AI / Business Model Design / Collaboration / Customer Engagement / Customer Journey / CX / Design Thinking / innovation / Machine Learning / Value

Designing Customer Value

Every discussion of value must begin with an understanding of the the jobs your customer is actually trying to do

Understanding Value

People often switch off when they hear the word ‘value’ because it has become almost meaningless. Value is a meaningful term, however, when used meaningfully: ‘value’ means enabling a customer to achieve their objectives and it has three requirements:

  1. clearly understanding the job the customer is trying to do
  2. enabling the customer to overcome challenges to getting the job done
  3. enabling the customer to realize the benefits from doing the job

Inside-Out or Outside-in?

According to Forrester Research, we live in the ‘Age of the Customer’. If your first priority is to makes decisions based on what is best for you, achieving customer value will be coincidental, not intentional. This approach is called Inside-Out, because you’re championing your objectives over the customer’s and are being driven from ‘the inside’. If, on the other hand, customer value is your primary objective, you’re now designing for your customers’ benefits first and this is called ‘Outside-In’. Outside-In has the advantage of satisfying customer value and driving your company value and shareholder value – and it’s more sustainable.

Understand the Customer Journey

So where do you start? The customer journey map is the beating heart of the customer-focused, value-based organization. The customer journey map is commonly mapped over five stages: Awareness, Consideration, Acquisition, Service and Loyalty.

There’s a nice overview in The Art of Opportunity, where Parker Lee and co. break the customer journey into eight parts: Solutions, Evaluation, Selection, Purchase, Take Home/ Deliver, Use, Maintain and Dispose. They also use some pretty cool tools and templates, which you can access here.

The journey is broken out into two phases:

1) Pre-Purchase: when you want to eliminate any objections to a sale, also known as ‘barriers to consumption’;

2) Post-Purchase: when you want customers to feel they have gotten value and there are no ‘hurdles to satisfaction’.

Understand your role in the customer journey and who your collaborators are

All functional roles within an organization deliver customer value at some part of the overall customer journey. Specifically it will relate to a functional, a social or an emotional characteristic of the journey. A ‘connected’ customer journey means that the departments and functions within an organization know where they fit along the customer journey, what characteristics of the journey they support and most importantly, how they must collaborate with – or hand off to – each other to satisfy the customer’s needs. On the first half of the customer journey, the objective is to lower the customer’s “barriers to consuming” -aka ‘buying’ – your product or service. During the second half, the post-purchase phase, the objective is to lower the customer’s “hurdles to satisfaction.” (see journey map above) Your Customer Success manager will monitor this entire journey so that it can become a renewal loop and a circular business.

Think ‘User Experience’ everywhere sales and marketing should align

Modern databases and measurement tools are functionally sophisticated, but they are only as good as the data that is entered or the schema they are designed to report on. There are examples of some great customer journey and service design maps posted here. While we’re used to seeing this behavior in user experience (‘UX’), web and application design companies, how often do we see this in how our marketing or sales or operations functions are designed in our organizations? Great, human-centered design will accompany smart machine learning if artificial intelligence is to realize what it’s potential to create value.

Collaborate to build customer value systems

If you’re a movie fan, you’ll know that every single scene builds in some way towards the conclusion of the story. It should be the same way with organizations: no function should operate in isolation! Yet we still experience disconnection, inefficiencies, low productivity and frustration between teams. This often arises when functional and operational projects are designed to achieve goals, not to support systems. Businesses are systems. If they don’t operate collaboratively as systems, they spin into dysfunction and lose sight of overall customer value.

Businesses are systems. If they don’t operate collaboratively as systems, they spin into dysfunction and lose sight of overall customer value.

In the best customer organizations, each function knows the overall customer strategy and how the moving parts within the organization connect and relate in dynamic situations. Communication, culture, spatial awareness of and respect for the groups adjacent to yours are absolutely essential in high performing value organizations.

What does your group do?

While Customer Journey maps look at the overall journey, they can be broken down further into customer segments. Your organization’s relationship with customers along the journey should be like the hooks and loops of a strip of velcro. At every level and function of their organization, there should be a corresponding part your organization dedicated to cater to their needs.

You should be able to pin point where your team plays a role in enhancing the customer’s journey and which functions are both upstream and downstream of you. For an uninterrupted customer journey, the hand-off between functions must be continuous.

For an uninterrupted customer journey, the hand-off between functions must be continuous.

On many occasions, we find that organizations have invested in supporting a customer need with a specific function – social communities, customer service, inside sales etc., events marketing etc. – but either because they are oriented from the inside-out or because they haven’t communicated the upstream-downstream hand-offs clearly, gaps appear and the customer’s journey gets interrupted. This is why collaborative leadership and communication of strategy among internal groups is so important.

Just think of the last time you attended an internal strategy training: how many times was the focus on product or portfolio strategy, corporate strategy or shareholder value? How many times was the focus on customer value strategy or co-design between functions to enhance the customer journey?

Design, model and innovate

The way to avoid dysfunction is to design your organization and processes to support your overall customer strategy. This starts at the very top with good leadership and committed partnership across functions. Portfolios and individual projects should be designed with the same objective: to understand the jobs customers are trying to do, help them overcome obstacles to doing these jobs in order for them to realize the benefits available. ‘Design’ should be a critical enablement skill within every organization, at every level. The more complex the journey, the more the need for a deliberate design process.

‘Design’ should be a critical enablement skill within every organization, at every level. The more complex the journey, the more the need for a deliberate design process.

Enable competitive differentiation even in crowded spaces

Organizations who design from the outside-in understand that delivering value to their customers is their biggest competitive advantage, even in crowded markets. We like to talk about innovation, especially in the IT industry, but product innovation is only a small part of the innovation options available to us. Innovations in how we sell, how we market, how we run our supply chain, how we coalesce around our customer’s journey and experience will have just as – if not more – powerful an impact on our bottom line than our product portfolio. The organization with smart Customer IQ that collaborates across functions and levels and designs a purposeful customer value strategy from the outside-in will likely be a winner.

Credits!

Thanks to Parker Lee at Compass52, co-author of The Art of Opportunity.

Work+Texture is a design-based business strategy firm. We work with organizations to produce creative strategies, delivering distinctly better customer experiences. Come see us at:

www.worktexture.com

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s