Why Service Design, CX and UX are all part of a bigger customer-led world

One of Forrester’s analysts, Kerry Bodine, recently wrote an excellent article on how Service Design relates to CX and UX. The main hypothesis was based around the following diagram that service design (SD), customer experience (CX) and user experience (UX) all overlap in the following way:

CX SD UX 3

The best description of these overlaps is given in Kerry’s article, but in summary:

  • UX primarily focuses on the design and development of digital journeys, whilst CX covers the whole multi-channel journey (both off-line and online); therefore, UX is a sub-set of CX
  • SD encompasses the whole customer journey in the same way that CX does
  • However, there are differences between service designers and customer experience people, most notably:
    • There are elements of CX that fall outside the normal scope of service designers (such as measurement and governance)
    • By contrast, service designers often focus on areas such as social innovation – something outside the common definition of CX
  • Finally, SD does not fully overlap with UX because in today’s business world, we simply do not use service design in digital marketing

Kerry then went on to state that as businesses evolve, there will be a merging of these areas into a more succinct structure as follows

CX SD UX 2

Whilst I agree with Kerry on what she said, I would actually argue that this merging of skills is actually a precursor to a larger, and more fundamental change to business that is being driven by the corporate desire to “put the customer at the heart of their business”. This hypothesis is based on the following argument.

Unfortunately, most corporate clients cannot explain what they mean when they tell the market that they are going to “put the customer at the heart of their business”. To be fair, this is not a new phenomenon – consultancies and agencies have been making money for decades from the fact that their clients are unable to describe their problem.

The fundamental difference today however, is that these traditional advisors no longer have the answers themselves.

The phrase itself highlights the problem: “Putting the customer at the heart” is an emotional connection – something that has always been the hunting ground of the agency because it is about communications, engagement and brand promise. “The heart of the business” however, is where the consultancy has always focused because it is infers changes to operating models, technical architectures and financial plans.

In this brave new world of constant change and consumer power, the future will be driven by those companies that successfully combine emotional relationships with hard-nosed logic.

To take an overused example: The Apple experience is a beautiful thing that people have a strong love for.  However, it would never have reached such emotional bliss had it not been underpinned by a technical architecture, digital supply chain, operating model and financial structure that is second-to-none.

This is where Kerry’s article links in nicely. Service design agencies are one of a new breed of Cogencies (the hybrid offspring of consultancy and agency) that are successfully providing an end-to-end link between customer-led insights and business operations. The reason why companies like them is not just that they are quick, agile, customer focused and relatively inexpensive (when compared against 3 year, $30M major infrastructure programmes). It is because they are also able to cross the divide between emotion and logic that enables them to speak sense to both the CMO / Head of Brand as well as the CFO / COO / Customer Services Director. They are providing a solution that everyone on the Board can buy into (if done well). And an aligned Board – well, that is the cornerstone to a successful implementation.

The issue with service design agencies is that all too often they are given a business problem and make a shiny solution only to find that they have, in fact, just beautifully fixed the wrong problem. They are arriving too far down the corporate chain, often used by companies that are looking for a quick fix. It would be far better if they were involved up-front during the strategy development process.

This is where there is a need for a fundamental change towards the creation of the true Customer-Led business model (CLB). Service Design in of itself are not adequate to create business strategies. However, the underlying principals of emotion + logic + agility are.

In the world of the customer-led business model, we need to combine the emotive elements of brand, purpose and corporate soul with the logical building blocks of market reviews, customer analysis, agile prototyping and financial modelling. Think WPP meets McKinsey meets IDEO – without them killing each other!

CX SD UX 1

As stated, Service Design is not a panacea that will turn companies into customer-led organisations. You do still need market analysis a la McKinsey, along with brand champions, big data geeks, cultural evangelists and all the other skill sets to be successful. The key point is that Service Design is you can mix the logical and the emotional to build a better offer. Take that thinking to a corporate level and you can build a true customer-led organisation.

You never know, you may even give yourself a chance of being able to explain what “putting the customer at the heart of your business” actually means.

 

 

 

Culture Trumps Strategy with Amazing ROI

I’ve been talking a lot recently about Zappos where the corporate culture is a central pillar that drives everything they do.  Their clear sense of purpose, shared values and strong sense of identity are credited with their success – but as a privately held company the tangible ROI is hard for outsiders to prove (could it just be that they are operationally excellent?) – I don’t believe so but a detailed evaluation of Zappos is an entirely different post.

I came across this very interesting article re-acquainting us with research from 1992 which found that a company’s Culture was a linked with a significant difference in overall financial performance.

In particular the type of culture quoted as being so effective was one that

highly values employees, customers, and owners and that those cultures encourage leadership from everyone in the firm.

This type of culture was responsible for an average net income growth of 756% versus 1% for a company without this culture.  

These values were credited with enabling the companies to respond to ever changing customer needs and therefore remain relevant in the marketplace – I suspect though and the article strongly implies that there is a deeper connection that this.

If you’re looking for some stats to justify the ROI of Culture then I highly recommend you dig out their book Corporate Culture and Performance and read the original research.  The authors remain convinced that their study was robust.

So what IS going on?  There are already studies linking CX Leaders with outperforming the S&P 500.  Do we need any more bottom line proof?  What’s holding back the CEOs now?