ve called luck or opportunity, and then also what you make of those opportunities. You’re obviously a big part of how you took the opportunities you have and then parlay them into some experience and success and track record. But also seeing perhaps what you learned from the entrepreneurial experience and then using that in a larger organization experience. Maybe you can talk a little bit about what you think you’ve gained from that and to apply to other experiences.
Ujjwal Dhoot: I think what I’ve always learned is to be curious, and I was, as I said, lucky enough to work with a wide range of entrepreneurs. And when you have entrepreneurs who push you to the boundary and push you to go beyond your comfort zone and try new things, you automatically… they say everyone gets trained a different way in their career, and the first 5 or 10 years are the most important. I’d say the first couple years of your career are the most important and how you get trained, and the more you are pushed to the limit and the more you try new things and the more you are curious, it’s a combination of these things that help drive a much better outcome and a much better inflection in your career later in the years when you have gained that experience.
So a simple example I can give is you can have 20 years of experience, but someone with 5 years of experience but 5 years of doing different things every year might have a better set of experience versus someone who’s been doing the same thing for 20 years. So it is, I think, being an entrepreneur is also… it’s critical to have a lot of varied experiences in a lot of different situations and having the ability to experiment and be curious about outcomes with changing customer behavior.
Chris Goward: I’ve been thinking a lot about the entrepreneurship as an entrepreneur myself and in groups of entrepreneurs, and then thinking about these people who champion change within large organizations, which some people call intrapreneurs. They’re in some cases making innovation happen within a larger group. Would you consider yourself that kind of an intrapreneur type of person?
Ujjwal Dhoot: I think I have been at organizations that have been, so I would say there are kind of three tiers. I have not spent time in my career yet at a Fortune 500 type of company, but I have been at organizations that are kind of in the 5 million to 50 million range. then I’ve been at organizations that are in the 50 million to 200 million range, where you’re still growing, but you’re a little more mature, there’s a little more process. And then I have been at organizations that are half a billion dollars or in that range, which are mature and are a very different beast compared to the smaller organizations. And I think if there is one thing that I tell my team every day no matter what type of company it is, you need to learn to challenge the status quo, and you need to learn to challenge how we do things today. The difference is that in an organization that’s half a billion dollars, you’ve been doing things a certain way for longer than a organization that is only $50 million that was established five years ago. So it’s a lot easier to be the change agent in a smaller organization that just started five years ago versus a much larger organization that’s been around for a few decades. So the challenges are different in each of these types of companies, and you need to address them differently, but at the same time, being an intrapreneur is trying to find different ways to approach the same challenge in different organizations.
Chris Goward: You need different, perhaps, modifications to your approach or skillset or how you’re approaching challenges.
Ujjwal Dhoot: I mean, another example is… and it’s kind of related to the size of the organization. In the smaller organizations I worked at, and especially the direct-to-consumer eComm type of companies, you have the founder and the founder… founders usually have a lot of clout. Founders usually have a lot of say in everything. You get the founder on your side, and as the head of marketing, you can kind of make things happen on a 24-hour turn and 48-hour turn. Whereas bigger organizations that are professionally run and that are past the growth stages that there are growing pains that startups often see, you have a certain process. You have many different stakeholders you need to get on board and on the same page. The process of change is much slower than it is in the smaller organizations.
So the challenge becomes how do you get everyone up to speed on the same page at a much quicker pace because if anything, the change of pace of innovation is not slowing down. It’s only accelerating. So any bureaucracies or any slow processes in large organizations need to be rethought and relooked at because otherwise, they’re not going to survive. You’re innovative today, but the definition of innovative is at a point in time. If you don’t change to the changing habits or preferences of the customer, what’s innovative today might not be innovative tomorrow.
Chris Goward: And that leads to a whole other conversation, I think, on the balance between structure in process and methodology versus questioning and reinvention and disruption, and at what point each are valuable or for what purpose each are valuable. I mean, there’s books on that topic. But thinking about your role or your mandate at DXL Group or in your recent history, what do you feel like your… do you feel like you have a mandate or a goal or something that you tend to try to advocate for?
Ujjwal Dhoot: I think I always find myself advocating for the customer. I always find myself advocating for, “But is this the best way to do it?” There’s questions about we’ve always done it this way, and whether it’s DXL Group or anywhere else, it’s about, “We’ve always done it this way,” or, “This is how we’ve typically done it.” That’s really the starting point of when change needs to happen, and when you hear that, you know that there is a certain way. And all of us have certain blinders on. I have certain blinders on because my experiences have put that blinder on me where I can’t think about another way. If you tell me not to A/B test something, I’m like, “Are you crazy?” So I would say in certain scenarios, founders and others have a passion and a vision that sometimes you don’t necessarily have to A/B test, but why not when you have the luxury?
