customer experience
How to grow by tuning into future customer expectations Stefan Moritz
VP Customer Experience Veryday stefan.moritz@veryday.com
Recently, on my way across town to pick up the kids from school, my Google Maps proactively suggested a better route based on current traffic conditions. Have you ever thought about how that works or how a service company always manages to stay one step ahead of your needs? Google, of course, invests heavily in order to anticipate our needs and come up with new ways of creating value for us. The question is, is this something that your business can do, too? If so, how? What businesses need is a way to be more effective. A vision of the future combined with real, deep customer insights that keep companies moving, adapting and growing alongside the exponential opportunities ahead. At Veryday we’ve created the Future Customer Experience Framework, a model that describes how to succeed.
a new playing field
Malin Orebäck
VP Design Veryday malin.oreback@veryday.com
In a recent survey, Gartner research found that 89% of companies expect that soon they’ll compete mostly on the basis of customer experience (versus 36% four years ago). Customer-centricity and innovation have been discussed in many boardrooms and most CEOs have started to invest, focus and prioritize in that area. How can your business compete in a landscape like that?
If everybody is running toward the same goal, it’s speed that counts - but also the right direction.
Siamak Tahmoresnia
Senior Design Strategist Veryday siamak.tahmoresnia@ veryday.com
89% 89% of companies expect to compete mostly on the basis of customer experience by 2016, versus 36% four years ago according to Gartner Research.
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Great customer experience has a significant impact on customer loyalty, employee engagement, company value and stock market performance. Watermark recently launched an updated version of their Customer Experience ROI Study demonstrating the business value of great customer experience: http:// www.watermarkconsult.net/ blog/2015/06/02/the-2015customer-experience-roi-study/
Three opportunity areas 1 - expectations across sector Many companies know that smart, connected customers have high expectations that evolve quickly. The new generation has a greater influence than ever on older generations. Expectations permeate across age groups and geographies, but also across traditional sector boundaries. The ease of cardless payment in an Uber taxi, for example, may raise questions the next time you check out of a hotel — why isn’t your experience there as seamless, too?
2 - reviews As customers consider subscribing to or buying into your service or experience, they interact with others who actively share thoughts about their experience. Sharing reviews has never been easier, and this makes positive customer experience essential for a successful service company. A hotel’s TripAdvisor rating, for example, is more crucial than a glossy website. Unlike consumer products, you cannot return an experience, so customers use mobile transparency to make smarter choices from the start.
3 - latent needs Many service companies are switching to new technology platforms to improve their back-end capabilities, often basing these significant tech investments on assumptions and surveys of what customers say they want today. However, many customers do not articulate their needs well, and what they say often differs from what they do. This can bear the risk of financial loss, but it’s also an opportunity to tap into latent needs.
The value of knowing what customers will expect in the future has never been greater.
Many customers can’t articulate their needs. What they do is often different from what they say.
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Going forward As connectivity and customer empowerment rise exponentially, every day that passes is a lost opportunity to engage, create value and optimize customer satisfaction. Companies that don’t have a process for continued improvement across the organization are missing out. Most business leaders need to guide their teams and companies to a future that may be more uncertain than ever before. The threat of disruption is high and often comes from unexpected places. The challenge is to be more effective and combine a future vision with insights about real, deep customer needs.
future customer experience framework At Veryday, over the years we’ve seen that successful companies simultaneously look at numerous future horizons. We combine this type of thinking with a customer-driven iterative process that aligns stakeholders, creating a strong innovation pipeline along with required organizational transformation.
1 - 3 YEARS UNMET NEEDS
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Our Future Customer Experience Framework systematically structures iterative innovation work from both short term and long-term perspectives. It’s divided into three periods: Today, Medium Term (1-3 years) and Long Term (4-10 years). Hypotheses can be quickly prototyped and tested in the short term to define and shape the future direction of a company. Simultaneously, the framework allows for futuring and trend forecasting that adds value and inspires implementation initiatives today.
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At the core of our model is an iterative and truly customer-centric process that links insights to business value. This iterative development compass runs 24/7, with an inner Customer Value focus and an outer Business Value focus.
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By establishing collaborative, multi-disciplinary working environments, companies can increase productivity and foster innovation.
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You can start in any quarter of the compass, but most often we begin by uncovering customer needs through people insight research. A significant unmet need frequently points toward a corresponding business opportunity.
Read more about our work with Customer Experience: http://veryday.com/marketfocus-areas/service-sector/
The next step is then to prioritize and develop concepts around the most promising opportunities while simultaneously putting the business model to the test. In the following phase, select concepts are brought to life as prototypes and financial potential is estimated. Finally, to close the loop, prototypes are tested and validated with customers and other stakeholders – both for user experience and commercial viability. Most development initiatives move through the model several times and are further refined in each cycle. The first cycle is usually generative, with a focus on learning about and identifying customer needs, as well as what’s really meaningful and valuable to them. The second cycle begins when something starts being built or a few ideas have been generated. In the third cycle and beyond, a detailed solution typically needs verification to prove that it’s on the right track. In these generative cycles, it‘s most appropriate to use qualitative methods and meet with fewer customers. In later validation cycles it’s also relevant to use quantitative methods but include a larger number of customers.
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Some companies develop the Value Compass into a system, scheduling a bi-weekly timeslot to meet with customers and test initiatives currently in the making. From here, they often develop the natural habit of spending time with customers to tune in to their needs and co-create new opportunities.
