What does Customer Experience mean to you? It sounds like a simple question, but in a corporate world grappling to come to terms with jargon and concepts from the alien field of design, CX has come to mean many different things. Depending on who you talk to, CX can be used as an umbrella term to cover everything from desk research to visual design, and everything in between. Especially in an increasingly digital economy, the term is quickly becoming synonymous with “app and website design”.
I recently spoke at a series of roundtable events organized by AWS to discuss “The Future of Customer Experience”. The audience across the three events was made up of senior business stakeholders from a variety of industry sectors. Here’s what I found…
The problem with CX
Almost all corporates are currently investing in some form of customer centricity initiative, and the level of investment has been constantly increasing over the past five years. However, very few corporates are willing to put themselves out there as a customer centric organization. This forms the crux of the problem: if we are continually investing in something and not getting close to our goal, the problem is not one of more investment; rather we need to maximize our current investments to make them more effective. To use an analogy: we need to seal the leaks in the funnel before pouring more in the top.
The typical CX brief
A typical CX brief follows a predictable pattern: Head Office determines that a new product is to be taken to market. Someone in the local or regional office is tasked with being the project sponsor, and it’s their job to commission a “go to market” plan: which geographies should we launch in? Which customer segments should we target? how much should we charge? etc. This is often assisted by strategy consultants who use hypothesis driven research to develop a static GTM plan (aka “the $1m PowerPoint deck”).
After all of these important decisions have been made – we issue a brief to a design team to create a world class Customer Experience.
To reiterate: we consider the customer’s needs for the first time AFTER all product and business model decisions have already been made.
The best we can hope for from the design team is to make a great experience layer to bolt onto something that was designed from the inside-out.
Case Study of bad CX: Fitbit enabled insurance plans
A great example of how not to deliver great Customer Experience is the recent rash of health insurance plans that promise lower premiums if you reach a certain fitness target using a Fitbit or other health tracking device.
The customer promise is to deliver a better, healthier life (positive motivation), flipping the typical insurance model of insuring against injury or death (negative motivation). And yet, the product is designed by the business in isolation – it’s still a product based on underwriting risk. The business model is to get better intel on the risk profile, allowing smarter underwriting and therefore less actuarial risk. At the end of the value chain, we eventually create a UX that is via a Fitbit and a tracker app.
What behavior do we see? A rash of people and corporates actively cheating their fitness tracker stats in a variety of inventive methods. They don’t believe in the product or the promise – their primary goal is to drive down their monthly premium or earn points and prizes. This doesn’t fit with the idea of promising better or healthier lives, instead it fits the behavior we see with highly commoditized products with low consumer involvement.
By ignoring customer needs until the final stage of the value chain (the experience layer), the CX fails to live up to the customer promise.
Why is this a problem?
The process of addressing customer needs as the last step creates three key problems that hinder your progress:
- Customer needs are not considered anywhere in the design and business model of the product. As we saw with the insurance example, when the product and business model ignores customer needs, customers ignore whatever you are offering.
- Customer journey maps end up as beautiful wallpaper that (at best) feed a 3-year roadmap of activity
- False sense of belief in our customer- centricity; without tangible results, disillusioned executives stop investing in CX programs
Case Study of good CX: Netflix disrupts three industries
Who did Netflix disrupt? Was it Blockbuster?
Initially, yes. But Netflix quickly moved from DVD’s to an online library of video content delivered through an on-demand streaming service. Sound familiar? Apple launched iTunes and Google launched Play store with exactly the same strategy. Netflix actually took on the two biggest giants in the world – and won! How did they do it?
Sure, Netflix initially beat them on the experience layer – the claim is that you can find any title with just three characters in the search bar. In reality, their suggestion engine is so personalized based on your user data that you often don’t even need to search in the first place.
They didn’t stop there. Netflix also modified the business model – no more pay per view, just pay a monthly subscription and binge all you want. This created a whole new way of consuming content that didn’t apply to iTunes or Google Play.
This allowed Netflix to shift from a simple content distributor; they used their rich user data feeds to actually dictate and eventually generate content that users want. They became a content creator, disrupting the movie and TV studios who had previously stood unchallenged.
The result: Three entire industries disrupted by what was a relatively small and humble startup just a few years ago.
What can we learn from Netflix? When the product (content), business model (subscription) and experience (personalisation) are all based on customer needs, we can achieve truly great CX and disrupt even the biggest giants in a given vertical.
Putting good CX into action
“Don’t just do things better… do better things” – Pete Trainor, founder of Nexus CX
How can we put these learnings into action? Can we use our previous investments to quickly bring focus to our CX efforts and start driving real business results?
Here are three suggestions you can bake into your next initiative:
- We need a framework to design a holistic proposition
Rather than sequentially designing customer propositions from the inside-out, can we try building out the product, business model and experience layer in unison? Can they all be developed and iterated simultaneously and all be based on real customer needs that we’ve gathered?
- We need to do it in iterative slices so we’re lean and data driven
Rather than building an entire proposition in isolation, let’s use lean methods like rapid prototyping to quickly put something in the hands of our customers and gather feedback. Use testing to quickly debunk or confirm all of our assumptions in the lowest cost way possible.
- And we need to ensure it’s scalable from day one, so there’s no hidden costs later
Don’t build prototypes or MVPs for the sake of it… never build something that needs to be thrown out. Build something small that can easily be scaled by simply building on top of the existing proposition. Wherever possible, partner and borrow capabilities that can be scaled over time rather than investing heavily on a hunch.
By first recognising the problem with our CX investments, and then baking customer needs into the product, business model and experience layer, we can start to show actual results and evolve from “better websites” to true CX.