So I would say my mandate at DXL is to be the voice of the customer, to obviously grow the digital channels, but to also grow the overall customer base and customer channel and improve our omnichannel experience. And what we’ve seen and learned with COVID is if anything, digital acceleration is only increasing. I think in the last three months, digital acceleration has… I would say we’ve seen a change with five years and three months. In some industries, it could be over 10 years, so I understand that digital has been the beneficiary of change, but how do we think about our stores, and how do we think about our site, and how do we think about our app? Our app sales are exploding, so how do we kind of balance all of these to think about customer preferences and what role do individual channels play in driving that customer, and how are ways that we are differentiating ourselves at the top of the funnel to get new customers in the door?
At the end of the day, the mandate for any leader in the business is growth, and the mandate for any leader is you have your customer funnel, and I call it a customer bucket. You need to fill more at the top than is leaking at the bottom. That’s as simple a mandate as can be, but how do you do that and what goes into getting there is the fun of, I guess, being in this role.
Chris Goward: Let’s touch on that, what’s happening today, the world of COVID and shift to digital acceleration, accelerating. What do you see happening in consumer behavior? Are there insights you can share with us on kind of whether it’s a DXL or kind of macro level in your conversations, how retailers are responding and what the trends are that they need to respond to?
Ujjwal Dhoot: I think I can talk about a few things that are more general, but one thing specific to DXL is we are accelerating development of our app, which we were already digital-first and we were already mobile-first before COVID. Now we are just accelerating the change towards our app, which is seeing great inflection. Our web business is seeing great inflection as well, and we shared that recently publicly. I think what we were already doing we are trying to accelerate further and focusing on what are the things that make us unique? And a couple of things make us unique.
The first one is we have an omnichannel capability that the infrastructure is already built for. So we are leveraging that omnichannel capability to drive things like curbside pickup. During COVID, it took us one week or somewhere in that range to launch our curbside pickup functionality, and now we’re constantly thinking about how to improve that curbside pickup functionality because I don’t think it’s going away. I believe it’s going to be one of those behaviors that sustains beyond the pandemic, and that’s why we are betting on it and trying to refine the customer experience and what that means.
The other thing we’re doing, which we were doing pre-COVID as well, but we are really accelerating is how do you improve the omnichannel experience overall? We already use our stores as a point to fulfill our web orders, so a lot of our web orders actually go to store because that way our DC is not as strained, and the customer gets it much quicker. Because if you’re living in California, why can’t a store in Southern California fulfill your order, because your order coming from Boston? So there are many things we’re working on, but if I were to say, it’s obviously acceleration of digital, acceleration of the omnichannel capability, and thinking customer-first instead of trying to think about the product or the promotion first.
Chris Goward: So in terms of shopper behavior, are there any patterns or trends that you’re seeing in that area?
Ujjwal Dhoot: There is lots. Obviously, I mentioned there’s inflection to digital. There is an inflection towards the app. Buy online, pickup curbside orders are through the roof. We see stickiness on the website, and we see excitement for things we’re doing digitally. I believe and I have a thesis that there is still place for other marketing that’s not digital. But where the customer might shop might… if off 100 customers, 50 were going to the website before ending up in store, my guess is a bigger percentage of them are going to go to the digital property or the app and going to continue their shopping experience there. So we are already seeing that shift in customer behavior, and most of the peers that I talk to that are marketers in other organizations are seeing the same.
Chris Goward: And how much of this do you think is going to stick and this behavior will stay permanent?
Ujjwal Dhoot: If I had the answer to that, I’d be making a lot of different bets everywhere. But for our business specifically, we are taking the test-and-learn approach to see what we can learn from this time and see what behaviors are likely to stick. If I were to throw darts and present a thesis, I would say the behaviors that have a much greater inflection have a much higher possibility of sticking longer term. The behaviors that have a smaller inflection compared to pre-COVID would obviously mean that there is some level of friction, that’s why those behaviors don’t have the extreme inflection that the others are seeing.
