dancingmango

Bubblegum generation presents a compelling model for Apple’s iPhone strategy:

1) Pick an industry which sucks (ie, imposes significant nuisance costs/menu costs/externalities on consumers)
2) Redress the imbalance by making something consumers love
3) …Which disrupts the long-standing industry equilibrium, and shifts market power
4) Use said market power to redesign (a hyperefficient) value chain

Don’t think that organisations in industries that suck don’t aspire to “do an iPod”. Go to any proposition development or product strategy workshop and it won’t be long before someone is mentioning Apple products. Yet all too often they fail to do anything truly revolutionary; they end up doing something different rather than “Redress(ing) the imbalance by making something consumers love”.

Do customers want something that is different or something that is just better?

Interestingly, little functionally in the iPhone is new. Like every other phone on the market it makes phone calls, sends messages, receives emails, takes photos and allows users to listen to music. Nothing different or new there… other than being better than every other phone on the market.

What Steve Jobs espouses is the experience of the phone. He says “So, we’re going to reinvent the phone. Now, we’re going to start with a revolutionary user interface… Now, what’s the killer app? The killer app is making calls! It’s amazing, it’s amazing how hard it is to make calls on most phones.”

He’s not looked to do anything radically different, rather do it radically better.

So how do you bring revolution to your product set? Rather than trying to be different, why not try to better. Make something that consumers love?

Take a leaf from the Apple book and focus upon the experience. Design and attention to detail are critical. Moving beyond purely functional and satisfying products to crafting experiences that engage the emotions. In agile product development it is often easy to focus upon delivering functionality that is perceived to deliver business benefit, yet end up with a mediocre product that has little resemblence to the original idea it was meant to become. Incremental delivery is a key feature of agile; it means you get stuff out there early and often. The challenge is to identify what that stuff is. To make something that consumers love using the agile approach, in addition to great developers and focussed project management, you need three people;

1. A passionate sponsor who has a dream and a vision and can articulate that to the team, banishing mediocrity from the outset
2. A business analyst who will help the team slice the functionality according to consumer needs and desires; that take the consumer of the journey they want to travel, not a predefined route that constrained to picking those features that eventually will deliver greatest value.
3. A customer experience architect, interaction designer or graphically minded usability dude who can champion the product aesthetic and usability.

Get them on your side and maybe you might be taking the first step on developing a better gizmo that your consumers will love, and sleep outside your retail outlet for hours to buy one.

Following a recent Economist article, JP Rangaswami blogged about “can versus should“. His theme was around DRM and identity; just because the government can monitor your digital behaviour does not mean that they should. I like this, but think it can be extended to much of the IT domain.

Web 2.0 introduces many new styles of interaction, drag and drop, take over the right-hand mouse button… just because we can do these things doesn’t necessarily mean that we should. What will the impact be? Hide calls to action behind the mouse button on your site and your site alone, how does the user know to find them there? When building a “deluxe web” site at the forefront of mind should be how will people actually interact with the proposition. Just because we can do some technically cool stuff that would give us a buzz and gain nods of appreciation from our technical colleagues, doesn’t mean that we should. A customer who has come to the proposition probably requires clarity and an ability to accomplish their goals. They care very little for the stuff we can do.

And then there is mobile. Just because we can deliver the ability to enable customers to watch TV on their phones, doesn’t mean that we should. Too often new propositions are driven by IT ability rather than consumer demand. WAP was a great example of this; IT consultants getting excited about delivering content on mobile phones using WAP, completely overlooking what a shocking experience it was and simultaneously missing what consumers actually wanted to do - text message.

I recently borrowed a motorola flip phone.  The first non-Nokia I’ve ever used.  I really liked it, once I’d worked out how to switch it on.  How intuitive is it to switch the phone on using the red off button?  How hard would it to have built the green button to have a call to action for on?

The “customer” agenda has moved beyond CRM. “Customer experience” is being taken ever more seriously; some more enlightened organisations have customer experience representation at the board level. It’s all about thinking in terms of the experience customers have with us- considering every touch point - understanding the journey the customer takes from first becoming aware of our brand, through researching and purchasing our products to developing them as a loyal and profitable advocate of ours.

Sadly the IT that underpins many organisations doesn’t get the customer journey. It is routed in organisational silos and delivery channels that mean everything to the organisation but nothing to the business.

We know how successful our web channel is: we’ve got webmetrics. We know how successful our telephony channel is: we’ve got a sales force motivated to sell, and a dashboard that tell us their success. We know how successful our stores are: we’ve got sales data, we even measure footfall in our stores.

But is it joined up?

