The Value of User Experience (from Web 2.0 Expo Berlin 2008)

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Companies and brands should think about (user) experience to find new competitive edge for their business. Better experiences create more value for users, which can be in turn transformed into business value for the company.

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User Experience Oct 21, 2008 N. Nyman Oy niko@nnyman.com My name is Niko Nyman, and Ive run a tiny company for 11 years. We do Rich Internet Application development. Meanwhile, Ive co-written a book on social media and marketing, in Finnish. You can read more about me on my blog: http://www.nnyman.com/personal/ about/ User Experience Oct 21, 2008 N. Nyman Oy niko@nnyman.com Why do I talk about user experience? Because I truly believe good experiences can make the world a better place. In the Web 2.0 Expo Tim OReilly urged people to work on stu! that matters. I believe bad, meaningless experiences just wont cut it. Simply Experience Oct 21, 2008 N. Nyman Oy niko@nnyman.com I want to talk about the experiences of everyone: consumers, customers, employees, competitors people. How people who interact with your product, service or your company experience those interactions. 1. What Experience 2. Experience design 3. Thinking about Experience 4. Evaluating Experiences 5. Value of Experience ence is Oct 21, 2008 N. Nyman Oy niko@nnyman.com So, what is experience? Experience is Subjective. PERIOD. First of all, experience is completely subjective. Experience is small things Oct 21, 2008 N. Nyman Oy niko@nnyman.com Experience is small things. Its a heart in my co!ee. Experience is a great movie Oct 21, 2008 N. Nyman Oy niko@nnyman.com Its seeing a great movie. Experience is a pleasant surprise Oct 21, 2008 N. Nyman Oy niko@nnyman.com A pleasant surprise is an experience. Its receiving an unexpected letter. Stu! that triggers your emotions. Experience is a phone keypad you can feel Oct 21, 2008 N. Nyman Oy niko@nnyman.com Experience is tactile feedback, a phone keypad you can feel. (Unlike my iPhone.) Experience is using your phone for creating art Oct 21, 2008 N. Nyman Oy niko@nnyman.com Experience is nding unexpected uses for common objects. Its stu! that triggers your mind. (This is a long exposure shot of drawing images in the air with the ashlight of the previously shown cheap Nokia phone.) Experience is BIG things Oct 21, 2008 N. Nyman Oy niko@nnyman.com Experience is memories Oct 21, 2008 N. Nyman Oy niko@nnyman.com Experience is memories. This summer Club Unity, a club my friends have run for 12 years, had an event on a small island in front of Helsinki. They took a photo of 400 party-goers on the beach, then emailed the photo to each and every one. They made sure the night will not be forgotten. Experience is learning Oct 21, 2008 N. Nyman Oy niko@nnyman.com Experience is learning new skills. Experience is knowledge Oct 21, 2008 N. Nyman Oy niko@nnyman.com Experience is knowledge. The capability to combine what youve learned in meaningful ways. Experience is life experience Oct 21, 2008 N. Nyman Oy niko@nnyman.com And experience is all this, accumulated over time. Its life experience. disconnected moments The small moments you remember become more interesting and more memorable when you see the connections between those experience moments. disdis connected moments The small moments you remember become more interesting and more memorable when you see the connections between those experience moments. Experience A stream of disconnected, separate experiences, become a whole, continuously evolving Experience. longevity This idea of connected experiences underlines how important it is for product experiences to have longevity. The Wii is built on the experience of shared play. The experience is designed to last and grow better by time. wow! The rollout experience of Sony PS3 was designed to provide a great rst impression by wowing users with great specs and lists of features. I hear the games are not that great. How long does the PS3 experience last? BIG PICTURE A wholistic experience is about making sure the big picture small details is reinforced by the small details. Apple store in San Francisco by tanakawho on Flickr Can Experiences be designed? Oct 21, 2008 N. Nyman Oy niko@nnyman.com If to design is to plan something with a specic intention, then yes, experiences can be designed. You cannot create a blueprint for how an experience will unfold, but you can take measures to maintain the intent of providing a certain kind of experience through all you do. User Experience design is a mindset Experience design is more a mindset than a eld of practice. Experience design is not something you apply to a product, its how you create a product. Everyone should work on creating the intended experiences. Together! Everyone not only can, but will inuence the experience of a company and their