Over the course of our customer experience research and consulting work, we’ve found it helpful to evaluate organizations based on their level of maturity in delivering an intentional customer experience. At each of these maturity levels, a different set of actions is required in order to improve the customers’ experience in a way that drives business performance. One simple, effective approach is described as follows:
Level 1: “Experience by Default”
Whether you’ve designed it or not, your customers have an experience interacting with your organization, its products, and its services. If yours is like the large majority of organizations, the desired customer experience was never intentionally specified or designed in the first place. As a result, the customers’ experience ends up being ad hoc; all over the map. It may be highly inconsistent based on where and when the customer happens to touch the organization; sometimes it works, sometimes it’s frustrating as hell.
Many organizations operating at the Experience by Default level have been or still are product leaders. Perhaps, there remains a strong belief that the organization competes primarily on the basis of product features or quality. If so, a lot of effort may be put into the design of products. However, the customer experience surrounding the use of even the highest quality products can be highly non-intuitive. As products become more sophisticated, they often become more difficult for customers to use. If you’ve ever checked into a hotel and tried to set an alarm clock you’re not familiar with, you probably know what I mean. Beyond displaying the time, that clock has exactly one primary function; wake you up at the time you want. Performing this function should be totally intuitive and the clock should provide visible feedback that it’s been done correctly. Unfortunately, in most cases, it’s not so simple.
Many organizations operating at the Experience by Default level rely heavily on the creativity and heroic efforts of individual employees to make up for their lack of a clearly designed customer experience. Executives at these organizations often say, “the key to delivering a better customer experience is our people.” As a result, efforts to improve the experience generally are centered on training and motivating a better set of individual behaviors. This might include customer service and sales skill training, changes in compensation to reinforce more proactive individual behaviors, etc… Although these changes seem sensible, they miss the point. Delivering a fundamentally better customer experience involves fixing the design of the organizational system, not training and motivating a better set of individual behaviors. Training and motivation just leads to an incrementally better state of ad-hoc.
One additional characteristic of organizations that operate at the Experience by Default level is reflected in the way they measure customers’ satisfaction or loyalty. With these organizations, questions that appear on satisfaction or loyalty surveys tend to ask the customer about their satisfaction with a long list of “things we do” or on their satisfaction with the individual behaviors of people in front-line sales or service roles. Since there is no clear statement of the intended end-to-end experience, there is no way to measure whether customers are, in fact, having that end-to-end experience.
There are three critical steps to moving beyond Experience by Default:
- The first is to clearly specify the intended customer experience. For the past 10 years, we’ve been working with a Customer Experience Specification that answers the following questions for each type of target customer (personae):
- What are the most important situations that type of customer finds themselves in… sorted by decreasing order of criticality to the customer?
- What are the specific outcomes we intend to produce for that customer in each of these situations?
- How will we deliver these outcomes in a way that positively shapes the customers perceptions, interpretations, and evaluations of the experience they are having with us?
- The second step is to use this Customer Experience Specification as a requirements document for identifying and designing specific changes in the operating model required to consistently deliver this experience. This looks a lot like a reengineering project. Generally holistic changes are required in customer communications, customer-facing processes, role definitions, skills, organizational structure, performance measurement and management systems, information technology, etc…
- In parallel with the second step, the third step is to develop an Economic Model of the Experience. This economic model is driven by: the processes involved in and the associated costs of customer acquisition, service, and retention; the expected lifetime revenue stream for that type of customer; and expected benefits associated with cross-selling additional products and services, as well as, word of mouth advertising. It is exceptionally easy to make uneconomic customer experience improvements. The economic model is critical for guiding design choices that have positive economic value and to avoid trying to improve the customer experience by “giving the customer three scoops for a penny.”
Level 2: Experience by Design
About 20% of the organizations we’ve encountered have deliberately designed the experience they intend their customers to have; from the customers’ perspective. Experience by Design represents the state of the art of the late 90’s and early 00’s. Some organizations at this level, like Disney, have always designed every aspect of their business from the perspective of the customer experience. Other organizations at this level, have adopted this perspective as they have realized that the quality of the customers’ experience is the primary driver of their ability to acquire, retain, and improve customer profitability. One of these organizations is Wachovia, who frequently tops the list of major banks in service, particularly for it’s online banking.
The most common characteristics of organizations operating at an Experience by Design level include:
- Clear alignment on the intended customer experience. If you ask people throughout the organization what that experience looks like to the customer, you tend to get answers that are relatively if not completely consistent. The development of a Customer Experience Specification can help get started building this alignment.
