Customer Experience

Escaping the commodity trap through customer experience design

Have you noticed that your profit margins are dropping? Is competitive pressure transforming your once-unique products and services into commodities? What can you do about this? General Electric’s CEO Jeffrey R. Immelt said, “Managing innovation better may be the only way out of the abyss called commodity hell.” Looking at the many different ways to innovate, the one that offers the best chance at escaping that hell is customer experience design.

What is a customer experience? What is customer experience design?

In 1994, Lewis Carbone and Stephan Haeckel defined customer experience as “the ‘take-away’ impression formed by people’s encounters with products, services and businesses — a perception produced when humans consolidate sensory information.” In a 1998 Harvard Business Review article, Joseph Pine and James Gilmore said that customer experience was a new kind of economic offering. Experiences “are as distinct from services as services are from goods” because they provide customers with meaningful, individualized and highly memorable moments. This suggests you look at customers not as users or buyers, but rather as guests visiting your home.

Companies doing this include Disney with their theme parks, Harley-Davidson with their motorcycles and owners’ subculture, and Apple, where attention to user experience is apparent in all of their products. The deeply satisfying moments experienced by their users explain why those users feel such a strong emotional bond with those companies. You, too, can use customer experience design to improve your customers’ experiences of your products or services.

Why should you design meaningful customer experiences?

A unique, memorable experience is, and is seen as, more valuable than an ordinary one. Customers are thus willing to pay significantly more for such a meaningful experience. Companies that can provide such experiences can charge higher prices, with correspondingly higher profit margins, than can companies that offer nothing but products or services that are on the verge of becoming commodities. And as the examples above show, focusing on customer experience creates much stronger brand loyalty.

How do you design meaningful customer experiences?

Better customer experience design starts with identifying which experience you want to improve. Depending on your industry, this could be a better experience opening a bank account, buying a luxury car, shopping for a computer, getting a check-up at the doctor, or applying to a university.

Next, assemble a project team that will use a systematic innovation process (such as Thinkergy’s X-IDEA innovation method). Doing this well involves several specific, ordered steps:

  1. Map out the customer journey. Describe the current customer experience in a timeline. Ask yourself what happens first, what happens next, and so on. Note that most customer experiences have more than five distinct steps, and start earlier and end later than is commonly thought. For example, applying to a university starts as soon as the aspiring student realizes the desire to get a degree, and ends well after the admission letter is sent.
  2. Toss in what happens when to your customers. Add to the timeline all the actions and “touch points” that your customers encounter at each step. Touch points are direct contacts that customers have, either directly with your product or service, or indirectly through things your company or others say about it.
  3. Chart out how they typically feel about it. Now try to understand the satisfaction levels and emotional responses of the customers to each action and touch point. If you’re not certain of how they feel, you might use surveys, focus groups or interviews to find out. Focus on their emotional responses, and invite additional comments. Score the responses, and add the averages to your timeline as a graph so you can easily see when your users are having good experiences, and when they’re unhappy. Be sure to look for places where more, or fewer, actions and touch points are needed. For example, it might help to add a fun activity at an event where you recruit students, or you might need to provide additional information at one point to reduce confusion.
  4. Generate raw ideas for possible new experiences. Once you fully understand the customer experience, including its emotional ups and downs, you are ready to create ideas for providing a better customer experience for each action and touch point that needs fixing. It helps to ask yourself questions like: What if we had to make this more fun? More entertaining? More informative? More exciting? More sensory? More emotional? More friendly?
  5. Design delightful new customer experience concepts. Now you have what it takes to design better experiences for your customers. Take the ideas you have created and try combining and transforming them until you have meaningful idea concepts that will help your customers see your product as uniquely valuable. Take your time, make your customers’ experience as good as you can make it, and you and your product or service will escape commodity hell.
  6. Rapidly prototype your most promising experiences. Last but not least, use rapid prototyping to find out how you could quickly and effectively bring your best new experiences to life. Rapid prototyping allows you to test a new experience concept with your target customers, observe their emotional responses, and ask them to tell you “what’s wrong with this” and “how to improve on the experience”. As such, rapid prototyping aims to make you fail sooner to succeed earlier with your aim: staging a range of delightful new experiences for your customers.

Would you like to learn more about customer experience design with our systematic innovation method X-IDEA? Then drop us a line and let us know more about your situation and needs. Then we can share with you our thoughts on how customer experience design may help you resolving your issues, and how we may do this together in a joint X-IDEA innovation project.

 

© Dr. Detlef Reis 2014. 
This article is published in parallel in the Bangkok Post under the same title on July 31 2014. All rights reserved.