products. Everyone, from the packaging warehouse to HR, not only the designers. Experiences are (or should be) part of the company DNA. management Because everyone is involved, a companys ability to create good experiences is a management issue. You need managers who can make the hard decisions required to enforce the intended experience materializes in the products. human resources And it is a human resources issue. Personnel issue. Human issue. You need great communications and true leadership. culture It is a culture issue. Employees need an environment that supports and guides them in creating the experiences the company wants to provide. You need a clear vision shared by all employees. You need to empower the employees to act towards the vision. ! Vision ! Maintain intent Experience Design is: creating a strong vision of intended experience creating the necessary practices to maintain the intent Practical notes on experience design Mortality & User Experience - Slide (12) by ario j on Flickr Oct 21, 2008 N. Nyman Oy niko@nnyman.com Every time someone handles a product, uses a service, talks to someone at a company, they have an encounter with the company. Every encounter is an experience moment and builds the overall experience about the company and their products. No active interaction is needed: If I see a McDonalds sign, I will have an encounter with the McDonalds brand, and it will a!ect the image of McDonalds I have in my head. Most encounters with companies are forgettable, but some are remembered. The question is, how will you be remembered? If you had taken this photo, you might remember it was Emirates airlines that provided you with the memories of this breathtaking view. It is most important to identify the encounters that form the experience youre creating for people. You can call these encounters touchpoints, experience moments, service moments, interactions... depending on where you come from and what eld you work in. The next step is to link the encounters together, to understand the overall experience youre providing. Service designers talk about the customer journey, and what are the service moments the customer goes through for a given service. Hyundai in Finland has thought carefully about what is lacking in the Hyundai experience. They gured people have a hard time justifying their choice, after they have made the purchase. So, they actively provide the customers with rationale for choosing the brand. Think of the full lifecycle of the product and all manifestations of the product and the brand. Be aware of your experiences: 1What happened? 2How did I react? What was my subjective response? 3Was the experience likely to be intentional/designed? 4How does this experience a!ect what I think of the provider of the experience (a company, for instance)? Be someone else. It takes great empathy to create a good experience. To create relevant experiences, you have to Forget everything you know and design for others. Align with the expected patience, level of interest, and depth of knowledge of your users. Talk in the users language. Avoid sugar coating. If you think youre helping yourself by putting lipstick on your product, youre setting up yourself for failure. Youre raising expectations, and you know you will fail them. There are no shortcuts with experiences. Fix the problems, dont hide them. Think about design cues. Car manufacturers use design cues to maintain consistency in their range of car models. Think how design cues could be applied to experiences provided by a company. The idea, the intention remains, while the execution changes. Virgin Atlantic doesnt want to make their customer service sta! into service robots. They want to make them into service experts. Providing the customer experience is not about following a service manual to the letter, but making sure the customer has a good experience every time. Ive already said this but: involve everyone. By getting everyone involved you will help make sure the user expectations and the resulting experience are aligned. In practice, this could be about making sure marketing and design and engineering are talking to each other. experience design Realize that anything, even the smallest detail can be experience designed. My parents love movies. They have a dvd player/projector, which instead of a pause button has a co!ee pause button. The button pauses the movie and fades the screen white, illuminating the room. Experience design can be a strategic question, too. The Apple experience is arguably very integrated, but teleoperators now control areas of the iPhone experience, providing sales and service; they control many of the encounters users will have with the iPhone. How does Apple manage this? Apple store in San Francisco by tanakawho on Flickr Evaluating Experiences Oct 21, 2008 N. Nyman Oy niko@nnyman.com How do you know you have created a good experience? How can you quantify the user experience? Oct 