We soar to new heights this episode as we look at how Otis Elevators uses the Internet of Things (IoT) to actually solve problems before they happen. It’s practically magic, and it’s a fascinating look at how to create mind-bending experiences that keep your customers happy.
Oh yeah. Hey, welcome to the CXM Experience. As usual, I am Grad Conn, chief experience officer at Sprinklr. And we’re here talking about experience because experience is the new brand. And today we’ve got a special show. Kind of a fun show. I’m going to do a little bit of history today as usual, and a little bit of recent history, not as usual, and a little bit of foreshadowing.
So I’m going to talk about elevators. I’m actually going to talk about Otis Elevators very specifically. And we’re going to do a little bit of history on Otis elevators, which I think you’ll enjoy. Elevators are something that we all use, although not as much recently. But we all use elevators. We’ve all been in many, many elevators. But do we really know the story of elevators. And this all has to do with where we want to go in CXM, or customer experience management.
But let me let me start with a bit of a history about the Otis Elevator company. Otis Elevators started in 1852 when Elijah Otis invented the safety elevator. And the safety elevators idea was that they would automatically come to a halt if the hoisting rope broke. And he demonstrated it at the 1854 New York World’s Fair. And essentially, the elevator industry established credibility immediately after that. Just trying to imagine the pre-safety elevator era, where when hoisting ropes broke, the elevator plunged everyone to their death at the bottom of the shaft. I guess you can see where that would have potentially created some angst amongst folks about taking elevators. But certainly Otis did an awesome job of creating confidence in elevators, because, we’ve all been in probably thousands of elevators in our life. And with some exceptions, but very rare, people don’t worry about it. They get in the elevator, they press a button, they get out of the elevator, don’t even think about it.
Otis has obviously continued on and become a great company. Was for a while owned by United Technologies, but it’s actually its own company now. And it’s been independent through 2020. Just as the pandemic burst on the scene Otis actually went private, which is kind of interesting. And they’ve installed elevators in some of the world’s most famous structures, including the Eiffel Tower, the Empire State Building, the Twilight Zone Tower of Terror at Disneyland and Walt Disney World, my favorite places. The Petronas Twin Towers, the CN Tower — that’s an amazing elevator ride. If you’ve never been there you’ve got to go to the Winchester Mystery House, craziest place ever. And the Skylon Tower at Niagara Falls, which is again another amazing place.
One cool fun fact about Otis Elevator is that their office, their headquarters is in Farmington, Connecticut. And there are no elevators in their headquarters. It’s a two story building. So, I don’t know, there’s something very poetic about that. I think if I was Otis, I think I would have built a very skinny 25,000 story building to demonstrate my elevators. But it’s always hard to it’s always hard to drink your own champagne, or eat your own dog food.
So, Otis Elevator? Why am I talking about elevators? So I actually worked with Otis very closely a couple years ago, as CMO at Microsoft US. I took a side job as the BG lead, or the business group lead, for Dynamics. And I did that job for about six months. So it was a gruesome period of my life because I was essentially going full speed on two jobs. But i learned a lot of interesting things about Dynamics. And Dynamics and the Microsoft Cloud formed a really interesting relationship with Otis. Basically, they’ve got millions of different products that they have, and hundreds of thousands of elevators out there. And one of the things that’s really cool about Otis is that they have sensors that they can install in the elevators. And so they did a contract with Microsoft Dynamics. And we created a very interesting model where they have 2 million units under contract at Otis, they have 30,000 mechanics, and they were at the time spending approximately 16 million hours servicing elevators and escalator equipment around the world on a global basis, annually.
Now, the problem generally with elevator maintenance and service is that an elevator breaks down, the service person is called, they come to see the elevator, they figure out what the problem is. That takes a week or two. Then they order the parts to fix that. That takes a week or two. Then they come back and they fix it. And that takes a week or two. And so anywhere between three to six weeks, an elevator can be out of service, which is significantly disadvantages in a building with one elevator. And it’s still quite problematic even in multi elevator buildings because you’re losing a fairly significant percentage of your capacity.
