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8 Service Design Trends to Watch for in 2014

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Dec 12 2013, Posted by Florian Vollmer

Given the over 80% of economic value generated in services (as percent of U.S. GDP), it is clear that we are in the middle of the experience economy. Leading organizations have long learned how to make good, meaningful and differentiating customer experiences a core part of their revenue generation. However, disruptive innovation (think smart phones) has enabled new ways of engaging directly with the customer.

Service Design—the practice of planning for effective, efficient and meaningful service experiences—has matured. It now has established tools and processes and is recognized as the practice of designing for better customer experiences. Multichannel integration is no longer a differentiator, it is expected by the consumer. To win over the consumer, businesses must go beyond the expected to create lasting engagements. As DMI president Michael Westcott puts it: “Business is personal. At the end of the day, we are all in the business of designing relationships…”

Every year the world’s Service Design leaders gather at the Service Design Network Conference. This year the conference, held in Cardiff Wales (UK), honed in on some key Service Design trends. Here are 8 to watch for in 2014:

1. Rethinking Business Models: From Value to Values
All businesses exist to create economic value. Design centers around the needs of people. Service designers then can make the greatest contributions by “Creating value, designing with values”—combining the needs of the business with what truly matters to individuals. Values-centered, new or improved services often require aspects of business model innovation.
However, a brand that successfully connects to its costumers via shared values fosters stronger partnerships—creating a sense of loyalty and advocacy stronger than any advertisement campaign can ever create.

2. Conscious Businesses Win
Service innovation and delivery is messy and complex. Customers strive for authentic experiences. Service delivery by script will never feel truly authentic to a customer. So what do we do to activate these improved service relationships? We know that front-line actors (i.e. people who are in the field and participate in the delivery of the service) that believe in the mission of their company are enthusiastic about their customers. Organizations therefore need to focus on their core contributions, the “why” behind doing business. When front-line actors know and understand the “why”, they can translate it daily into the right actions and communications—the “what”.

3. From Transaction to Long-Term Relationship
In a retail world that is fast becoming multi-channel with a bargain-hunting emphasis, value needs to be generated past the initial purchase. Today, brand building is less the function of advertising as it is the behavior of organizations over the lifetime of the relationship with the customer. Service Design has a time lens that discretely looks at the times prior/during/post the core service experience. Leading brands understand how to emphasize the pre- and post- phases and create customer engagement throughout the entire timeline.

4. Product and Service Hybridization
Significant innovation is happening in the space where a product can’t be without a service and vice versa. Smart home appliances are an example of products in customer homes that will have no additional value if not backed up with an online service enabling access to additional features and functions. Iterative approaches are a key element to service design, and with hybridized products and services, this iterative approach becomes more possible. Think Nest, the smart thermostat: the product is the thermostat, the service is energy-saving advice (delivered by analysis and subtle rewards to change individual behavior). Insights and software updates allow for an iterative approach to an otherwise static and commoditized product.

5. From Big Data to Little Data
Today, quantitative data is collected almost ubiquitously and measured in terabytes. The question is: how do we use it for innovation? Designers are really good in “little data” (Kerri Bodine)—qualitative research methods. However, true insight comes from finding relevance at the intersection of quantitative and qualitative research. An integrated design and innovation process will harvest data for those TAOs (trends, anomalies, observations) and find actionable starting points.

6. From Strategy to Capacity
A customer experience strategy is a core component of structured planning and investments, service design projects and engaging with agency partners. However, since customer experience is inextricably linked to the core processes of an organization, strategy is not enough. If a better customer experience is to remain a long-term strategic advantage, organizations have to build a core capacity in Service Design and Customer Experience Innovation. Leading Service Design consultancies recognize this need and are helping clients building their base Service Design capacity. At the end, iterative innovation can be faster and more targeted, and when a brand engages with a consultancy for disruptive service design innovation products, then are more effective clients.

7. Measuring Customer Experience
If customer experiences are deeply personal, how can we measure the effectiveness of an experience? There are indirect measures like retention, life-time value and advocacy, but the question remains how do we measure customer experience as they happen? Video analysis offers some options, as we can measure quantitative elements such as impressions and dwell time, and then take a deeper dive with a qualitative analysis of a touchpoint to study user behavior. If we look at the three key players in most customer experiences—the customer, the brand and the front-line actor—we can see an interaction of their individual “force fields” affecting each other. The expectations and needs of each of these players may be different, but keeping track of that differential helps manage customer experiences over time.

8. CX Grit—Closing the Reality Gap
Service Design is hard work. Because changing the actual service experience in the real world requires energy and grit: there are touch points to consider, individuals to motivate, and logistics to coordinate (just to name a few). Service Design coupled with effective project management makes change happen. In the name of closing the service gap, elements of co-design and co-creation enable a “Designing for doing” foundation. An effective Service Design provider understands that while the concept phase leading up to the blue print is important, helping clients make services happen is even more important.

A maturing profession has left the confines of the academic discourse and has arrived in the nitty gritty of real project work. Working on the business/enterprise level (1-3), creating new ways to innovate engaging service experiences (4-6) and new approaches to measurement and execution (7, 8) define the conversation. Service Design asks deeper and more systemic questions than most other design disciplines (after all, designing a toaster will not affect how the enterprise thinks about delivery). When organizations understand the possibilities that derive from engaging at a deeper level and open up to unexpected results, service design projects can bring about innovation that will propel their brands to the next level of consumer relevance.

Sources: Conversations at the Service Design Network Conference 2013 in Cardiff, Wales
DMI Magazine – The Changing Nature of Service Design & Experience Design

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