service design thinking

Are you the chief employee experience officer?

March 31, 2016By Mike Hohnen

Focusing on the customer experience is the key to high customer loyalty – it’s well established.

That is also why around 70% of medium to large UK companies have a customer experience manager at the level of VP or equivalent. The current buzz-tool for developing these customer experiences is ‘service design thinking’.

So far so good.

But if you’re familiar with the service profit chain, you also know that the key to an exceptional customer experience starts somewhere else. We need to create what we call ‘internal quality’ – more popularly referred to as ‘a dream team cycle’.

So what would happen if we were to turn all this service design thinking on its head and focus more on the employee experience? When did we last sit down to analyse the employee journey as it unfolds throughout the day?

Do we know what the critical touch points are? Have we done some emotional mapping that could help us understand what the possible frustrations are during a day?

What are the learning opportunities? Does this job have varying challenges, or is it just the same thing day in, day out?

This idea came to me as I read Global Human Capital Trends 2016, published by Deloitte University Press. According to this latest survey, 92% of executives listed organisational design as very important and something they will be focusing on this year.

So designing our service organisations from the employee perspective should receive the same kind of attention and resources as we use when looking at the customer experience. Yes?

This leaves the question of who the chief employee experience officer is going to be in your organisation. Will they be part of HR, or will your organisation create a totally separate role?

I would love to hear your views on this, so please feel free to reply to this mail.

The Asymmetric Nature of Services

April 21, 2016By Mike Hohnen

In my previous blogposts, we started looking at this whole concept that we have labeled “The Experience Economy” and why the shift towards a service-dominant logic is raising the bar for everyone involved in service.

So, if we can agree that there is a shift from focusing on goods to focusing on needs, we need to spend some time understanding the concept of needs as seen from the consumer’s perspective.

Many hotels, restaurants, or other traditional service providers forget that they are in the needs business and fall in love with their own products. They mistakenly think that it is the product the consumer is actually interested in and do not understand that the product is just a translation of their needs into something more tangible.

Loving the product and missing the need is also what happens every time a company or industry is disrupted. The needs shift or someone sees a totally different way to fulfil those needs – and titans of industry get washed away. Kodak never believed for one moment that we would ever drop Kodachrome and replace it with pixels.

Services are Asymmetric

So, when we look at the nature of services, it is important to remember that there is this phenomenon of asymmetry – what you sell and what the consumer buys are often two very different things. If you are an airline, you will have a tendency to think of your product as Seat 7A on Flight AB1234. That is what you have sold to that passenger. But the passenger doesn’t think of it that way. What they have purchased is transportation from A to B. That is the need they have.

If you take the restaurant industry, you don’t go to a fine dining restaurant because you are hungry. The restaurant may see itself as providing food and drink…that is its product. But, you are presumably there for something completely different. Something that has to do with atmosphere, occasion, or whatever.

In the hotel industry, they see themselves as providing you a room with certain specifications. But in many cases, you are not in that market for that product specification. You are in the market for a good night’s sleep…that is your need. If the ventilator on the ice machine rattles all night and prevents you from sleeping, then all the beautiful treats and frills in your room are not going to help one iota – you will hate the experience.

So, in that way, traditional service providers also need to make sure that they don’t fall into the trap of seeing themselves as product providers fixated by their own product specifications, to the extent that they forget about what the need is that they are supposed to fulfill.

Now, the problem this surfaces is that needs are deeply personal, subjective, and situational. So, when the travel industry talks about pax – we have 50 pax next week and then 200 pax on that flight – or the restaurant industry talks about covers – we will be doing 145 covers for dinner and then 85 covers for lunch – it is an insult to the individuality of their customers.

What pax and covers implies is that they are all the same – a flock of sheep that all need a standard shearing.

In the next blog post, we will take a closer look at how we can get better at understanding what needs are all about and maybe, more importantly, how to better get a grip on the fact that different people have different needs

– welcome to the age of mass-customization.

In a Sea of Sameness, We need to Manage the Experience

May 17, 2015By Mike Hohnen

We have been talking about the experience economy for years, but what does it mean to create an experience?

