007 model

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What is the 007 model?

The 007 model helps organizations improve their products and services by focusing

attention on the desired outcomes and the options for maximizing value.

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A case study

One of our clients, is a big e-commerce platform. The market is very competitive and they are slowly losing market share. They want to improve three business outcomes:

1. Increase revenue2. Increase market share3. Increase customer satisfaction

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We start with the problem or opportunity

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The problems

“Our customers are not buying enough of our products, causing us to lose revenue and market share”

“Customers say our website is difficult to use, and hard to find what they want”

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We need to understand more

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Gather data

We gather information from customer service, speaking to the users of the

website, and review the website analytics.

“Site too slow” “Can’t pay”“Confusing”

Analysis - users

> 7 seconds page load = bounce rates of 85%

Analysis – page load`

45% leave atcheckout-shipping

29% leave at checkout-payment

15% leave at checkout-

confirmation

11% proceed to checkout-

complete

11% total

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Discover – what we find out

Only 11% of people who start the checkout process actually buy something.

85% of users abandon checkout when it takes more than 7 seconds to load.

Customers call customer service as checkout is confusing and products are hard to find.

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1. People don’t buy when pages take too long to load

2. The checkout experience prevents people completing purchases

Our insights

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Create target outcomes

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Outcomes are the desired results that deliver value.

Examples• Increase revenue by 15%• Increase checkout conversion rates by

19%• Decrease time to create a report by 4

minutes

Make them measurable

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Use target outcomes to improve practically anything

Increase revenue by 15% Increase checkout conversion rates

Business outcomes Product outcomes

Decrease cost to provision environments by 25%

Service outcomes

Decrease time to approve new requests by 3 days

Process improvement

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How to create a Target Outcome

Set a baseline e.g. Currently only 11% of people

complete checkout

Set a target e.g. 30% of people complete

checkout

Baseline: 11% Target: 30%

Give it a name in verb + noun phrase form

Increase checkout conversion rates

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You can link high level outcomes to lower levels - it’s fractal

Increase revenue

Increase customer satisfaction

Increase # successful purchases

High level business outcomes Product and service

outcomes

Improve site performance

Increase payment options

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Create Options

Option A Option B Option C

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Options are the outputs or actionswe take to achieve the outcomes.


Improve page load speed

Decrease customer service complaints

Setup local datacenter

Option

Redesign checkout

experience

Option

Cache page elements

Option

Improve the network

Option

Add payment options

Option

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How to create an option


Brainstorm ideas that might help achieve the

outcome

Start with the Target Outcome

Redesign checkout

experience

Option

Improve page performance

Option

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Work out how to measure progress

Decrease time to find products

Reduce customer service complaints

Measure options with target outcomes.

Redesign checkout

experience

Option

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You can link outcomes and options

Redesign the checkout

experience

Option

Improve page performance

Option Decrease page loadtime


Option

Cache page elements

Option

Improve the network

Option


Increase customer satisfaction (NPS)

Reduce complaintsIncrease revenue

Fix pay.htm

Option

Redesign search results

Option


Sell more products

Option

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Deliver

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Which options should we do first? We can guess, or we can test with an experiment

?

20

Decrease page load time


Option

Test caching elements on the payment page

Experiment

Cache page elements

Option

Setup one server test with 1% of traffic

Experiment

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Outcomes Options In Progress Done

Visually track outcomes and options during delivery

Decrease page loadtime


Option

Cache page elements

Option


Redesign search results

Option Clickstream

analysis

Research

Datacenter split test Australia

Research

Test caching one page

Research

Split test redesign

Research

Trace route analysis

Research

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Measure

How much progress did we make?


Baseline:

7 minutes Target:

< 3 minutes

Current:

5 minutes

Reduce customer complaints

Baseline:

250 calls per day Target:

< 150 calls per day

Current:

190 calls per day

We saved 2 minutes

We reduced

calls by 60 per day

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Redesign checkout process

Option

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How did we impact the next level target outcomes?


Redesign the checkout

experience

Option

Reduce customer complaints

We made 6% improvement!


Baseline:11%

Target:30%

Current:17%

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How much value did we create?

6% improvement = $7.2 million annually!


Increase revenue

Each 1% improvement = $1.2 million

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Adapt

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Choose to deliver more or discover new options

Do we keep investing in this option or invest elsewhere?

How much is it costing us for the return on our investment?

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Choose to deliver more or discover new options

Deliver until you reach your

target outcomes or it is costing more than the value returned compared to

other options.

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The more you improve your capabilities and learning, the faster

you go

Decrease deployment time Improve quality

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Continue to discover options and deliver outcomes 007 style.