The New Year is still young I would like to use this post to reflect on the various projects that kept me busy in 2009, the experiences I have made in these projects and give an outlook on my focus at the Customer Experience Labs in 2010. If you would like to read more about a certain topic on this blog in 2010 let me know in the comments or via eMail at bernhard@customer-experience-labs.com.

Design Thinking in Action in 2009

One of my personal highlights of 2009 was our “design thinking & business innovation” course in which business students develop innovative solutions to problems that are defined by industry partners. In this course we follow a methodology that has been originally developed at the Center for Design Research at Stanford University and which we have adopted to meet the requirements of teaching the course at a business school. Our student teams developed solutions ranging from community involvement in the life-science industry to personalized sales consultation for telecommunication services as well as a new printer concept which turns the printer into multimedia terminal in your living room.

Besides the these teaching projects, we have also applied our “design thinking & business innovation methodology” in a number of workshops with industry partners to bring the idea of concept design and design thinking into organizations. These projects were about: 1) ensuring end-user acceptance for a IT-based CRM and sales solution, 2) training employees the skills to run design projects themselves and to train other employees, 3) setting up and coaching/managing an internal design innovation team at a major financial service provider in Germany, 4) organizing a co-design workshop with customers to improve the service experience for a German premium car manufacturer

Several observations I have made in these workshops:

1. Most organizations have idea management processes and systems in place but this is not enough to trigger breakthrough ideas in an organization. You cannot “manage” and “analyze” yourself towards innovation.
2. If employees are given the freedom to innovate and experiment with ideas for new products and services, ideas will emerge that are not just incremental improvements but truly breakthrough ideas. With our approach we basically define rules that overrun corporate rules to unleash a surge of motivation and creativity.
3. The way many large organizations are managed and controlled is exactly the opposite of management and control that is necessary to allow the emergence of breakthrough innovations. Nevertheless changing “the organization” or “changing the culture” is a long and tedious process that is not measured in weeks and months but years and decades.
4. If you want to foster change, you have to start with implementing an agile “organization within the organization”. This internal startup needs dedicated employees who have mechanisms and support to circumvent control mechanisms that are necessary to manage and keep large organizations in control.

These findings are by themselves not radically new. The interesting aspect is the process we have followed in these projects to develop customer-oriented solutions with minimal budgets, limited time frames and various other constraints that are present an mature organizations.

The documentation of these findings as well as a detailed description of our projects will be my main academic focus in 2010. In the coming months I will be working on my Ph.D. thesis and synthesize all the experiences, results and data that we have gathered in the last months and years into a coherent document. So stay tuned for updates about this.

Customer Experience Labs in 2010: The same but different

While I won’t be focusing on much else than my Ph.D. thesis I am in the process of redefining and changing the “Customer Experience Labs” blog to better reflect the development of the customer experience management field since I started writing three years ago. While I still strongly believe in the concept of creating remarkable customer experiences through innovative products and services to gain a competitive advantage, I think the “customer experience community” has evolved in the last three years.

The State of Customer Experience Management and Design

I think we have come quite far in the last years with more and more companies understanding that customer-orientation is very often too abstract but by focusing on the customer experience a new, more concrete understanding and frame of the customer’s requirements and needs can evolve.

In this process, two trends shape our understanding of customer experience. A number of innovative companies emerge who bring methods and tools from User-Centered Design, Industrial and Interaction Design and transfer them to design remarkable customer experiences. These methods and tools are getting more and more accepted. Therefore doing an ethnographic study instead of a questionnaire based survey is a valid option and nobody is irritated when you test a low-fidelity prototype with a selected group of customers to get feedback as early as possible in the design process.

At the same time many companies start to use the term “customer experience” to spice up their marketing material. The services are the same, they just have a different label. There is nothing wrong with that but I think one should be aware if you are actually confronted with a new set of innovative methods that help you to transform the customer’s experience or if it is simply the same call center solution that has been turned into a “customer experience platform”.

Of course user-centric, customer-experience focused design principles are not yet established in every organization but I think a blog like the “Customer Experience Labs” should discuss new topics and address emerging issues and not try to advance the diffusion of well-known practices.

Based on these findings as well as other trends I plan to put my focus in 2010 on three areas:

1. Leading the realization of innovation

2. The Tipping Point of the Mobile Revolution

3. Innovative Pricing to influence the customer experience

Leading the realization of innovation

You think you have a great idea, now what? The customer experience and innovation community is obsessed with new ideas and how these can be integrated into new concepts for products or services. The only problem is that most of the time these ideas are not as useful as everybody thinks they are. If you have done a sufficient number of design projects with different groups of people you usually come up with pretty similar ideas. Or as the head of design for a major printer manufacturer told me once “I have observed this industry for more than 15 years and I have to tell you, we have every variation of printer design that you can imagine in our design studio. The big question is, which one do we bring to market?”