So if you take the 5 or 10 behaviors that we’re talking about, whether it’s the app or the website or buy online, pickup in store, or couponing or the promotional approach or a resurgence in marketplace type discount websites, I just think some of them will stick, but it’s a factor of relative importance in terms of which ones are seeing more or less inflection, constantly monitoring every single of these metrics that’s changing on a week over week basis and year over year to see if there’s shifts in trends based on how the economy is opening up versus how the customer behavior is changing.
Chris Goward: I’m really interested in the idea of habits and the friction and fuel model for how to motivate behavior change and really thinking about how when there are these inflection points in life where people are actually forced to fulfill their needs in different ways, then it breaks a habit cycle, whereas a lot of our decisions are made just without even thinking. They’re subconscious or they’re emotionally driven. But when we are forced to change our lifestyle, then we sample different types of behaviors that we might not be willing or interested in or even aware of. So it’s interesting to see, I’m going to really be curious over the next few months to see how many of those, if they present a better value proposition and now people have actually tried them, if they’ll become the new habits and we’ll see dramatic long-term changes in behavior because people will have sampled things that they wouldn’t have tried before.
Ujjwal Dhoot: I mean, one of the examples I have is Blue Apron, which is a good example. As soon as COVID started, there was a resurgence in the Blue Apron stock price and there was a lot of interest in how the category would do, and they were in the news for that reason. But I don’t know how many of the new customers that tried during the COVID era or COVID period would continue to do that post-COVID. It’s obviously worth seeing, but if I were to say this is the moment in time, or these are the three to six months that Blue Apron has to reshape and reimagine and evolve their business model.
Because what they do out here can leave a lasting impression on the legacy of the business because this is when they’re acquiring probably hundreds of thousands of new customers. So what is it that you are doing to make those customers stick post-COVID versus just saying, “It’s one more thing I tried. I’m back to my normal behaviors”? And we’re thinking about it this way as well. How do we delight the customers during this time so that post-COVID, they do come back and shop with us again because we can acquire all the customers in the world, but it is about the long game. If we cannot get the lifetime value out of them, then what’s the point?
Chris Goward: Well, yeah, and I think what’s interesting to think about, we’re still in the mindset of looking for this post-COVID period and wondering what it’s going to be like, and another scenario that a lot of people are playing with is there may never be a post-COVID period. It’s just going to be a pre- and during COVID, and it’s just an ongoing new lifestyle that we might not mentally be prepared to accept yet, but there may be just a new normal that’s actually much more dramatically different than we’re yet willing to contemplate.
Ujjwal Dhoot: I’m hoping that’s not the case and I’m hoping you’re wrong about that one, but we’ll see. And right there, you see I have some resistance of trying to or wanting to accept that this is the new normal, so as someone who claims they’re open-minded, I’m already resisting to the idea that this might be the new normal, and I found myself saying something interesting the other day. We were talking about… and I’m thinking about customer expectations as a marketer and as a marketer for a product and category where I would say 50% of… well, Amazon constitutes about 50% of eCommerce, and 50% of all eCommerce growth approximately, I’m giving round numbers, comes from Amazon as well. But I found myself telling my wife the other day, “I don’t want to drive to a store. Just order it on Amazon.”
I have always been part of businesses that are trying to grow and take some of the inflection away from Amazon and bring it to your own business, but I find myself as marketer and as a consumer also saying, “Just order it on Amazon. It’s easy.” So easy is one value proposition, but what are the things we can do as a business that make it not just about easy, and that’s where our experience for customers and our fit of clothes comes in because I don’t think anyone can rival us when it comes to fit and how the customer experience is of in store today.
Chris Goward: And there is still a lot of space beyond Amazon of course, especially in your space in fashion, that Amazon just isn’t set up to fulfill, so there’s still a lot of opportunities. And Amazon’s been the big elephant for quite a while that everyone’s been scared of, but luckily we’re still finding ways to find niches that work.
Ujjwal Dhoot: And I think I read another survey this morning that was talking about how customer expectations on delivery have been tempered, and if it used to take me two days and Amazon’s been investing all of their cash flow into building their infrastructure towards shipping to the customer much quicker, but the customer is okay with a delayed shipping experience for COVID. And during the holiday season as well, they will be okay with shipping experience that’s less than ideal compared to what they were used to a few months ago. So it’s amazing to think that a customer is likely to shop with someone because of a certain experience, but they’re also willing to shift their thought process and expectations so dramatically because of changes in the market, which makes Amazon a little vulnerable.
