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DMI's producing customer happiness

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Millions of marketing dollars have been spent trying to satisfy customers, when what customers really want is to be happy. These authors categorize four types of happiness. Your job is to align what …

Millions of marketing dollars have been spent trying to satisfy customers, when what customers really want is to be happy. These authors categorize four types of happiness. Your job is to align what you do with at least one of them.

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  • 1. K E Y N OT E David W. Norton, Consumers don’t want to Founder, Stone Mantel be “satisfied,”—they want to be happy. Your product’s long-term success depends on Jeffrey F. Durgee, Associate Dean of loftier goals and a broader Academic Affairs, Associate Professor of Marketing, Lally School array of design strategies that of Management and Technology, Rensselaer Polytechnic Institute deliver emotional and social results for your customers. Jeffrey VanDeVelde, Director, Client Experience and Loyalty, SunTrust Bank6
  • 2. Producing CustomerHappiness: The Job to Dofor Brand Innovationby David W. Norton, Jeffrey F. Durgee, and Jeffrey VanDeVeldeConsumers don’t want to be the feelings and the meaning that Feeling happier is one of the“satisfied”—they want to be happy. customers ascribe to being happy. great unmet challenges of modernAnd here’s the rub: For all the mil- When a company decides to commit consumption—and it’s this chal-lions of dollars spent on customer itself to producing durable happiness, lenge that design thinking should besatisfaction initiatives, and for all its innovations last longer, its brands addressing, rather than focusing onthe brand innovations companies deliver, and those brands create last- methodologies for customer satisfac-have created over decades, consum- ing loyalty. We provide principles tion. The steady rise in GNP levelsers are no happier today than they for designing brand experiences to over 50 years has not been accompa-were 50 years ago. facilitate increased happiness by nied by rises in national happiness It is possible to go beyond mere focusing on the jobs to get done, the levels1 despite millions of customersatisfaction to produce customer four customer “dispositions” toward satisfaction survey questions andhappiness. But to get the job done, happiness, and the key moments that millions of dollars spent.companies need to bring to market have the greatest impact over a longer 1. Michael Argyle, “Causes and Correlates of Happiness,” in Daniel Kahneman, Ed Deiner, and Norbert Schwarzsolutions that actually increase both time period. (eds.), Well-Being, the Foundations of Hedonic Psychology (New York: Russell Sage, 1999). © 2010 The Design Management Institute 7
  • 3. Design Think ing—Design Management Methods and Processes Three happy innovations that So how do we explain General Mills’s toward social jobs—so much so that shouldn’t actually exist pervasive, long-lasting Box Tops for many refer to social tools, such as In a modern house, a fireplace Education coupons? One of the most Facebook, Linkedin, and Wikipedia, has no functional purpose. In fact, successful promotional ideas ever as a part of Web 2.0. in most new-build houses, using the created by a consumer goods com- Over time, products that are fireplace actually sucks the heat out pany, Box Tops for Education makes successful evolve from a focus on of the dwelling. Yet homebuilders no functional sense whatsoever. For functional jobs to a focus on emotion- continue to add fireplaces. According every box top you collect, General al and social jobs. That’s because they to theories developed by, for instance, Mills donates 10 cents to your local make the happiness people experience Clayton Christensen,2 the fireplace school. You cut them out, put them last longer. Solutions that increase the should have been “disrupted” a long into a plastic bag probably taped to episodes of people’s positive emo- time ago. People use furnaces and your fridge, and transport them in tional and social encounters increase stoves to do the functional jobs that backpacks to teachers who must then happiness and last longer as innova- the fireplace was originally hired to coordinate their transport to the com- tions. In some cases, they even hold do—heat the home and cook the pany. The process isn’t cheap, simple, off the forces of market disruption. food. So why do we have fireplaces? or convenient. Yet people collect The functional job for which the billions of box tops. Why? Because it Principle One: Get the jobs done Internet was first developed no longer makes them happy. To produce durable happiness, compa- exists either. The Internet was origi- In each of these very different nies must have a long-term strategy to nally designed to allow the US military cases, the original, functional job develop the emotional or social jobs their to execute communications even if for which the product was designed customers want done. central command was hit by an enemy. either disappeared or became unim- When customers hire