21, 2008 N. Nyman Oy niko@nnyman.com Its a bit like asking how much in love are you? You know you are, but just how much? no. yes! -3 -2 -1 1 2 3 Oct 21, 2008 N. Nyman Oy niko@nnyman.com You could create a poll asking quantiable questions: is there enough holding hands? Does he bring home owers often enough? Is there enough quality time spent together? Is there enough time spent between the sheets? You can do this, but does it tell you how much in love you are? Context / convenience INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Taste GOOD ENOUGH / appeal EXPERIENCE UNATTRACTIVE BAD EXPERIENCE Despite this, heres my model. It has two axes: context, or convenience on the horizontal axis, and taste, or appeal on the vertical axis (things that draw you onto something). Imagine a dot in the center, then start moving it around according to how you feel about an experience. Context / convenience INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE A few examples of what you could concentrate on to make an experience better on the horizontal axis. Right is better, left is worse. INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Implement only the absolutely necessary. Complete on features vs. Only the right features. GOOD EXPERIENCE Save users time. Waste of time vs. Time well spent. The route planning service Reittiopas transforms sometimes complex public transportation routes into a convenient and quick way to travel. Let users be undecisive. Permanent vs Undoable. Dishwasher that can be paused or interrupted. Fully Easy detailed overview INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Help users get started quickly. Overwhelming with detail vs. o!ering an overview that is easy to grasp, and most importantly, easy to start with. Incom- Com- patible patible INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Play nice with other gizmos the user might be using. Closed Open system system INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Let users nd creative uses. Be hackable, mashable, connectable. Build an API. Complex to Simple to operate operate INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Make it e!ortless to use. In your Subtle face INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Be subtle. Dont shout at the user. Make your service as invisible to the users as you can. Has me Doesnt thinking make me think INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Dont make me think. Effort in Effort in Benefit Benefit out out INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Balance the e!ort and benet for the users. Not the The right right time time INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Talk to the users only at the right time. Dont engage users at an inappropriate time. The wrong The right place place INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Talk to the users only at the right place. Engage users where they want to be engaged with your products. INCONVENIENT ATTRACTIVE Taste / appeal UNATTRACTIVE BAD EXPERIENC A few tips to increase the appeal of experiences. INCONVENIENT ATTRACTIVE Beautiful UNATTRACTIVE Ugly BAD EXPERIENC Make it prettier. Everybody likes beauty, whatever it means to them. INCONVENIENT ATTRACTIVE Interesting UNATTRACTIVE Boring BAD EXPERIENC Feed the users curiosity. INCONVENIENT ATTRACTIVE Pleasant UNATTRACTIVE Unpleasant BAD EXPERIENC Act nice. Unpleasant vs Pleasant. Rude vs. Friendly. Valid characteristics especially for service products. INCONVENIENT ATTRACTIVE Compassionate UNATTRACTIVE Could not care less BAD EXPERIENC Care about your users. An attitude of could not care less vs. a compassionate attitude. Again valid for service. With a little creativity, extendable to user interfaces too. INCONVENIENT ATTRACTIVENESS ATTRACTIVE UNATTRACTIVE BAD EXPERIENC Not designed vs. designed. Hire a big name designer. People buy plain co!ee mugs because they have been designed by someone whose name they know. Who cares? Most people do! Were drawn to design. INCONVENIENT ATTRACTIVENESS ATTRACTIVE UNATTRACTIVE BAD EXPERIENC Get the right people to use it. If Burberry doesnt know what to do when the wrong people start using it, neither do I. INCONVENIENT ATTRACTIVENESS ATTRACTIVE UNATTRACTIVE BAD EXPERIENC Bad reputation vs. Good reputation. Do everything you can to maintain your reputation. These are two Finnish banks. The one on the left recently merged with Danske Bank and screwed up everyones accounts for weeks. They tried to play it down at rst and lost thousands of customers. INCONVENIENT ATTRACTIVENESS ATTRACTIVE UNATTRACTIVE BAD EXPERIENC Make it exclusive. Too cheap vs. A!ordable. INCONVENIENT ATTRACTIVE Trusted UNATTRACTIVE Not trusted BAD EXPERIENC Prove your trustworthiness. Do you trust this product? Do you trust this company to deliver? INCONVENIENT ATTRACTIVE Trusting UNATTRACTIVE Distrustful BAD EXPERIENC Trust your users. Does the company trust you? Are you