Chris Goward: For sure. That’s an interesting thought to contemplate as well. So want to get back to… so you’ve mentioned a little bit about humility and about open-mindedness and being… sort of challenging preconceptions. You also wrote an article back in 2014 called Let Customers Tell You Why You Are Wrong, so that sounds like a pretty humble perspective. No one wants to be told they’re wrong, or am I wrong about that? Do you think that that’s a foundational belief, and how does that… so how do you, first of all, maintain an openness to having your own ideas challenged? And then secondly, how do you help a program or an organization create that culture of humility?
Ujjwal Dhoot: I think it’s very difficult. It’s one of the most difficult things there is to be open-minded. I’m not going to say I’m always open-minded, but I would like to believe that I am more than others just being thrown into the world of testing and experimentation and the whole process of having a hypothesis and validating it. So I think it’s very difficult to maintain that level of comfort to be open, but at the same time, it can happen and I speak about that in the article as well. That article was a long time ago, but some of those things I still believe in that you can still have a very strong testing and innovation and experimentation culture if you have a sponsor, and the sponsor is willing to be challenged.
So early in my career, I worked at an organization where I challenged… have you heard of the term challenge the hippo? So challenge the hippo where you challenge the highest paid person’s opinion, and the founder at one of the companies I worked at had a very strong opinion about the home page, and I challenged that saying, “I understand you’re the founder and CEO, and I understand that you have an opinion, but why don’t you let the customers decide with their wallets?” But it wasn’t about the test. I don’t even remember the outcome. I think the founder was right, but it is about the approach and it is about the notion that just because you are the visionary doesn’t make you right, and it is okay to challenge the opinion because you could totally be wrong.
The other thing that I think is extremely, extremely important, more than anything is having a team that has an entrepreneurial attitude. You can do anything done without a team that is willing to try things, and with that also, if you yourself have… and I’m talking about me in this case, if you yourself have a limited view on what is the right versus wrong path or limited view into what the correct hypothesis could be, the best place these ideas come from is your team, and if you open up the various parts of the organization.
So some of the best tests I’ve run actually have come from customer care centers and call centers and guest engagement centers that we work with. They are the front lines, and the amount of detail they have on customer frustration, I wish I had as a marketer. So the more connected I think a business is to the customer care centers that they work with or that work with the customer directly, the better off you are in your experimentation and testing and the quicker you can innovate. So at a previous life, I managed the marketing and the product function, and I think just as critical it is for marketing, it is for product as well to be very, very connected to what the customer is saying.
Chris Goward: So how do you create those connections with the front lines?
Ujjwal Dhoot: It’s much simpler in a smaller organization because there aren’t as many functional areas and there aren’t as many processes, so it was as simple as having a weekly meeting with a customer center. I think in larger organizations, you need to work harder to make sure that you’re always connected and in tune with the customer and what they’re saying. One of the things we do at DXL right now is there is customer feedback on frustrations that comes every single morning from our guest engagement center, and I personally try and read those feedback files at least a few times a week. It goes not just to me, but it goes to a few different people on the marketing team, and it specifically goes to the team that manages the web UX and the web A/B testing because I think that’s just fodder for trying to create new experiments and to reduce friction for the customer.
Chris Goward: I mean, so you talk about product. What role does experimentation and innovation play in product development do you see?
Ujjwal Dhoot: I think it depends on the type of organization you are. If you’re purely B2C, your product… and I’m specifically talking about retail. If you’re purely B2C, your product is your website and store experience, and it plays a pretty big role in experimentation. Everything we do from an experimentation perspective is happening in our stores or on the website or part of the channel or approaches we use to drive traffic to these buying destinations. But if you’re part of a B2B organization where… I’m going to make it up, but you’re a healthcare, an online healthcare provider, product becomes even more important than it is in our case because your product is your commerce destination and service destination for customers.
So it’s important for us and it’s important for them, but if I were to rank order, it becomes slightly more important for a B2B business than it is for a B2C. And B2C organizations, marketers oftentimes play the head of product as well because if your web and your stores are your product, you are constantly learning about customer preferences and trying to adapt to the customer preferences in these channels.
Chris Goward: So getting in touch with the customers, getting information and perspectives from the front line is really important, and then somehow maintaining the humility in leadership to be challenged and to see that information. And it seems like you have to have some way to have more people in touch with data or information to do that. I know we’ve had conversations in the past, and I think you’ve mentioned about democratization of data. Are there ways that you’ve found that work well to do that, to sort of decentralize decision making or insight generation? Is there a way to create the culture that empowers people at more of the front-line level to bring those insights up?