1 - 3 years unmet needs
Growth How will you invest in creating relevant solutions for your customers in the medium term? What will generate the best return on innovation investment and where do you find the best growth potential? Understanding who your customers are, how they behave and what their needs are is critical to knowing where to put your money and time. You need to venture out and investigate real customer needs to avoid making assumptions, stereotyping or boxing customers into generalized personas.
Veryday looked at personality and behavior to create uniquely defined customer profiles with distinctively different needs and values for one of Sweden’s largest grocery retailers. The solution became a portfolio of services that fit a broad customer base and were more in tune with the distinct needs of each profile. Once such profiles are identified, you can ensure that key customers are offered solutions that fit their needs. When you have a broad target (like food retail), knowing your various customer groups and quantifing how big these groups are is key to building a roadmap for your service portfolio. Once you’ve identified who your key customers are, it’s a good idea to map the customer journey. This often reveals complexities and pain points, as well as where things are great. Journeys can have different purposes and map entire service flows, individual customer journeys or include numerous layers of stakeholders. One powerful form of journey mapping is emotional experience mapping, which focuses on emotional responses to situations over time. So what can you learn from a customer journey? It can provide in-depth knowledge about the good and bad parts of an experience, help identify where critical improvements are needed, and provide ways to find easy fixes. However, a journey map is also somewhat limited to the current situation. It investigates and describes reality as it is today. If you envision an entirely different solution tomorrow, you need to complement this with some other methods.
Emotions evoke different actions and reactions to products, services and the brands that create them. Read more about Emotional Experience Mapping: http://veryday. com/people-insight/ emotional-experiencemapping/
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4 - 10 years future needs
Creating the future Futuring offers tailor-made insights that fill the gap between pure data prediction and strategic decision-making.
To fuel projects with new perspectives and unlock potential for radically new ideas, we need to add a layer of forecasting to the creative process. In the future, customer expectations will transcend age groups and sectors. Individuals will have overlapping identities that result in mindsets changing in emphasis – depending on life stage and context. To truly meet our future customers, we’ll need to navigate through key shifting mindsets. In the near future, customers will be the digital natives that have been immersed in the digital environment for as long as they can remember. They’ll have entrepreneurial, adaptive minds and see the world in continuums: anytime-anywhere production and consumption of content. Everyone and everything will be connected. Things will just work, seamlessly, meeting their demands before they realize them – as expected. The technical solutions that simplify people’s lives will be sophisticated, and consumers will have little interest in understanding them. They’ll simply want to engage with the never-ending flow of content, with activities that range from social media to shopping. What can brands offer to engage these confident and fluent future customers? In ten years, where will today’s teenage social media masters hang out digitally? What platforms for expression and creation will they need as adults? How will brands be a part of people’s lives when they expect services to be delivered unnoticed? How can brands support customers in an increasingly complex and diverse digital world?
Read more about how we help clients develop innovation processes: http://veryday.com/businessinnovation/innovation-support/
By setting the stage through scenarios and context descriptions, it’s possible to co-create and even prototype future solutions with consumers and uncover ideas they couldn’t articulate if simply asked. Bringing early prototyped ideas also helps spark new thoughts and reflections on future needs. The results of this work can inform the vision and direction of today’s decisions. Used in the right way, it can direct the heavy investment being made in IT infrastructure and make it more adaptable to customers’ futures – hugely reducing the risk of making large investments in the wrong technologies. 6
4 - 10 years future needs
Transformation drivers Being open to changing along with your customers also means that your organization needs to be set up for continuous transformation. Future vision, insights and the Iterative Value Compass become a foundation for the innovation pipeline and roadmap of the future. Unless your organization is ready to change, nothing in the innovation pipeline will come to life. Well-crafted and detailed directions – transformation drivers – will fuel your organization to transform and provide concrete actions for change and alignment with key stakeholders. For example, a global telecom company used transformation drivers to align IT, retail, processes, partnerships and communications by defining key shifts required from a customer perspective. Each driver was a theme underpinned by concrete insights and linked to the customer journey. A tangible business opportunity was identified for each theme so all areas knew why they were working together towards a particular goal. Key business requirements were defined overall and for each area. The advantage of this way of working is a process that allows for evolution and adjustment.
Unless your organization is ready to change, nothing in the innovation pipeline will come to life.
bringing it all together Our framework is based on many years of experience working with companies in the financial services, telecom, hospitality, travel and education sectors. We truly enjoy collaborating with multi-disciplinary teams in various organizations to effect transformation through customer experience. And we know that each organization is different in its challenges, culture and opportunities. A co-created discovery of how to establish and fuel this new way of working has already yielded results, and we believe there are many simple ways to benefit from the possibilities of scaling and evolving.
getting started: 1. Set aside time Invite your team to a workshop to explore: What do we know about how our customers will live in the future? What will be our brand’s role in their lives? What will be their expectations from a service like ours? Spending a few hours reflecting about the future together will allow you to push forward in the right direction today. Many good materials about trends are available for free and you can get help to facilitate this session if you want. 2. Get organized Consider how you can bring different parts of the organization together. Together, review and share what you already know: Who are our most valuable customers? What do we know about their needs? What do we know about the customer and service journeys? How can we make this knowledge more accessible and actionable? Do we have any gaps to fill? 3. Set an ambition Set up a discussion with the leadership team to agree on where customer experience should be placed in your organization: What strategic value does it have? What are the business objectives that could be fueled with more customer oriented efforts? What goals could we set for cross-functional customer and business value. What are the key metrics? What is our vision? Contact us for more information: stefan.moritz@veryday.com, malin.oreback@veryday.com
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