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White paper
Designing outstanding customer experiences
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WHITE PAPER
Designing outstanding customer experiences Experience design
Experience design can transform customer experience and deliver competitive advantage but most enterprises struggle to transform their customer experiences to meet rising customer expectations. Here’s how to do it.
White paper
White paper
Designing outstanding customer experiences
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The business case for experience design
Design thinking is a methodology to solve complex problems putting the customer experience at the heart of the problem to solve. Design is the process of identfying customers’ needs and creating new products, processes or services that meet those needs in ways that are simple, useful, valuable and evoke a positive emotional response.
We have all loved new experiences that have removed friction making our lives easier and making us feel better. Whether it be the Apple iPhone, a Dyson vacuum cleaner, a Tesla electric car, Netflix’s personalisation, Google search, the Uber app or Amazon Prime’s seamless delivery, these products and services set new standards and create new expectations for customer experience powered by beautifully functional design.
Customers are increasingly more aware of poorly designed experiences and seeking transformative new experiences. We have an emotional attachment to good design and feel positive about well-designed experiences and suffer frustration from poorly designed ones. These experiences influence what customers buy, how often they buy and how much they spend.
Companies recognised for their strong experience design deliver superior business performance. They generate stronger growth and higher profitability than companies with poorly developed designed capabilities. Further, the market disproportionately values companies who design and deliver unique and better customer experiences. Whilst most consider design to be focused on products, good design matters across physical and digital products, processes and services.
Good design is good business.
Thomas J Watson IBM President 1973
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Designing outstanding customer experiences
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Design as a strategic lever
Quantified experience design is a strategic enterprise lever and is becoming a more important driver of competitive advantage in competitive markets.
Customers now have more choices, less perceived time, less loyalty and rising expectations for better experiences. Enterprises that get design right attract higher loyalty, command premium prices, stay relevant and outperform peers. These companies understand the end-to-end customer journey to guide the development of key moments of delight whilst eliminating pain points. The ideation, incubation, implementation and iteration innovation stages that deliver customer experiences rely on continuous customer feedback to maximise the opportunity for success.
Design is a lever for effective strategy because you can compete on customer experience, generating better engagement and loyalty than competitors, that results in superior financial performance. Disruptors often exploit weaknesses in the customer experience of profitable incumbents through better experience design.
Design is a lever for effective strategy because you can compete on customer experience, generating better engagement and loyalty than competitors, that results in superior financial performance.
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Designing outstanding customer experiences
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7 advanced practices for effective experience design
Whilst ‘design thinking’, as a concept, was developed fifty years ago, few companies have successfully step-changed performance through design and measured the direct value contributed by great design. Many enterprises seek to create delightful and engaging experiences but few are able to deliver on this ambition sustainably. Their failure is rarely a question of intention because the majority of enterprises want to serve their customers. Rather, it’s usually a question of alignment that prevents enterprises from delivering great customer experiences and reaching their ambitions. Those that have delivered value have adopted seven practices including senior executive ownership, measurement and rewards, design-driven culture, distributing skills, deep customer understanding, continuous learning and vision with measured risk.
Design has C-Suite ownership
Experience design has C-Suite ownership and is measured like other key business drivers. It is resourced and seen as a priority for performance. Design is no longer a second tier ‘nice to have’, it’s how the product or service works for customers. Some leading enterprises take design so seriously that they have a Chief Design Officer like Apple, 3M, BBC, Samsung and PepsiCo to drive design outcomes. Senior leaders must value design and foster a customer-centric culture. These leaders are accountable for the customer experience and understand the areas for design improvements deploying resources to drive continuous iteration.
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Designing outstanding customer experiences
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Design is measured and rewarded
Senior leaders suspend their own preferences and rely on the insights derived from customer research, feedback and performance. Experience design is measured on input drivers like customer satisfaction or net promoter score and outputs like acquisition, retention and ultimate revenue and profitability. The input drivers allow enterprises to prioritise the product or service roadmap.
Experience design-led enterprises include customer satisfaction measures into executive incentive plans like bonuses. They balance customer satisfaction with typical financial targets like revenue, profitability or total shareholder return to tie senior leaders’ bonuses to the output of good design.
