In 2000, the CEO of Blockbuster was offered a chance to buy a struggling startup called Netflix. His assessment of the situation at the time was that “the dot-com hysteria is completely overblown.” Fast forward 10 years later, and Blockbuster filed for Chapter 11 bankruptcy. There were many issues that ultimately caused Blockbuster to fail; however, I believe they can all be traced to slowly losing touch with their customers and an unwillingness to act on what was happening around them.
How can companies remain relevant over time to avoid the fate of Blockbuster? Through the application of a set of methodologies from the practice of human-centered innovation (also known as design thinking), companies can greatly reduce the risk of becoming obsolete. In applying these innovation tools to improve customer experience, there are specific steps to take:
- Understand your current customers’ experience and define their needs.
- Evaluate competitive and inspirational experiences. both within and outside your industry.
- Identify what makes your company unique.
- Develop a vision of the future.
- Create new solutions to address the gaps in your experience, address your customers’ needs in new ways, fulfilled in a way that only your company can.
Understand what is going on with customers as they interact with your business
The best way to understand your customer is to spend time with them outside of your business. Seeing how your business fits into the rest of their lives can unlock empathy and ideas for how to improve your offerings. Because what people say and what they do can be two different things, you should utilize different sources of information about your customers.
Quantitative analysis can help you to understand what is happening and where there might be less than optimal aspects in your experience. Examples might be surveys, a net promoter score or customer support calls. Qualitative information can uncover why your customers make decisions and engage with your company. This type of data can help clarify their needs, both met and unmet. Examples include customer interviews, co-creation workshops with customers, and experience mapping. The key aspect of this step is to be curious about what your customers do, think, say and feel as it relates to your services.
Evaluate competitive and inspirational experiences
With a baseline understanding of your current customer experience and your customers’ needs, the next step is to deeply investigate both competitive and aspirational experiences from other companies.
There can be much to learn about how your customers are addressing the needs of their customers (and maybe yours too). Specifically you’ll be able to spot what your competitors are good at and what parts of their experience they may not be addressing so well. You’ll be able to strategically avoid their strengths and exploit areas of weakness. In evaluating inspirational experiences — like a best in class hotel, restaurant or startup — you’ll see how other companies are addressing customer needs in ways your business has not previously considered. This can be great fuel for innovation.
Identify what makes your company unique
Strategically speaking, you should strive to address your customers’ needs in ways that only you can. In order to do this, you will need a strong sense of who you are as a company and what makes you unique. In other words, as a brand, you have to identify what you stand for and how you are delivering on those specific areas. Armed with this knowledge, you can reimagine new and unique ways to address the needs of your customers. If you don’t differentiate your experience and add value at the same time, customers will have a hard time understanding how you can help them and may not be willing to try you out.
Create a vision of the future
After gaining inspiration from your customers, evaluating experiences, and understanding what makes your company unique, the next step is to imagine a better experience for your customers. The challenge in this step is to combine all of the information, ideas and opportunities identified up to this point into a new experience. This is your chance to dream about what could be, not just what is currently possible. It’s important at this point to set aside constraints. Without pushing beyond what’s possible now, you may never get to innovative ideas. Think “head in the clouds” during this phase.
Develop solutions to address gaps and fulfill your customers’ needs as only you can
Once you have a compelling vision of the future that both your customers and internal teams are excited about, you can identify innovative ways to bring that customer experience to life. Naturally, there will be gaps between your vision of the future and your current customer experience. This is where the rubber meets the road for innovation efforts. It is often challenging for companies to make the necessary changes to improve their customer experience due to organizational inertia (remember Blockbuster). Prototyping new services and running pilot tests of new offerings can reduce the risk inherent in making changes to your experience. The key is to create data that doesn’t exist yet to prove out your new vision.
How do you know when might be a good time to invest in rethinking your customer experience? Answering the following questions can help you decide:
- Are you seeing a decline in net promoter scores?
- Are you losing market share to competitors?
- Are you struggling to find new customers?
- Are you hearing increasing stories of customer dissatisfaction?
If you answered yes to any one or more of these questions, now might be the time to start rethinking your customer experience.
Chris von Dohlen helps both individuals and companies create new possibilities for growth through the application of human-centered innovation. Over his 23-year career, he has helped companies of all sizes develop new experiences for both customers and employees. He can be reached at [email protected].