Saturday, December 10, 2022

Rethinking Value: From Product Delivery to Nurturing Services

You think you sell products and goods to your customers, but I propose that you are really engaged in a series of microservices (an act for or with someone), which in fact are value exchanges (mutually beneficial interactions).

These value exchanges occur throughout any life cycle and include production, sales and marketing, and post-sale stages and experiences. When fully integrated, these value exchanges can optimize your business to: increase production efficiency; drive industry differentiation; create compelling offerings for heightened sales, adoption, and customer return rates; and eventually provide high return profitability. You can accomplish this by delivering a complete and reciprocal set of services, inclusive of your product or good, which is enabled and supported by an ecosystem of people, process, technology, and experience. Several theoretical and logic frameworks are discussed below; I offer an additional provocative approach, which augments these concepts by incorporating innovation and differentiation activities into the latest logic framework. This modern Full Lifecycle framework enables you to reframe your digital transformation initiatives.

The diagram below melds Service- Dominant Logic (S-DL) (Vargo and Lusch, 2006)—where value is derived by customers through a series of micro service-for-service exchanges—with Service Design, which creates better outcomes by holistically designing frontstage experience and backstage service delivery.

(Adapted from work by Patrick Quattlebaum and Harmonic Design, circa 2019)

By looking at the combination of S-DL and Service Design across each stage, opportunities are identified for integrating these two theories to evolve your digital transformation efforts. I present to you: Full Lifecycle S-DL.

Fast-Following or Inventing?

During the first stage of production, one of the early missteps can be prioritizing speed over understanding customer needs and wants. A rapid approach may work for iterative designs and feature releases, but can hinder success when trying to launch and become an industry leader or market disruptor. If your priority is to ‘keep up,’ then this approach is fine. However, if you are attempting to be an industry competitor, disruptor, or leader, then take the following to heart.

Organizations want efficiency in production and development, but there is more to just implementing the newest development approach or methodology within your tech efforts. Assuming you know what your customers want/need without engaging them can send you down the wrong path. Even in AGILE, Waterfall, or Design Thinking, if you do not prioritize an understanding of WHY at the onset, then you risk missing the mark when building the WHAT. If the question is how do we cross the river, and we begin building a bridge only to realize we should have been building a boat, you cost your organization time and money. This early misstep often creates product usefulness and desirability issues in the marketplace. Leaping into the production of WHAT by slightly improving on your competitors’ offerings puts you into the category of Fast-Follower instead setting you up as an industry leader. By understanding the WHY first, you will find original and unique WHATs, which are untapped by others, and lead to innovative and differentiated creations and outcomes.

To ensure success during the production stage, there are numerous actions that are imperative to success:

  • Determining your organization’s readiness or maturity to start down the path of something new.
  • Structuring appropriate governance to define guiding principles in order to refine methodologies or approaches
  • Operationalizing a pipeline for initiating work and actuation of solutions
  • Managing any external partnerships

Adoption is Key.

No product or service thrives in isolation. Its prosperity is derived from the ecosystem around it, or from being a part of something greater. From production to sales and marketing, creating a compelling offering enables an innovative and differentiated market. A few things need to occur to ensure this momentum. First, run continuous feedback cycles to gain knowledge about feature changes that allows teams to incorporate new information from customers and translate it back into the offering to increase value- thereby increasing its adoptability. Second, focus this customer information to targeted audiences through the right messaging and channels to broaden awareness and create higher impact. Third, evolve the experience of the offering over time and have a strategic release plan that maintains an industry lead.

This highly collaborative and iterative process is not only impactful to production and sales and marketing, but the series of interactions can positively impact the front line of servicing and customer experience, as well as the organization’s strategic direction.

Some important things to consider are:

  • Make decisions from real data, not from assumptions.
  • When iterating enhancements, understand the root of the feedback and apply trends, futuristic thinking, and creativity to solution thinking.
  • Understand your customers so you can anticipate their reactions by understanding their behaviors.
  • Shift internal behaviors, mindsets, and cultures to prioritize customer desirability and the business’s strategic vision.

True Success is Brand Loyalty.

By visualizing the frontstage and backstage actions among customers, service providers, and technology enablers (i.e., the Service Blueprint), the entire ecosystem can benefit from enhanced interactions, innovative development solutions, and organizational culture shifts. Developing a deep understanding of these value exchanges allows us to evolve adoption until we hit saturation. Saturation is key to profitability–satisfied return customers.

A disconnect will occur in the value exchange between a customer and a business when a customer’s expectations are not met, often due to a disjointed experience created by competing directives within an organization. This damages trust and credibility and will ultimately affect Customer Return Rate (CRR). A company that prioritizes alignment will ensure there are no hiccups that disrupt a customer’s holistic experience — thus creating a stronger ecosystem.

  • When you incentivize and prepare your sales campaigns, make sure you have aligned principles that have continuity between what you say you do and the reality of what your front line customer experience teams are empowered to do.
  • Bring your front-line into the collaboration process to understand their needs and unique perspectives on the offerings being delivered.
  • Focus some budget towards training and preparing customer service team members to be customer experience providers.

So, now what?

Even though the OUTPUT of your company may be a product or a good–the key to continued success in this increasingly global and competitive market is to stay focused on the micro services that make up your lifecycle from beginning to end (Full Lifecycle S-DL). Perfecting an efficient and positive exchange of services from production, sales and marketing, to continued customer experience makes you a SERVICE company backed by a valued offering.

Pay close attention to this ecosystem of interactions in your environment, as it’s what separates companies that thrive from companies that strive.

Related Information

Service Dominant Logic by Stephen Vargo and Robert Lusch, 2006

The Diffusion of Innovation by Everett Rogers, 2003 5th edition