And, have you ever wondered who is responsible for the total experience in your company?

Most companies I work with have subdivided the responsibility for the experience into various sections – the kitchen is responsible for the food experience, the restaurant for the table service, the reception desk for the welcome.

When doing it that way, we hope that if each of them do it well, then the total experience is going to be the best possible experience.

But if we were to apply that principle to manufacturing, we would be calling it sub-optimization. Ensuring that the parts are fantastic doesn’t guarantee that the total becomes fantastic. Purchasing the 11 best soccer players in the world does not guarantee a championship.

If you take your family to a theme park for the day – does it end up being a fantastic day because of one or two rides, or is it the integration of all the different experiences that blend into what you all feel was an exceptional day?

So, how do we ensure that the overall experience is fantastic?

I became curious about all this because I came across an article that stated that 69%of major UK companies have a customer experience manager.

The financial sector and the telecom sectors seem to lead the way. In retail, we don’t see many; and I struggled to find any in the hospitality sector at all.

Interesting.

Why have people in finance and telecoms seen the need before everyone else to appoint someone senior to take responsibility for the total experience of our customers?

I think this has to do with the fact that in the financial sector and the telecoms sector, they have a huge challenge in differentiating their product.

Once you have obtained your overdraft facility or your loan or whatever it is you want from a financial company, the difference in the actual product is not clear. A loan is a loan. The same applies to the telecom sector. If I send you an SMS, it’s difficult to know if it has been sent through Telia or Orange or whoever it is. The quality of the SMS doesn’t vary from one telecom provider to the other – although the content may vary… but that is another story.

What does vary from company to company is the actual experience you have when applying for your loan or creating your mobile phone account. Paying your bill etc.

This is something that Virgin understood years ago.

They took boring industries and tried to see if they could improve the experience. Not a cheaper experience but a more interesting or fun experience. They did it to the airline industry, they did it to trains, they’ve done it in the banking sector, telecoms, and fitness centers.

So why is the retail sector or the hospitality sector not concerned about the total customer experience – they stand out as the two sectors who don’t seem to employ customer experience managers?

They don’t see the need because when you have a shop or a hotel and you stand inside your own business and look out into the world, you are convinced that what you have is very different from any of the other products out there. Furthermore, you are convinced that, of course, the customers can tell the difference between your beautiful shop and all the other mediocre shops that are out there. It is obvious. But if you switch perspective and look at the marketplace through the eyes of the customers, what they see is a sea of sameness.

From the customer’s point of view, in each category they are all similar products that do the same things at the same prices, etc.

Which is why we have now come to a point where customer service is probably the last frontier of a sustainable competitive advantage. Products are very similar; process – the way we do things – is the differentiator.

So, if you want to out-perform your competition, you need to focus on your processes. How do all the things we do blend into that great total and unforgettable experience?

In the following blog posts, we will take a closer look at what that means.

Customer centric – do you get it?

October 6, 2014By Mike Hohnen

In my view there are basically 3 kinds of hotels.

Hotels that just don’t get it. The law of supply and demand eventually takes care of them.

Then there are hotels, who get it, or should I say they think they get it. They are the hotels who continually ask themselves: how could we get more money out of each guest by providing more options, loops and hops they must jump through?

– so they have complex internet packages, like lousy internet for free, decent internet at a price – cheaper if you take the full 5 day pass etc.
– or when you walk into the room the television screen is blaring at you suggesting all the films that are on offer – at a price – and it takes you 10 minutes to workout how to turn the dam thing off or find the news.

Then there is the third category .

These are the hotels that ask themselves: What is it like to be on the road, away from home? What does one need, what is annoying, troublesome, irritating? How can we create a service that would make life better, easier, smoother or more fun for our guests and what would we need to charge to make that possible.

From a guest point of view this kind of hotel has a very different feel from the former. The final guest experience is totally different because that basic intent ‘to serve’ comes out in everything they do.

And when you experience that it is such a pleasure because you feel like a welcome guest and not like a ‘wallet on legs’.