Customer Experience Labs: Reflections on 2009 and an outlook on 2010

The New Year is still young I would like to use this post to reflect on the various projects that kept me busy in 2009, the experiences I have made in these projects and give an outlook on my focus at the Customer Experience Labs in 2010. If you would like to read more about a certain topic on this blog in 2010 let me know in the comments or via eMail at bernhard@customer-experience-labs.com.

Design Thinking in Action in 2009

One of my personal highlights of 2009 was our "design thinking & business innovation" course in which business students develop innovative solutions to problems that are defined by industry partners. In this course we follow a methodology that has been originally developed at the Center for Design Research at Stanford University and which we have adopted to meet the requirements of teaching the course at a business school. Our student teams developed solutions ranging from community involvement in the life-science industry to personalized sales consultation for telecommunication services as well as a new printer concept which turns the printer into multimedia terminal in your living room.

Besides the these teaching projects, we have also applied our “design thinking & business innovation methodology” in a number of workshops with industry partners to bring the idea of concept design and design thinking into organizations. These projects were about: 1) ensuring end-user acceptance for a IT-based CRM and sales solution, 2) training employees the skills to run design projects themselves and to train other employees, 3) setting up and coaching/managing an internal design innovation team at a major financial service provider in Germany, 4) organizing a co-design workshop with customers to improve the service experience for a German premium car manufacturer

Several observations I have made in these workshops:

1. Most organizations have idea management processes and systems in place but this is not enough to trigger breakthrough ideas in an organization. You can manage and analyze yourself towards innovation.
2. If employees are given the freedom to innovate and experiment with ideas for new products and services, ideas will emerge that are not just incremental improvements but truly breakthrough ideas. With our approach we basically define rules that overrun corporate rules to unleash a surge of motivation and creativity.
3. The way many large organizations are managed and controlled is exactly the opposite of management and control that is necessary to allow the emergence of breakthrough innovations. Nevertheless changing “the organization” or “changing the culture” is a long and tedious process that is not measured in weeks and months but years and decades.
4. If you want to foster change, you have to start with implementing an agile "organization within the organization”. This internal startup needs dedicated employees who have mechanisms and support to circumvent control mechanisms that are necessary to manage and keep large organizations in control.

These findings are by themselves not radically new. The interesting aspect is the process we have followed in these projects to develop customer-oriented solutions with minimal budgets, limited time frames and various other constraints that are present an mature organizations.

The documentation of these findings as well as a detailed description of our projects will be my main academic focus in 2010. In the coming months I will be working on my Ph.D. thesis and synthesize all the experiences, results and data that we have gathered in the last months and years into a coherent document. So stay tuned for updates about this.

Customer Experience Labs in 2010: The same but different

While I won’t be focusing on much else than my Ph.D. thesis I am in the process of redefining and changing the "Customer Experience Labs" blog to better reflect the development of the customer experience management field since I started writing three years ago. While I still strongly believe in the concept of creating remarkable customer experiences through innovative products and services to gain a competitive advantage, I think the “customer experience community” has evolved in the last three years.

The State of Customer Experience Management and Design

I think we have come quite far in the last years with more and more companies understanding that customer-orientation is very often too abstract but by focusing on the customer experience a new, more concrete understanding and frame of the customer’s requirements and needs can evolve.

In this process, two trends shape our understanding of customer experience. A number of innovative companies emerge who bring methods and tools from User-Centered Design, Industrial and Interaction Design and transfer them to design remarkable customer experiences. These methods and tools are getting more and more accepted. Therefore doing an ethnographic study instead of a questionnaire based survey is a valid option and nobody is irritated when you test a low-fidelity prototype with a selected group of customers to get feedback as early as possible in the design process.

At the same time many companies start to use the term “customer experience” to spice up their marketing material. The services are the same, they just have a different label. There is nothing wrong with that but I think one should be aware if you are actually confronted with a new set of innovative methods that help you to transform the customer’s experience or if it is simply the same call center solution that has been turned into a “customer experience platform”.

Of course user-centric, customer-experience focused design principles are not yet established in every organization but I think a blog like the “Customer Experience Labs” should discuss new topics and address emerging issues and not try to advance the diffusion of well-known practices.