And so what Otis did is they went to an IoT model, an Internet of Things model, and they started installing sensors in all of their elevators. And when I say all the elevators, you have to understand that, there’s some very old elevators in the Otis stable. For example, in New York City, at 10 Riverside Drive, there’s the oldest continuously operating elevators in the United States. It’s still operated by a door person. It was actually in the You’ve Got Mail movie if you if you’ve seen that movie, and the elevator began operating in 1910. And it’s in a 12 story residential apartment complex. At 171 Genesee street in Utica, New York, there’s another elevator, which has been also manually operated. The first passenger rode on that elevator in 1917. And in the Foundation Building an East Seventh Street… it’s the oldest elevator shaft. But at the time the building was built, they had not actually invented elevators, they just knew they were coming. So the shaft is very old. But the building put elevators in and replaced them. So the first elevator was steam powered. And then the new one was an electrical one in 1890. And then that was replaced in 1972, with a new elevator. But that’s a pretty old building.
But the core of this is even though superduper old, more than 100 year old elevators need a New York City elevator inspection certificate before you can ride on it. And Otis has got to keep all that running. Plus, you can imagine hundreds of thousands of elevators across many generations and many decades, through the 20th century and beyond. So how you manage that?
So they have been operating on a model of when it breaks to fix it. Nothing wrong with that. But they realized there was the better approach. And the IoT approach was install sensors on all the core operating parts of the elevator. And when the part started to vibrate, or change its motion in a significant way, that IoT sensor would send an alert through Microsoft Dynamics to a central dispatch center. And they would be able to see A: that an elevator was entering distress but had not stopped working. But the part was beginning to fail. Number two, they would see what the part was. And so what they could do is they could send a service person to the elevator and fix it before broke.
But what did this do? A bunch of things. One is they spent less time going back and forth. They had more uptime with the elevators. Create a higher level of customer satisfaction, and generally ran fewer risks as a company because they were staying on top of anything that was going to potentially fail. And this partnership with Microsoft with Microsoft Dynamics and the Microsoft Azure Cloud. Very important. Very cool. We actually announced it in November 2017. And Alyssa Taylor and Judson Althoff talked about it on stage at one of our Dynamics events in Chicago. And it’s been a great partnership ever since.
So why am I talking about elevators? I mean, I really do enjoy talking about elevators, they’re really cool. And this whole story is a really cool story. But what does it mean for customer experience? Because if you think about it, what Otis is doing is they’re creating a great customer experience. It’s a customer experience that is in absence of… So when elevators are working, one doesn’t tend to note it. It’s just a little bit like… I think that’s why it’s so tough being in the IT department. Nobody ever calls up the IT team and says Hey, thanks, my email went through, or Gee, that was really great I was able to access all my documents in the central folder. No one ever says that. Geez, my login worked really well. Never happens, right? It’s always complaints and issues. So basically what this is doing is reducing the incidence of complaints and issues, reducing the incidence of waiting longer than you want to to be able to get to your apartment or to get to your office floor because an elevator is broken. They’re reducing the inconvenience, and to a certain extent, they’re also decreasing overall risks of the population as a whole. But that’s still an awesome way of thinking about customer experience.
And the challenge I would put out there to anyone running a SaaS business is, don’t you already know, when something’s gone wrong for your customer? Don’t you already know when someone is rage clicking on a button because it’s not working? Don’t you already know when someone didn’t get something in time? Don’t you already know when someone has abandoned a cart because the coupon wasn’t working? Or don’t you know that someone’s abandon a cart because the coupon code isn’t there? Like you know these things already. And it’s amazing how often people fail to architect their SAS systems in a way to pre anticipate or understand what the customer issues would be. Doesn’t make any sense to me.
The expectation of customers today, as they get more educated with better and better service from more and more companies is that you should know I have a problem before I call you. You should call me. You should tell me that you fixed a problem, you should tell me that you’re seeing something happening. And you can tell that I’m upset. You should be the one in front of that. That’s real customer experience management.
This idea that we wait until someone complains, and we all know that only one out of 10 dissatisfied people complain. So just waiting for that 10% of the user population to complain. And then to do something about it is really backwards. Really the right way to do this is to pre-anticipate and see what everyone’s doing, understand the click streams, understand the event streams, and then be able to optimize those event streams in real time. So the people, as they’re getting frustrated are having their problem solved for them. It’ll create a great customer experience, so they may not thank you, which is a little bit of the drug I think we’re all on. They may not even notice that you fixed it. Ungrateful. But they will buy more from you or buy more because it worked. It worked well. They got what they needed.
That’s elevators, that’s customer experience. Get in front of your customer. Don’t wait for them to call you. For the CXM Experience, this is Grad Conn and I’ll see you next time.