Navigating Exponential Growth: Air Up’s Strategy for Customer-Centric Success

Health and wellness is big business these days.

Consumers are actively taking greater control over their wellbeing and their lifestyle like never before, and they’re prepared to back the brands that can meet their needs with effective, sustainable, scientifically proven products or services.

One such brand is Germany-based Air Up – a groundbreaking start-up retailing refillable bottles that add flavour to plain drinking water through nothing but scent. The technology behind their products is radical and innovative and so, too, is their approach to building and maintaining connections with their audience. Here, we speak with Air Up’s Head of Customer Engagement Thomas Staudte who describes the story behind the brand’s exponential growth. He dives into the initial challenges he faced when he came into the company, the core elements that underpin his communication strategy, his learnings relative to implementing generative AI, his digital roadmap over the next 12 months, and a whole lot more.

Let’s dig in.

Simon Hall: Thomas, thank you for joining me! Air Up has been on quite a growth journey over the last few years – disrupting an entire industry and revolutionising the way people drink and think about water. Can you unpack what that journey has looked like from inside the organisation?

Thomas Staudte: Thanks, Simon. Yes, indeed. We’re on a very intense journey.

Each team within Air Up will likely approach this question differently. However, we do all share a common experience of operating within a dynamic, fast-paced, high-performance setting. Our foremost objective is to consistently deliver value to our customers and excite them every day – this is the fundamental tenet of our company’s ethos.

It all started back in 2016 when our founders Lena and Tim were working on their bachelor’s thesis on the convergence of neuroscience and design, and they uncovered the concept of retronasal smell. It sparked an idea centred around creating a product that could change the way people think about drinking healthily and change how people experience taste.

Of course, a good idea doesn’t always translate into a successful product or service – you need to sell consumers a story. And the seminal moment in Air Up’s early journey came when the initial batch of bottles they launched in a retail store quickly sold out – it signified that Lena and Tim’s vision resonated with people and that they could cultivate a dedicated customer base.

Thereafter, their job was all about securing investors and formulating a direct-to-consumer (D2C) strategy, which began with the opening of an online retail platform. Today, our collective mission revolves around advocating a healthy and sustainable lifestyle. With our unique and innovative taste technology, we’re building our own category in the beverage market. During those first years, our developmental trajectory was sharp, and it was characterised by ongoing learnings. The first big questions were dedicated to market entry and product launches: Where to launch first? Which products to launch first? What kind of team is needed?

We're on a never-ending journey and it’s incredibly important that we stay curious in our mindset – this is embedded in our identity. We’re driven by the enthusiasm our customers show in our products and our goal to reshape the habits people have around consuming sugary drinks.

SH: You joined the company as the Head of Customer Engagement in 2020. What were your priorities when you first entered the business and how have they evolved over time as the brand has scaled rapidly?

TS: When I joined Air Up, we had one single support email address. I inherited a team of four and we had a backlog of over 1,000 support tickets alongside other unresolved support tasks. The immediate priority was to remedy that situation and establish a clear customer engagement strategy that we could build on in the years ahead.

In my early days, the primary focus was implementing effective self-service and getting the basics set-up – Think: creating an FAQ page, introducing customer care on social media channels, launching the right tools to engage with our audience, etc. Of critical importance to us was tapping into a customer-centric approach and enabling a feedback loop across the company that could capture and act on customer insights that are critical to our organisation – their reception of products, their preferences, the offerings they would like to see from us in the future. This was an essential step in empowering our product and marketing teams with actionable data that they could then use to inform strategic decision-making.

Once that whole ecosystem was built, we directed our attention towards the type of support we would provide. Should we offer phone support or not? Which languages do I need in my contact centre? We asked ourselves those types of questions and we started working on scalable and efficient processes that would accommodate substantial growth. And to give some small insight here – one of the most significant challenges was keeping on top of our exponential success. It was fantastic, but tough to manage. To illuminate the scenario with numbers: In 2020, we made €21 million in revenue; the year after we nearly reached €90 million in revenue. Within 12 months, we grew by a factor of four plus, and our support workload grew in parallel. You can translate that growth to areas of customer engagement: One email became four emails; one ticket became four tickets – and that’s on top of all the social media activities we had to manage as well.

This was an enviable challenge, albeit a challenge nonetheless.

To deal with it, my approach was, and still is, to balance hands with technology. Over the years we’ve been implementing and refining the strategy, and now the basics are in place, we’re taking the next step by integrating automated, personalised dialogues, 24/7, in all languages.

SH: Air Up has amassed a loyal customer base that actively and proactively contributes to marketing the brand on channels like TikTok and Instagram – Gen Z and millennial demographics and general health-conscious consumers represent those particularly enamoured with your products. What are the core elements that underpin your communication and engagement strategy?

