Customer-Driven Transformation

How Being Design-led Helps Companies Get the Right Services to Market

Joe Heapy, Oliver King, James Samperi

• Publisher: Kogan Page
• Year: 2018
• ISBN:
  9780749483029
• Edition: 1
• Topic: Business
• Subtopic: Leadership
• Index: Business

Service design is the activity of utilizing resources and people to build and sustain services that not only meet customers' needs, but also add that little bit of magic or true competitive advantage. In an overcrowded marketplace there is often little opportunity to break away from the pack and influence customer perceptions; Customer-Driven Transformation demonstrates how to use design thinking as a driver for organizational change to translate your vision into compelling services that will delight your customers. How did companies like Netflix, Airbnb and Uber revolutionize industries and win loyal followers? They started here. By thinking about what customers need foremost, you can reinvent your value proposition and deliver services that work. Customer-Driven Transformation shows how to instill an outside-in approach to strategy, moving away from management that's technology, marketing or resource optimization-led, towards being customer-inspired and experimental with innovation. It is a practical guide for any business to lead a transformational programme and use design thinking to change how services are created, ensuring they are expertly designed, elegant in use and advance in customer-mindedness. With ground-breaking case studies from the likes of E.On Energy, Hyundai Motor Company and Bupa, this cutting-edge book will empower companies to take control of customer experience and deliver long-lasting and impactful change. Focusing on one of the hottest management topics, it is an inspiring read for any business leader to understand how to reinvent their value proposition, gain market share and win customers.

PART ONE

The challenges

We know creating and delivering an inspirational customer experience can be hard. If it wasn’t, every business would be doing it effortlessly and we’d all be delighted by services every day. So what are the challenges we all face in giving our customers the services that make them want to come back for more? There are six of them, and Part One goes through them in detail.

Although it may seem as if we’re only focusing on the negatives here, this part of the book is designed to make you feel better. Your problems are almost certainly similar to those faced by managers in other service-based organizations. The difference between you and them, though, is that by the end of Part One you’ll understand the issues so much better than they will, and will therefore be primed to tackle them through the skills in Part Two.

Developing the ability to spot and articulate these challenges is the first step towards being able to share them with your colleagues. As you become better at designing great services, you’ll be glad you took the time to understand the challenges first.

01

The challenge of outside-in

Cast your mind back to the last time you called your phone or utilities provider. Most likely you had to make a selection from a bewildering and increasingly intricate series of menu options before you finally got through to a human being, at which point you were asked to repeat the security details you’d already entered at the beginning. You may have been tempted to vent your frustration, but after taking a deep breath the knot in your stomach began to subside. ‘It’s not the customer service agent’s fault,’ you reminded yourself, ‘it’s the system they work with.’

It’s not much better when we wait in for an important online order delivery, only to find it doesn’t arrive. All we have from the delivery provider is an email with the expected time on it – there’s no way of contacting them to ask when it’s going to turn up. Or if there is, it’s a link to their tracking tool, which simply says the delivery ‘has left our depot’. How helpful. Increasingly frustrated, we log on to the website from which we ordered the item and call their customer service team. At which point, cue a repeat of the scenario above.

Thankfully these scenarios are becoming less common. Day-to-day transactions at least take place quickly and easily, often via our smartphones. More joined-up and intelligent systems are taking more of the effort out of our basic requests. Yet, paradoxically, we often have the worst experiences when we need real help and understanding the most; when we no longer fit the standard business process, when we need a human and a machine won’t quite cut it.

Why do customers still have difficult, impersonal, maddening and, in the worst of cases, antagonistic interactions with the services they use? The main reason this happens is that many companies don’t organize themselves around the customer and their experience. Without this customer-centredness, companies miss out on its commercial benefits, and they also risk wasted time and effort.

In this chapter we identify some of the common mistakes and lost opportunities for businesses that are not customer-centred. For example, without understanding what your customers need and will value most there’s a risk that you spend time launching the wrong products and services. Without a shared customer strategy, there’s a risk of duplication of effort as different departments set to work tackling what they see the problems to be. Without a shared vision and plan, departments can even find themselves pulling in opposite directions. Work started with the best of intentions ends up perpetuating a service experience that’s not coherent or joined up.

One important barrier to being customer-centred and working outside-in is the ‘siloed’ structure of many organizations. Although necessary in some respects, this structural barrier seems to prevent large organizations from doing two important things: seeing the world as their customers see it (rather than through the objectives of a business function and professional skill set) and seeing their own services as customers experience them (as a whole and joined up). The management challenge is to work horizontally (opening up the possibility of greater customer focus) and vertically (maintaining the core functions of the business and delivery) at the same time.