Design is part of the culture not a phase
A design-driven culture is important for a customer experience enterprise as it is a source of competitive advantage. Understanding the customer and their needs is everyone’s responsibility not just the product, UX and customer teams. Bring customer empathy into the enterprise through simplified segments and personas across the entire enterprise to help build understanding. Encourage employees to spend time with customers and make customer performance measures accessible. Further, align job design and performance plans and rewards to customer experience outcomes.
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Understanding the customer and their needs is everyone’s responsibility not just the product, UX and customer teams.
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Designing outstanding customer experiences
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Agile practices, real-time decisions and empowered teamwork result in higher engagement, faster speed to market, at lower cost and with higher success rates.
Design is distributed not centralised
Design should not be siloed and it is more than a department. In support of a design-driven culture, all functions need to focus on their customers and have regular customer interaction. Leading enterprises have autonomous squads focused on designing specific solutions for customers with a view to contributing positively to the entire customer experience. These smaller independent teams deliver faster and more successful results than central departments as a result of better collaboration and a clearer and closer focus on the customer. Enterprises with advanced design capabilities break down silos between narrow expertise of physical, digital and service design. They integrate industrial, user design, interaction design and service design skills to design experiences through the lens of the customer, not the organisational structure.
Leading enterprises pay close attention to how they design the space and the interactions between employees and partners to drive innovation. Like a lean start-up there are no silos, departments, assigned offices, bureaucratic decision making and conflicting priorities. The space is designed to facilitate collaborative teamwork across product management, design, engineering and product marketing skills. The team has a single-minded focus on collaborating to design, build and release a great product or service that gets customers engaged and achieves business goals. Agile practices, real-time decisions and empowered teamwork result in higher engagement, faster speed to market, at lower cost and with higher success rates.
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Designing outstanding customer experiences
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Design is informed by deep customer empathy
Empathy is the core of great experience design. Enterprises should not see a trade-off between empathy and business performance. Empathy is derived from participation (try what customers experience), inquiry (ask customers what they do) and observation (look at what customers do).
Qualitative research involving usability studies, participatory design workshops, in-depth interviews, observational studies and focus groups help teams understand needs and identify why customers do what they do. Supporting this research with longitudinal quantitative research, including online or in-store surveys, online reviews and customer service reporting, helps designers identify the what, where and how of customer behaviour. Data from observational research, social media monitoring, customer service feedback and customer interactions help the enterprise listen, identify insights and inform design iteration. Learning what frustrates, excites and delights your customers is essential to gaining the empathy required to release better products and services.
Design-led enterprises leverage this research to measure performance and identify opportunities for designing a better experience. Most look to improve the current customer journey whilst others focus on eliminating complete stages of the experience which creates friction. For example, when Amazon developed the Amazon Go convenience stores they removed the whole payment experience, removing all check-outs so customers could simply walk out with their needs.
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Design continuously learns
Experience design is inherently iterative. An experience design-led approach to innovation sees design occurring throughout the development stages, not just leading into development. Here, design is developed and optimised with customer input before release. Design also has an important role in the ongoing iteration stages when the product is improved based upon in-market feedback from customers and partners.
Prototyping is a model of a system used to demonstrate and evaluate customer behaviour. A key principle for agile software development is to develop a minimum viable product to test with customers and to iterate the product based upon in-market customer feedback. Leading enterprises start by defining a customer use case and building a prototype in response to the identified customer problem to solve. When developed early, prototypes can help communicate the product ambition to stakeholders, generate internal alignment, test the design with customers to inform improvements for further testing, whilst giving delivery teams focus. The prototype evolves with customer input until it is released where the learning continues in-market to inform future design.
A key principle for agile software development is to develop a minimum viable product to test with customers and to iterate the product based upon in-market customer feedback.
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Design has vision and measured risk
Whilst design-led enterprises respond to customer needs, they also possess the insight and courage to develop a new vision for the market, one that does not conform with the existing norms set out by incumbents. They are willing to invest for long term growth and compromise short-term profitability. Rather than designing incremental change, they adopt a more radical and disruptive approach to shape the future of customer experience.
Whilst design has a bias for action and is all about learning to guide incremental improvements, risks can be managed by continually listening, testing, learning and iterating with customers. It allows you to make gradual releases and updates rather than waiting for a periodic launch, minimising the magnitude of change and associated risks.
