EP #21: How QuadX Uses Personalization to Win in Philippines’ Digital Logistics Space

Miguel: “Alright, welcome to a new segment of our Netcore podcasting sessions. My name is Miguel Rojo and today I have a very special guest. I’m joined by a representative from the Quad X company, a man who has been a part of the digital startup scene for most of his career through his consulting firm and full-time experience with various tech companies such as Summit media, Seek Asia, Myproperty.ph, Travel book, etc and his name is Raffy Vicente. He’s been able to establish a very credible role in account management. marketing and product development. So Raffy, thank you for joining us today.”

Raffy: “All right. Good afternoon. Thanks for having me.”

Miguel: “Yeah, thank you so much for agreeing to this call. So right off the bat first thing I really want to find out is how have you guys been doing? How is quad X been doing? I mean considering the quarantine that’s been in place for a little over a month now? I’m really interested to know how Quad X and your team have been dealing with the situation.

Raffy: “Maybe I could share with you how we are doing in three different weeks, how the customers are doing, how the company is doing, and how the service is doing? 

Miguel: “Yeah”

Raffy:  So let’s start with the service. So right now I’m actually handling our shipping cart business, so shipping cart is a cross-border delivery service where you can buy stuff from the US and UK and have it delivered around Asia, so we have operations in Malaysia and the Philippines right now. So definitely on the service side of things we have a lot of problems because we’re doing deliveries, we have challenges with the lockdown areas where we have problems getting into certain locations, our trucks delivering Iris gets held up for various reasons, even the flights, international cargo company in the UK and US, the frequency is going down and of course, costs are going up. There are a lot of challenges on the service side of things although business-wise, that good thing is well, we definitely saw a huge drop when the whole warranty and groom pandemic started. Our volume has dropped as much as 70%.”

Miguel: “Oh my gosh” 

Raffy: “ That’s how business was doing when it first started but we’ve seen a little pick up the last couple of weeks where people are starting sending more stuff from the Shipping cart, but I think they realized that it’s not so easy to get Goods in Mandela in particular because here people like online shopping and most of the stores are closed and there is this chance to get more good sync through shipping cart that they can get you the US and shipped here. 

Miguel: “Yeah. I know. Yeah, I definitely agree and may I just say from a consumer’s perspective somebody who’s actually tried the services of shipping cart, it still works guys.  Please, don’t doubt that they are still working hard on it. I actually just got my package yesterday from the shipping cart. 

Raffy: “Wow, that’s great news.”

Miguel:  “Yeah. It really is. I got it shipped from a friend, they bought it for me, they used a shipping cart to sort deliveries into the US warehouses and I got it. 

Raffy: “Okay.”

Miguel: “So, yeah. Thank you.” 

Raffy: We are getting a lot of uplift in terms of things like vitamins for example in supplements we are getting a lot of people shipping them from the US including the Philippines, a lot of homes stuff as well, disinfectants even masks so people are shipping that also so a lot is going but aside from that other normal stuff as well so like in the UK, I think you see Christ recently released sneaker so we are also sending shoes and other hard to get stuff. 

Miguel: “Yeah. That’s actually really nice to see you know that kind of Collaboration like even across companies across countries there’s a, it’s that little bit of hope that I think helps a lot of people to like.”

Raffy: “Yeah, but I also wanted to share on the company’s side, how we are doing, I think we are kind of lucky that we are prepared for this kind of setup even before coming into a whole work from home lockdown situation, the good thing about Quad X is that we were really promoting work from home in every sense so we have a bring your own device policy in the office so you have your own laptop that you can bring home every day. We use slack immensely for our day-to-day collaboration so we chat a lot and activity happens through our slack channels, of course, emails are still available, zoom calls, and hangouts. I think the company was pretty much prepared in terms of this working from home scenario.”

Miguel: “Yeah. So that’s a very interesting point that you made, to be frank not a lot of businesses are practicing even a semblance of work from home. I mean, it’s primarily just that you have to come to the office. You have to work there eight-nine hours a day and then you leave so it’s very interesting that you guys already have that in place. So can I ask then given the lockdown or given the quarantine that’s been going on throughout the world? Have you guys noticed any difference in productivity or change in team dynamics for that matter?”

Raffy: “Maybe I’ll separate the question into two because you see we are a logistics and operations-driven company.

Miguel: “Yes”

Raffy: “So definitely because the lockdown operations have been affected immensely.”

Miguel: “Yes.”