We’ve worked with organizations to understand and assess how customer-centred they are; how able they are to put the customer, metaphorically, at the centre of design and decision-making. To do this you first must have viewed the world and your brand and services through their eyes; in other words, from the outside in.

Opportunities missed by businesses that are not customer-centred

Let’s explore what happens when the services you provide don’t take your customers’ perspectives as their starting point. The consequences fall into four main areas, and they’re not necessarily the ones you would predict.

You might waste time and money launching a service your customers don’t want or need

Surely no-one does this, do they? Unfortunately, they do. It usually happens because the company is working with the wrong assumptions about what its customers value. Without clear insight and a process in place to imagine and test assumptions and ideas, the new service development will tend to be ad hoc, and occasionally even subject to the whims of individual decision-makers who don’t understand all the implications. Something that seems like a bright, shiny idea in theory doesn’t always work in practice, because not enough thought has been put into whether people value it, or how they might use it.

As an example, in 2013 Facebook launched Facebook Home, an optional home screen Android for smartphones, which showed the owner’s Facebook newsfeed. The problem was, most people didn’t like having no control over the content displayed on their home screen, which meant it was only appealing to Facebook obsessives. This, together with the high data and battery usage involved, and the fact that it was a paid subscription service, led to its downfall (Baer and Yarrow, 2014).

Crispin from the Rail Delivery Group highlights the reality that organizations often make decisions based on assumptions about their customers:

Very often organizations have never asked their teams to put their feet in the shoes of the customer. Decisions are made based upon assumptions about what the customer wants, upon business need or upon a mixture of both. It should come as no surprise that when asked to do so, organizations can struggle. When the Rail Delivery Group established the Customer Directorate in 2015, it did so using existing teams and very few had ever been asked to think about the customer; in fact, only a very small percentage of the team mentioned the word customer when describing their role. It took time to change that – it was a complete change in thinking.

It’s the easiest thing in the world to make mistaken assumptions about what services your customers want to buy, and not as difficult as you might think to find out for real. We’ll be exploring how you do this throughout the book but the best approach is simply to spend some time with them.

You can create or perpetuate dysfunctional processes

Many companies view service as operating a set of customer processes, rather than as a holistic experience. As a customer yourself, how often have you had to fill out overly detailed forms or provide the same information several times, in order to support a set of disjointed processes? This happens because those organizations haven’t stepped into their customers’ worlds and understood what interacting with them is like. Instead, they expect their customers to compensate for their own poor process design. Organizations within the charity sector, for example, often have come to expect people to donate, and have become reliant on low-cost, high-volume direct marketing. It’s important these players face up to a ‘new reality’ and understand the current pressures from regulators to tone down what is now considered to be aggressive canvassing for donations. Instead, they can adopt an outside-in mindset and focus on how their support customers want to be treated and engaged with.

Your efforts might get duplicated

Until relatively recently, it wasn’t uncommon for several different departments in a large company to operate their own customer website for their particular sales or servicing area; there was no coherent view of the customer experience or of the duplication inside the business. The result was a mushrooming of the number of websites over time, each requiring their own customer login and providing a disjointed and often frustrating experience for their customers (to say nothing of a poor impression of the brand).

We often audit the communications that businesses send to customers at points in the service journey and when we do it almost always comes as a surprise how many there are and, more importantly, how inconsistent they are. Each function involved in delivering the service communicates slightly differently. Organizations with many products and many teams often end up bombarding their customers with duplicated or conflicting sales messages.

You might see your customers as a burden, rather than as inspiration for your future competitive advantage

It’s unusual to return a faulty product and receive a completely helpful and positive response. Customers are still asked to ‘justify their case’ by returning the goods (at their cost and inconvenience) or arguing their point. The assumption from most businesses seems to be that customers are ‘trying it on’ unless the purchaser can prove otherwise. For organizations that don’t need to make a sale or profit directly from their end customer, for example, those in the public sector or monopoly privately owned (but regulated) public infrastructure, customer service and a consideration of the customer experience as a whole is often a conversation about controlling cost or spending only to appease customers who might otherwise do nothing but complain.

This outlook is improving, mainly due to the readiness of customers to complain on social media if they feel they’ve had a raw deal. Many companies would now rather agree to rework, refund or exchange than have a public fight with their customers about it. They’ve seen the cost of returns is relatively small, but the impact of bad press is huge. It’s also time-consuming to pursue a drawn-out argument at the till, when there’s a queue of customers waiting to hand over their cash. Most people are honest, after all, so why not trust them? What’s more, if this mindset shift is handled well in an organization, it can even lead to a change in the way the whole business thinks about its customers. If it believes the world is full of dishonest people, this shapes its culture, guides decisions about the design of its service, and affects the way it communicates. On the other hand, if its view is...