Outside Innovation

Make It Easy to Stop Being a Customer

By Ronni Marshak
SVP and Sr. Consultant/Analyst, Patricia Seybold Group

In these hard economic times, we keep being reminded how important it is to keep the customers that you have. But sometimes you simply can’t. The customers aren’t moving to another provider, they are simply doing without.

So it is important to also offer a great customer experience for the customers you are losing so that, when things get better (soon, we all hope!), they will be excited about returning to do business with you.

Looking at finances this week—and facing a major construction repair project in my condominium—I realized that I had to cut down on expenses in anticipation of a possibly bleak financial year and continuing investment losses. Just yesterday, I had two very different customer experiences related to reducing my costs.

An Unpleasant Product Cancellation Experience

First, the bad experience:

Months ago, I ordered a beautiful, yet relatively expensive sweater online from an etailer with whom I have often done business, and with whom I have a great history. The sweater was backordered, but I was informed it would be shipped before the end of the year. During the holidays, I got an email notice saying “good news, your backordered item has been shipped and should arrive within 5 to 8 business days.” And then I forgot about it as I went about celebrating with family and friends.

Since I hadn’t yet received the sweater, I called the company, first, to see where it was, and second, to arrange to return it. I really didn’t need it.

After going through the IVR labyrinth, I was connected with a lovely woman to whom I told my story. She checked my account and saw that the delivery company stated that the package had been left outside my (condominium’s) door. Since my item was now “missing” (probably stolen, since it was left outside the building), she had to escalate to a supervisor.

It’s SOA Time: Do You Know What Services Your Customers Need?

Service-Oriented Architecture is finally coming of age. Those of you who are designing or refining your SOA strategies shouldn’t ignore many of our early reports on this topic. Many of the best “how to’s” and conceptual overviews were written by Brenda Michelson. Brenda is now the Principal, Business Technologist, of Elemental Links. You can check out her blog and Web site for an update on her activities. Now, thanks to Brenda’s evangelism and that of many other enterprise architects, SOA is finally becoming a best practice in IT enterprise architecture to support the design of adaptive applications and infrastructure.

However, if you want your organization to have a CUSTOMER-adaptive architecture, you’ll want to take an “OUTSIDE INnovation” approach to designing your Services-Oriented Architecture. The good news is that Brenda and I collaborated a number of years ago (2005!) on developing such a methodology. We used customer co-design techniques with our proven Customer Scenario® Mapping interactive design tools to capture customers’ “Ideal State” scenario designs. Then we identified the customer-critical services and used Brenda’s service classification scheme to help the technology architects on the co-design team correctly identify and describe these customer-critical services.

Brenda and I were a bit ahead of our time back in 2005. We think that many folks may finally be ready to take advantage of this streamlined and powerful technique. So this week, I’m re-offering her seminal report, entitled Service Discovery Using Customer Scenario Mapping.

Using Distributed Sensing Technologies to Understand Complex Systems

I just finished a research project on “green engineering.” I interviewed pioneering “lead users” who have been designing new approaches to solving tough environmental problems using affordable, easy-to-deploy sensors and holistic feedback systems. I learned from a Malaysian mechanical engineer how he was able to monitor and control commercial air conditioning systems in the tropics to reduce his clients’ energy consumption by 30%. I learned from a PhD chemist and a controls engineer how they were able to design a zero emissions hydrogen-powered switching locomotive from commercially-available components and to develop a complex control system to keep it running safely. And I followed the story of a group of 24 biologists, engineers, and computer scientists as they teamed across two continents to model and monitor an unusually salty chain of lakes in Argentina.

What struck me as I completed this project (which was a “green engineering” white paper for National Instruments) was that the approaches these engineers and scientists are taking to address specific issues while saving our planet may be relevant for other kinds of businesses as well.

 

Customer Scenario® Patterns

For many years, I’ve been aware of the value locked up in the design patterns that have emerged as business and consumer customers have co-designed their ideal approaches to everything from how they’d like to invest for retirement, to how they’d like software to install, to how they’d like to make a purchasing decision in our Customer Scenario mapping sessions. We published our first Customer Scenario pattern in 2004 (B2B Select & Buy: Part 1 and Part 2). Nobody seemed particularly interested. But I believe the time has come to put these out into the world. It may be that nobody will notice (Christopher Alexander’s work, which is very profound, is still under-acknowledged 30 years later, even among professional architects).

There are (at least) three different genres of Customer Scenario patterns:

• Customer Lifecycle Customer Scenarios. These are closely connected to customers’ discovery, acquisition, and use of your products to fulfill a need they have. How do customers ideally want to interact with your brand and your ecosystem through their product lifecycle?
  
  
• Event-Triggered Customer Scenarios. These relate to life events or business events that customers need to deal with. For consumers, these might include buying a new home, retiring, welcoming a new baby into the family, sending a child off to college. For business people, these scenarios may include things like launching a new product, opening a new branch, or downsizing the business.
  
  
• Outcome-Based Customer Scenarios. Some scenarios are focused on a specific outcome, such as losing 20 pounds, getting a promotion, or increasing your revenues by 20 percent while retaining or improving your current profit margins.

The Big Idea: Focus on Customers' Outcomes!

Paul Brown's "Off the Shelf" column in this Sunday's New York Times, The Season of the Sage - New York Times, comments on three new business books: John Naisbitt's MindSet!, Stephen Covey's The Speed of Trust, and my Outside Innovation. Of the three, Paul likes Covey's best. Mine least.

"The good news is that she offers intriguing insights through her new book, Outside Innovation, Innovation occurs, she says, 'when customers lead the design of your business processes, products, services and business models.'

For example, she argues 'you no longer win by having the smartest engineers and scientists; you win by having the smartest customers.' "

Later, after saying that:

"readers...won't find much new ground broken here if they are hoping to learn how to become even more customer-centric."

Of course, he neglects to mention the over 20 case studies in the book!

He closes by saying:

"While Ms. Seybold is fine at providing a broad framework--identify and study your smartest customers, for example, and provide them with tools so they can use your products and services the way they want--specific "how to's" are hard to come by, or are confusing. Consider:

'For each group of customers you choose to serve, there will be several scenarios that are critical (read valuable) to them at any given point in time. A good rule of thumb is to focus on one to three customer-critical scenarios for each target audience. Then move on to the next scenario for that audience (since you've made it easy for them to accomplish their outcomes, they're ready for the next transformational experience).'

Sometimes what is clear to a guru isn't clear to the rest of us. Unfortunately that is as predictable as fall foliage tours this time of year."

Ouch! Of course, I appreciate the ink. And even more so, I appreciate the fact that Paul actually TRIED to understand one of the core prescriptions of the book--focus on your lead customers, work with them to figure out what outcomes they're trying to achieve and either provide them the tools to "do it themselves" -- thereby sharing their innovations with you, and/or work with them to co-design how they'd ideally like to achieve their outcomes--thus unleashing lots of innovative new ideas you'd never come up with on your own.

A simple idea: Customers' Outcomes Drive Innovation

It really boils down to this: Find your most insightful and passionate customers, find out what outcomes they're trying to accomplish and help them do so.

By focusing on customers' outcomes--what they'd ideally like to accomplish--and helping them achieve those outcomes in the easiest, most enjoyable way, your firm becomes an engine of innovation: customer innovation.