The sources for remarkable customer experiences are not only great products as we are often made to believe but also great services that engage customers and create additional value.

Customer experiences are enabled by thoughtfully designing the complete lifecycle of your customers and understanding their needs from the “prenatal stage” when they are not even aware of your offerings until they drift away and don’t repurchase anymore (which should obviously prevented before).

Different models exists that aid in understanding this process with various names. Most commonly these models are called the marketing cycle, sales cycle or consumer buying cycle. The following picture shows an example of such a consumer buying cycle.

Understanding the needs of customers in the single stages is just as important as understanding the needs for the product or service that a company is offering for the “Application” stage of the cycle.

One high-potential area for service innovation is the “after-sales” stage in the buying cycle, when a formal relationship with customers is already established. But then again, it depends on your customers needs to identify the area where to find the biggest potential for innovative services.

This is not just relevant for business-to-consumer markets but also for business-to-business markets where innovative services can lead to significant increases in performance or overall cost-reductions.

Some examples how manufacturing companies use after-sales services to generate revenue can be found in the report “The Service Revolution” from Deloitte, the overview table is shown below.

Why do I blog this? While everyone likes to talk about service innovation in consumer markets maybe the real potential for service innovation is in the business markets? Maybe service design has much more potential in the B2B area than in the field for creating the “next Starbucks experience”?

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Consumers buy products and services to reach a certain outcome or get a specific job done. You buy a car to drive to work and maybe improve your status (if you chose BMW, Audi or a similar premium brand) and you buy a BlackBerry to be able to do your email during a business trip.

Understanding these goals is essential when developing new breakthrough ideas because only then designers and developers are able to create products and services that makes it easier and faster for customers to reach a certain outcome. The best example for this is the integration of the Apple iPod with iTunes. The customer’s goal is to listen to music and this requires also to download music from the Internet and seamlessly upload it to your MP3 player.

In the May 2008 Issue of the Harvard Business Review, the Lance Bettencourt and Anthony Ulwick, consultants at Strategyn have published an article titled “The Customer-Centered Innovation Map” that introduces a tool kit to analyze customer’s job to discover opportunities for breakthrough products and services.

The article can be found online at the HBR store.

Why do I blog this? My research is directed in a similar direction. The goal is to develop a formal method to understand consumer goals and model their behavior using different resources (i.e. products, services, skills) to reach a certain outcome. If you are working in this field as well or if you are interested to find out more, send me an email, I would be interested in exchanging ideas.

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In order to design and deliver great customer experiences it is necessary to understand customers in-depth. Traditional approaches to segmenting and capturing user requirements are not suitable because they all face on big challenge: in order to really surprise the customer one has to go beyond the obvious and explicit needs and focus on the latent needs of the customer.

In order to capture these latent needs, it is necessary to employ so called empathic research methods that help the designer or engineer of a new product or service understand the underlying motivation and goals of the customer. Usually market research budgets are not located for this.

One potential method to identifying latent customer needs is to deeply understand customer value and the customer process. With a suitable modeling language one is able to illustrate unmet needs and potential areas for improvement. If you want to read more about the empathic research have a look at the article “abstract truth“, written Alan South, Director of Service Design of IDEO, UK.

What is Customer Value?
Customer Value is the customer’s perception of what they want to have happen (i.e. the consequences) in a specific use situation, with the help of a product of service offering, in order to accomplish a desired purpose or goal.

What is a Customer Process?
A customer process is the sequence of activities that a customer has to perform to satisfy a need or to solve a specific problem, e.g., building a house. A customer process therefore determines the required products and services that a service provider has to offer to cover a customer process entirely.

With these two concepts in mind it is now possible to dive further into actual methods and tools to capture and describe customer value and customer processes.

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