Customer Experience Driven Innovation

Posted on August 10, 2016

At a time when digital technology is transforming one industry after another, many tend to view innovation as the result of breakthrough discoveries, powered by technology wizards. This belief, combined with the industry ‘folk tales’ of businesses overthrown overnight due to disruptive technologies, leads to most people concluding that: “We don’t know how to do this”. This story, however, is in most cases in-accurate. In fact, most startup successes grow because of how they improve customer experiences, enabled by existing technologies, but in new ways. To give an example: Uber did not become a global player because they developed a mobile, peer-to-peer app, with a perfect marketplace pricing model. Uber grew because they created a solution that was able to provide a superior experience while saving consumers time and money. Technology was an enabler – not the end goal.

“You’ve got to start with the customer experience and work back toward the technology – not the other way around.”
– Steve Jobs
 

Bad CX Are Opportunities

Businesses exist because they provide customers value. However, in pursuit of their own needs (an improved bottom-line), businesses often end-up placing customer needs as a secondary priority. This phenomenon, together with new possibilities enabled by emerging technologies, create opportunities for new concepts to emerge. Netflix began as an online movie mail-order service back in 1997, after the founder, Reed Hastings, received a 40 Dollar late-delivery fine by Blockbuster. It was a frustrating experience that lead to the launch of Netflix, which later outmaneuvered the competition as video-streaming moved online. The lesson is: As business managers and entrepreneurs, we must train ourselves to acutely identify opportunities to exceed our customers’ expectations. The simplest way to start is by noticing the experiences we encounter in our daily lives.

 

CX Analysis of Uber

To support this argument, let us take a closer look at the previously mentioned example of Uber in relation to their customer experience. Similar to Netflix, it was a customer pain that triggered the concept. According to the founders, the idea for Uber came up when they had trouble hailing a cab in Paris. Most people would agree that ordering a taxi with Uber is simple. However, there are many other aspects of the customers’ journey that have been improved upon. In the table below, I’ve illustrated the experience with Uber compared to the experience of a traditional taxi ride. The comparison is shaped around the different customer ‘pain points’ – most of which are related to a level of uncertainty.

 

Screen Shot 2016-08-10 at 1.29.40 PM

 

Many of Uber’s improvements to the customer experience were only made possible because of the rise of smartphones. GPS and in-app payments made it possible to track drivers and create a more seamless experience. Technology was an enabler in providing a radically different solution.


More information about CX
 

If you’re interested in reading more about customer experience, my colleague Ditte has written an article introducing customer experience and providing an overall framework on how it can be strategically approached. Follow this link