Ujjwal Dhoot: I think the culture, it starts with asking questions and being curious. As an organization, if you are asking… I mean, as a leader in an organization, if all you expect your team to do is do the what, then they will do the what. But as a leader… you see I struggle to answer this because I struggle with this everyday, as a leader, our jobs are not to ask the teams to say what, but is to say and ask the why and the how. So there’s teams that are very operational that focus on the whats, and those are the kinds of teams that can be as innovative versus the teams that are asking the questions on… it’s very easy to say this channel did so much in revenue and this coupon had so many redemptions, and this is how this performed, but why, and how did customers behave when we did this versus that?
And trying to draw the lines between the what and the how and why to create not just the correlation but the causality is really important in driving that culture, and it really starts from the leaders, whether it’s the CEO, the heads of marketing, or other practices in other functional areas. But being able to ask the questions and being curious about why did this happen?And you’re relentless in your pursuit to understand why it happened, not just saying why did it happen and then moving on to the next thing because as retailers, there’s 50 things I’m chasing everyday, but trying to maintain and understand here’s all the things that I’m chasing that I need to chase, and I need to keep chasing them down until I get the answer. And it’s okay to not get the answer on 20 or 30% of things, but if you don’t get the answer on 80% of things, then you’re not doing your job.
Chris Goward: It seems like a leadership question where you’ve talked before about the hippo, the highest paid person’s opinion, and how in some organizations the hippo is averse to being challenged. They have ego at play or whatever. But if the leader starts with the expectation that my people will challenge and will ask those hard questions and will actually question my ideas, that creates the space, I think, for sort of what you’re saying, for people to then develop that muscle in themselves and realize through the little micro cues that they get that, oh, it’s okay to challenge. And a good leader seems like they actually value that, and they’ll value the people who do challenge more.
Ujjwal Dhoot: And I think in addition to that, I think it’s celebrating failure. A lot of teams don’t celebrate failure. A lot of organizations don’t celebrate failure. When you try new things… and I think Amazon, I think Jeff Bezos said this, for every 40 things they try, 1 thing works. That’s two-and-a-half percent. I think Amazon has a two-and-a-half percent batting average, and they’re the most valuable organization in the world, so you need to go out and bat. But if you have a team that’s nervous to go out and bat, how can you be successful? So I think a good coach is what a leader is the ability to tell the player to try different things and risky things and knowing when to take a risk and when not and what are the areas you can work on the most is critical to make sure that you have a team that’s willing to go out and swing.
Chris Goward: Well, yeah, and placing smart swings or smart bets as well. So it’s a function of how many bets you place and placing intelligent bets, and then also learning from… what you learn from what happens with those swings.
Ujjwal Dhoot: And I know that I’ll never swing and get it 100% of the time. All we need to make sure is we get a 60% of the time to 70% of the time and we’ll be okay. It’s about being comfortable making decisions knowing that you will never have the perfect data, and there will always be a level of ambiguity or a level of uncomfortableness in making the decision, but that’s the function of experience and experimentation that you know directionally… I mean, I’ve probably run 5,000 tests in the last decade across different channels, whether it’s email, direct mail, and the web and everything else combined. I’ve probably gotten only 5% of them right at best in terms of wins from an A/B testing perspective. But knowing what not to do and knowing when not to swing is as simple as what you need to do to be swinging more often directionally correctly.
Chris Goward: Well, yeah, and knowing how to set up experiments properly, the experimentation methodology so that you know you can actually have reliable results and answers. And a lot of people, when they start experimenting, they get wins or they get results, but they don’t realize that they’re actually fooling themselves because they haven’t actually designed their experiment properly. They haven’t learned what they think they’ve learned. There’s a lot of technique and practice and methodology in that.
Ujjwal Dhoot: But I will say that the way I think about testing is different than what I did about a decade ago, where a decade ago, I thought about testing as you need to get the 98% confidence interval. It’s okay if the test doesn’t win and you need to. But I think I’ve pivoted to the philosophy of if you have 10 different tests and you can get to 88% confidence interval, it’s better to go with the 88% confidence interval because at worst, you’re not at least worst. You’re improving your experience, or at least it’s providing a similar level of experience and it’s not any worse, but you’re improving the cadence and the speed at which you go.