TS: That's a great question.

Our strategy is deeply rooted in understanding and embracing the needs and values of the younger generations. Air Up is made by the young generations for the young generations – all our founders are part of the Gen Z and millennial cohorts. Our ideas and our products are designed to meet new consumption behaviours and it’s incredibly important that we’re on the channels and in the spaces where our audience is and where our brand culture develops – on the likes of TikTok, YouTube, and Instagram.

If you talk to our Head of Brand, he will say that our product is a cultural artefact that people can shape and influence, and that’s why we actively engage with our market to understand their needs and continuously develop our offering. And that comes back to the feedback loop – we try to be where our customers are. We communicate in a way that they delight in and in a way that they appreciate. We want to showcase and demonstrate the authenticity that we have as a brand.

SH: Just recently you went through a rebranding process that taps into Air Up’s playful side and displays a visual language that captures and conveys the brand’s distinct sensory experience. Can you describe the thinking behind this rebranding from a customer experience, customer engagement perspective?

TS: It all routes into where we come from.

Typically, healthy products are perceived as rather mundane or unremarkable. Right from the inception of our company, it has been important to us that we differentiate our brand expression. The rebrand is an evolution of that. We’re aiming to imbue our audience with the understanding that our products are distinctive, not only in appearance, but also in their approach to health and sustainability. It’s our firm belief that our products are more respectful of people and their environment, and they possess the capacity to exude excitement and enjoyment, even in the simplicity of plain drinking water.

Looking at our customers around the world, we’ve found that they have one inherent characteristic in common – and that is finding a good balance between gratification in the short term and the promotion of health in the long term. This ties perfectly into our company’s purpose that is defined by making healthy habits irresistible. Our products look to resolve the tension between the indulgence and cravings of our inner child and the discipline of our adult selves. It’s this equilibrium that we have encapsulated in our new tone and voice, which are structured to encourage the pursuit of wholesome living.

Our aspiration is for individuals to derive a sense of vibrancy and wellbeing when they drink with Air Up, empowering them to cultivate healthy routines without the need for sugary drinks.

SH: Moving on to the subject of your upcoming presentation at the CCW Europe Summit in October. One of the key themes you’ll be covering will be your learnings relative to implementing generative AI technology across your email and online chat ecosystems. As a preview to your session, can you dive into the specific challenges you were facing that prompted your investment in AI?

TS: There were a few, I can tell you!

It was back in 2021 that we began integrating AI into our email communications. At the time, I evaluated various platforms as the landscape of conversational AI was still developing with numerous players entering the market on a constant basis. Many of these providers helped us on our journey to understand what was possible with this nascent technology.

The most significant challenge for me was navigating our fast-changing internal dynamics as a start-up continually venturing into new markets, languages, and partnerships. The instability and fluctuation in our processes made automation-based projects particularly demanding. One of my key learnings was the importance of driving action despite the countless justifications for inaction – there will always be 100 reasons not to move forward with a new business initiative. You just have to get started somewhere. And so it was, after defining approximately 70% of our core processes (for example, handling returns, dealing with product issues, managing customer complaints), we launched a soft integration of AI into our email management system (EMS).

The decision to collaborate with Digital Genius proved to be a pivotal move and they remain our trusted partner for all our AI and generative AI ambitions today. Within just six months, we had successfully automated the top five basic questions in our email communication – the platform was able to detect customer intent and then craft email templates in response. This facilitated a gradual transition toward full automation, reducing the need for agent intervention. Our collaboration with Digital Genius marked a significant entry point into a new realm of automation, and the aspect I like most about their platform is its independent approach – it has allowed seamless scaling from emails to FAQs, contact forms, chat, and social media. This operational infrastructure – this background engine – ultimately eliminates the need for separate tools for each channel, to which we attribute a return on investment of slightly over 600%. Insane numbers.

SH: Introducing customer-facing generative AI is a daunting prospect for any brand. Where did you start?

TS: You’re spot on. For us, it was relatively easy. We simply continued on the path we were already on.

I have always been a keen observer of the development of generative AI, and it’s clear that this technology has tremendous power. But as you allude to, brands need to be extra careful here and it must be implemented with rigorous control in a corporate environment.

We made the decision to roll it out within our chat service first and we started in the U.K. market, leaning on the fact that most of the existing generative AI platforms have their base in the English language. Once this channel was set, it was a case of defining the biggest lever that could generate the biggest impact. We had already automated basic conversational use cases (for instance: Where’s my order? How do I return my item?), and so we strategically focused on all the pre-sale inquiries that typically cover product usage, product durability, product compatibility, or suitability for children.

The results were impressive.