I go into a store and a salesperson helpfully shows me the product, but I’m not yet ready to commit. She offers me a great deal, I’m tempted, but I want to check it out on the web. I search the competitors, the salesperson was right, she was offering me a really good deal. So I got to their online shop and there is nothing like the tailored deal I was offered in the store. There’s a number on the website and I get through to the call centre. I start all over again. I get the same sales patter I got in the store and saw on the web. I’m offered a deal that is similar to that in the store. I’m ready to commit… but they don’t have any in stock, I’ll have to wait seven day. So can’t I buy it now and pick it up in the store tomorrow? I don’t think so.

Where is the driver to improve things? Each channel has contributed to the sale but each is a silo that has its own reporting lines. They are in competition with each other, each wanting the sale none of them recognising the other in the journey that led to that sale. Yet ultimately their failure to work together is destroying the brand value.

Here’s a user survey where you can moan to Nokia about how bad your N80 is (or any other N series phone).

There once was a time that you could go to any office in the world and be able to charge your Nokia phone. Every Nokia phone used the same charger. A small and insignificant thing, yet this small detail in the technical implementation was undoubtedly important in maintaining brand loyalty and the dominance of Nokia in the market place. Nokia built informal communities in workplaces that no other brand did. Communities that shared their chargers. I’ve not witnessed that with other brands.

Then something happened at Nokia. They changed the charger. The plug is now smaller. I presume this can only be down to the ever decreasing size of their phones. But my new Nokia N80 is bigger than my old Nokia that used the old charger. Bottom line? There are half a dozen old style chargers lying around in the office. There are no new ones around. I leave mine at home / it is broken, and combined with the risibly short battery life of the N80, I am stuffed. This will impact my purchasing decision when I change phones. I’ve been loyal to Nokia since I got my first mobile almost ten years ago. No more.

(As a postscript, I recently found myself with three other unlucky souls who owned a Nokia N80. Not one of us had a good thing to say about it. If you are in the market for a new phone, steer clear of the N80. Buy one at your peril!)

I recently picked up an old BT phone at a car boot sale. Using it made me realise how using the phone has radically changed since my youth.

Then: In those days you remembered all your phone numbers- the frequently used ones at least. Others would be in a notepad that was close to the phone.

Now: Phones have memories, the notepad is in the phone. And frequently used numbers can be set as speed dial. (It’s an interesting question whether the move to from analogue to digital phones has had an impact on memory…)

Then: To make a phone call with x digits would take y seconds. Oooooh how slow and painful! The pleasure of the retro experience using the old phone soon turned to frustration. How long to dial a number? And if the number was engaged there was no such thing as a rapid redial.

Now: the fingers fly accross the keypad. Engaged? wait a few minutes and press redial.

Two words articulate the new experience; speed and convenience. The old BT phone sits in the lounge. It sounds cool when it rings. I may pick it up. But use it to dial numbers? I’ll stick with the modern experience of speed and convenience.

Bad experience #1.  Got a mail from Skype telling me that because I’ve not used their service for a while they are going to “expire” my credit.

Skype Credit expires 180 days after your last purchase or SkypeOut call. If you’re not using your balance we need to expire the credit sooner or later to comply with normal business accounting rules

Eh?  I’ve topped up my account with money, what rules are these that confiscate it for not having made a skype call in a while?

Bad experience #2

So I want to visit Skype and see exactly how much I am going to loose, and take a good look at the rules.  I’m using a vodaphone 3G card.  I link to a skype URL and…

Eh?  Skype is “restricted content”.

On what grounds is that I wonder.

Imagine.

I go into a store and a salesperson helpfully shows me the product, but I’m not yet ready to commit. She offers me a great deal, I’m tempted, but I want to check it out on the web. She says “great!” scans the products and prints me of a personal card with a short unique identifier and a unique website URL. I search the competitors, the salesperson was right, she was offering me a really good deal. So I got to their online shop and enter the URL and there is the tailored deal that the salesperson told me about. It has even got her name on it (so I know he’s going to get some credit for the sale). I get through to the checkout screen. I enter my personal details and I’m just about to buy, but I’ve got a question about the terms and conditions so I take a pause in filling out the form. There’s a number on the website and I get through to the call centre. I don’t have broadband so I loose my connection. The voice at the end of the phone knows who I am and where I am up to. I’m ready to commit… but she apologises, she doesn’t have any in stock. I’ll have to wait seven days. But I could pick it up from the store tomorrow if I want (or even a store close to where I work) or I can get the store to deliver if that would be more convenient. I’m delighted. The next day I go to the store and it is waiting to me. The sales person smiles. She didn’t take my money, but she ultimately made the sale and she’ll be rewarded for it.