Chris Goward: So let’s pivot a little bit here so we don’t lose everyone with a stats conversation because I think we could go in a lot of different directions there. So I want to think about your experience moving from startups and midsize to large companies and specifically how to make change in large organizations. A lot of people might feel like, okay, if you’ve got the resources of this enterprise company, it’s almost a luxury. You’ve got so much opportunity to try new things. You’ve got all this to work with. But there are challenges that are unique to large organizations, so what are the biggest challenges you’ve faced in trying to implement this kind of a culture of programs?
Ujjwal Dhoot: I think I mentioned earlier about challenging the founder and challenging the hippo, but I would say the biggest challenges that I have faced haven’t been about… I’ve been lucky enough to not face challenges about getting buy-in to test because I’ve always worked with leaders that were open. Where you face challenge is the what to test and how, so that’s the process of trying to get everyone aligned on… everyone loves testing. I think it’s been a buzzword for at least 5 to 10 years now and everyone understands and appreciates what it is, but how do you get them from understanding what it is to starting and learning new? And it’s no different than saying I want to build a new team.
At one of the organizations I worked at, which we grew from 10 million to over 100 million in revenue, one of the things we did was to build an analytics team. And we built the analytics team. I didn’t go on day one when we were a very small organization with under 20 people where I was head of marketing, I wouldn’t say to the founder, “Hey, I would like to hire three different… or two data scientists.” When you’re a company that’s small and a startup, you just don’t do that. So knowing how to proceed, and you start small where we hired consultants and external resources, and you hire someone who’s doing their master’s in statistics and is fresh out of grad school looking for a job versus hiring a data scientist.
And it’s the approach of what can we do in effort that is only 20 or 25% of the effort, but get an outcome that gets us 70 to 80% of the way there? A data scientist might get you 100% of the way there, but someone with a master’s in statistics and understanding of the same concepts might get you 70% of the way there. So I think it’s very similar with testing where it is about learning with small and a basic set of resources versus asking for the world and applying big things, and then sharing your learnings and sharing your progress as you start asking for bigger and bigger resources.
It’s the exact same philosophy when you have a new marketing channel and you want to try whether it works. You try with $10,000. If you want to try conquesting a paid search campaign for a competitor, you start with $2,000. You see how the first thousand clicks do and if you get any conversion at all. And it’s kind of the philosophy of looking for signs of life, and I see marketers as, a lot of times, we’re explorers, explorers in the unknown where you’re looking for signs of life. And if you get no conversions and you spent $10,000, it’s much easier to say, “I don’t want to spend the next thousand dollars,” versus saying, “Let’s try testing with $200,000 campaign.” So I call it the signs of life philosophy.
Chris Goward: So if you’re looking for life on Mars, start with the little rocks, just see what’s under there first before.
Ujjwal Dhoot: I’m not in any way, shape, or form an expert to comment about Mars, but I know I can talk about marketing spend and I can talk about spending wisely and being careful with a million dollar budget versus trying with $50,000.
Chris Goward: So even in a large organization, you want to start with pilot projects, skunk works projects, under the radar, get some momentum, get some signs of life, and build from there.
Ujjwal Dhoot: Beautiful part is that when you start at an organization, I think you have resources that are limited, it drives you to be way more conscientious about how you spend those dollars. If you think about organizations that have raised hundreds of millions of dollars versus organizations that have raised a $5 million seed round or a series A, you’ll find that the resources drive a much better prioritization versus the infinite resources. If you have a limited amount of resources, you always do a better job of saying, “I only have so much money. What do I want to do?” And then you pick the best bets to make and the most likely to succeed bets to make.
Chris Goward: So having constraints and resources actually creates more-
Ujjwal Dhoot: It is a very good thing.
Chris Goward:… creativity and innovation.
Ujjwal Dhoot: And fortunately for me, I started my career at organizations where resources were always not unlimited. I worked at venture-backed businesses. I worked at a business that we grew really fast, but very fast unprofitably, so I know the downside of doing that as well. I worked at a business that could not raise a series B round, so I know what happens when the entire staff is let go because you couldn’t raise a series B round, and I’ve worked at a business that we scaled very quick, but being smart about marketing and how we spend our resources.
Chris Goward: So thinking about that from a leadership perspective, are there ways that you manage constraining resources within your team to manage creativity or to encourage innovation or new ideas from team members?
