Marketing as Service Design /                  This article appeared in Contagous issue Thirty One.                      C...
contagious insider / marketing as service design /                         Marketing as Service Design /                  ...
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contagious insider / marketing as service design /                                                                        ...
contagious      		                    62 / 63                         case studies                                        ...
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Marketing service design

  1. 1. Marketing as Service Design / This article appeared in Contagous issue Thirty One. Contagous is an intelligence resource for the global marketing communiy focusing on non-tradiional media and emergng technologes For more information please email the team on sales@contagiousmagazine.com1st Page.indd 1 23/05/2012 22:50
  2. 2. contagious insider / marketing as service design / Marketing as Service Design / Marketers have a new mandate: create innovative services that build better brands. Agencies that can srategise, build and deliver those services, and brands that are more consumer- centric are set to capitalise / By Dan Southern / T he genius of Michael Dubin is his comedy timing. As founder and CEO of the US subscription-based and hard-sell advertising are the norm. A service-based David in a land of product-focused Goliaths. male grooming startup, Dollar Shave Club (DSC), his But it’s not just plucky Los Angeles startups that are wit and enthusiasm have brought fame and acclaim to using service approaches to enhance their business. his fledgling company, sparked by a launch video in Giant corporations, from Procter & Gamble to Kellogg’s, which he stars and has, to date, amassed more than are investing in the next generation of CRM platforms four and a half million views on YouTube. ‘Do you think designed to deliver personalised and content-rich your razor needs a vibrating handle, a flashlight, a brand experiences that educate, inspire lifestyles, back scratcher and ten blades? Your handsome-ass and form long-term engagement with customers. grandfather had one blade… and polio,’ he quips. Manufacturers like Philips and Nike are developing However, it’s also his insight into the shaving market products designed to enable services which can that’s a winner: ‘There is no such thing as the average enrich and transform lives. Forward-thinking marketers shaver,’ he recently told Bloomberg Businessweek. are using their intimate knowledge of the consumer to ‘Everyone has their own grooming habits.’ spot gaps in the customer journey, identify friction and For between one and nine dollars per month, DSC develop innovative services to fulfil their unmet needs. subscribers receive their choice of a set of three Marketing as service design is an evolution of types of blade in the mail – saving them a journey to branded utility, which refers to useful tools that support the local store to pay premium prices for ever more products. Now, products are being viewed as part of complex and expensive blades from the likes of Gillette the ‘brand network’ which is the entire value ecosystem and Schick. What’s more, Dubin claims that ‘social of consumer touchpoints, including retail, customer product development’ is at the heart of the company service, advertising, websites and so on. ‘Services are – as it diversifies into cream formulas and such like, all the behaviours and interactions within the brand subscribers will be asked to help review and provide network,’ says Wing Pepper, managing director of feedback on their preferred products. Huge Inc., whose work for HBO is featured on page 48. By enhancing these services, and sustaining them, New ways of creating value brands can create experiences that prove the brand From product development to distribution and promise directly to customers. marketing, Dollar Shave Club (with its $1m seed According to Rachel Lawlan, former head of funding) is creating a service built around its customers planning at AKQA, London (now of Saatchi & Saatchi, for whom it co-creates value and claims to save up London): ‘What we’re looking at is completely different to $300 a year. That’s in contrast to the rest of what ways of creating value for the customer. It enhances Global Industry Analysts, San Jose, estimate to be the existing products, creates new experiences, and adds $25bn shaving industry, where lengthy and intermittent new revenue streams.’ R&D processes, mind-boggling product innovationsMarketing_FINAL.indd 2 23/05/2012 23:14
  3. 3. contagious 60 / 61 social in particular, they’ve completely outsourced the relationship with their customers to agencies. They’ve reduced it down to a yearly ad campaign of messages. The best companies realise they need to keep heavily involved and retain the relationship with their customers.’ One that does retain that relationship Distributing services through goods is AKQA client Nike, and the launch of FuelBand in In 2004, the Journal of Marketing published a paper January, a product-enabled service featured in Issue that is now one of its most frequently cited. In ‘Evolving 30, is clear evidence of that. to a New Dominant Logic for Marketing’, US academics Robert (Bobby) Lusch and Stephen L. Vargo claim that the objective of marketing is shifting from efficiently ‘What we’re looking at is completely diferent delivering tangible goods to market towards creating value through the exchange of intangibles such as ways of creating value for the cusomer. knowledge, information, and skills, to the benefit of It enhances exising producs, creates new customers. All well and good for services themselves perhaps, but how does that work for actual products? experiences, and adds new revenue sreams.’ Like shoes, or a breakfast cereal? The article argues that this logic applies equally to goods: ‘As humans have become more specialised as a species, use of the market and goods to achieve higher- order benefits, such as satisfaction, self-fulfilment, and esteem, has increased. Goods are platforms or appliances [...] best viewed as distribution mechanisms for services, or the provision of satisfaction for higher- order needs.’ The potential of that view has sky-rocketed in the eight years since the article was published. With developed markets heading for smartphone saturation and the deployment of high-speed 4G mobile networks underway, rich and highly personalised, context- relevant services and experiences can now be delivered to consumers whenever they need and wherever they are. But advanced technology has also brought demand side pressures too: in a world of information and communication abundance, consumers expect brands to keep pace with them and deliver seamless experiences, before, during and after purchase. Are they doing so? The wristband, which measures a user’s physical Amidst the fossils, evolution activity throughout the day to produce a ‘Fuel’ score Evidence would appear to suggest not quite. Bain & and then motivates them through a combination of Company claims that 80% of company CEOs believe embedded LED lights and social tools, is the product they offer people superior customer services. But in of the new ‘Digital Sport’ division at Nike created in the same piece of research, it was found that only 8% 2010. Its mission is to create services for athletes of customers agree. In their book Marketing Plans For that help them to reach their true potential. As Mark Services, McDonald, Frow, and Payne found that 90% Parker, president of Nike, remarked on a recent call to of CEOs believe their organisation to be customer- investors, ‘Because we give consumers opportunities focused: but when asked about their experience of to reach their potential, we create opportunities for suppliers, they claimed only 5-10% were. Nike to reach its own.’ For Lawlan, technology has caused some brands That might be a sentiment the sportswear giant to lose sight of their customer. ‘There are companies could claim was always there; but now the methods that have completely fossilised: they have departments are truly evolving. Technology helps Nike exchange that don’t really talk to each other and, in light of valuable data and information with its customers for theMarketing_FINAL.indd 3 23/05/2012 23:14
  4. 4. contagious insider / marketing as service design / By mapping user journeys to better understand their contexts, emotional states and needs, the GDS is developing an alpha version of the UK’s directgov website (the home of all online government information for citizens), to provide user-centric services and information. Zoe Stavrou, senior design researcher at innovation and design consultancy Seymourpowell says that this approach must also be matched by a deep understanding of the organisations behind the service benefit of the recipient at the individual level. As Stefan too. When Dixon’s Retail Business Group wanted Olander, VP of Digital Sport, remarked at the launch of to improve the after-sales and support service for Velocity, the book he co-authored with AKQA founder customers of two of its brands, PC World and Curry’s, Ajaz Ahmed, ‘Too many businesses are thinking “I need it called on Seymourpowell for help. to sell inventory”, rather than “How can I add value to a smartphone, or a new device?”’ ‘Goods are bes viewed as disribution Coming to you live and direct mechanisms for services, or the provision There are, of course, businesses that might not lend themselves readily (just yet) to embedded connected of satisfacion for higher-order neds.’ technologies. But marketing as service design should be just as urgently pursued by them. ‘Every company needs to start thinking how its brand lives and ‘To get an appreciation of the whole ecosystem, breathes offline and online, all the time. Every brand we looked at the journeys of customers and the tech needs services to differentiate,’ argues Wing Pepper, support guys,’ says Stavrou. ‘That helped us to empower emphasising that creating and sustaining a direct people across the whole system to deliver a better relationship with customers is paramount. What does service.’ The result of those insights was KNOWHOW, this look like for FMCG brands then? a new tech support service launched in 2011 to meet Super-smart service-driven CRM is leading the way. the increasingly complex technology issues in people’s Sophie Cumming, brand manager at Kellogg’s Special lives, which includes in-store technology clinics and K, whose My Special K platform was revamped earlier promoting employee capabilities to customers. this year says: ‘It’s at the core of everything we do, A new mandate for marketing on every consumer touchpoint and at the heart of our communication idea: everything is about signing up Services are vital to a brand’s bottom line. According to My Special K.’ The platform offers a combination to the 2010 Accenture Consumer Survey, 64% of personalised lifestyle content, weight and shape of customers switch companies within a year of tracking tools and mobile utilities, in order to manifest experiencing poor service. Meanwhile, the RightNow Special K’s position as a ‘shape management brand’, Customer Experience Impact Report 2011 states whilst locking the product into customer behaviour. that 86% of people would pay more for better brand experiences. Posing the difficult questions Marketing as service design offers a new mandate for Creating services means designing primarily for the marketing departments; it not only improves the brand needs of the customer. In the UK, the recently launched experience, but creates value and transforms business, Government Digital Services (GDS) team has often by transforming the lives of customers. The published its ten ‘design principles,’ the first of which challenge for marketing departments, and the agencies is: ‘Start With Needs (user needs, not government helping them, is reprogramming their objectives needs).’ Ben Terrett, head of design, says that this can towards continually building and sustaining value for be challenging: ‘It’s uncomfortable and it’s hard. In the long term. That means evolving beyond the delivery organisations, people naturally want to do things in a of hermetically sealed ad campaigns that periodically certain way.’ However, he emphasises that this doesn’t support a product or message. At the intersection of mean simply giving people what they ask for, ‘We try multiple business units – from commerce, to CRM, to find out what they want to do. We ask, what is the customer service, logistics and all other points in the problem you’re trying to solve?’ brand network – marketing needs to align around the company’s single most valuable asset: its customer.Marketing_FINAL.indd 4 23/05/2012 23:14
  5. 5. contagious 62 / 63 case studies Expect more intelligent CRM activity from other Kellogg’s brands around the world soon. The company has announced that it is working with data and Kellogg’s / My Special K CRM specialists Epsilon International to develop a Personalised life-style programmes web portal where consumers can sign up to receive My Special K, accessible in the UK, Ireland, France, Italy communications from Kellogg Company’s brands via and Spain, is the evolution of Special K’s longstanding email, web and mobile across North America, Latin weight management programme, the Special K America, Europe and the Asia Pacific region. Challenge. The revamped programme, launched earlier this year, offers personalised Special K Plans designed to help members reach their goal weight and then maintain it in the longer term, as opposed to the original two week challenge. In addition, it provides recipe suggestions, tools such as Body Mass Index (BMI) calculators and eating out guides, online forums, as well as a showcase of the brand’s healthy cereal- based snacks, bars and shake drinks. Philips / Caregiver App Caring for the elderly Last October, Philips CEO Frans Van Houten outlined to journalists his vision for ‘meaningful innovation to improve lives’ at an event celebrating the company’s 120th anniversary. Value in the market, he argued, is created by value in society. At the same event he announced an app-based extension of Philips Lifeline – a medical alert service aimed at the elderly, which counts 700,000 subscribers across the US. In the UK, the brand has partnered with content providers such as MSN Her, Kiss and Makeup, and ‘The bes companies realise they ned to kep OSOYOU, to provide additional quality editorial content heavily involved and retain the relationship and features on fashion, beauty and wellbeing. The mix of content can be personalised by the user, based wih their cusomers.’ on their preferences, to create a more customised Lifeline is a product-enabled service that includes experience. a sophisticated motion-detector pendant that senses One particularly eye-catching utility is the use of if its wearer falls over. If the wearer doesn’t press the the Tesco API. Ingredients from the programme’s button on the device in such an event, it automatically suggested recipes and meals are pre-populated on to connects to the Caregiver call centre, which then a shopping list, which can then be added to members’ phones the wearer to check if they’re okay. Tesco baskets without leaving the My Special K site, If they’re unable to respond or get up, the new providing a frictionless commerce experience. Caregiver mobile app, which is installed on the While partner agencies have helped deliver the smartphones of the patient’s support network – friends, platform, the expertise of Kellogg’s in-house teams family and neighbours – comes to life to alert the user. has driven concept and content. Internal nutritionists The app includes a group messaging service, geo- develop the programme, helping Kellogg’s sustain the location (to find who is closest to the patient at time of customer relationship in the long term. call), details of the patient’s medication and symptoms and side effects, as well as a group calendar to arrangeMarketing_FINAL.indd 5 23/05/2012 23:14