I strongly believe that ideas individually are not the key ingredient for successful innovation. The key is instead the execution and implementation of these ideas, overcoming obstacles and the persistence that is necessary to realize an idea and bring a conceptual prototype to market.

This becomes increasingly important for organizations that are already successful in a market and which have to find the balance between maintaining the status quo and driving innovation to launch new products and services. While setting the goal that a certain percentage of revenue has to come from new products is one step in the right direction, the question how to design and manage an organization that is able to achieve this goal needs to be answered as well.

So in 2010 it is not just about designing solutions but also implementing and delivering these solutions to the customer – within a mature organization as well as within a startup. Facilitating and managing the change that is necessary to deliver remarkable customer experiences through innovative products and services.

The mobile revolution gains traction

The first mobile application that I have developed was a simple WAP-based application to monitor air pollution in a project for the Tyrolean Government in 1999. A lot has changed since then and while the iPhone was an industry game-changer, the real change is happening now with other mobile phone companies adapting to Apple and the iPhone. The move away from feature phones towards smartphones, the increasing power and functionality of mobile operating systems and the increasing availability of mobile broadband connectivity are creating an ongoing stream of new opportunities. The latest Quantcast Mobile Trends report gives a clear indication in which direction the mobile web is directed to:

Concrete examples are the rapid adoption of Android OS, the increased use of mobile application stores (i.e. Android, BlackBerry, Windows Mobile), the potential of carrier billing (paying for mobile content and applications through your phone bill) and the number of streaming music applications for smartphones like Pandora, that will substitute your storage based MP3 player in the next 5 years.

Many companies have already developed mobile applications, but most of them followed the principle “we have something available for the desktop/web, let’s bring it to the mobile phone”. The next generation of mobile applications will not just be a translation of existing apps on mobile phones but instead take the user behavior into consideration as well as the simple fact that the mobile phone has become the most pervasively used device besides our wallets and keys. The best example for this are mobile banking applications: The need to do money transfers while on the go is probably very limited, nevertheless basic account information would be great. Even though I am able to receive emails and even my credit card invoice on my mobile phone I still can’t track my account balance conveniently on my BlackBerry smartphone. Hopefully this will change in 2010.

The mobile market offers huge opportunities for companies who understand the “mobile behavior” or “mobile lifestyle” of their potential users and then come up with solutions that integrate into existing behavior. I think 2010 is the year when we will see large organization bring radically new solutions into the mobile space and use them to offer new services and build customer loyalty.

Prototyping Innovative Pricing Concepts and Business Models

Jeff Bezos, CEO of Amazon.com, creates the best customer experience by bringing the lowest prices to customers. Yet many people understand customer experience principles as a way to charge higher prices. Sure, that’s one way to approach customer experience management but I think the most powerful untapped area is by reducing prices but still delivering a remarkable experience for customers and through this generate increased revenues and profits. Economics 101 tells us that when lowering prices, volume has to increase in order to maintain or increase revenues. Innovative approaches to pricing as well as new business models could create this increased demand by better meeting and addressing the customers “willingness to pay”.

That sounds easy in theory but there is a huge untapped field that needs to be addressed: How do we prototype innovative pricing concepts and new business models? And how can these new concepts be tested before rolling them out and maybe exposing your bottom-line? Just as you can’t introduce a new car by driving around on a parking lot you can’t test new prices by simply showing customers a prototype in an artificial situation. I see a lot of opportunities in this area and I plan to focus on the area of “prototyping innovative pricing concepts and business models” in 2010 on this site.

What are you interested in?

Most importantly I would also like to hear your interests, suggestions and comments what you would like to read in 2010 on this site.

Just drop me a question, comment, critique and I will try to address it in a dedicated blog post. You can do this by either leaving a comment on this blog post (you can do this anonymously as well) or just send me an email at bernhard@customer-experience-labs.com

If you are intersted in the topic of customer experience managemend and design thinking and you in Switzerland, Southern Germany or Austria let me know, maybe we have a chance to grab a coffee and discuss experiences and share ideas.

Posted in customer experience, future | Permalink | 1 Comment »

If you are working at the interface with customers you have probably been in this situation before: Should you make a decision focusing on short-term profits and accept customer experience trade-offs or should you focus on delivering a truly remarkable customer experience? When you look at this problem from an abstract point-of-view the answer seems to be clear: of course you should focus on the customer experience.