you to help If the Internet has lost its original portant. Instead, the jobs people hired them accomplish a task, you are doing purpose, then why hasn’t another tech- the innovations to do evolved into a functional job. When they hire you nology disrupted it—one specifically emotional and social jobs. Fireplaces to help them feel something, you’re designed to do the Web-based work are used by consumers to invoke doing an emotional job. When they necessary to satisfy consumers? emotions of comfort and familiar- hire you to help them relate to others, Then there is the very odd case ity, and to help them relate to others. you’re doing a social job. Aiming for of the box-top coupon. Packaging on The emotional and social jobs proved customer satisfaction around a func- a cereal box or on a cake mix box is to be more durable than the original tional job can be expensive. Think prime property. Food manufacturers functional job (heating the house). about banks and credit unions. Before constantly change what is communi- And consider the eventual fate of online banking, most people went to cated on the box to inform, entertain, the Internet: People found new jobs branch locations to accomplish things and offer consumers new promotions. for that technology to do, some of like transferring money to an account. 2. Clayton Christensen, The Innovator’s Dilemma (New which could be construed as func- Before ATMs, they went to branch York: HarperBusiness Essentials, 2003); and Clayton tional jobs, but the overall thrust of locations to get cash. Financial insti- Christensen and Michael Raynor, The Innovator’s Solution (Cambridge, MA: Harvard Business Press, 2003). innovation on the Internet has been tutions realized that many of the tra-8
  • 4. Producing Customer Happiness: The Job to Do for Brand I nnovationditional, functional reasons for going the teller. Actual wait time did not tion coupon delivers. The typicalto a branch location were being dis- necessarily go down, but customer bank branch doesn’t. We know thisrupted by new technologies. And for happiness went up.) because most customers spend asa while banks believed that branches Christensen and Raynor point little time as possible in a branchwould disappear. But they didn’t. For out in The Innovator’s Solution that location. Bank branches need to findemotional and social reasons, many of companies often innovate faster than new emotional and social jobs to gettheir customers insisted on a location consumer demand for performance done—jobs that will not overshootnear their homes—even though many requires, causing them to overshoot customer demand but will insteadof their transactions could be handled what consumers need. That process make customers happier (Figure 1).online. This created a quandary for happens faster when companies framefinancial institutions. Should they the job to get done in functional Principle Two: Prime the enginekeep the expensive brick-and-mortar terms. In most cases, the original in- Consumers are predisposed to one ofbranch locations or not? Most banks novation made people happy because four general types of happiness. Com-did, because of customer demand. the jobs it accomplished for them panies produce happiness when they Banks kept their branches open were emotional and social rather than engineer their brand experiences to runbecause they thought their customers merely functional. Remember the like well-designed emotive machines.were looking for convenience. With fireplace? That solution never over- From Socrates’s day to today,that in mind, banks hoped to increase shot customer demand. people have pondered how to pursuecustomer satisfaction by speeding up The Box Tops for Educa- happiness. The problem with manythe process of carrying out functionaljobs (like making deposits). Theyfocused on things like teller lines, Where most financialspending endless hours analyzing institutions innovate Where they will createwait-time and applying six-sigma- the most happiness PRODUCT PERFORMANCE Performancetype approaches to improving the demanded at y tor the high end ecfunctionality of an in-branch transac- of the market traj tory on rajec ati tion ttion. The result: a reduced perceived ov s innova inn ial job job d socwait time of 30 seconds to 2 minutes al io nal an tio n Emot ncon average—and no real increase in Fucustomer satisfaction. (We know of Performance demanded atonly one credit union in San Diego the low end of the marketthat was even remotely successful inmaking the teller line seem more con-venient. And it did it by not focusingon wait time, but rather by creating TIME BASED ON CHRISTENSEN AND RAYNOR (2003)an experience that allowed people to Figure 1: The risks of innovating too fast for what the high end of the market will sustain can be miti- gated by focusing on emotional and social jobs to get done. Some innovations are never disruptedmeander until it was their turn with because they continually produce happiness. 9
