Photo by jenlen

Since turning my focus to ‘Service Design’ I’ve been seeing everything in a new light.

Service Design uses creative techniques to map-out your existing services, study the customer experience, improve existing services and visualise new ways to reach customers.

What many people would understand is simply a ‘product’ (e.g. a cup of coffee), I’ve instead been analysing as a ’service’. What’s interesting is that those companies who wrap a service around their product are the ones doing a roaring trade at present.

Some of you may recall my blog about a year ago about Zipcar – a highly successful car rental service in the US and Europe which is taking on the traditional car rental companies. Their whole business is modeled, not around cars, but ease-of-use. They’re continually improving the experience for customers.

So what have I noticed about Service Design in New Zealand?

I considered three ‘products’ I interact with frequently – takeaway coffee, my bank mortgage and my iPhone.

MOJO COFFEE

Mojo Coffee is a Wellington-based coffee cartel which has recently spread to Dunedin, Christchurch and Auckland. They are the latest success story in a history of caffeine’s greatest hits in Wellington including Havana, L’affare, Fuel and People’s Coffee. It appears that the secret of their success is choosing strategic and unusual locations, coupled with unmatched service. The coffee is great too, but without the fantastic customer service, in my opinion their business would not have grown.

I asked my Twitter friends – is Mojo Coffee a product or a service?

A product, but I expect good service

Isn’t it both a service (the act of making coffee) and a product (mojo brewed coffee)? The difference is consumer motivation?

Product/service isn’t a true/false thing, there are many shades- coffee = product, but tables/newspaper/atmosphere etc = services

So no right or wrong answers, but my view is, that without good service the product is almost useless.

Here’s why, on the whole, it’s the whole Mojo service package which makes them a roaring success…

Great locations

Mojo - more than a just a product. Photo © Br3nda

Customers like where Mojo outlets are located. In the Wellington CBD they are not just casual coffee hang-outs, but a regular meeting place for business people and industry networking. There’s even a Mojo located in the Parliamentary Precinct – a wise move for capturing customers in what used to be a lack-lustre part of town for the coffee meeting culture.

So the Mojo locations actually provide a service – a place to meet and network.

Customers are special

From the outset Mojo staff greeted me, remembered my name and then continue to engage with me on a first name basis. And the experience for me is consistent across several different Mojo outlets.

I’m not sure if this level of engagement is something that is taught to staff, or simply inherent in their culture, but it makes Mojo feel friendly and like you are getting special service every time. Now, I know my treatment is not that unique since I see other customers getting similar treatment. But this doesn’t matter to me. What matters is that the greetings don’t feel fake – the staff come across as genuine people as opposed to staff just going through a sales script.

So the customer engagement provides a service - a feel-good coffee with a wink and a smile.

Easy to do business with

Early on Mojo did away with the traditional loyalty ‘clip as you go’ card and introduced an electronic pre-pay card. So if you have a card you get a discount every time you pay, not after purchasing 10 cups of coffee. This makes ordering and paying for a Mojo coffee convenient – no need to use EFTPOS or dig around for cash every time I order. It also allows me to set myself a monthly coffee-budget and stick to it.

So the Mojo payment system provides a service – less messing around, saving me time and money.

In all I don’t shop at Mojo just for the coffee. It’s all about the whole service package. They’ve nailed it!

MORTGAGE

So what about a mortgage? Is this a product or a service?

Some thoughts from my Twitter network…

It is a product, which is backed by service in my opinion. Although I use some other adjectives to describe mine.

I’d go for a ‘product’, coz it’s something you choose from a list of options and then use to make your finances work. In comparison, you receive a ’service’ from the person who helps you select the right mortgage, and helps set it up for you.

I think you’re referring to ‘brands’ here Zef. Product + service = brand… A mortgage is a product that you purchase from a brand.

In my experience every bank in New Zealand treats a mortgage as a product. They provide a ’service’ to get you to buy a mortgage product (or package), but once you’ve bought into the mortgage they only provide a very limited set of services – such as a 3-month break from the mortgage if you really need it (which, by the way, comes at a high cost further down the line).

In my view all the banks could do better by using Service Design. Here’s why…

"I have no life, I have a house with a mortgage." Photo by Luxerta.

Chances are that the mortgage you bought didn’t quite meet your needs. You perhaps chose a product with the lowest interest rate, took a punt on a fixed rate, or based it on a montly repayment your budget at the time could handle.

Fact is you were sold a financial product. An ill-conditioned loan with 25 years of pain.

I don’t know about you, but when I got my first mortgage all the banks seemed to be offering pretty much the same over-complicated products wrapped in different colours and terminology.

Instead, the bank should have picked up that while I have a good income and have never been unemployed, I’m not the brightest financial guru on the block. In fact, I’m a bit dim in that department.

What if the bank took the view that, “Zef has potential – let’s help him proactively manage his loan and pay it off as fast as possible… and let’s make him more financially literate along the way”.

Had they been proactive chances are that by now I might be in a better position to be building my own house, setting-up a business or saving money instead of spending it. That way I would benefit and, in the long-term, so would the bank.

So what I’m talking about here is financial advice and services. No bank has ever (personally) offered me that. They’re crazy not to. I’m a potential cash-cow waiting to fed, fattened and milked! (but not eaten).

A service design approach by my bank would help me acquire, live in and pay for my own home over my entire lifetime. Imagine how we could have all avoided the credit crunch mess if the banks had treated mortgages as a service, and treated customers as partners in an investment.

