Game Changers

Game Changer Profile

Scott Carr, CEO, Modria

Scott Carr, CEO at Modria Read insights

As CEO of Modria—the pioneering Online Dispute Resolution (ODR) platform—Scott Carr provides businesses and government agencies globally with a transformational tool for fast and fair resolutions, customer service efficiency, and even brand loyalty. The model provides a unique pathway to justice and institutional trust for global consumers, and is rapidly growing beyond transactional disputes. After 15 years of development and technological enablement, ODR itself has surged beyond its initial brief of legal cost savings and eCommerce complaint solutions to become a game-changing catalyst for brand building, civil justice access, and marketing intelligence. Carr says that between one and three percent of all transactions go wrong each year, and that clogged Small Claims courts are unable to cope with either the volume or the cross-border jurisdictional nature of online disputes, while consumers have neither the time nor the resources to pursue them through traditional channels.

As Director of Dispute Resolution at eBay and PayPal between 2003 and 2011, Modria’s co-founder, Colin Rule, designed a system that resolved 90 percent of some 60 million annual disputes through a disruptive software system, and without the need for any human involvement in the resolution. While parties retained the right to appeal the outcome to court, the astonishing result was that 99.9 percent of the tens of millions of parties involved were sufficiently satisfied that they did not appeal—surely an outcome with profound implications for the future of global civil justice itself. Modria has since innovated a modular SaaS platform to resolve a wide variety disputes at scale—from relational disputes to insurance claim conflicts—where the company designs and manages a software-driven system involving diagnosis, negotiation, mediation, and, in rare cases, arbitration. Carr says, “Our innovation is in user experience, process design, and then using data to help create better experiences.”

In terms of incremental innovation outcomes, cost savings for companies include the reduction of complaint contacts from 12 dollars for an average customer service call in the US to just four dollars and eighty cents for Modria ODR. This is partly because the platform significantly reduces the number of CS interactions. But the disruptive potential is revealed in another number: companies like online marketplace brands have found an 18 percent higher reactivation rate among customers who had gone through the ODR process—even if they considered the outcome unfavorable. Rather than slamming the phone down on a customer service agent when a purchased item or service arrives in the wrong form, or not at all, research found that customers appreciated the quick, fair, and easy access the resolution provided, and are rewarding those brands by renewing subscriptions. Carr says, “Back in the late ‘90s, Colin saw that the internet could be used to resolve conflicts in ways people had never considered, but also that there would be whole new categories of disputes that would come up from the digital age that traditional courts could never handle. Part of what is driving the acceleration of transformation to ODR is that courts were designed for a time when everything I did was face to face. The courts today in the US are clogged with Small Claims cases where I cannot get a date for two years; the time it takes is almost not worth the effort.”

Beyond its commercial application and its marketing potential, Carr says ODR could ultimately transform access to justice for millions of people in the developing world. He also raises this profound question for marketers: how many millions of consumers drift away from brands without those companies knowing it—simply because those consumers are confrontation-averse, and don’t have the energy or desire to argue with a CS agent over the phone? Modria empowers those consumers to lodge their disputes and, if needed, evidence without the need for confrontation, often with checked boxes on a software platform that can anticipate their likely preferred outcome through AI, and the company’s decades of imported dispute experience. Meanwhile, since legal disputes uniquely cut through to the ultimate emotions and candid motives that move consumers to loyalty or boycott, ODR also presents marketers with their potential data holy grail. Carr says the combination of re-earned trust and these new insights are proving so valuable that many companies involved with high volume, low value transactions would even welcome higher claim numbers that might flow from the easy-to-use dispute resolution process.

“A question we often get is: if I create an easy-to-use ODR process, will I have a sudden influx of disputes that will overwhelm me? What we often say is, if that happens, it means there were latent disputes in your customer base or community that you weren’t addressing. You had customers or citizens not getting access to justice or resolution, and you were therefore losing the loyalty of those customers. You want to surface that, because ultimate dissatisfaction is what erodes your customer base.”

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