Raffy: “So we have to consolidate our warehouses in some locations because we cannot get to work. There’s a part of our business where we still require people to physically go to work, especially off-site things. Yeah, so on their side definitely a lot of productivity losses, but if we talk about the knowledge workers, we have a lot of developers for example customer service or marketing team. The good thing is we haven’t seen any decline in productivity. So, for example, our development team, we’re practicing an agile way of working so we do our daily stand-ups via zoom calls at least we are like face to face, of course, you will have like a physical one that’s how it’s usually done before the whole lockdown but now that we are working from home, we devise a way of doing this remotely so we still have like a virtual board that we share with the team and we do our daily stand-up calls and our weekly what you call this, weekly spring plannings and retrospectives, we do all of that online through video class for now and it’s kind of working well for us.”

Miguel:  “That’s an amazing point because I think since a lot of people aren’t used to work from home. There’s a kind of struggle and then there’s a lot of adapting that needs to happen. So essentially you guys have been prepared for that since day one, which is a very different I would say kind of setup for a company and has essentially helped you out through this whole experience. Would you agree?”

Raffy: “Yes, I think it’s actually good that we were designing our work systems. It’s an unintentional benefit I guess, now that this is happening so we’re kind of happy that we were prepared for that. So we have some friends who work in different Industries where they still use desktop computers at the office so they don’t have access to files anymore and some people don’t have access to emails at home. I have a friend who works in a bank and that’s the problem.”

Miguel: “Yeah. Yeah. Yeah. I know that. Lots of people, lots of Bankers sometimes even government workers. Yeah, they don’t have access to that stuff like even Trying to set up a VPN or some kind of something like that will be difficult. So it seems like you guys have, you know, a lot of steps and a lot of processes that have helped you throughout this experience. So one thing I kind of wants to pick your brain on is as a business leader as a leader of your team. What do you think leaders should have as their main thought throughout this whole lockdown  so what is the one thing in their mind that they should prioritize when handling their business when managing their teams, just like overall like mental stability.”

Raffy: “It’s actually one recently. We had an all-hands session via zoom call, we have over 200 people across the company joining that call. We surely have our all-hands once a month and it’s a face-to-face celebration so we have updates, we have food, we have a mini party at the office. It was our first time doing this virtually through a zoom call and during that time our CEO, Denal shared one important thing related to your question. His message was, Please make sure everybody that you stay healthy. That’s the number one rule is because if you’re healthy individually that also means that you will be healthy in your jobs and you can help the company become healthy also so you want to make sure that they’re not worried about their personal health because it is a health crisis that we are going through right now, you wanna make sure that people are taking care of themselves at home, you want to make sure that they are not panicking psychologically with what’s happening because if you’re in that state of mind, of course, it will affect your work, it would affect productivity which would, in turn, affect the customer and the business also. You want to make sure that everybody is aware of how they should stay healthy and people’s approach to work while they work from home.”

Miguel: “Definitely, I definitely agree with that because like a healthy mind what I would say goes a long way with a productive”

Raffy: “So that’s why in office hour, we do have like a health officer and she provides reminders on slack, how to prepare your groceries and us kind of have a bulletin on slack about the fake news and what’s legitimate news, how to have cleaner groceries, how we should wash, is it really necessary to like clean your shoes when you come back home so all of these things, we have like a channel that we people share of what’s useful and what’s fake news.”

Miguel: “That sounds amazing”

Raffy: “So people are more confident and they aren’t blind as to what’s truthful and whatnot.”

Miguel: “Yeah that fake news bulletin board sounds very useful, I think we definitely need that for every company, I think it makes a much better communication channel.”

Raffy: “We don’t know our staff not knowing what to do at home so we wanna make sure that they are focussed and they’re not distracted by other stuff.”

Miguel: “Agreed 100% agreed. So but one thing I kind of also want to sort of ask from you is given this whole experience everyone is going through like in the Philippines, South East Asia, and throughout the world. Do you think this lockdown will change quad X’s business in the future? Do you think it has an impact on how you guys will be doing things moving forward and infinitely?”

Raffy: “Yeah, definitely” 

Miguel: “How so? how so?”