Fantasy? It shouldn’t be. Thinking in terms of the customer experience and the customer journey is only the first baby step. The giant leap is to get IT bought into it and implement a solution that is not going to cost the earth and take years to (not) deliver.

And that’s where ThoughtWorks comes in. We thrive on getting everybody together and using creative, collaborative and highly visual techniques we quickly get everybody to consensus on the vision we want to move forward on. Because we are an IT company, we understand the opportunities and constraints with technology. But most importantly because we use lean and agile techniques to delivering technical solutions we are responsive to change, flexible with emerging requirements and can focus on getting things done – the baby steps – whilst working towards the giant leap that will win lifetime value for customers. Hmmmm. That’s beginning to sound like marketing blurb.

Let’s imagine a mobile phone provider that that has an on-line presence as well as a high street retail network. Their current website was built several years back on legacy technology; it is slow and has a conversion rate lower than industry norms. Along with having poor usability, the current shopping cart functionality does not support the concurrent usage figures that are hitting the site. The business takes the output from their web metrics and throw these at IT and demand improvements. And a new IT project is born. Rebuild the existing site on a new platform. They get a design agency to handle the look and feel. The functional requirements are built upon the existing functionality and chunked into functional silos:

• Content managed brochureware site
• Phone selection
• Tariff selection
• Shopping cart
• Order management

A typical project process. That is flawed. It is starting with a functional premise. An alternative is to think in terms of the customer and customer journeys.

We can start by asking who the customers are. Almost certainly the marketing department has a customer segmentation model - this is a good place to start. That may give us basic attitudinal and behavioural details on customers, but we need richer data. How do customers shop for phones? So we go and spend time in the stores and observe how people buy them. It soon becomes clear that the choose phone - choose tariff buy model is a journey that is only taken by a certain number of customers. Other customers come into the store with intentions - they don’t know what phone or tariff they want, but they know what they want a mobile phone for. Other customers come into the store asking lots of questions, they are doing research; they leave the store with the sales guy’s number, and costs for a couple of phones and tariffs. We look at the competition and see how they sell phones. We look at Amazon and eBay and expedia and see how other retailers sell products and experiences on the web. We synthesise our research and suddenly we have a whole bunch of new requirements. Gasp! Scope creep. Indeed if we list them out into functional silos again:

• Content managed brochureware site
• Lifestyler phone selection wizard
• Save a quote
• In-store quote save for on-line fulfilment
• On-line purchase for store fulfilment
• Phone selection
• Tariff selection
• Shopping cart
• Order management
• Etc

The business is excited and IT is despondent. When the business announce the date all this must go live by, the letters of resignation land on the IT directors desk and they start looking for contractors. It does have to be this way. You can have your cake and eat it.
Rather than thinking about vertical functional silos, we should think about horizontal slices through the functionality. Slices that support customer journeys. We can start with simple journeys to start and build complexity as we prove our process and new platform, mitigating technical risk as we progress.

The first release probably needs to demonstrate the new platform works: we can deliver on time; that a new shopping cart interfaces with our legacy warehouse order management system; etc. What’s the bare minimum we can do that does this and delivers business value. How about a microsite that sells a single product. Customers are directed to the microsite via a URL published on a flyer handed out in the stores.

As a customer who has picked up a special offer N80 deal flyer, I want to buy a Nokia N80 on a pay as you go contract

Our acceptance criteria:

Given I enter my personal details and credit card details When my credit card details are validated Then send order to warehouse to dispatch phone and activate contract.

We can decompose this requirement into discrete requirements, “stories” of sufficiently small size and estimate them. We’ll soon get a project velocity and because it is only a small release expectations, risks and dependencies will be easy to manage. We’ve not had to wait for months to get something out, everybody is happy.

We identify that a profitable segment of the market are the aspirationally clueless. People who want a mobile phone, realise they are a minority who don’t have one but are too afraid to admit they have no idea what they want. So we build a new customer journey.

As an aspirationally clueless I want say what I do and how I live my life and have a suitable phone selected for me.

OK, not the finest story, but you get the point. This story might take elements of the phone selection and tariff selection functional silos, but just enough to realise the required functionality. Because we are building around customer journeys, just enough to realise customer intentions that support those journeys we build only what is required. We are not building by feature list. We don’t over promise and under-deliver. We are building trust with all stakeholders. Surely this is the better way to build software, thinking about customer intentions and incrementally delivering to support more complex customer goals. Sadly, people all too often get fixated by feature lists. Because that is what they are used to. Because that is how products are sold. But isn’t there a marketing 2.0 where we sell experiences and go beyond the product. Isn’t that what Virgin does? But I’m probably off on a tangent.