Seven advanced practices of experience design
1 Senior ownership Design is owned, valued and resourced as a strategic lever.
2 Measured and rewarded
Design processes and outcomes are measured in customer satisfaction which directs incentives and bonuses.
3 Culture Design is embedded in the culture and not seen merely as a phase of product and service development and delivery.
4 Distributed Design skills are distributed and embedded into project teams or autonomous squads.
5 Customer empathy Design is informed by deep customer understanding through ongoing participation, inquiry and observation research. They move from data to insight to direct action.
6 Continuous learning
Rapid prototyping and proof of concepts are deployed to test, learn and iterate.
7 Vision with measured risk
Informed by deep customer understanding, design has the courage to release useful, desirable, feasible and viable products and services.
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Designing outstanding customer experiences
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Applying experience design
Experience design is the cornerstone of solving problems, big and small, from the perspective of the customers. It brings structure to how we gain a deep understanding of the problem or the opportunity and combines the power of ideation (divergence) and a creative way to filter down to make informed choices on the product or service concepts that have the highest potential (convergence).
Experience design helps enterprises influence existing product adoption and engagement, bring disruptive new concepts to market and help enterprises adopt new enabling technologies with scale.
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Designing outstanding customer experiences
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Influence product adoption and engagement
Experience design can be applied to influence behaviour and improve the adoption and engagement of existing products or services. By understanding the current customer experience, identifying the pain points that lead to lower satisfaction and result in lower loyalty, enterprises can focus their resources on designing a better experience which they can test. Leading enterprises establish experience principles and derive customer metrics that help the product team make choices on roadmap priorities based upon desirable, feasible and viable criteria.
Bringing disruptive new ideas to market
Design thinking can be applied to develop new disruptive ideas focussing ideation on the customer problem to solve. Filtering through a range of ideas on desirability, feasibility and viability to prioritise the concepts most likely to solve the customer problem is often one of the most challenging parts of the process. Once prioritised concepts have been identified, moving from ideation into incubation with customers, allows enterprises to design product or services iteratively with customers feedback.
Technology adoption at scale
One of the biggest challenges enterprises face is identifying the right use cases to build and the right technology to enable future products and services. Whilst legacy technology is understood, enterprises find it difficult to determine where to invest when considering rapid changes across technologies like artificial intelligence, machine learning, data science and personalisation.
Leading enterprises are partnering to determine technology requirements that will enable the innovation roadmap, validating concepts to trial, learn and adapt the most relevant technologies.
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Designing outstanding customer experiences
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Conclusion
Experience design is the method used to solve complex customer problems by understanding customer needs and developing new improved experiences. Designing seamless and beautiful customer experiences has become a way to compete because good experience design is good business and a source of competitive advantage.
Enterprises with highly developed experience design capabilities and partnerships outperform and receive higher market valuations.
Seven advanced practices have been identified including senior ownership, measurement, design-driven culture, distributing skills, deep customer understanding, continuous learning and vision with measured risk, to generate better performance.
Experience design helps enterprises influence existing product adoption and engagement, brings disruptive new concepts to markets and helps enterprises adopt new technologies with scale.
White paper
Designing outstanding customer experiences
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About Arq Group Arq Group, previously Melbourne IT Group, is Australia’s leading digital solutions partner. Arq Group creates unforgettable experiences, solves complex challenges, and provides seamless, end-to-end solutions – from design thinking, mobile, cloud, analytical insights, digital marketing and web design capabilities that come together to create valuable products and channels and unforgettable consumer experiences. Arq Group powers the growth of businesses, big and small. Founded in 1996, Arq Group has evolved from the leading Australian internet infrastructure business to the leading Australian digital solutions partner. Today, the company builds and manages innovative products and channels to market for many of the country’s largest enterprises, and provides digital marketing solutions to Australian small businesses.
This publication contains general information only. By means of this publication Arq Group is not rendering bespoke professional advice or services. Therefore, this publication alone should not be used as a basis for any decision or action that may affect your business. Arq Group shall not be responsible for any loss sustained by any person relying on this publication alone. Given each business is operating under unique circumstances and with individual requirements, please approach us directly for specialist advice. A
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Adam Kennedy Executive Director, Digital Experiences