Yet if you are facing an operational decision whether you should increase the number of agents in your customer care center or if you should save costs because service-levels are still “good enough” you know that this question is more complex. One has to accept that there are times when you are not able to deliver a remarkable customer experience and I personally believe that consciously accept these situations as outliers is not a problem. But there is one area where you should not accept trade-offs: strategic decisions.

Don’t let operational goals interfere with strategic goals

If you are truly committed to delivering remarkable customer experiences you have to form your design decisions with the customer experience in mind. Kevin Mattice has written an article where he calls designers to be arbiters of truth who protect the customer experience.

Designers should be arbiters of the truth: They should be the kind of people who stand up and tell it like it is, and that usually calls for courage. Fixing a bad customer experience requires the courage to admit that something’s wrong, and it only comes from a willingness to be transparent, to be open and honest, to communicate, and to be accountable. Good design is all that, and good designers are as transparent as they can be, even if it hurts them. Sometimes it does.

Now you might say this is a mundane statement. But just have a look at the integration of MySpace with News Corp and you will understand that this is not just an empty call to action. At News Corp strategic design decisions have been made with a focus on short-term profits instead of the long-term customer experience. If you have been wondering why MySpace lost its edge over Facebook make sure to read the article “The rise and fall of MySpace” in the Financial Times that brings light to some decisions made at News Corp. Here is the section that was most eye-opening to me:

[…] Former MySpace executives say News Corp dragged its feet over implementing Ajax, a program that allows users to send a message, an e-mail or to post a comment on their friends’ pages without having to open a new browser window. Facebook was quick to embrace Ajax but MySpace did not follow suit, partly because to do so would have reduced the number of page views the site generated and therefore its advertising revenue. “It would take five steps to post a comment or send a message, so five different pages would open,” explains another former executive. “There would be ads on each of those pages, so we were making money. We went to News Corp and said: ‘We want to change this but in the short term our revenues will drop.’ It became a long back and forth. [They] were pushing back – they wanted to make sure we weren’t going to drop our revenue numbers.” (emphasis added).

News Corp, meanwhile, contends that the request to adopt Ajax came at the beginning of 2009 – when Facebook had already established its supremacy. In other words, it was too little, too late.

Such a decision is hard to comprehend but the responsible advertising manager might have said: “Well, if we change the system now, revenues might drop now and I risk losing my job. If we keep it this way, we might lose revenues later on, but at least I will keep my job for now”.

Conclusion

Consciously making operative decisions to accept a trade-off on the customer experience can be accepted if they are indeed based on operational conditions – increased call-center activity or short-term product and service problems. Nevertheless strategic decision should never be influenced by operative goals and responsible managers have to ensure that employees are able to openly communicate – to speak the truth – when short-term profit gains might have a negative long-term impact on the customer experience.

 

Read the full article “The rise and fall of MySpace” in the Financial Times

Read the full article “The Clear Way” by Kevin Mattice

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Have you ever wondered what is necessary to make sure that an iPod can be used intuitively even by new users or that a phone does not break when you accidently sit on it? Every great product is not just the result of a great designer but also of great user and product testing experts.

YouTube, Microsoft, Nokia and Apple are four companies that are well known for their innovative products and the focus they put on the user. Yet little is actually known about what these companies do to really ensure that their customers have a remarkable customer experience.

I would like to share with you some practices that companies apply when they are aiming to design and test new products that I have collected in the last months. 

YouTube: Why do users watch videos online?

YouTube/Google is not sharing much corporate information, but in a recent blog post they have shared some insights into their user testing process. YouTube has identified two distinct groups of users, one who just wants to watch movies and one who wants to connect with other people online. Here are mockups of what these different user groups expect from YouTube:

 

 

The design for each user group is different as they summarized in their blog post:

So what exactly is user research like at YouTube? Sometimes it means letting users design their ideal experience. For example, last year we used a method called FIDO (first utilized by Fidelity Investments) where we cut out different elements of various video sites, stuck them on magnets, and had users arrange their ideal organization of the elements (see below for an example). Other times we use a more standard research method called a usability study, which entails seeing whether a user can or can’t complete certain standard site tasks in a usability lab.

One of the most important findings has to do with the difference between the large group of users who are on YouTube simply to watch videos and a smaller, but very important, group of more engaged users — often uploaders. The latter group will, unsurprisingly, care about details like how to make communication with their audience easier and more effective, how to grow their audience, and even how to make money on YouTube. The former, on the other hand, want as simple of an interface as possible: "Just let me watch the video, please!"