Before transitioning to generative AI, we had template answers to all the pre-sales questions, but we never contextualised them. We never personalised them. But moving this into generative AI, we saw our automation rate increase by 50%, which was fantastic for our business. Just by employing different technology for the same use case, we’ve unlocked new efficiencies – and it has paved the way for expansion into other areas.

SH: When executing a digital transformation on this scale, just how important is it to get total organisational buy-in? And how do you do that?

TS: Very important. It's also multi-faceted.

In addition to the support from the core stakeholders (specifically executive leadership), obtaining buy-in from your team is imperative when new technology or digital processes are involved. AI technology holds the potential to revolutionise our digital operations, and this necessitates full alignment across your team.

At Air Up, we’re leaning into a vision of making healthier habits irresistible. It’s powerful and it’s very ambitious. As a leader, I recognise the crucial role I play in guiding my team through the AI journey and I have prioritised transparency. Indeed, sooner or later, we’ll all be faced with the disruption brought by generative AI. Is that a potential danger for your team? That all depends on what you intend to do. Our initial focus with this technology is deploying it to handle the mundane tasks of my team, which will then obviously free them up to work on more meaningful, value-add services – for example, driving loyalty. But if you don’t carefully communicate that into the organisation, it could lead to fear, frustration, and insecurity.

Embracing this journey presents a significant opportunity for everyone in customer engagement, but from a management perspective, and from a company perspective, you must uphold transparency. Set the right expectations. It’s essential that you reassure your team that your objective is to enhance their work, improve their output, and drive greater job satisfaction, rather than replace them.

SH: Consumer expectations today are through the roof. Just one instance of disappointing customer service is enough now to turn people away from any given brand. Against such a fickle loyalty landscape, what work are you doing to ensure your automated customer interactions feel natural – like a seamless, personalised dialogue that is always on-brand?

TS: This is another huge challenge for my team. You're right. And it’s sad but true. Negative word of mouth and negative reviews can be detrimental to a company – it’s frustrating and sometimes demotivating for passionate agents. Everything they do is to try to make customers happy.

From my personal perspective, there needs to be an understanding that no business runs perfectly. There needs to be room for failure. I totally understand that if an order arrives late, it can be frustrating – but do I necessarily need to go to Trustpilot and shout about it? I don’t think so. Businesses will make mistakes, whether the operations are run by a machine or whether they are run by a human. We need to keep this in mind.

In our approach to personalisation with AI, we have a small, dedicated team of analysts and automation managers who collectively address the challenge. They meticulously read every single dialogue, in all languages, and then they feed the AI with the learnings. It’s crucial to tailor the data we input to align with our brand guidelines and ensure the technology has accurate product information including details such as available colours and bottle dimensions, etc.

That’s one element.

Adjacent to that, we’ve also devoted a lot of time to training the machine with our preferred communication style, and the outcomes of this have been very positive. I’ll give you an example of one dialogue I can recall. We had a customer who was becoming unpleasant and offensive in the chat, and they were trying to take advantage of a situation to solicit some free products from us. The machine handled it better than perhaps any agent could have. And I say that because when an agent finds themselves in such scenarios, it’s easy to succumb to stress and there are often no conversational scripts that can help in that extreme environment. The AI, though, handled the situation gracefully and amiably, ultimately prompting the customer to backtrack and leave the conversation.

In the aftermath of interactions of this nature, our team members would typically require a moment to decompress and recuperate, but with AI, this emotional aspect doesn’t come into the equation. Its ability to competently manage multiple challenging interactions simultaneously without succumbing to emotional strain can deliver significant advantages. 
 
SH: Throughout the entire process of integrating AI into your customer engagement strategy, were there any times when you needed to course correct?

TS: Definitely! Our commitment to the initial goal has never changed – it's important to state that. Nonetheless, it has been essential for us to adapt our approach and outlook along the way.

For instance, the first chatbot we introduced was a flow-based chatbot with basic AI intent detection. My team did a lot of work and invested a lot of time in that project, building out content in all our supported languages, but then generative AI came along, and we decided to make the switch. And this goes back to the transparency piece – it was critical to communicate why we were making this transformation. It was a bold decision to move forward with generative AI, but a necessary one. Introducing this technology has helped boost our CSAT score and our automation rates.

The task now is to ensure that our team remains flexible and receptive to future developments.

SH: To round things off Thomas, let’s look to the future. What’s next on your digital roadmap? What are your major priorities over the next 12 months?

TS: This question is straightforward for me because I have such a simple answer. While it may seem banal, our focus will be to continue what we’re doing: To continue elevating automation rates across all our channels and continue driving personalisation and high customer satisfaction.

I’m particularly excited about venturing into social channels with AI. I also want to establish more effective communication with generative AI and harness AI to enhance our services, drive sales, and foster customer loyalty. These are the initiatives I’m keen to implement within the next 12 to 24 months, and it promises to be a very interesting journey.