  • 5. Design Think ing—Design Management Methods and Processes of today’s brands is that they promise The engines behind the feelings similarity on the basis of about 400 happiness (for example, Coca-Cola’s To illustrate the four happiness variables. The technology essentially Open Happiness brand campaign) engines, consider these products and takes a stimulus (one song chosen by but they don’t deliver happiness. brands: Pandora, Royal Caribbean the listener), and creates a positive Brands shouldn’t be in the business International, Deluxe Financial Ser- reflection (by playing another song of promising happiness; they should vices, and Facebook. that matches many of the charac- be in the business of teristics of the original, helping people pursue it. People’s previous experiences predispose thus giving the listener In fact, to promise hap- them to believe that their subjective well- an exciting feeling of piness often results in newness). It is Pandora’s reduced customer hap- being would be improved if you produce ability to create a posi- piness, while delivering one of the four types of happiness. tive reflection that often on happiness creates real anticipates what the user brand differentiation. Pandora, the perceptive engine would want to experience next that From philosophers to farmers, Pandora.com is Internet radio. Built generates happiness in the customer. people create meaning from positive around a sophisticated music da- Pandora is an example of a brand emotions they call happiness by the tabase filtering system, it helps you experience that generates percep- aim (higher purposed or physical/ to customize a radio station with a tive customer happiness (Figure 3). sensorial) they see for their happiness wide range of songs chosen for their Perceptive happiness helps people feel and where they locate the source of happiness (through others or within FOUR TYPES OF HAPPINESS themselves/organization). People’s previous experiences AIM predispose them to believe that Higher Purposed their subjective well-being would be improved if you produce one of the four types of happiness. The very TRANSFORMATIVE ALTRUISTIC make up of your product sends cues LOCUS about the type of happiness people Within Through Self Others should expect from your company. Each consumption component of a PERCEPTIVE UTILITARIAN product—how it is consumed, where it is consumed, who else is involved, the materials used—disposes the Physical consumer to a feeling. Your goal is to (Sensorial) align what you do with at least one Figure 2: The meanings and emotions associated with happiness can be explained by the aim of indi- type of happiness (Figure 2). vidual and the locus, or felt source, of the emotions. Four types of happiness can be designed for.10
  • 6. Producing Customer Happiness: The Job to Do for Brand I nnovationand think positively, anticipating new- perceptive customer happiness. They experience. Royal Caribbean Interna-ness with anticipation; they perceive launch product extensions that cause tional has been a long-time leader intheir circumstances in a better light. people to reflect positively and antici- cruise innovation, installing the firstIn order for a brand to be successful pate newness and adaptation. Look rock climbing wall, ice skating rink,at creating long-term perceptive hap- down any aisle and you will see com- wave rider, and zip line onto theirpiness, it must become great at doing petition to make you perceive greater ships. Royal Caribbean International’sthree things: happiness by trying something new. success as the largest cruise brand in • Creating compelling stimulus the world stems from the fact that (sights, sounds, tastes, smells, Royal Caribbean International: A it designs its ships to maximize the textures, and so on) utilitarian engine pleasurable feelings of the onboard • Getting people to reflect, slow When you think about a Royal Carib- experience (Figure 4 on next page). down, focus, and savor bean International cruise, you become To maximize the pleasure your • Creating a pattern for newness predisposed to a different kind of hap- customers experience, you have to and adaptation that builds upon piness. You want to have fun. Utilitar- think about dramatic action. Dra- previous positive experiences ian customer happiness, named for matic action is the sensation that the tradition of theorists and econo- an experience is building toward a Many consumer goods compa- mists who see happiness in terms of climactic moment. The engine thatnies, whether they know it or not, are its utility value, seeks to maximize drives brand innovation for a com-actually in the business of creating the pleasure associated with a staged pany focused on utilitarian happi- ness must be primed to excel at the PERCEPTIVE HAPPINESS ENGINE following: REFLECTION • Creating stimulus that excites2 (sights, sounds, tastes, smells, movements) 3NEWNESS/ OBJECTIVE Help people feel positive emotions Example: • Building dramatic action to a climactic moment • Then offering newness and ADAPTATION PANDORA.COM adaptation that starts the whole 1. Stimulus process over again A series of like-sounding songs stream to you 2. Reflection Note that both perceptive hap- 1 STIMULUS Every new song causes momentary reflection: How are these songs linked? 3. Newness/Adaptation piness and utilitarian happiness pre- dispose people to expect a continual stream of stimulus, newness, and ad- New channels are added/ channels can be combined aptation. What they don’t predispose them to is a desire for more choice.Figure 3: Perceptive happiness is driven by experiences in which rich stimulus causes reflection and asense of newness or adaptation. While some choice is helpful in con- 11