Read the full article.

 

Microsoft: Inventing a new game of play for Halo 3

The designers of Bungie Studios, the company that is developing Halo 3 for Microsoft, are facing a tough challenge. They need to create an experience that is challenging enough to thrill the 15 million existing hardcore fans of Halo— yet appealing enough to lure in millions of new players. In their quest to make the video game a success the company is able to gather a lot of data that can be used to derive conclusion about the actual game play.

The lab also records video footage of every testing session and hyperlinks these clips to the individual progress reports. If the design team wonders why players are having trouble in a particular area, they can just pull up a few test games to see what’s going wrong.

 

Take what happened last March: A report noted an unusual number of "suicides" among players piloting the alien Wraith tank in an upper level. After watching dozens of archived test games, Griesemer spotted the problem. The players were firing the tank’s gun when its turret was pointed toward the ground, attempting to wipe out nearby attackers. But the explosion ended up also killing (and frustrating) the player.

To prevent this, Griesemer reprogrammed the tank so that the turret couldn’t be lowered beyond a certain point. The Wraith suicides stopped.

Read more about this in Wired Magazin or download a presentation from about tracking player behavior in computer games by Ramon Romero at the Game Developer’s Conference. (Direct link to presentation, 14 MB)

 

Apple: Why you can’t innovate like Apple

Ask somebody to name an innovative company and you will most likely hear Apple. One reason why there is so much mystic around Apple is that the company doesn’t talk about the process of developing radical new products.

Sometimes though, some individuals set out and try to collect all information that is available and put together a coherent picture that explains how things play together. Alain Breillatt has done this for Apple and summarized what he could find about Apple’s development process. Alain has written up an article presenting his perspective of Apples design philosophy. One of them is the 10 to 3 to 1 principle:

10 to 3 to 1. Take the pixel-perfect approach and pile on top of it the requirement that Apple designers expect to design 10 different mockups of any new feature under consideration. And these are not just crappy mockups; they all represent different, but really good, implementations that are faithful to the product specifications.

Then, by using specified criteria, they narrow these 10 ideas down to three options, which the team spends months further developing…until they finally narrow down to the one final concept that truly represents their best work for production.

This approach is intended to offer enormous latitude for creativity that breaks past restrictions. But it also means they inherently plan to throw away 90% of the work they do. I don’t know many organizations for which this would be an acceptable ratio. Your CFO would probably declare, “All I see is money going down the drain.” This is a major reason why I say you can’t innovate like Apple.

You can find the full article here.

 

Nokia: Breaking phones on purpose

How can you ensure that mobile phones are not breaking when customers use them? By breaking them early in the development process and ensuring that you are using designs that ensure that they withstand the daily wear out.

The idea is to simulate years’ worth of real-life product use in just a few days — individual tests last anywhere from a few hours to three weeks or longer — by pressing buttons, sliding sliders, actuating hinges, heating, cooling, wetting, drying, dropping, whacking, shaking, rubbing, bending, and generally defacing the phones in every way imaginable.

Once a phone finally breaks, they look for obvious reasons — cracked plastic, broken springs, and the like — but if that initial analysis fails, they’ve got a well-equipped lab on site complete with a scanning electron microscope and CT scanner for taking microscopic looks at failed components in both two and three dimensions; from here, they can find broken connections on chips, incorrectly-fabricated materials, and the occasional ant eye magnified a couple thousand times (it’s posted on the wall in the lab, and yes, it’s scary).

I have embedded two videos, this one from the Nokia Test Center in Southwood, UK

 

This one is produced by Engadget and shows their development facility in San Diego:

 

Microsoft: The Story of the Ribbon

This has already been posted here on the Customer Experience Labs but I still think that this is a valuable case study that shows how a product  was iteratively developed and how continuous user testing beginning in early stages is done.

The Story of the Ribbon is a presentation by Jensen Harris from 2008. He tells the story of the development of the new Microsoft Office 2007 user interface. There are great insights on how Microsoft solved the challenge of “menu clutter”, various methods to collect user insights and how to setup an iterative prototyping process to create a product that radically improves the users experience when working with a Word processor or Excel sheet.

You can watch the talk online or download it. Powerpoint slides are available too. Highly recommended.

Posted in user experience | Permalink | 2 Comments »

The most popular article on this site is the comparison of different customer experience strategies with examples from the Ritz-Carlton Hotels and IKEA. The essence of the article also reflects my personal understanding and believes about customer experience: A remarkable customer experience is the result of an unexpectedly high customer value.

