Delivering service, experience and social is the key to growth but requires engagement from customers, employees – every aspect of the business
The Experience Ecosystem Challenge
It’s a brave new world out there, where the companies that succeed are the ones that have grasped new models of designing and delivering customer value by the horns. Remember when it was easy, and all you had to do was create a single product for a local market? Customers didn’t have anywhere else to go so their choice was to buy your product or nothing at all, even if it was difficult to use and didn’t really meet their needs. Word-of-mouth was limited to coffee shop gossip.
This world may have been easy for businesses but customers got the short end of the deal. Today’s customer has endless choice and a loud voice for instigating change. Rather than view this as a problem, innovative companies are rising to the challenge and reaping the benefits through new business models that capitalize on all the ways their solutions are bringing value to customers.
Savvy business leaders are using the power of social media to not only listen to their customer but to co-create solutions, harnessing their brainpower to innovate from the outside in. They are learning more about their customers likes and dislikes and using this knowledge to create customized products tuned to the individual, building competitive advantage at the same time. These business owners have moved from merely counting dollars to counting “likes” and tweets as the ultimate evaluation of their company.
Experience Engenders Loyalty: Enabling Mid-Sized Business Growth
In a recent survey on customer loyalty and satisfaction, Strativity found that as a business grew from a small endeavor serving a niche market to a mid-sized player poised for growth, they were losing touch with their customers (source: Strativity Customer Experience Benchmark Study, 2008). This graph depicts the results of their study, where only 33% of medium sized businesses felt they deserved the customer’s loyalty. In today’s connected society, these attempts at growth can be the death knoll for mid sized 500 person companies.
Further, a report by Gartner stated that Customer Relationship Management (CRM) software – the stuff that helps businesses track their customers’ requests and how well they are meeting them – has moved from number 18 to number 8 on a CIO’s list of priorities and is number 1 on the CEO’s list of investments to improve their business over the next five years (“Gartner Says Customer Experience Enters Top 10 CIO Technology Priorities for 2012”, April 24, 2012). These executives are seeing CRM as a way to improve the customer experience. Many CRM packages are now including social media, making it easier to incorporate social media as “… a whole new way of doing business”, as stated in the Gartner article.
How does this impact you? Perhaps you sell boxes or widgets, like a box of nails, and find it hard to think of delivering an experience with your existing product in the center. Experiences are just for entertainment providers like Disney, right? How do you uncover the experience that is going to delight your customers and put you ahead of the competition? Going beyond defining the experience, how do you justify your investment and even increase your revenue through new experience business models? What about implementation – how do you get those 500 employees to all deliver your experience to the customer, and even empower them to add their own unique value to the experience? Last but certainly not least, how do you move beyond just registering customer’s complaints to having a meaningful and indelible conversation with them, perhaps even engaging them to help you co-create your experience? It is a powerful model but it requires engagement from your entire organization to make it work.
Co-Creation: Designing from the Outside In
“The closer you are to your customers, the more relevant your product will be and the more likely you make it for people to choose you,” stated Mary Ellen Muckerman, columnist on Fast Company’s Co.Design site, “Engaging with customers then becomes an ongoing conversation, rather than the stop-start involvement that characterized the 20th century. This makes it much easier for customers to come back, and keep coming back.” Effectively, this puts all ears in your organization to the ground, listening to how your customers say they want to use your product rather than telling them how to use it. For example, ZipCar designed their experience around the eco-conscious urbanite that occasionally wanted the use of a car but also wanted the convenience of picking it up from the curb in front of their house. Had some of the big car rental companies listened to their customers talk about how they wanted to use their cars – with an open mind ready for innovative co-creation – they too would have discovered a new business model and whole new market of loyal customers; a whole new revenue stream. Certainly hindsight is 20/20 but no insight is blindness. Most companies today never go beyond just addressing their customer’s complaints to analyze the gift of insight they are being given, to ask the customer how they would solve the problem.
Certainly it is worthwhile entering a cautionary note here. As any product manager worth their salt knows, the customer doesn’t always want what they ask for. Many a bad design has emerged from focus groups or indiscriminately following the competitive market leader. Even businesses that do collect and analyze feedback are only listening, not engaging, and not gathering true insight. Which is where social media is such a great boon for companies willing to engage with their customers. Imagine – you can have an ongoing conversation with them! Like a vision test at an eye doctor, you can ask, “do you like a or b better?” and then later, “do you like c or d better?”. Suddenly the dial between the blindness of no customer feedback to 20/20 hindsight has many notches, each of which can be analyzed in its own right.
Building a Sustainable Experience Ecosystem: Employee Engagement
So far we have focused on the design and co-creation process. What about after launch – how do you keep the engagement going? Even further, how do you create experiences that your customers want to share and capitalize on the great network of word-of-mouth endorsements to grow your business? “A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is,” stated Scott Cook, co-founder of Intuit. It may be painful at times, but business owners can hear first hand what customers think of their products. How they choose to engage separates the cyclist in the yellow jersey who is winning the race from the rest of the peloton.
Businesses need to look at the unique combination of people and product to really get to the heart of the experience they are providing. It is their competitive advantage and the only thing that is separating them from greatness is their ability to harness that power. Just as it is important to engage the customer, it is equally important to engage the employees, to empower them to contribute their own personal flair to your experience. Social media is, well, social, which is ultimately about people. So the best way to deliver experiences to your customers that are worth socializing is through your employees. We also must not forget about the business leaders in these interactions – they too are employees and need to engage with customers.