  • 7. Design Think ing—Design Management Methods and Processes sumer decision-making, an increase in and want what is best for them them. There are all kinds of higher choices does not lead to an increase in over time. purposes that products can have, happiness and should not be the focus • Design the events or steps in including: for your happiness engine. the consumption process so that • Healing and providing comfort People will always enjoy these consumers focus on them and to those who are sick types of solutions, done properly. But savor them so much that they • Building self-esteem there is a challenge with perceptive do not wear out the enjoyment. • Helping to create positive and utilitarian forms of happiness: • Take a long view on managing change for people and business the hedonic treadmill. After all that expectations; don’t simply man- • Contributing to things that are stimulus, customers often wonder if age for the short term. larger than ourselves: family, the experience was worth it and find • Eliminate unhelpful choices. community, knowledge, justice. it hard to maintain the happy feelings. To improve perceptive or utilitarian Higher-purposed customer happi- How you go about delivering happiness engines, we suggest the ness strategies customer happiness that is higher- following: For reasons that go well beyond purposed depends on whether you • Deliver a “planful” series of consumption, people seek forms of want to situate those feelings within events that collectively show happiness that have a purpose higher the customer or through others. The customers that you value them than the consumption associated with engines are different, as well. Deluxe Collaborative: Transforma- UTILITARIAN HAPPINESS ENGINE tive engine 2 DRAMATIC ACTION The engine that drives transformative 3 NEWNESS/ happiness can be found in a company that excels at the following: • Identifying a goal that elevates STIMULUS OBJECTIVE ADAPTATION 1 Maximizes pleasure from a staged experience Example: • Reviewing the customer’s cur- rent state • Guiding the customer to ac- ROYAL CARIBBEAN INTERANATIONAL complish the goal 1. Stimulus • Providing new knowledge along Sky-high over a ship zip line the way 2. Dramatic Action The rush from zipping across the ship • Designing the sequence of 3. Newness/Adaptation events so that the customer Onboard surfing, rock climbing, ice skating. Activities refreshed experiences flow regularly Figure 4: Utilitarian happiness is driven by experiences that build to a climactic moment.12
  • 8. Producing Customer Happiness: The Job to Do for Brand I nnovation Deluxe Financial Services is pri- involved, leading the Collaborative on to help Deluxe keep and maintainmarily known for a product that fewer members through research studies market share from its main rival. It’s apeople use all the time: paper checks. and innovation sessions to develop key engine for creating new productsOnline bill pay has disrupted the a new solution. For the executives to serve financial institutions. And itsprinted check business. So Deluxe be- who participate in the sessions, the clients are happier.gan innovating around new emotional work they do is both challenging andand social jobs they could do for their rewarding. They feel what Csíkszent- The Facebook friendship engine:clients, banks and credit unions. They mihályi calls flow. Altruistic happinessrealized banks wanted their custom- You can imagine how participat- On the other side of the higher-ers to be more loyal. So they invited ing in the Collaborative might change purposed spectrum are offerings thatsome Deluxe clients to participate in a bank executive’s perception of predispose their customers to believea group they call the Collaborative Deluxe. Because the Collaborative that they will experience happiness(Figure 5). Collaborative members experience transforms them, these through helping others. Altruisticaim at solving industry-wide customer executives in turn become passionate happiness occurs when the consumerexperience issues. They charter a goal advocates of Deluxe. The Collabora- helps others accomplish somethingthey hope to accomplish together and tive has elevated Deluxe’s brand in the important.review their current understanding eyes of thousands of financial service The engine that drives altruisticof the challenge. Then Deluxe gets executives. It has become a key weap- happiness includes the following components:TRANSFORMATIVE HAPPINESS ENGINE • Allowing customers to create a common cause • Providing customers with op- 1 GOAL THAT ELEVATES OBJECTIVE Helps the individual/org improve the self/org through goal attainment and epiphany portunities to prepare them- Example: selves to share FLOW DELUXE COLLABORATIVE • Facilitating encounters among ALONG THE WAY 5 4 NEW KNOWLEDGE TO SHARE 1. Set a goal 15 executives from different banks people who share decide on an issues to study • Creating opportunities for gift2CURRENT 3 ABILITY TO GUIDE TO GOAL 2. Current state review Banks evaluate their own effectiveness at addressing the issues giving • Providing opportunities forSTATE 3. Ability to guide Deluxe guides executives through the reconnectionREVIEW innovation process to solve the issues 4. New knowledge to share Base camps are set up where Perhaps no new altruistic solu- executives learn tion has captured the hearts of so 5. Flow along the way Executives are required to contribute many so fast as Facebook (Figure 6 time and energy to make collaborative a success on next page). You feel like you areFigure 5: Transformative happiness is driven by goal attainment. connected to others. You want to 13
