Using Service Design to Create Service Capital

I have been working on developing my thinking on Service Capital and just today thought I would publish on Slideshare a brief few slides on what it is, how companies generate and maintain it.

I am half way through a fuller white paper on Service Capital , but thought I would starting putting it out there as a means to drive me to work harder on it. The reason I have been working on it, is that I believe Service Design in my opinion would benefit from more accountability, transparency and publishable) results driven culture.

You can see the Slideshare presentation here

Let me know what you think.

How to reduce Price Discounting by increasing focus on Customer Experience

Walk around any Shopping Mall in Australia and you will find it hard to find the stock for all the “on sale” and “40% off sale” signs that are plastered across retailers stores. The same goes for airlines, telecommunications and B2C and B2B organisations. Everyone is having to work much harder for the sale and are quickly resorting to price discounting to get their customers to buy from them.

In a recently published research report called “Customer Service Trumps Price,” 4,600 consumers were asked how they choose the companies they do business with across 12 mainstream industries.

In particular, it asked consumers to rate the importance of two criteria: good customer service and low prices. Here’s some of what was found when the data was analysed across five generations of consumers:

* Across all 12 industries (and every generation of consumers), good customer service was selected more frequently than low prices as being important.
* When it comes to the gap between good customer service and low prices, seven industries have double-digit spreads, led by banks (31%) and health insurance plans (18%).

Given nearly everyone has pulled or is close to pulling the price lever, this month I thought I would share with you an approach which is proven to reduce reliance on price discounting.

In a great 12 page mini-book written by Bruce Temkin who is the Vice President and Principal Analyst at the respected Forrester Research focusing on customer experience, he has used his extensive research to compile the 6 laws of customer experience.

1) Every interaction creates a personal reaction.
2) People are instinctively self-centred.
3) Customer familiarity breeds alignment.
4) Unengaged employees don’t create engaged customers.
5) Employees do what is measured, incented, and celebrated.
6) You can’t fake it.

While some isolated situations may not follow these 6 laws, they accurately describe the dynamics of customer experience for large organisations. Anyone looking to improve customer experience must understand and comply with these underlying realities.

With all companies challenged and marketing budgets cut back in this environment, keeping how to keep your customers (and keep them happy) is the key currency.

Whether you lead a service organisation or you are looking to find ways to add services to your product range to generate new opportunities for growth, if you are looking for ideas on how to improve your customer’s experience, I know you will find this article extremely valuable.

Selling the value of Service Design – How Barbara Minto of The Pyramid Principle might approach it

Every movement needs  two things, an enemy and a burning desire to change the status quo of something you see needs changing. Here is how I think Barbara Minto who wrote the hideously expensive but still great value book The Pyramid Principle, would approach how to sell the value of Service Design. It is designed to short.

The structure is as follows:

  • Situation
  • Complication
  • Question
  • Answer

You should nod with agreement with the core fact of each page, if not, lets call this a Prototype and build to learn as they say. I welcome your thoughts.

SD SCQA.001

click  here to see the presentation on Slideshare.net or cut and past the link below.

What does Service Design do for companies that no one else can?

I realised today that for Service Design to be successful, Service Design firms need to convince potential clients that they can change something or solve something that up until now hasn’t been able to be resolved.

That is, companies have been using product development and design tool-kits to solve service problems issues/opportunities. Only the Service Design methodology offers a tool-set and skill-set that is specifically designed and developed to solve and improve service based issues.

At the same time, it allows companies and customers to mutually benefit, to mutually access value without the exclusion of the other.

Maybe it is time to become more overt in communicating what has been lacking up until now, in order to clearly and confidently communicate to organisations, the significant benefits from using Service Design to achieve sustainable competitive advantage.

I am working on a Pyramid Principle(Barbara Minto) approach to trying to explain in 4 slides why Service Design solves Service based organisations problems unlike any company before them. And given this is the most expensive book i have ever bought,( USD$75 ten years ago) hopefully it will be convincing!!

More later

Proto Partners Service Design manifesto (Beta)

Working to dramatically transform the way service is delivered, the way corporations default to productivity without the balancing need for quality and the ambivalence of great customer service expectations in our society.

Our aim is to overhaul existing service experiences and create a major shift in the way service is not only delivered but experienced in the new millennium

This will require a major shift in the way people see the provision of excellent service from an almost grudging behaviour to something to be esteemed and admired.

Our enemy will be those that fail to understand in an economy that is dominated by Service based organisations, that to offer inferior or average service is to commit themselves to losing cutsomers and inferior or average profits in the future.

A Service Design manifesto for Transformation

I have decided after listening to Seth Godin that Service Design needs a movement. It’s not enough to think that what you sell is so good that it is enough to convert your potential customers. Potential clients buy passion, energy and commitment as much as they buy what you are selling.

To that end I have designed my own corporate manifesto. I believe in what I am doing and as i read and believed a long time ago, communication is not just saying something, it is the recipient successfully comprehending your intended message.

So here is my manifesto, the reason that I believe Service Design has the power to help companies transform their service experience for companies and their bottom line through increased customer loyalty and increased revenues.

Proto Partners Manifesto
Working to dramatically transform the way service is delivered, the way corporations default to productivity without the balancing need for quality, and the ambivalence of great customer service expectations in our society.