Ujjwal Dhoot: I think it happens organically when you have to prioritize, and I’ve always actually found it great and I love working, and I’ve seen in the past life that I’ve had as well, that it’s much easier to mold someone who is 2 years or 4 years into their career than it is to mold someone that’s been doing the same thing for 20 years. So in the culture of experimentation and especially in roles that require someone to think without blinders, it oftentimes is a great idea to get someone who is kind of earlier in their career, but at the same time extremely curious and extremely smart to be able to say, “Why don’t we do it this way,” or, “Why don’t we challenge ourselves to do it another way?” And we spoke about someone having 20 years of experience versus 5 years of experience. I would totally pick someone who is… depends on the role, of course, but in a role of experimentation, you need to have a team that doesn’t have blinders on, and blinders don’t help.
Chris Goward: So it sounds like the perspective, if I thread the pattern of what you’ve said, is a lot of times going for to 80% solution with the least amount of resistance or the least amount of investment. You seem to live by Pareto quite a bit there.
Ujjwal Dhoot: I think every marketer needs to because if we all think that we’re going to get perfect data to make that decision, it’s just not going to happen. So Chris, I’m going to ask you a question. How many tests get to… you could probably draw a simple bell curve… how many tests get a 99% significance versus 95 versus 90 versus 80? I think you’ll just see that there’s only, I would say, under 1% tests that get to 99% significance, but probably 10% tests get to 90%, and then 20 to 30 get the 85 to 90% range, so again, you got to go out and swing.
Chris Goward: Well, and even in terms of the investment that you make in… you talk about hiring data scientists versus hiring a stats major, and if they can get to a certain direction and get a little bit of a result, an early win with a lower investment, a lower resistance in the organization, then you build momentum. And it seems to me that especially in a large organization, momentum counts for a lot.
Ujjwal Dhoot: I think I’d be very curious to understand and learn about how Fortune 500 companies do it because when you’re a $25 billion organization, I can only imagine how difficult it is to create a culture of testing and experimentation out there where in a extremely large organization, you’re not thinking about the current quarter or next quarter because your fate’s already been sealed. You’re really thinking about two years out, and what you do today impacts the third quarter of 2022. I’d be very curious to think about or learn more about how they think about experimentation and just how difficult it is to manage it out there.
Chris Goward: Well, we have some more conversations lined up in the coming weeks within those organizations, so we’ll see what they say. So I’m curious just to think about… you’ve had a string of successes in your career from various places, and sometimes… we like to talk about our successes. Are there any real big milestone failures that you can point to that taught you a lot as well?
Ujjwal Dhoot: I think I spoke about different sizes and different types of organizations I’ve worked at. I have worked at an organization that has grown very fast, very unprofitably. That’s the first one. I have been at an organization that had to let go of most of its team or all of its team because they couldn’t raise a second round. That’s a failure. I have been part of another organization that grew very fast that we had an exit for, so that’s a great success. I have worked at a half-a-billion dollar retailer that went into chapter 11, so that’s another not-so-great milestone. But I think the one common thread that I spoke about earlier as well and I really like in an experience is that it’s very different in terms of… I’ve worked and learned because of the failures.
They say if you’ve always had successes, you don’t know how to deal with what happens when it’s not a success. And everyone’s a great leader in a successful time, but how do you be a good leader when you have headwinds against you and when it’s not a successful time? So I think the biggest failures are the biggest learnings, and personally, I have had an equal share of those in some organizations that have not done so well but others that have done so well, so you kind of learn about the mistakes you don’t want to make again.
And just from a purely testing standpoint we discussed earlier as well that if I’ve tested 5,000 different things and I’ve had under 5% of them work, most of them have failed. Some of them are big failures. The others are smaller failures, and that’s why I think the other thing you learn from your failures is you don’t always swing the pendulum from one side all the way to the other at once. They call it going guardrail to guardrail all at once, and you just don’t do that. You learn from your failures that any time you do that, you trip and fall.
Chris Goward: That’s great.
Ujjwal Dhoot: And I’m thinking about failures now that you say it, and I have been very… I’ve been in the CRM space along with the digital space for a very long time. And just in the world of CRM, one of my first jobs, what I did was we had customers who had just bought with us in the last 30 days, and I happened to just start managing email because the guy who was doing email before me quit. So the founder said to me, “Who’s going to be doing email tomorrow? You’re going to be doing email tomorrow. [inaudible], congrats on your new job.”