A services model would demand that the banks have a much closer relationship with their customers, because they want to keep them. Services adapt and change to meet the changing needs of customers.

My ideal mortgage would be so flexible that it would fit with the ups and downs of life – having a baby, helping a family member with an illness, moving house,changing jobs, losing your job. The bank should do everything to take the stress away so you, as a customer, can keep up with the payments and improve your life – not get stuck with stress and even more debt.

Instead, the current product model means we are threatened with fees for every time we need to take a short break or pay less – heck, there’s even limits and fees for paying more!

A service design approach to mortgages and loans would include:

• Getting to know (and even visiting) customers. Not just once, but regularly.
• Learning how each customer lives and getting to know and their financial goals. Help them achieve those goals. It’s good for business!
• Helping customers proactively manage risk and teaching them how be responsible with their money.
• Investing in us as customers – not seeing us as units of profit, but partners in wealth-creation.

What do you think? In the new age of responsible and sustainable living, is a service design approach the right way for banks to go?

iPHONE

I asked, “is the iPhone a product or a service?” One reply this time:

The iPhone is a product. You use services on it / via it. It’s no different to a Nokia phone.

An iPhone without Apple services - a Banana Republic? Photo by Ninja M.

But a bit like Mojo Coffee the iPhone would be almost useless without the service design model which Apple has craftily wrapped around this device. Via the phone you have access to the Apple service network including iTunes, iPhone Applications, MobileMe and software upgrades.

Some would argue that Apple have locked-down their service model so tightly that it’s almost impossible to avoid buying into more and more of Apple’s products and services. It’s cunning business on their part, and they’ve obviously analysed the customer from a service design perspective.

It’s not friendly service with a smile like Mojo, nor is it an inflexible product like the classic bank mortgage – it’s somewhere in between.

YOUR WEBSITE OR INTERACTIVE

The same sort of analysis as the above industries should be applied to online services or products.

A fantastic site or interactive won’t reach it’s full potential unless it’s wrapped in a service design model. My first question when approaching a new project, is, “Where does this fit into the overall customer experience?”

Your website is just part of the puzzle.

More on Service Design

• Wikipedia
• Design Council on Service Design
• Servicedesign.org – a glossary of terms

Photo Credits

• jelen
• Br3nda
• Luxerta
• Ninja M

Photo Credit: Mitch Haaseth, Bravo

The straight-talking Ozzie, Tabatha Coffey lends her sound advice and styling expertise to help make over America one salon at a time in this new series (Friday’s, 9.30pm on TV3).

In the vein of Ramsay’s Kitchen Nightmares, Tabatha cleans up failing businesses with a keen eye for the customer experience and broken business processes.

Her formula is simple…

• For a day she observes the business.
• She then sends in some mystery customers to gauge their experience.
• She feeds her observations back to the business owners and staff.
• She then fixes the broken parts of the business process (in last Fridays show, a phone-book sized staff instruction manual was painfully shredded).
• Next she hones in on the staff through up-skilling, and gives those who are failing a chance to learn and improve.

What I also like is that she allows staff to have more freedom over how they work, so long as the business benefits and the customer experience is improved.

Later she returns to check if her action plan has worked. She checks the financial performance of the business, staff morale and customer satisfaction.

As a viewer we are enraptured by the sharp-shooting and frank honesty of Tabatha’s whirlwind analysis. It’s all so obvious! We baulk at the abject stupidity of the business owners (usually in tears after Tabatha’s biting analysis), and at the amazing ignorance of the staff who treat their customers as if they are an annoyance and/or a chance to experiment with scissors and hair dye.

But some of us shouldn’t feel so smug at watching these poor people be frazzled and fried in public.

The fact is that when you’re working inside a business the flaws are not always obvious. Personally, I experience poor customer service all the time from car parks, coffee houses, banks, government agencies, clothing retailers and so on.

Of course we are only human, I don’t expect perfection, but it only takes two or three consistently bad experiences in a row for me to switch providers.

Over the course of several years the accumulated lost value of my custom could be costing these businesses hundreds, and in some cases, thousands of dollars of lost revenue. And assuming some other customers have also walked, multiply that to add up as the reason why too many businesses are only just surviving.

It usually takes someone with fresh eyes to sort out where and why a business is falling short on the customer experience. In the IT industry these people are often known as ‘user experience’ experts. But unfortunately they are often restricted to a narrow view of the business – its online interactions with customers.

‘Service Design‘ is the “design for experiences that reach people through many different touch-points, and that happen over time”. It takes in the big picture and is where I believe all service-based businesses need to align their thinking.

The redesign of a service may involve re-organising the back-office activities performed by the service provider (e.g. how phone calls from customers are processed internally) and the redesign of interfaces and interactions that customers use to interact with the business (e.g. a website or in person).

Typically, just like Tabatha’s Salon Takeover, the work is based upon deep insights gathered by shadowing service users. This technique produces more accurate insights in to the usability of a service than remote surveys because what people say they do is frequently different to what they actually do.

Concepts and ideas are captured in sketches and service prototypes – methods similar to those already used by business analysts and user experience consultants. The strong visual approach, combined with rapid prototyping and testing of services and interfaces, delivers real value in today’s competitive markets.

So if you’re a business owner, service delivery manager, business analyst or user experience consultant I suggest you take a deep breath and start watching a few episodes of Tabatha’s Salon Takeover and Ramsay’s Kitchen Nightmares. Imagine if this was your own workplace – what would they find?

We could all learn what good service is really about and get on the path to improving your customer experience, your staff happiness index and bottom line.