  • 9. Design Think ing—Design Management Methods and Processes share. You find yourself caring about ness. Of course, there are all kinds of the types of happiness that have a what they care about. The common ways in which to experience happi- higher purpose and the types that cause Facebook creates for partici- ness, but in general the four types we focus on the senses. pants is a desire to stay connected to have outlined are foundational to the family and friends. Personal prepara- way individuals and cultures have un- Principle Three: Design the right tion is required; you must create a derstood their subjective well-being moments profile, and the more you prepare, the for a long time. Asian cultures tend to Get the most out of key moments with more connected you feel. There’s gift- orient more to the types of happiness your customers by designing your brand giving and there are opportunities that are experienced through others; experience to get emotional and social for reconnection—all facilitated by Western cultures lean more toward jobs done in a sequence that maximizes Facebook. And people are the happier the notion of happiness coming from the impact of the type of happiness you for it. Facebook’s engine behaves simi- within the individual. Psychologists produce. larly to farmers’ markets, volunteer tend to emphasize the experience The insight reached by Joseph vacations, and Tupperware parties. It’s within the individual, while econo- Pine and James Gilmore—that we are all about the sharing. mists tend to discuss the value that moving to an experience economy— At different times and based on comes from the exchange between a has tremendous implications for their circumstances, customers want happy buyer and a seller. People in producing happiness.3 Consumers to experience different types of happi- general perceive a difference between choose brands as a result of the time they spend with them. In order to produce happiness, ALTRUISTIC HAPPINESS ENGINE companies need to identify the key moments in the overall experience DESIGN OBJECTIVE 1 COMMON CAUSE Helps the individual/org help others accomplish something important they plan to create. Most consumer- goods companies immediately call Example: to mind key moments—the in-store 5 RECONNECTION FACEBOOK retail moment, the first use mo- 2 PERSONAL PREPARATION 1. Common cause Stay connected to friends and family ment, and so forth. If your offering is cruises, you’ll be thinking about the 2. Personal preparation Create your own page first day on a cruise, the entertain- 3 FACILITATED ENCOUNTER 4 GIFT GIVING 3. Facilitated encounter Applets and tools ment and other activities, and the debarkation process. 4. Gift giving Ability to leave messages, gifts for others The key moments that Pan- dora will focus on are not the same 5. Reconnections Design to allow for regular updates moments that Facebook will focus on what the individuals is doing 3. B.Joseph Pine II and James H. Gilmore. The Experience Figure 6: Altruistic happiness is driven by facilitating gift giving. Economy (Cambridge, MA: Harvard Business Press, 1999).14
  • 10. Producing Customer Happiness: The Job to Do for Brand I nnovationFigure 7: Key moments can be mapped for the type of happiness produced. Different products need to produce happiness in different ways.on. Pandora’s success comes because tion. There are a lot of little decisions satisfaction. It requires insights intoits key moments align with percep- to make: networks to join, friends to the emotional and social jobs yourtive happiness: stimulus, reflection, invite, replies and responses to create, customers want to get done, an en-newness, and adaptation. That makes video to add, and gifts to give. gine for producing happier customers,it crucial for Pandora to design the and the ability to identify those keymoment-by-moment sequence of Conclusion moments that align with the type ofevents the customer will experience It is possible to plan and execute in a happiness you should design for.(Figure 7). The same approach would strategic way in order to increase the Reprint #10213NOR06not work for Facebook. Facebook is happiness of your customers. Produc-not a simple sequence of events; it re- ing durable happiness for customersquires the participant to do a signifi- means going well beyond strategizingcant amount of planning and prepara- for and executing toward customer 15