So I started doing email, and I said, “This customer’s just bought with us. We have 30,000 customers that have bought with us in the last month. Why would we just send them another email? I don’t think it’s a great customer experience.” And I noticed the next day, sales were down. For the next week, sales were down 20% or something like that, and I learned the hard way in CRM that recency is the biggest indicator of someone buying again. So that’s one example of a small failure, but more importantly what I’m trying to say is you fail once and you learn from it and you don’t do that again. I have since then, very early in my career, since then always known that recency is the big daddy of all variables that influence the customer to come back and buy with your business again.
Chris Goward: And we’ve always used the RFM, recency, frequency, and monetary value.
Ujjwal Dhoot: If there’s one amongst all of those three, you just don’t ignore your most recent customers.
Chris Goward: Well, and that’s a good example of you can make a mistake, but you only really learn from the mistake because you were looking at the resulting data and trying to get some insights from what actually happened from that and then sort of cementing that learning.
Ujjwal Dhoot: It’s almost making a mental playbook of everything you’ve learned not to do. In the last 10 years, this is my list of don’t ever do it again.
Chris Goward: Well, this is good. So I would summarize it, it sounds like from what you’re saying that humility, having a perspective of humility, being in touch directly with the customer as much as possible, and it sounds like choosing an organization very carefully where the leadership has buy in for being insight-driven, customer-driven, and allowing you to have the freedom to make change are some keys to success.
Ujjwal Dhoot: There are some very smart ways you can do that before you even join an organization. You can look at whether it’s data online for how the business has done as a very small… everyone is obsessed about looking at the PMLs before starting at an organization and the cashflow and the balance sheet and all of those things, but why don’t you read about what the leadership team has done in prior lives? Very big indicator. Why don’t you read about how long the leadership team has been at the same company, and who are the leaders and what their backgrounds are tells you a lot about how innovative the organization is and how they’re willing to change versus at what stage of a continuum is the organization and what would your presence or role there mean?
Chris Goward: Great tips. I want to leave with some takeaways. So thinking about a listener who’s working at a large enterprise or looking at joining enterprise organization. They have ambition and energy. They want to be a change-maker like you have. So what would you tell them that you wish you’d known early on in your career?
Ujjwal Dhoot: I think a couple of things. The first one is everyone wants to go work for Proctor & Gamble in their branding division in B school. You ask 10 people in B school who are doing their master’s or even an undergrad, and they all want to go into banking. When you’re in finance, you want to go be an investment banker. When you’re in marketing, you want to get into branding. I think it’s important to understand when you’re trying to do that that most brand marketers are extremely data driven. Most brand marketers, and whether it’s the P&Gs or the Apples or others, similar functions, to be a great brand marketer, you need to be obsessed with data and obsessed to have an understanding of the customer. So that’s the first one.
The second one is what you learn in a much larger organization that has 100,000 employees doing one very, very, very specific and small function, what you learn in five years out there, you can probably learn in a year or in six months in a much smaller organization, and you can learn not just that, but a whole breadth of different things. So it really depends on what you’re trying to do with your career or where you’re trying to be or who you’re trying to be where you can become a specialist in one small thing or become a generalist with experience. There’s many, many different things. But when it comes to any advice about testing and learning, it’s just being open to change and everyone speaks about change is the only constant then and the fact that we all have a certain set of beliefs we grow with.
But one of the interesting things that I read that I’m starting to think about is you need a network of whether it’s friends and family or mentors or individuals who think like you, but you almost need a network of similar people who do not think like you. So I would call it your network of people you can call who are very different in their way of thinking, and I happen to have some friends who think very differently versus what I do. It’s great to run my ideas off people who… I mean, you always have the yes man.
You’re always going to have… we surround ourselves with people who think like us, and we oftentimes hire individuals who think like us, but you’re not going to grow if you continue to surround yourself with people who think like you because you are a combination of the five people you spend the most time with. Who are the five people that you’re spending most time with and think about how similar or dissimilar they are to you, and do that early so you can have an experience set and you can have an opinion set that is based on many, many different experiences instead of just one small type of experience.
Chris Goward: That’s great. Great. Very good takeaways. Well, that’s the time we have. Ujjwal, this has been awesome. Really great insights, great tips and strategies and advice that anyone can apply, so thank you for joining us and we’ll get this posted soon.
Ujjwal Dhoot: Thanks, Chris. Always great to chat.
Chris Goward: Likewise. Talk again soon.
This show was made possible by Widerfunnel, the company that designs digital experiences that work for enterprise brands proven through experimentation. For more information, visit widerfunnel.com/tellmemore. That’s W-I-D-E-R-F-U-N-N-E-L dot com slash tell me more.
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