  6. 6. contagious insider / marketing as service design / visits and educational videos with tips on how to help Mobility, explains that it could be used to turn lights prevent falls. on and off, adjust a thermostat, and look in on children The average subscriber to Lifeline is 82 years old, or ageing parents, enabling users to ‘always stay has limited mobility, suffers from one or more chronic connected’. The platform can use multiple connected conditions and takes a number of medications. devices including cameras, doorlocks, themostats, and Crucially, they want to keep their independence, but sensors that are all linked to a controller and connected understand how serious and frightening an accident through broadband to the cloud. The simple to use can be. system can be accessed from any web-based device, be it smartphone, PC or tablet, to let users interact with Lifeline, with its Caregiver extension app, examines their home or business. a series of potential events for an end user, and triggers responses across multiple touchpoints. A series of Petersen explains: ‘When a window’s shut or a door extremely complex actions is transformed through opens or you hear a noise late at night, you’ll instantly service design into an effective, efficient and potentially have an idea of what’s going on around your house, life-saving service. whether you’re in the home or away from the home.’ AT&T / Digital Life Home on your mobile ‘Too many businesses are thinking “I ned to In the US, AT&T recently announced a remote sell inventory”, rather than “How can I add monitoring and automation platform, which makes it possible for people to control the appliances in their value to a smartphone, or a new device?”’ homes or businesses, such as turning lights on and off, even when they are not physically there. This system will enable carriers to increase revenue The telecommunications company, best known for growth as remote monitoring and automation is an its mobile, broadband and TV services, demonstrated untapped platform. Petersen says that carriers would its Digital Life platform at February’s Mobile World be able to customise the system to incorporate their Congress in Barcelona and is launching the service as own user interface, add devices and extend their a wholesale platform for service providers around the brand: ‘With Digital Life, service providers will have the world. ability to arm their subscribers with technology to stay In a YouTube video describing the platform, Kevin connected to what matters most to them in a simple, Petersen, senior vice president, Digital Life, AT&T convenient, secure, and customisable way.’ Mercedes-Benz / Driving Academy Safer, better drivers Because services are delivered over time, it can also take time to ascertain their merits and success. Back in 2009, following consultation with London-based brand experts Wolff Olins, Mercedez-Benz Europe established its very own Driving Academy, making use of down-time on the brand’s race track at Mercedez- Benz World in Surrey, UK. At the track, drivers from any age – as long as they’re over 1.5m tall – can start developing the lifelong skills and techniques they need to become confident and safe drivers. What’s more, the academy has franchisees – expert tutors who can take drivers out on the open road as they bid to pass their driving test. Since opening in 2009, the academy has achieved a 78% first time pass rate (compared to a wider UK average of just 40%) and has seen nearly 6,780 drivers pass through its doors.Marketing_FINAL.indd 6 23/05/2012 23:14
  7. 7. contagious 64 / 65 Such is Driving Academy’s success, that the UK brand academy launched a hub at Silverstone, the takeouts / iconic Northamptonshire race circuit. In addition to the contagious perspective expanding within the UK, the Driving Academies are Customers beat products / A company’s most going global. In November the scheme expanded valuable asset is its customer and their needs stateside, and became the first branded driver’s should be prioritised. Products can be thought of as education class to be certified by the US government. part of a brand’s network of consumer touchpoints. A new academy is planned for Beijing later this year. By creating new touchpoints for customers in the The usual $1,395 programme in the US includes network and improving the interactions within it to 16 hours of behind-the-wheel training, a driving course enhance overall experience, they are more likely to on a closed range, 15 hours of online theory and five return, spend more, and act as advocates for your classroom sessions as well as a car safety workshop at brand. the facility. For $290, the brand will also help students tackle the actual state driving test, allowing use of a Map the customer journey / Paraphrasing Elvis, Benz and pick up and drop off. the key is to walk a mile in their shoes. Use By using service design approaches to understand ethnographic research to tap into the psyche of the dynamics of the consumer touchpoints in the brand consumers and identify points of friction, waste network, the car brand has developed a new global or tension in their journey – before, during and business. after purchase – that could be resolved. This isn’t about providing people with what they’re asking for (remember Homer Simpson’s ideal car?), but examining behaviours to reveal the unmet need. Value in exchange / Data, information, actions: create an ecosystem of value exchange with customers that works primarily to their benefit, but which also guides, informs and directs you along the way. Use this feedback to constantly iterate, and improve the experience – that’s what co-creating value is all about. Multidisciplinary as mandatory / A range of people with varying skill bases must collaborate and work together to empathise with and understand all the stakeholders involved. Hiring or working with a wide spectrum of skillsets is vital to diving deep into an organisation to create a better customer experience. This means that logistics, customer services, retail, legal, PR may all need to sit around a table to get stuff done together, which can be unusual for some businesses. The service is the brand / Messages and metaphors have a time and a place but services will come to define brands. As companies continue to open up, consumers are increasingly seeing through the thin veil of advertising. Services are the key to differentiation; they manifest and prove the brand promise.Marketing_FINAL.indd 7 23/05/2012 23:14