Designing the Business – The Next Frontier?

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Companies have been putting a lot of time and effort to ensure they provide better, more engaging customer experiences – be it about making online shopping easier, or delighting passengers flying long-haul flights. This makes customers happier, and happy customers are worth more.

What we find, however, is that very few businesses succeed in creating truly great customer experiences.  Ask yourself what companies you have dealt with that really excel in making things easier or better for you. Not many I’d imagine.

One of the reasons that too often companies fail to achieve the holy grail of great experiences is that the innovation process traditionally starts by asking what customers want, and then try to embed this ‘ideal’ in the existing business model. This is where things become complicated, as often businesses won’t have the right channels, processes, systems or culture to deliver the intended experience.

One way to tackle this issue is by flipping the innovation challenge to its head. Instead of designing the experience around the business, companies should design the business around the experience.

For example, think about Nespresso. It’s one of the fastest growing and most profitable divisions at Nestle.

However, it wasn’t always a fairytale business story for them. In the  late 80’s Nespresso faced serious difficulties due to a non-performing business model. They had the same product, same value proposition, same ideas. However, their target customers were offices. Coffee pods and coffee machines were distributed by machine manufacturers through a joint venture deal. The issue was, business growth was well below than what they expected.

What did Nespresso do?  They kept the value proposition (restaurant quality espresso, easy to make) but changed the business model. Once they started to focus on the ‘home’ market through direct distribution fueled by an more upscale marketing strategy (aided by George Clooney as a brand ambassador), things changed radically, and the rest is history.

Innovation needs to happen in two directions: outside-in (to understand what customers want) and inside-out (to define what you business need to do meet you customers’ needs).

 

This post also appears on the Truth blog

Service Design Global Conference 2011


Last week I had the opportunity to present at the Service Design Global Conference in San Franscisco. Great to see some old friends and meet new ones.

My presentation was inspired by a few observations I got over the years working with Service Design, especially when trying to ‘sell’ service design projects to clients who are more likely to belong to a mainstream market.

If you are interested in learning more, you can donwload the presentation from here

Service Transparency

A while ago a fire ruined a small but charming restaurant situated in my neighbourhood. As soon as the owners started to get the place back in shape, I noticed that they were constantly leaving notes with updates on the window.

Keeping in touch with customers

These notes made me feel connected to what was happening in the restaurant. The owners could have left a simple sign saying: “We’ll reopen on June 11th.” But the decision to be open and transparent resonated with customers like me. It made me feel like part of part of closer to them.

Being transparent is a crucial step in making an emotional connection between service users and providers. It makes businesses seem more human and closer to their customers. It also helps to make customers feel more valued and trusted, which in turn leads to enhanced customer loyalty and advocacy.

Take UPS or FedEx as an example. These companies offer a fair degree of service transparency by allowing customers to track their packages in real time, leading to an extra level of reassurance and peace of mind.

In Brazil restaurants have to display a sign saying “please visit our kitchen” to comply with health and safety regulations. Although I haven’t met anyone who has asked for a kitchen tour, the offer surely makes the service provided by restaurants more transparent. As a result, restaurants seem more trustworthy and customers feel more comfortable.

However, there’s no such thing as a free lunch. In order for transparency to work, businesses need to ensure that not only the customer facing aspects of a service – but also the infrastructure enabling service delivery – are well designed. You probably wouldn’t recommend a restaurant with a dirty and messy kitchen, would you?

Good service is about trust, and being transparent is a certain way of gaining the trust of customers

This article was originally posted on the Engine website.

Service Design Conference

If you missed the last service design conference hosted by the Service Design Network, you can still check out the excelent presentations and some pictures on the SDN website.

Worth checking out the presentations from my ex colleagues from Engine, Tamsin and Joe.  Apparently Julia’s presentation, “Moving forward – learning from the health sector” was quite interesting too, but it seems that there is no link to download her presentation yet.

What’s easier than 1,2,3?

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Last Christmas I took an Air New Zealand flight from Auckland to Queenstown, and I have to say: it was the best check-in experience I’ve ever had.

Once I arrived at the terminal, I was quite impressed by how simple the process was. I basically had to follow two big signs on the concourse:

1. Start here (this sign was just above the self service kiosks)
2. Bag drop (this sign was just above a conveyor belt)

I got so excited about the whole thing that I had to take a few pictures while Jane, my girlfriend, was dealing with the check-in:

Scanning our e-ticket

Scanning our e-ticket

Selecting the passengers

Selecting the passengers

Answering the security questions

Answering the security questions

Printing the luggage tags

Printing the luggage tags

Weigh your bag and attach the luggage tags

Weighing your bag and attaching luggage tags

luggage drop-off

Going to step 2: luggage drop-off

Job done!

Job done!

The whole thing didn’t take more than 5 min!

Mpass: using your phone as a boarding pass

Air New Zealand is also rolling out self-service scanners at the boarding gates: you can either use your boarding pass or an mPass – a service that allows you to download your boarding passes for Air New Zealand flights onto your mobile phone. It generates a bar code that you can then scan at the kiosks to check-in or at the gates to board.

Scanning kiosks at the boarding gate

Scanning kiosks at the boarding gate

using your phone as a boarding pass

mPass: using your phone as a boarding pass

At Engine, we designed a similar concept for Virgin Atlantic, and the results were quite impressive. Check-in times were reduced by 50%, and passenger satisfaction increased substantially.

The great thing about this check-in is that it takes staff from behind the counter, enabling them to roam the concourse to help passengers. It’s a win-win situation: the airline has a much more efficient process, enabling staff to deal with problems that really matter (passengers with excess luggage or delayed flights), and passengers can go through a hassle-free check-in. Great example of how service design can bring value to both users and providers.

More info on Air New Zealand’s new check in here

Nordic Conference on Service Design

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The Norwegian Design Council will host a conference on Service Design and Service Innovation in November.

They are inviting people to submit papers and abstracts on the following topics:

* boundaries, foundation and constituent parts of the emerging discipline of service design
* history and trajectories of service design
* inclusive-design approaches to services for all
* critical views
* methods, tools and processes
* case studies
* relation to design thinking, design leadership and design management
* education and research perspectives

more information regarding submissions and deadlines here