Based on these findings as well as other trends I plan to put my focus in 2010 on three areas:

1. Leading the realization of innovation

2. The Tipping Point of the Mobile Revolution

3. Innovative Pricing to influence the customer experience

Leading the realization of innovation

You think you have a great idea, now what? The customer experience and innovation community is obsessed with new ideas and how these can be integrated into new concepts for products or services. The only problem is that most of the time these ideas are not as useful as everybody thinks they are. If you have done a sufficient number of design projects with different groups of people you usually come up with pretty similar ideas. Or as the head of design for a major printer manufacturer told me once “I have observed this industry for more than 15 years and I have to tell you, we have every variation of printer design that you can imagine in our design studio. The big question is, which one do we bring to market?”

I strongly believe that ideas individually are not the key ingredient for successful innovation. The key is instead the execution and implementation of these ideas, overcoming obstacles and the persistence that is necessary to realize an idea and bring a conceptual prototype to market.

This becomes increasingly important for organizations that are already successful in a market and which have to find the balance between maintaining the status quo and driving innovation to launch new products and services. While setting the goal that a certain percentage of revenue has to come from new products is one step in the right direction, the question how to design and manage an organization that is able to achieve this goal needs to be answered as well.

So in 2010 it is not just about designing solutions but also implementing and delivering these solutions to the customer – within a mature organization as well as within a startup. Facilitating and managing the change that is necessary to deliver remarkable customer experiences through innovative products and services.

The mobile revolution gains traction

The first mobile application that I have developed was a simple WAP-based application to monitor air pollution in a project for the Tyrolean Government in 1999. A lot has changed since then and while the iPhone was an industry game-changer, the real change is happening now with other mobile phone companies adapting to Apple and the iPhone. The move away from feature phones towards smartphones, the increasing power and functionality of mobile operating systems and the increasing availability of mobile broadband connectivity are creating an ongoing stream of new opportunities. The latest Quantcast Mobile Trends report gives a clear indication in which direction the mobile web is directed to:

Concrete examples are the rapid adoption of Android OS, the increased use of mobile application stores (i.e. Android, BlackBerry, Windows Mobile), the potential of carrier billing (paying for mobile content and applications through your phone bill) and the number of streaming music applications for smartphones like Pandora, that will substitute your storage based MP3 player in the next 5 years.

Many companies have already developed mobile applications, but most of them followed the principle "we have something available for the desktop/web, let’s bring it to the mobile phone". The next generation of mobile applications will not just be a translation of existing apps on mobile phones but instead take the user behavior into consideration as well as the simple fact that the mobile phone has become the most pervasively used device besides our wallets and keys. The best example for this are mobile banking applications: The need to do money transfers while on the go is probably very limited, nevertheless basic account information would be great. Even though I am able to receive emails and even my credit card invoice on my mobile phone I still can’t track my account balance conveniently on my BlackBerry smartphone. Hopefully this will change in 2010.

The mobile market offers huge opportunities for companies who understand the "mobile behavior" or "mobile lifestyle" of their potential users and then come up with solutions that integrate into existing behavior. I think 2010 is the year when we will see large organization bring radically new solutions into the mobile space and use them to offer new services and build customer loyalty.

Prototyping Innovative Pricing Concepts and Business Models

Jeff Bezos, CEO of Amazon.com, creates the best customer experience by bringing the lowest prices to customers. Yet many people understand customer experience principles as a way to charge higher prices. Sure, that’s one way to approach customer experience management but I think the most powerful untapped area is by reducing prices but still delivering a remarkable experience for customers and through this generate increased revenues and profits. Economics 101 tells us that when lowering prices, volume has to increase in order to maintain or increase revenues. Innovative approaches to pricing as well as new business models could create this increased demand by better meeting and addressing the customers “willingness to pay”.

That sounds easy in theory but there is a huge untapped field that needs to be addressed: How do we prototype innovative pricing concepts and new business models? And how can these new concepts be tested before rolling them out and maybe exposing your bottom-line? Just as you can’t introduce a new car by driving around on a parking lot you can’t test new prices by simply showing customers a prototype in an artificial situation. I see a lot of opportunities in this area and I plan to focus on the area of “prototyping innovative pricing concepts and business models” in 2010 on this site.

What are you interested in?

Most importantly I would also like to hear your interests, suggestions and comments what you would like to read in 2010 on this site.

Just drop me a question, comment, critique and I will try to address it in a dedicated blog post. You can do this by either leaving a comment on this blog post (you can do this anonymously as well) or just send me an email at bernhard@customer-experience-labs.com

If you are intersted in the topic of customer experience managemend and design thinking and you in Switzerland, Southern Germany or Austria let me know, maybe we have a chance to grab a coffee and discuss experiences and share ideas.