being treated as a thief or as a valued customer? INCONVENIENT Tested and ATTRACTIVE true UNATTRACTIVE Never heard BAD EXPERIENC Let people know others use and enjoy your services too. A product youve never heard of cannot have a bad reputation for you, but neither a good one. We tend to trust tested and true products. INCONVENIENT ATTRACTIVE Looks simple UNATTRACTIVE Looks complex BAD EXPERIENC Make it look simple. This is about perceived complexity and simplicity. And looks can be deceiving. INCONVENIENT Seems to have ATTRACTIVE all I need UNATTRACTIVE Looks inadequate BAD EXPERIENC Make it look like it does everything. Again, the reality might be di!erent. And another problem is, people often overestimate what they need, and get drawn to things that are more than they will every really need. INCONVENIENT ATTRACTIVE Available UNATTRACTIVE Unavailable BAD EXPERIENC Make sure your product is available. It baquot;es me how some music and small manufacturers prodcuts are often impossible to get. We have this thing called the internet where anything is one google search away, you know. INCONVENIENT ATTRACTIVE Cheap or free UNATTRACTIVE Too expensive BAD EXPERIENC Make it a!ordable. Free samples. Buy two get third for free. Two for one. Coupons. Free is attractive. INCONVENIENT The easy ATTRACTIVE choice UNATTRACTIVE One of too many BAD EXPERIENC Be the rst choice. Come rst in Google search. Get the best spot on the store shelf. INCONVENIENT ATTRACTIVE Different UNATTRACTIVE Same BAD EXPERIENC Be di!erent. INCONVENIENT ATTRACTIVE Safe UNATTRACTIVE Dangerous BAD EXPERIENC Be safe. Be extreme. INCONVENIENT ATTRACTIVE Dangerous UNATTRACTIVE Safe BAD EXPERIENC Be safe. Be extreme. INCONVENIENT Has personal ATTRACTIVE meaning UNATTRACTIVE Meaningless BAD EXPERIENC Talk to peoples hearts, not their minds. Context / convenience INCONVENIENT CONVENIENT ATTRACTIVE GOOD EXPERIENCE Taste / GOOD appeal ENOUGH EXPERIENCE UNATTRACTIVE BAD EXPERIENCE After plotting various characteristics on the graph, moving the imaginary dot around, you will have ended somewhere on the graph. The graph is calibrated by the users expectations, attitudes, previous knowledge, cultural background, etc. Its completely subjective! Why design experiences? What makes experiences so valuable in business. The New Fred Meyer on Interstate on Lombard by lyzadanger on Flickr Oct 21, 2008 N. Nyman Oy niko@nnyman.com Its easier than ever to create new products. Theres more competition than ever. In fact, you can go to a website like alibaba.com to get anything manufactured in Asia, quickly and cheaply. The New Fred Meyer on Interstate on Lombard by lyzadanger on Flickr Oct 21, 2008 N. Nyman Oy niko@nnyman.com A product with a Superior Experience stands out. Experience creates competitive advantage. Its not like the idea of experience as a di!erentiator is new. Jerry Gregoire, chief information o#cer at Dell said The customer experience is the next competitive battleground. Jerry Gregoire 1999 quot;The customer experience is the next competitive battleground.quot; He said this in 1999. 95% agree In fact, according to one study 95% of business leaders agree. Perfection! Good experience The problem I see is that most companies view their e!orts like this: Good enough experience means basic usability requirements are met, service exists, etc. Perfection is the extra mail were working on, nishing details etc. Perfection! Good experience Perfection! Good experience This is how the users feel about the experience: Good enough means everything works smoothly. Perfection is that everything works automatically, transparently, with zero e!ort, and no waiting. Its all about details! Apple's worst product ever by albertus on Flickr Growing dissatisfaction with products Oct 21, 2008 N. Nyman Oy niko@nnyman.com For this reason I think there is a growing dissatisfaction with products. which makes good experiences all the more important di!erentiator.The average user experience of products hasnt probably gotten worse, we've just got more intolerant of bad experiences. Why? Foobar Poster - The Internet by Sebastian Prooth on Flickr EVERYTHING NOW Oct 21, 2008 N. Nyman Oy niko@nnyman.com We have become used to instant gratication. We are used to having everything now. Were intolerant to waiting. And You Thought Airline Food Was Bad... by jochenWolters on Flickr SHARE(BAD)EXPERIENCES Oct 21, 2008 N. Nyman Oy niko@nnyman.com We can now share experiences easier especially bad ones. The sharing of bad experiences fullls an important role in the evolution of mankind, helping people avoid making the same mistakes someone else has made. e il tempo passa...o forse no by confusedvision on Flickr TIME HAS BECOME MORE VALUABLE Oct 21, 2008 N. Nyman Oy niko@nnyman.com Were intolerant of bad experiences because theres simply too much to see, read, listen to too much to experience. Products compete for the time of people. Time has become more valuable. Often