Community Alignment: Creating a Social Business
Cree is a lighting manufacturer that engages their customers by creating a community of like-minded consumers who are eco-design conscious to share pictures of bad lighting and best practices for LED lighting. Their engagement model is around inspiring their customers to “light the LED revolution” rather than buy their products. This makes for a company that customers want to engage with and an open invitation to invite others to join – a social connection. Because they have aligned themselves with an endeavor that is for the greater good of society, their social return on investment is very high. They have both loyal customers who belong to their community AND word-of-mouth recommendations that lower the cost to attract new customers.
Cree’s case showcases another part of the social experience formula – making an emotional connection. Ideally, your experience engages all 5 senses in the customer, creating something that is not only memorable, but also that your customers want to share with others. For example, this photo was one a customer shared with Cree and their own social network, documenting their personal lighting revolution.
Really? I want my box of nails to smell? Well, perhaps, but engaging the 5 senses is about connecting to an emotion that is evoked by a sense. For my box of nails, perhaps the warm, comfortable emotion that is evoked by the smell and taste of lasagna is what I want my customers to connect with my brand. Then my challenge is to evoke that feeling in my experience – the way the nail feels in my customer’s hand, the way it is packaged and presented at the store, the way I connect with that customer online, etc.
Case Study: HP – moving a stale box business to an experience ecosystem
In 2003, Dreamworks approached HP with a business proposition. They had designed the perfect studio for video conferencing using their expertise in filmmaking, making the imaginary look real. When two studios were connected over a distance, broadcast quality cameras and surround sound audio along with identical (but mirrored) room designs created the illusion that participants were all in the same room. But the rooms were very expensive to deploy, using over 100 mb of dedicated bandwidth and highest quality audio / visual components utilized by the movie industry. Dreamworks request of HP: make this system affordable and easy to manage so that we can deploy it to all of our offices and business partners globally.
HP took the challenge and turned the videoconferencing industry on its head, delivering a service experience to global Fortune 50 corporations looking to save money on travel for their executives. The hidden benefit: business return from doing business faster, bringing together innovators no matter where they were in the company. For example, Dreamworks moved from making one movie a year to two, doubling their income. HP cut the time to move an assembly line from the US to Singapore from 1 year to 6 months, getting product to market that much sooner. These hidden benefits were where the real returns lie for HP and their customers.
To deliver this value to customers, the experience was accessible and easy to use by anyone, 24 X 7, and installed not just in executive boardrooms but also near factory floors and in R&D centers. The business model reflected this, charging customers a flat monthly service fee per studio anywhere in the world, including an optional lease for the studio equipment. For customers, this took the solution from a high-cost capital expenditure to an operating expense that could be easily justified against the travel cost savings and business returns of using the system.
HP then took it one step further. To save customer IT managers from providing system “baby sitters” during their executive meetings, the service included a global redundant network designed for real-time video exchange and a service guarantee of “available when you need it”. Accompanying the network was a concierge available live during a meeting at the touch of the button who could remotely adjust any of the system components in seconds – even turning on and off lights – and help with making company-to-company connections. This kept the IT manager out of the hotseat with their executives, winning the trust of these crucial evangelists for the service. The icing on the cake: the monthly service fee included a technology refresh so that as new software and even hardware technology became available, customers were automatically rolled to the latest and greatest.
Once the product was delivered and installed, HP used the business-to-business connections that were enabled by the system to stay closely connected to their customers. Service managers were assigned to a customer account and were responsible for ensuring that the service met expectations, that any issues were addressed appropriately. As the service evolved, they brought in product designers, operational developers and even executive managers to listen and learn. These were face-to-face connections, forming the basis for trust and evolving co-creation of the solution.
Call-to-Action: Designing Your Distinctive Experience Ecosystem
Many of these socially enabled enterprises were previous experience and social media introverts. They had to learn the hard way through trial and error and heavy investment to get it right. Here at Inceodia we have developed practices that will uncover your business unique experience value proposition to customers. Key to the creation of a unique experience ecosystem that sets your business apart are the following steps:
Envision a new future – from the outside in, envision what you want to be in the eyes of your customer. What unique quality does your business and your employees bring to the table to create this future?
- Address customer needs differently, uniquely to stand out from the competition – design an experience that is indelible, creating a competitive advantage, including how your experience will inspire social connection and word-of-mouth recommendations.
- Create new business models tied to the value customers get from products and services, not costs – build experience business models that are the cornerstone for sustainable growth.
- Operational engagement, creating new operating models to deliver the experience – build an operational engagement plan that details how your experience will be delivered.
- Employee engagement – ensure employees understand the nuances of the experience and are empowered to add their own unique value.
Businesses today don’t have to be afraid of engaging customers in the co-creation of experiences; they also don’t have to relinquish all control to the customer. The rich level that customers are willing to participate in co-creation of an experience ecosystem should be seen as an opportunity to harness that innovative brainpower to create new businesses that can grow sustainably and thrive.
Inceodia is a management consultancy helping CEO’s and business leaders incorporate ideas for sustainable growth, diverse thought leadership and customer value creation.