Proto Partners Aim
Our aim is to overhaul the existing service experience and create a major shift in the way service is not only delivered but experienced in the new millennium.

What your Company needs: More Elegance

I think this is a fantastic article that demonstrates the power of using Big ‘D’ design for the purpose of growing your business using focus and well…..elegance.

What Your Company Needs: More Elegance
By Jessica Stillman
May 19th, 2009

* The Find: It’s usually a quality associated more with evening wear than management, but one expert is arguing that businesses should up their elegance quotient to succeed.

* The Source: An interview with Matthew E. May, the author of In Pursuit of Elegance: Why the Best Ideas Have Something Missing, conducted by blogger and venture capitalist Guy Kawasaki and published on the American Express Open Forum blog.

The Takeaway: Whether it’s a mission statement, a strategy, the formulation of a goal or a product design, May argues you should aim for elegance in your ideas. First things first, what exactly does he mean by the term? “Something is elegant if it is two things at once: unusually simple and surprisingly powerful. One without the other leaves you short of elegant,” he says. Great, so why is this quality so important?

Elegance cuts through the noise, captures our attention, and engages us. The point of elegance is to achieve the maximum impact with the minimum input. It’s a thoughtful, artful subtractive process focused on doing more and better with less.

Certainly it’s easier to remember an idea that’s short and punchy and minimalist products – think of all those little iPods nestled in everyone’s pocket or purse – certainly seem to earn consumers’ loyalty and love, but have other companies succeeded by focusing on elegance? May offers the surprising example of “freakishly popular” hamburger chain In N’ Out Burger – an establishment not usually associated with elegant dining. He explains:

The menu offers only five items: a hamburger, cheeseburger, double burger, French fries, and a short list of beverages. By keeping things simple, founder Harry Snyder says he is able to provide the highest quality food in a sparkling clean environment.

In ‘N Out understands that seduction, and that subtraction can simply mean “not adding.” By resisting formal menu expansion they’ve avoided the self-defeating overkill seen in consumer electronics, with its “feature creep,” and the resulting “feature fatigue.

Microsoft Word, famous for its seemingly endless features most users never needed nor wanted, is cited as a classic example of a feature fatigue inducing product, but how many managers have induced a similarly sleepy feelings in their teams by failing to reduce their aims down to a simple, streamlined and compelling idea and instead throwing a messy list of duties, goals and responsibilities at their employees?

The one thing you need to know about creating a remarkable retail shopping experience

I found this article by Bernhard Schindlholzer and thought it was pretty good advice on customer touch-points and ensuring you focus on the right customer touch-points at retail.

Every retailer has at some point thought about the design of his retail stores in order to create a remarkable customer experience with the goal to maximize revenues. The design of retail stores with customer experience in mind is a complex task and usually a lot of focus is put on the stores environment, the stimulation of the customer’s senses and extraordinary service.

With all these different areas that provide opportunities to design remarkable experiences, the ultimate question remains: What are the areas of customer experience design that will have a direct impact on your sales?
Let them touch and they will buy

A recent study has shown that the longer people touch certain products, the higher is the probability that they will actually buy the product. The researchers from Ohio State University and Illinois State University discovered this by asking participants about their willingness to pay for a product in a bidding process depending on the time they have hold the cup in their hands. In case your products are locked away in a glass showcase or – even worse – have a sign that says “don’t touch” you should think if there might be a better solution to present your products and give customer a chance to experience them. You might be missing out significant amount of sales.

Thinking about these findings, I asked myself: What is really the essence of a remarkable shopping experience? What drives people to buy instead of just look around?
The reason why people enter your shop

It is clear that not every potential customer enters a shop to make a purchase. Sometimes people enter your shop just to look around and collect information. Nevertheless, it is important to understand the underlying reason why people enter your shop:

Customers enter your shop because they want to experience your products, not your shop.

The focus of designing retail shopping experiences is therefore on designing opportunities for the customer to experience the product as realistically as possible and not to design the shop so that it creates a better experience.

Customer want to experience what it is like to own your products – your shop should be designed to help create these “product discovery experiences”.

Exclusive interior is overrated

Following this approach, it becomes obvious that exclusive and expensive interior does not necessary lead to a better shopping experience. Potential customers will enter your shop because they want to experience your products, not to see a nice shop. Just ask yourself how this exclusive wood boarding will influence the “product discovery experience”.

“But what about exclusive fashion boutiques?” you might ask. “They have nice shops with expensive interior so it must have an impact, right?”. Yes, they have expensive interior but the interior is secondary. The primary experience driver is the interaction with the sales clerk who will “simulate” real world experiences by telling you how great this new suit or dress looks on you. This is a simulation of the real-life effect that you want to achieve with your exclusive clothes, handbag or watch, created by employees in a personalized “product discovery experience”. A pleasant environment plays a role to create a remarkable experience, but it is not the key driver of the experience.
The implications for your business

If you are responsible for designing a retail experience or shop for your business, you should ask yourself the following question: Are you designing a “shop experience” or are you designing a “product discovery experience”? If you approach the design problem from a “product discovery experience” perspective, you should identify the design elements that contribute to a simulation of the effects of owning your products. Let your customers feel what it is like to own your products.

Approaching the retail shopping experience problem from this perspective, I am sure you will come up with countless opportunities to create a truly remarkable customer experience that will not just make shopping more fun, but also influence your bottom-line.