Raffy: “Yeah, like we always say this will be the ‘new normal’, things will never go back to the way it was before. In fact just yesterday we had something like our committee and we’ve already decided we will work from home policy permanently even after the lockdown is finished. It is something that has been on our mind for some time now, now that we’ve been forced to and like what I mentioned, the knowledge missing the company productivity-wise as it really was affected negatively but the people were still able to do our jobs. We decided that the leadership team decided that we could actually make this permanent from now on and even after the lockdown is done so we are already preparing the office for this. So we are changing the office layout to work for a quarantine style of arrangement where we have desks, where we have meeting rooms for example so we are preparing the office such that the lockdown is done, it still permanently works from home and you just come to the office for like celebrations, group meetings, important Cascades but we want people to be working for home for more days in a week than working in the office.”

Miguel: “Sounds Wonderful, and I’m glad that you mentioned the term called normal because essentially after this COVID lockdown or after the quarantine throughout the world. I mean things are going to change. I mean the way we used to do things, the way we need even something like the way we greet people. I think that’s going to change dramatically.”

Raffy: “Yeah, so you know we are a logistics company, so we are practicing contactless deliveries so we want to make that a standard already moving forward. It’s not just because of the situation you want to make sure that we fact is safe delivery, moreover cash handling you want to push digital payments rather than physical COD deliveries. Even though we do have a local delivery product that we call GG Express, Go-Go express, this is a scheduled delivery business where you buy online and we deliver it to you in three days for example. The production, we’re already pushing for seeing the delivery right now because it is for people’s needs. It was a product that we had in the pipeline. We were supposed to launch it by August or September but were forced to launch it this early. It is like four months early. It is not yet perfect but we are kind of pushing the product this early because we know that in the future that same-day delivery will be more important so we are actually, we think our operations support that, that new normal also.”

Miguel: “For sure. I mean people want things now. There’s a really huge sort of immediacy that goes on with consumers Minds. So definitely in the right direction towards where you guys are going at least operationally and marketing-wise. So what thing? I’m sorry. So one thing I did also want to talk about with regards to marketing then is the changes that have been going on throughout the whole discipline itself. One of the major topics that sort of has been brewing around marketing is personalized marketing. You know, you have to sort of release content or release media at the right time, for the right person and the right reasons, so I kind of wanted to pick your brain on that as well. What are your ideas or opinions about personalized marketing?”

Raffy: “I definitely agree that it’s not just a trend but it’s really the future especially if you’re after Performance Marketing like you mentioned we have like in our case if I would talk about shipping cart, so it’s our cross-border delivery service. We have people in our database or people using our product in different stages of usage so we have like-new users, we have power users, we have occasional users and we really have to personalize the service, the way that you interact service or even the price of the product for each of those groups because you want to grow with them in using the service over time. Of course, you want to take care of them, but they have different ways or they have different needs to them that’s important to them like some people. We actually did that initiative recently where we had a Persona mapping activity for different customers. So some customers are very price-sensitive because we are a delivery service. So they want to make sure that the mentioned are correct, the measurements to ride that the weight is properly captured because of course translates to what you call this price whereas other customers don’t care about price so much what’s important for them is the status updates? So they want to make sure that they get timely updates on where your items are, how many items are, if we say it has to arrive at this time or arrive by that time and some customers are more, customer service is very important for them. So they don’t want to talk to a bot because we have a chatbot. They hated when they talked to a chatbot so they want to talk to a real person so we actually need to capture all of those different needs of the customers and then personalize the service for them.”

Miguel:  “That’s perfect. That’s what I think you excellently described.”

Raffy: “Yeah. you can’t have a single product or service with different types of customers, I mean you can’t for most of them because they will be paying points, they will need more service, they will need more attention. If you force-fit a single unified product to everybody so you actually have a hard time operationally also, serving that type of business.”

Miguel: “Yeah, I absolutely agree because one thing that you know, people hate this just being bombarded with the same thing that they didn’t even want or need that the time and with that you sort of lose numbers or you lose customers in that kind of method so speaking of numbers though. I know personalization is somewhat subjective in a sense. A lot of marketers are kind of Blind as to how they should be measuring this or how they should be keeping track of how well personalization is doing. So in your mind Raffy, how would you track numbers or what KPIs should you be building on when using personalization?”

Raffy: “Okay, maybe one part of it, the way that I view it, personalization for our business. I’m looking at two things, the number one purchase activity so how much do they pay, transactions because again, it’s delivery.”

Miguel: “Yes. Yes”

Raffy:  “Our revenue depends on the size of your shipment the frequencies and even the promos that we use so you want to make sure that we can personalize the offers that we’re giving so that our customers will transact more often that the revenue will not die and are actually rolling usage on a per customer business. So the personalization of offers is very important in that sense. The other way that we use personalization is the customer journey when someone signs up and then makes an account different people have different I get some timetables before you transact. Some people transact in two weeks, others will take six months before they make their first transaction.”

