In fact it can be said even more simply (creating good customer/reader experience for you I hope) here:
If a customer likes you and continues to like you, they will do business with you. If they don’t, they won’t. — Paul Greenberg
It doesn’t get simpler than that.
This post is not about what Customer Experience is however (we will touch on it lightly), but how you as a business leader can realize the juicy benefits of Customer Experience through the conduit of Design Thinking (DT), and Business Process Management (BPM).
Why is Customer Experience so (commercially) important?
Great question! Some of the advantages which accrue to the business are bulleted below:
Commercial advantages of prioritizing Customer Experience are:
- From the BPM Institute - “a positive customer experience is not just a feel-good factor for business but is also associated directly with Customer Lifetime Value and related Revenue” (emphasis mine), due to decreased spend in marketing and increased loyalty and advocacy (reiterating Paul Greenburg above). “67% of consumers cite bad experiences as reason for churn”. When attracting a new customer is 6-7 times more expensive than retaining an existing one, this is worth putting some serious thought, and action, behind making sure they are having a good time. Source.
- By prioritizing the needs of the people who will use your solution, you cut through complexity - products and services built on an emotional value proposition are simpler than competitors’ offerings - a massive source of competitive advantage.
- Businesses and organizations are able to optimize a customer’s perception of their brand by reflecting brand values at each touch-point in the customer journey. This is “experience-based differentiation”.
An example from Forrester on the business impact of customer experience: by focusing on eliminating the root causes of customer calls to its contact center Sprint, a telecommunications company, was able to save $1.7 billion annually as a result of fewer outsourced calls, and fewer customer credits.
This example hits the nail on the head - as it was Sprint’s focus on identifying and resolving the root cause of their customer experience challenges, leading to greater customer experience, which created their financial benefits. Root causes is where Design Thinking comes in.
What is Design Thinking exactly?
To unpack that idea a bit: Design Thinking and Customer Experience go together like Berlin and currywurst, tea and biscuits, or, if you like, sausage and rolls (for the Australian/New Zealand crowd).
A departure from the more traditional approach of product or service-centric operational models, Design Thinking in the business context makes the customer King.
How you ask? At its marrow, Design Thinking is about people. Design Thinking takes the end-user’s experience as a starting point, applying empathy to the process of deeply and holistically discovering the root causes of a business problem. Once the human and systemic factors are understood (through interview and observation, among other techniques), Design Thinking practitioners move on to prototyping of the new future state of a service, or product. Through an ongoing cycle of collaboration and iterative change, an entirely new, customer-centric output is born, one which is specifically designed to meet not just the pragmatic, but emotional needs of multiple end-users.
For those well-versed in the old ways of product and service development, this may sound fluffy, but in the current business context, when the public sector is being squeezed to do more with less, and the private sector is scrambling to differentiate in a highly competitive environment, CX must be the bedrock on which business is built.
So what are the business benefits of Design Thinking? To name but a few:
- Design Thinking results in quantum change rather than incremental change to products and services. By definition it is a method constantly hunting for unforeseen innovation, ergo, opportunities to generate more revenue (by satisfying customers more deeply)...
- ....leading to competitive advantage (much like Customer Experience). From Harvard Business Review “True competitive advantage requires non-obvious solutions executed in elegant ways”, in turn leading businesses to...
- ... produce clear, simple, and pleasurable experiences for customers, by focusing on their needs, their priorities, and the root causes of their challenges.
And there we are back to root causes. Observant readers will note that the benefits of Design Thinking are analogous to what is aimed for with CX.
So we’ve established that Design Thinking is a holistic way of viewing and analyzing your organization’s processes to ensure they are focused on customer needs - next big question is of course - how do you take those valuable insights, and incorporate them into your operational model in a meaningful way?
This is where Business Process Management (BPM) makes its entrance.
What is Business Process Management (BPM)?
Business processes are the means by which an organization creates value for its customers - by producing a product or service - and Business Process Management (BPM) is the discipline which combines the principles, methods, and tools used to optimize business processes. You can read more here.
BPM contributes to a focus on value in organizations by creating transparency. The output of BPM is business process models which both document and reveal the way things are done at an organization, as well as showing dependencies and relationships between people, process, and technology. BPM also makes all the inputs and outputs generated in the course of value creation explicit.
In the context of Customer Experience, BPM is the glue drawing together the outputs of Design Thinking to produce the much coveted Excellent Customer Experience. This is for the simple reason that without a clear (i.e. transparent) view of the current state operational structure and business process landscape to analyze, the risk of producing a ‘solution’ which is in fact not fit for purpose, or causes issues in other parts of the system, is amplified.
To get to the bottom of exactly how BPM, Design Thinking, and Customer Experience come together in practice, we were lucky enough to interview Alexander Renneberg, a Software Engineer at the Hasso Plattner Ventures affiliated D-LABS GmbH in Berlin. With the principles of Design Thinking deeply embedded in his consulting work as a Software Engineer, his insights into how to create business systems designed for user and customer satisfaction with Design Thinking, and implemented through BPM are both practical and effective.