It’s time to advance from service design focused on sheer customer orientation and simplification. Only unique brand experiences can build long-lasting competitive advantages.
Services are increasingly business- and brand-critical
When it comes down to it, customers aren’t interested in you. Studies show that consumers wouldn’t care if three out of four brands disappeared today. They’re interested in their own lives, experiences and needs. It’s up to you to make yourself relevant and accessible at each point of contact in order to be given some of their precious time. This is increasingly done through extra services or expanding the core service experience.
The customer experience is the sum of all impressions a customer has with an organisation, product or service. As the digitisation of customer experiences continues at high speed, the borders between product, service and marketing are increasingly becoming blurred. In this context, many have realized that the service aspect of the customer experience is more important than ever, because it is often services that best offer the value that customers want. Over the past years this has fuelled the increased popularity of customer orientation and service design.
Service development must differentiate, not only improve across the board
According to a study from Forrester only 60 % of executives say their company has a clearly defined target market. Even worse, only 24 % say employees share a clear understanding of their target market. At the same time only 45 % say that the brand strategy is used to determine how services are developed.
As this indicates, the way businesses’ work with their services often rely on rather tactical improvement. This might for example be fixing pain points or gaps in the general customer journey, or covering additional basic customer needs for more simplicity and efficiency across the board without a clear target group. This can be very important work – and being on or above the general benchmark is often required to compete – but in itself it is not enough. The effects of such improvement efforts will often become basal requirements that are taken for granted quickly. You might be liked by many, but not loved by any. Also, your competitors will rather easily be able to match or surpass you (if not what you’re doing is precisely to match your competitors). The result is a functionally effective, but generic and copyable experience that does not differentiate you over the long term. The solution, however, is to not compete in this arms race head on, but let the brand strategy steer development and improvement of services.
A proper brand strategy defines precisely the one race you decide to run and sets you up for the lead. It does this by consisting of critical decisions about the competitive qualities and target market you will compete for. Based on the unique strengths of your business, and what is attractive and relevant to your particular target market, you define how you will be preferred, and – perhaps more importantly – how you will not be preferred.
Letting this strategy influence service design means focusing the majority of your resources in strengthening a certain set of competitive advantages within the area you have decided to be preferred for. Developing ideas for new services, as well as the design, implementation and improvement of these, should be created on the basis of which unique brand experience you want to offer your target market. Especially in a competitive situation now common in many industries, where intensifying competition and forces such as globalisation and commoditisation are rampant, this type of strategic service design has the potential to give you an enduring edge over competitors.
In working with this there are four high level things you should do:
1. Define the desired brand experience
Based on the brand strategy, customer needs and the current state of service experiences, define the ideal total experience you want to create for your target market. Also, prioritise and define the ideal experience within single customer journeys, such as the onboarding journey or a problem resolution journey.
Look for closely opportunities at each touch point in the customer journeys to create unique experiences that offer more than just functional value. Often it will help looking through the eyes of a particularly important subset of your target market. Personas and customer journey exercises are useful tools for differentiating service development, especially if one manages to be empathetic and uncover the characteristics of underlying user needs, in addition to the superficial ones. In this process it is important to be visionary on behalf of both your customers and the brand!
2. Work closely with other parts of the organisation
In the past it was cost-effective that the marketing department was responsible for advertising, IT for technology, R&D for innovation, and PD for the product. This just doesn’t cut it anymore. To create great experiences, the entire organization is required to understand the brand strategy and be in sync to deliver on it. The companies that have a culture to “live the brand” have the ability to create unified customer experiences where products, services and communications are integrated and deliver coherently on the same goal. Different disciplines such as analytics, technology, communication and design must work closely together. Rather than just specialized expertise, you will require multi-domain skills (the ability to work across disciplines such as technology and communication on several product/services, which requires a deep understanding of the strategy and the customers’ needs), as well as boundary-spanning skills (the ability to forge connections across internal silos).
3. Cooperate with partners and customers too
A clear trend within service design is to involve customers and partners in the value creation. Pioneering companies are expanding their focus from just the relationship with their customers, to including the relationships between customers, and between customers and partners. Some go as far as building a platform, or an “ecosystem”, where partners and customers participate and contribute (such as Facebook or Apple’s App Store). Some start with having an open API and making data available to customers and partners.
Which partners you choose and the experiences you choose to create together, must be governed by the brand strategy and an intention to create differentiated experiences. Then you will really create value that is not easily copyable, as Nike and Apple did with Fuel Band.
4. Experiment, listen and learn
Technology is an established source of innovation that can lead to better services and better marketing. But APIs, “big data” and applications are not something only the engineers and analysts should be working with. More people from different roles must be included and what they create should be openly tested and experimented with, in order for you to be in front with differentiated services.
Connected technologies such as cloud computing are increasingly becoming available to the masses. Competitive situations change rapidly, as do consumer preferences. Therefore, you must be quick and agile too. Everything doesn’t have to be entirely complete before you take the service to the market. Rather, you should test from the start, preferably in small projects and on small scales, in order to see for yourself if the new services are something that could robustly reinforce your competitiveness. If it creates enduring value for you and your customers, keep it. If not, fail fast, learn from it and move on.
This post was based on the breakfast seminar I developed with my colleague at Creuna, Kjersti Solem. Thanks!
Anything to add? Please share in the comments.