- Aligned and designed operating model. Customer communications, customer-facing processes, role definitions, organizational structure, performance measurement and management systems, information technology, etc… are deliberately designed in order to consistently produce the desired experience.
- Experience management process. Unless the experience is designed, it can’t effectively be measured, managed, and improved. As a result, organizations operating at an Experience by Design level generally have ways of measuring whether the customer is having the intended experience… not just satisfied with the things the organization does. This measurement is used to provide input for correcting design or execution issues.
- Continuous improvement. Due to increasing customer expectations and competitive advances, not only is there a shelf-life of any differentiated experience but that shelf-life decreases over time. As a result, organizations that operate at an “Experience by Design” level more frequently have a way of understanding the trajectory of customer expectations and a way of turning that understanding into opportunities to improve the experience.
- Ownership for customer experience management. Key leaders in the organization are responsible for the quality and consistency of either the end-to-end experience or for each major component of the experience. Occasionally, this takes the form of a Chief Customer Officer (CCO). However, the presence of a Chief Customer Officer is no indication that the organization is actually at an Experience by Design level. In fact, many organizations appoint such a role and that person proceeds to do things that lead to no more than a better state of Experience by Default.
Over the past 25 years, my colleagues and I have worked with many dozens of organizations to help them get from Experience by Default to Experience by Design in a way that leads to a measurable improvement in business performance. Wouldn’t you know it, as soon as we know we’ve gotten the process right, the next level of experience maturity would emerge.
Level 3: Experience on Demand (Next Generation Experience)
Recently, a Next Generation Experience has emerged. It has been both defined and accelerated by online service providers like Google, eBay, Facebook, MySpace, YouTube, Trip Advisor, LinkedIn, and Wikipedia. These providers have addressed and amplified a growing preference amongst customers to create the experience they want to have… rather than just consume the experience you want to give them.
In general, this next generation of customers has several important characteristics:
- Most of them have “grown up digital” and possess a high level of comfort and facility with technology
- They are comfortable networking with people they know and people they don’t know in an electronic medium
- They would really like to have the “source code” for what you do whether it’s a product or a process. This allows them to know how best to personalize your offering to meet their needs.
- The might feel compelled to “mashing up” your offering with resources from other providers in order to assemble something that more closely meets their needs
- They want it their way and have very little patience for organizations that make them do things that don’t make sense to them
- If they have a bad experience with you, they may find creative ways to tell the world about it
- They’re much more interested in what other customers have to say about you than what you have to say about yourself in your advertising.
Whether your business deals directly with next generation customers or not, their presence is stimulating a shift in the way business is done. In particular, power is shifting to the organizations that provide a platform or context rather than content. Witness the success of the aforementioned business and many other platforms in which the organization provides context and the users contribute all the content.
The fundamental nature of the Next Generation Experience is highly influenced by the preferences of each customer or the behavior of other customers. These experiences blur the boundary between who is producer and who is a consumer of value. The organizations that deliver a Next Generation Experience:
- Think like a context (platform) provider rather than a content provider. How do we provide THE SPACE where customers can go to accomplish their objectives? This might be achieved by interacting or collaborating with other customers, accessing content from complementary or even competitive providers, actively contributing to the design of your next generation of products (and possibly getting compensated for my efforts).
- Deliver a flexible toolset on that platform. This toolset might help customers envision what’s possible; configure their own products, services, or experiences; connect with other customers; own and benefit from what they create: and have creative license with peer-reinforced community norms.
- Share the source code. By being open and transparent, more customers will find it in their interests to take advantage of your platform in ways that suit their needs. In the course of doing that, they will contribute to the emergence of an offering that will be more compelling to other customers.
- Design for emergence rather than control. Although you are ceding control of the experience to customers, it’s important to have a vision for the overall direction that experience is likely to go. That vision is necessary in order to allow you to create the conditions for the emergence of that experience. The best way to think about designing for emergence is captured in the work of the visionary architect, Chris Alexander, who in his book “A Pattern Language” describes how an effective architect organizes physical space in a way that generates specific compelling experiences. For example, how an architect can create a town square specifically designed for the emergence of a “Dancing in the Street” experience or a compelling “Sidewalk Café” experience.
We’ll have a lot more to say about the Next Generation Experience in future posts. For now, we’d love to hear from you.