the best experiences simply minimize needed attention. Hotel Marqus De Riscal by brockleyboyo on Flickr Apple's worst product ever by albertus Growing SATISFACTION with experiences Oct 21, 2008 N. Nyman Oy niko@nnyman.com On the other hand, theres a growing satisfaction with experiences. People are willing to invest in experiences. And not only for Gehry designed hotels, but even the smallest experiences which reduce e!ort. Old people tell me that as people grow they nd more things to worry about it can almost feel like the world is breaking apart. Good experiences make daily existence easier, and therefore are craved for. Trendwatching.com talks about daily lubricants. Italy by Kazze on Flickr SHARING makes experiences more valuable Oct 21, 2008 N. Nyman Oy niko@nnyman.com Were more satised with experiences because digital media has enabled us to share experiences, without actually having to experience them together. Sharing is important because sharing makes experiences more valuable. by ~RAYMOND on Flickr Oct 21, 2008 N. Nyman Oy niko@nnyman.com Like they say: youll always have Paris Oct 21, 2008 N. Nyman Oy niko@nnyman.com but not those shoes you wore. The funny thing about concentrating on experiences is that it doesnt cost much, but the returns can be huge. - Its just a mindset after all. Cost of Cost of creating a bad creating a good experience experience The cost of creating good experiences vs. the cost of creating bad experences are almost equal. It takes virtually the same e!ort to create a good experience than a bad experience. While youre doing something, why not do it well? Value of a bad Value of a good experience experience The value for the user is immensely di!erent. Your business model is how you translate the value provided to users into prot. Im not delusional about the power of experiences: Despite Apples superior focus on experience, Nokia will still kick Apples ass in the mobile phone market when comparing prot. But in many industries the balance of power is di!erent. experience lived up to their promises? chase. (See Figure 1) FIG. 1: BUSINESS DYNAMICS ARE BETTER FOR CUSTOMER EXPERIENCE LEADERS Customer experience index relative to industry average First quartile Second quartile Third quartile Fourth quartile Likelihood to consider another purchase from 6.0% provider compared to industry average 2.1% -3.0% y Reluctance to switch -8.9% business away from 6.8% provider compared to or industry average 1.1% mer e -4.0% g. Source: North American Technographics customer experience online survey. Q3 2007 -11.2% Research shows that there is a remarkably close correlation between good customer experiences and customer loyalty. The customers of companies who provide good experiences are more likely to buy again from the same provider, and more reluctant to switch over to competitors. Good experiences win customers hearts. At most extreme cases, good experiences create customers who love you. The advertising agency Saatchi & Saatchi talk about lovemarks, companies and products that transcend brands. Experience Oct 21, 2008 N. Nyman Oy niko@nnyman.com Remarkable experiences leave a mark whether the experience is remarkably good, or remarkably bad. These memories are mind-share, essentially brand equity, the capital of brands. I have a dream I dream of a day when products fullll my needs without a glitch, when I am being served swiftly, compassionately and with understanding, by humans and computers alike. Not because Im a designer and I like good experiences but because good experiences make the world a better place. I have a dream Good experiences help us do more good. Good experiences help us feel better about what were doing. Good experiences free us to spend more time on the important things and less on the mundane. Dont make another useless fully ajaxed web2.0 product. Make the future better. Thank you. N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com Roll the credits http://www.flickr.com/photos/wwworks/ Thank you. N. Nyman Oy 2222523978/ Niko Nyman niko@nnyman.com http://www.flickr.com/photos/ www.nnyman.com 8388956@N06/1123806188/ http://www.flickr.com/photos/mvs/2432686869/ Mine! Stolen (its promotion for the movie, you know: check out Wall-E, I hear its great) http://www.flickr.com/photos/mikewade/ 2532758930/ I have no idea where this came from. Roll the credits Probably stole this one too. Thank you. N. Nyman Oy Niko Nyman niko@nnyman.com http://www.flickr.com/photos/andystoll/ www.nnyman.com 2394547280/ www.clubunity.org http://www.flickr.com/photos/emeryjl/388610729/ http://www.flickr.com/photos/activeside/157793329/ http://www.flickr.com/photos/soylentgreen23/491093601/ http://www.flickr.com/photos/lokate366/2451116282/ Roll the credits http://www.flickr.com/photos/sometoast/557148562/ Thank you. N. Nyman Oy Niko Nyman niko@nnyman.com http://www.flickr.com/photos/doobybrain/ www.nnyman.com 339372920/ http://www.flickr.com/photos/reinis/305683208/ http://www.flickr.com/photos/28481088@N00/2457465195/ http://www.flickr.com/photos/whatsarahsaid/2451365979/ http://www.flickr.com/photos/pochateca/305999085/ http://www.flickr.com/photos/stuckincustoms/2297555157/ Roll the credits http://www.flickr.com/photos/whatsarahsaid/ Thank you. N. Nyman Oy 722567289/ Niko Nyman niko@nnyman.com www.nnyman.com http://www.flickr.com/photos/ario/317208966/ http://www.flickr.com/photos/ario/317208966/ http://www.flickr.com/photos/hamedmasoumi/2118909538/ http://www.flickr.com/photos/obd-design/2374030181/ http://www.flickr.com/photos/21541790@N00/2784028242/in/pool-a380_on_board Nicked from netcarshow.com Roll the credits http://www.flickr.com/photos/whatsarahsaid/ Thank you. N. Nyman Oy 1104587030/ Niko Nyman niko@nnyman.com http://www.flickr.com/photos/whatsarahsaid/ www.nnyman.com 1104605572/ http://www.flickr.com/photos/whatsarahsaid/2112678233/ http://www.flickr.com/photos/jbcurio/1681490961/ http://www.flickr.com/photos/netwalkerz/2921918865/ http://www.flickr.com/photos/bcorreira/2143129022/ http://www.flickr.com/photos/sillyjilly/254654062/ Roll the credits Mine! Thank you. N. Nyman Oy Niko Nyman niko@nnyman.com http://www.flickr.com/photos/shapeshift/ www.nnyman.com 356637239/ http://www.flickr.com/photos/hazel-jane/2481627394/ http://www.flickr.com/photos/knivesout/2279220049/ http://www.flickr.com/photos/cgc/416101950/ http://www.flickr.com/photos/lopez_roderick/1428681866/ http://www.flickr.com/photos/auro/262810153/ Roll the credits www.reittiopas.com Thank you. N. Nyman Oy Niko Nyman niko@nnyman.com Ok ok, I stole this one too from Google. www.nnyman.com Actually all of these: http://www.flickr.com/photos/mulad/183111670/ http://www.flickr.com/photos/london/44070187/ http://www.flickr.com/photos/sudarkoff/2928742614/ http://www.flickr.com/photos/lyza/49545547/ Roll the credits alibaba.com Thank you. N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com www.altabikes.no http://www.flickr.com/photos/albertus/1532856741/ http://www.flickr.com/photos/sebastianprooth/315686462/ http://www.flickr.com/photos/polytropia/445334910/ http://www.flickr.com/photos/confusedvision/104967819/ http://www.flickr.com/photos/martyworld/157466781/ Roll the credits http://www.flickr.com/photos/ethanhein/ Thank you. N. Nyman Oy 1555065877/ Niko Nyman niko@nnyman.com www.nnyman.com http://www.flickr.com/photos/kazze/2489678711/ http://www.flickr.com/photos/digitalink/2368971420/ http://www.flickr.com/photos/an_untrained_eye/2102196106/ http://www.flickr.com/photos/arimoore/2922539993/ From Apple press photo library From Nokia press photo library S4B STRATEGY FOR BUSINESS ISSUE 29 Summer 2008 Roll the credits The next competitive BATTLEGROUND? With customer experience receiving more attention than ever before, we explore the impact on the bottom line. The basic concept of customer experience The bottom line is now widely understood. In sectors as diverse The latest studies suggest that customer as local government, retail and nancial experience has rightly become a priority. Thank you. services, there is an agreement that func- According to Forrester Research, there is a tionality and price are no longer enough. remarkably close correlation between good Instead, organisations are beginning to focus customer experience and customer loyalty. on improving all of the interactions that Forresters Customer Experience Index customers have with them. (CxPi) ranks 112 US rms for their ability to It is a trend that was discernible back in deliver a good customer experience. Signi- 2003, when Beyond Philosophy found that cantly, customers of the rms in the top 71% of business leaders saw customer expe- quartile were 6% more likely to make addi- rience as the next competitive battleground. tional purchases than the industry average. By 2005, 95% had come round to this view. Customers of those in the bottom quartile So have investments in improving customer were 8.9% less likely to make another pur- experience lived up to their promises? chase. (See Figure 1) FIG. 1: BUSINESS DYNAMICS ARE BETTER FOR CUSTOMER EXPERIENCE LEADERS Customer experience index relative to industry average First quartile Second quartile Third quartile Fourth quartile Likelihood to consider Fujitsu Strategy For Business, issue 29 Summer 2008 another purchase from 6.0% N. Nyman Oy provider compared to industry average 2.1% -3.0% Very few senior Niko Nyman executives regularly Reluctance to switch -8.9% 6.8% interact with their business away from provider compared to customers or monitor industry average 1.1% the quality of customer interactions to make niko@nnyman.com -4.0% sure the situation is genuinely improving. Source: North American Technographics customer experience online survey. Q3 2007 -11.2% 01 www.nnyman.com www.gapingvoid.com Google for lovemarks :) I guess this image is not available on Flickr... http://www.flickr.com/photos/travischurch/238590930/