Miguel: “Yeah.”

Raffy: “So again the personalization for them also would be very different so if I talk about your question about the numbers. So I think those types of parts of the business would have different KPIs to track. All the journey personalization we do is segment our base of different groups or different cohorts and their KPIs of how soon they move on to the next stage or the next step. So this base of customers, for example, that we got from a campaign with a partner bank will take usually two weeks for the first transaction so we are a mixture of pushing our personalization efforts. You want to increase it by just 5% of it because you’re already changing the overall basis performance in that sense so we have different segments from different sources or from different parts of campaigns that we do and we do extensive AB testing of what flow works better to convert their first transaction. So do we give them a promo offer in the first week or do we educate them on how to use the service first? So we have like different Journeys that we are programming to see how it will change the standard or the default conversion rates.” 

Miguel: “Yes, Yeah. Yeah. Good luck. No, please go ahead.” 

Raffy: “Okay. Yeah, the other part of it is the offers, right?”

Miguel: ”Yeah.”

Raffy: “It used to be, when we were, the Shipping Cart started about 2015. So we’re in our fifth year right now. For the first two or three years of Shipping Cart, We were doing Universal promo offers. It was just like a blanket 15% discount that we would give to everybody and the first-timers loved it because they can see what their shipping fees are. But we did take a deep dive into our profitability on the first transaction level and we found out that we were actually losing money. Well, almost half the transactions because the approvals didn’t have any minimum spend or thresholds for like anybody could just use it. So people use our approval code consistently for all their transactions without any caps. So it really is a lot of our revenue So we started having more personalized promos where we would have different buckets of users and different promo offers that the minimum spend is higher or lower depending on what you have in your cart Also based on your history, how much you spend we would personalize the offer so that it is attractive to you but also at the same time it doesn’t devalue our revenue so when we started doing that we have zero negative transactions. Everything makes money now.”

Miguel: “Nice. That sounds like a success story to me. It doesn’t. Yeah, it’s all about learning. You know, we mean you try one thing you see how it works and if it doesn’t work adapt and learn from it and try something different and I think even you guys have done that well, so if let’s say I started a company tomorrow by the way, not leaving but if I wanted to start the company tomorrow and I had personalization in mind or I had I’ve been hearing about personalization. What advice would you give to somebody like that to an entrepreneur or to somebody who’s starting? How should they go about starting with personalization?”

Raffy: “I think it will always start with the customers so you should be able to organize in your mind how you can group the customers in any useful way because you can never personalize until you are able to organize your customers better. It could be by psychographic demographics, but always at the Vivid, it could be by the life stage of the life cycle of your product. It could be by their spending capacity. So it anyway depending on whatever business you are in. I’ve always wanted to group things into three so if I will group people into three ways how will it look like or what kind of groupings would I have and  once you’re able to group them in that way, that’s how you serve them price-wise, customer service wise even reaching out or communication with them, What’s the best way to reach them and you can actually build your final from that but I guess it always starts with how you understand your customers and then you should be able to group them, segment them, categorize them in a useful way that will service then better.”

Miguel:  “Sounds like sounds like a plan and I’m ready to start. I think that’s a wonderful way to end our session today. I think you’ve given a lot of wonderful Insight on both. How to deal with our current situation with the lockdown and even how to start with creating your own personalizations with your customers with your company, so once again, everyone listening to this podcast, I thank sir, Raffy  Vicente for joining us today. Rafi any final thoughts you’d like to share.”

Raffy: “What I would say is you don’t have to jump into using complex, sophisticated pools. Start with because if you can’t draw the personalization campaign without the tools even in the simplest form. I think you have a difficult time operating and running it So always starts with the basics first and Because I’ve also experienced jumping into using a tool and it’s failing because you don’t know how to use it because you’re focused on things like the functions, the features, etc. But if you start with a good understanding of how you want to run your campaigns using pools that will be so much easier and more organic in the way that you are using it because, you know, the use cases prior.

Miguel: “Perfect. Sounds like a wonderful final thought. So everyone listening to this podcast, please do visit the shipping cart at shippingcart.com for any of your US or UK buys that you just can’t get here in the Philippines. Once again, Thank you so much and I hope everyone here has a wonderful day.”