Customer experience management can not just focus on customer service or branding because a company’s products and (core) services are ultimately the drivers of customer value and therefore essential for the customers experience.

When flying with a low-cost airline it is accepted to take the bus to get on the plane. Yet when you are booked on a business class ticket with a traditional carrier everybody expects to use the jet bridge to enter the plane. Customers can indeed have a great experience even though they have to take the bus because the price of their ticket is so much lower.

"The Good Enough Revolution: When Cheap and Simple Is Just Fine" is an article in Wired Magazine that applies a similar understanding of the elements that constitute a great customer experience.

Even though the business model was not successful, the founders of Pure Digital and creators of the now famous Flip Camera found out something interesting about customer expectations:

"Customers would sacrifice lots of quality for a cheap, convenient device. To keep the price down, Pure Digital had made significant trade-offs. It used inexpensive lenses and other components and limited the number of image-processing chips. The pictures were OK but not great. Yet Pure Digital sold 3 million cameras anyway."

The article continues and describes the success of the company’s next product, the Flip Ultra:

After some trial and error, Pure Digital released what it called the Flip Ultra in 2007. The stripped-down camcorder—like the Single Use Digital Camera—had lots of downsides. It captured relatively low-quality 640 x 480 footage. It had a minuscule viewing screen, no color-adjustment features, and only the most rudimentary controls. But it was small , inexpensive , and so simple to operate that pretty much anyone could figure it out in roughly 6.7 seconds.

The success speaks for itself:

Today—just two years later—the Flip Ultra and its subsequent revisions are the best-selling video cameras in the US, commanding 17 percent of the camcorder market. Sony and Canon are now scrambling to catch up.

The article presents some additional examples ranging from MP3, to unmanned aircraft to healthcare and closes with a statement from Pure Digital founder why Flip knockoffs from the likes of Sony have failed:

"I think it’s because we have a better product." What’s odd is that executives at Sony and Canon would likely say the same thing—after all, their models have far more features and often produce sharper images. But Fleming-Wood is using a different definition of "better." He now defines quality entirely in terms of ease of use—how easy it is to shoot and share the video.

So what is the essence of a great customer experience? It is not about the number of features and it is not about providing always more and more functionality and amenities (like in a Ritz-Carlton Hotel or with a Sony DSL camera).

A great customer experience can also be the result of a product that offers the core functionality in a way that is easy to use and in a quality that is just good enough and a prices that creates a remarkable value offer for the customer.

Read the full article in Wired magazine.

Posted in customer experience, customer value | Permalink | 1 Comment »

If your organization is committed to delivering remarkable customer experiences then simply serving your customers is not enough. It is essential to go the extra mile and use each interaction with customers as an opportunity to "wow" them. "Wow" moments are hard to explain but everyone has experienced these moments when one is just blown away by the efforts retail staff takes to ensure customer satisfaction.

The best indicator that you – as a customer – just had a "Wow" experience is that you feel a strong desire to talk about this remarkable experience with your friends. And this is exactly what companies have to aim for: not just serve their customer but to wow them so that customers start to talk about your products, services and brand.

The Elements of Wow Experiences

Wharton School of Business has teamed up with the Retail Council of Canada to identify the elements that constitute a Wow experience and have identified five major areas:

• Engagement: being polite, genuinely caring and interested in helping, acknowledging and listening.
• Executional excellence: patiently explaining and advising, checking stock, helping to find products, having product knowledge and providing unexpected product quality.
• Brand Experience: exciting store design and atmosphere, consistently great product quality, making customers feel they’re special and that they always get a deal.
• Expediting: being sensitive to customers’ time on long check-out lines, being proactive in helping speed the shopping process.
• Problem Recovery: helping resolve and compensate for problems, upgrading quality and ensuring complete satisfaction.

The article also stresses the importance of selecting the right staff that is able to take basic information about shopper preferences and convert that knowledge to customized service. This is in my perspective the essential aspect for delivering remarkable customer experiences.

Delivering Wow is hard, but it can be done

When reflecting on these elements it is obvious that it is not “rocket science” that is required to deliver remarkable customer experiences. On the contrary, it is not  the most sophisticated strategy that will bring success but the discipline and committed of the organization and its employees to deliver “Wow” every day to every customer.

A "Culture of Wow", a commitment that is lived in the organization where every retail employee understands that it is necessary to Wow and not just to serve, is requires for organizations to achieve this.

References

• Getting to ‘Wow’: Consumers Describe What Makes a Great Shopping Experience
• Discovering ‘WOW’ — A Study of Great Retail Shopping Experiences in North America

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