Today’s interview is with David Kalt, founder and CEO of Reverb.com, an online marketplace where musicians go to buy and sell guitars and other music gear. Dave joins me today to talk about how they have made customer experience the job of each and every one of Reverb.com’s employees with “The Contest.”
This interview follows on from my recent interview – If you are in employee engagement then you are in management development as well – Interview with Jim Barnett of Glint – and is number 188 in the series of interviews with authors and business leaders that are doing great things, helping businesses innovate and delivering great service and experience to their customers.
Here’s the highlights of my interview with David:
- Reverb.com in the last 4 years has grown to be one of the most popular websites amongst musicians for buying and selling new and used gear and has between 500,000 and 600,000 buyers and sellers on the website at any one time.
- David started his career in the music industry as a recording engineer and then discovered he also had a passion for software. Since then he has started, developed, grown and sold a couple of software companies (ClientBASE and optionsXpress).
- David started Reverb.com shortly after purchasing well-known musical instrument shop, Chicago Music Exchange, and then became frustrated with the process of buying and selling guitars online.
- Often there is a difference between customer experience as a company sees it and the customer’s experience. To combat this and to make Reverb.com’s experience ever evolving, David and his team have approached this challenge very differently and are using a new initiative they have introduced called “The Contest””
- Started just under a year ago and it was a way to ensure that employees, particularly new employees, were getting plenty of one on one time with their platform as both buyers and sellers of gear.
- The way it works is like this:
- Every five weeks during their stand up, all company meeting they ask for 10 volunteers from all levels and departments with a particular focus on those that have recently joined the company.
- Once the volunteers are selected they give them each $1,000 in their Reverb accounts and challenge them to buy and sell as many guitar pedals as they can in five weeks.
- Apart from the time limit there really are no rules.
- They encourage them to buy from new users to show them a nice search experience.
- They produce a leader board during the contest to promote healthy internal competition.
- They evolved into focusing on guitar pedals and other similarly sized electronic gear as they are volume products and they avoid the complexity around shipping larger musical items.
- The focus is not on making the most money as that would change the focus of the competition to items with the most profit potential. Rather, they focus on maximising the number of ‘turns’ (transactions) they complete.
- There is a dollar prize for 1st and 2nd place with the first place contestant receiving around $1500.
- They started it after the company grew to a size such that David could no longer personally instill in every employee the customer driven experience he wanted.
- The benefits they have seen come from this approach include:
- All employees across all functions get to experience the platform exactly as the customer does and they also get to see first-hand where the ‘pain’ points are.
- The employees in The Contest are often the first to spot issues and when they do these tend to be taken more seriously and are acted on quicker than when a customer identifies an issue.
- Given that they ask all employees from every department to participate they also bring a wide variety of their own skills to bear. That can translate into learnings and improvements that can be made across the whole platform.
- For example, one employee won the contest because as a graphic designer he took beautiful photographs of all of his products and took great care around writing his descriptions.
- Another example comes from a software developer who used back-end analytics and data to uncover opportunities and help him win.
- These insights and tips are then shared with customers as best practice guides/knowledge to help them on their journey.
- The Contest gives employees great face time with customers that they would not normally get.
- Many companies these days have all sorts of specialists that don’t really understand the customer, how their work fits into delivering a great customer experience or what the customer experience is.
- About 80% of Reverb.com’s staff are musicians so many of them already use or have used the platform before they come to interview or apply for a job.
- David’s advice to other businesses that want to emulate or replicate an initiative like this and get their own employees into ‘testing’ their business is:
- Don’t limit it by department. The added benefit of not limiting it is that it encourages collaboration across departments.
- Don’t be afraid to fail. You won’t always make the money back so money spent should be seen as an investment.
- Encourage proactive problem solving. If employees spot a problem, encourage them not to just report it but to own it and come up with a solution for that problem.
- Wow service/experience for David occurs when a customer feels like they are buying from their best friend and there is an emotional connection. Delivering that will mean that those customers will go out and defend Reverb.com and become your best form of marketing.
- The things that can help deliver that include:
- Data – Reverb.com study their data on their customer’s behaviour looking for clues on how they can improve.
- Knowledgeable team members – every member of the team should be able to do the elevator pitch for the business.
- Content -interesting and engaging stories help create that emotional context underpins a wow experience.
- Finally, check out Reverb Lessons their newly launched and complimentary business where musicians can find and work with tutors and mentors, in person and online, to help them on their journey.
Since launching Reverb.com in 2013, David has been working side-by-side with his growing team to make the online marketplace the best place for musicians to buy and sell new, used, vintage and handmade music gear. As the company’s evangelist and product visionary, David has grown Reverb.com into the most popular music gear website in the world.
David started Reverb.com shortly after purchasing well-known musical instrument shop, Chicago Music Exchange, and growing frustrated with the process of buying and selling guitars online. Prior to that, he made a name for himself as co-founder and CEO of online broker optionsXpress, which he took public in 2005 before the company was sold to Charles Schwab, and as founder of ClientBASE, the first CRM solution for travel agents and tour group operators.
Prior to finding success as an entrepreneur, David began his career as a recording engineer/producer. He holds a bachelor’s degree in political science from the University of Michigan and a master’s degree in computer science from DePaul University.