OSU Competing on Customer Journeys Reflection

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Read the attached article carefully and write a short reflection one page. Introduce the topic and the point you plan to make about the experience and learning. Develop your point through body paragraph(s), and conclude the paper by exploring the meaning you derive from your reflection.NOVEMBER 2015
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
Competing on
Customer Journeys
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You have to create new value at every step.
by David C. Edelman and Marc Singer
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ARTWORK Hong Hao, My Things No. 1, 2001–2002
Scanned objects, digital c-print, 120 x 210 cm
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SPOTLIGHT
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
2 Harvard Business Review November 2015
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Competing on
Customer Journeys
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No
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You have to create new value at every step.
by David C. Edelman and Marc Singer
November 2015 Harvard Business Review 3
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
The explosion of digital technologies over the past decade
has created “empowered” consumers so expert in their use
of tools and information that they can call the shots,
hunting down what they want when they want it and getting
it delivered to their doorsteps at a rock-bottom price.
are thus becoming central to the customer’s experience of a brand—and as important as the products
themselves in providing competitive advantage.
Consider how one company, Oakland-based
Sungevity, competes on its ability to shape the journey. At first glance, Sungevity looks like a typical residential solar panel provider. But closer inspection
reveals that the company’s business is to manage the
end-to-end process of sales and custom installation,
coordinating the work of an ecosystem of companies
that supply, finance, install, and service the panels.
Sungevity’s “product” is a seamless, personalized
digital customer journey, based on innovative management of data about the solar potential of each
home or business. Sungevity makes the journey so
compelling that once customers encounter it, many
never even consider competitors.
One of us (David) experienced the Sungevity
journey firsthand. The process began when he received a mailing with the message “Open this to
find out how much the Edelman family can save on
energy costs with solar panels.” The letter within
contained a unique URL that led to a Google Earth
image of David’s house with solar panels superimposed on the roof. The next click led to a page with
custom calculations of energy savings, developed
from Sungevity’s estimates of the family’s energy
use, the roof angle, the presence of nearby trees,
and the energy-generation potential of the 23 panels
the company expected the roof to hold.
Another click connected David through his desktop to a live sales rep looking at the same pages David
was. The rep expertly answered his questions and instantly sent him links to videos that explained the
installation process and the economics of leasing
versus buying. Two days later, Sungevity e‑mailed
David with the names and numbers of nearby homeowners who used its system and had agreed to serve
as references. After checking these references, David
returned to Sungevity’s site, where a single click
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In response, retailers and service providers have
scrambled to develop big data and analytics capabilities in order to understand their customers and
wrest back control. For much of this time, companies have been reacting to customers, trying to anticipate their next moves and position themselves
in shoppers’ paths as they navigate the decision
journey from consideration to purchase.
Now, leveraging emerging technologies, processes, and organizational structures, companies
are restoring the balance of power and creating new
value for brands and buyers alike. Central to this shift
is a fresh way of thinking: Rather than merely reacting to the journeys that consumers themselves devise,
companies are shaping their paths, leading rather
than following. Marketers are increasingly managing journeys as they would any product. Journeys
Streamlining the Decision Journey
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4 Harvard Business Review November 2015
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COPYRIGHT © 2015 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
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THE SOLUTION
Companies can use new
technologies, processes, and
organizational structures to
proactively lead rather than
follow customers on their
digital journeys. By making
the journey a compelling,
customized, and open-ended
experience, firms can woo
buyers, earn their loyalty, and
gain a competitive advantage.
THE STRATEGY
Superior journeys feature
automation, personalization,
context-based interaction,
and ongoing innovation. To
achieve all this, companies
need to treat journeys like
products, built and supported
by a cross-functional team
that’s led by a manager
responsible for the journey’s
business performance.
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THE PROBLEM
Digital tools have put shoppers
in the driver’s seat, allowing
them to easily research and
compare products, place
orders, and get doorstep
delivery of their items. Sellers
have largely been reactive,
scrambling to position
themselves where customers
will find them.
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Idea in Brief
can refer to the sequence of interactions consumers
have before they achieve a certain aim—for instance,
transferring cable service to a new address, or even
discovering and buying the right mascara. Many
firms have become competent at understanding the
journeys their customers take and optimizing their
experience with individual touchpoints along the
way. The more sophisticated companies have redesigned their operations and organizations to support
integrated journeys (see “The Truth About Customer
Experience,” HBR, September 2013). Still, firms have
largely been reactive, improving the efficiency of
existing journeys or identifying and fixing pain
points in them.
We’re now seeing a significant shift in strategy,
from primarily reactive to aggressively proactive.
Across retail, banking, travel, home services, and
other industries, companies are designing and refining journeys to attract shoppers and keep them, creating customized experiences so finely tuned that
once consumers get on the path, they are irresistibly and permanently engaged. Unlike the coercive
strategies companies used a decade ago to lock in
customers (think cellular service contracts), cuttingedge journeys succeed because they create new
value for customers: Customers stay because they
benefit from the journey itself.
Through our experience advising more than
50 companies on journey architecture, infrastructure, and organizational design; our deep engagement with dozens of chief digital officers and more
than 100 digital-business leaders worldwide; and
our research involving more than 200 companies
on best practices for building digital capabilities,
we have seen this shift unfold. And although it is
still early, we believe that an ability to shape customer journeys will become a decisive source of
competitive advantage.
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connected him to a rep who knew precisely where he
was on the journey and had a tailored lease ready for
him. The rep e‑mailed it and walked David through
it, and then David e‑signed. When he next visited
the website, the landing page had changed to track
the progress of the permitting and installation, with
fresh alerts arriving as the process proceeded. Now,
as a Sungevity customer, David receives regular
reports on his panels’ energy generation and the resulting savings, along with tips on ways to conserve
energy, based on his household’s characteristics.
Starting with its initial outreach and continuing to the installation and ongoing management of
David’s panels, Sungevity customized and automated each step of the journey, making it so simple—and so compelling—for him to move from one
step to the next that he never actively considered
alternative providers. In essence, the company reconfigured the classic model of the consumer decision journey, immediately paring the consideration
set to one brand, streamlining the evaluation phase,
and delivering David directly into a “loyalty loop,”
where he remains in a monogamous and openended engagement with the firm (see the exhibit
“Streamlining the Decision Journey”). Sungevity’s
journey strategy is working. Sales have doubled in
the past year to more than $65 million, exceeding
growth targets and making Sungevity the fastestgrowing player in the residential solar business.
Getting Proactive
McKinsey’s marketing and sales practice has spent
more than six years studying consumers’ decision
journeys. The term (as explained in “Branding in
the Digital Age,” HBR, December 2010) broadly describes how people move from initially considering a product or service to purchasing it and then
bonding with the brand. More narrowly, the term
November 2015 Harvard Business Review 5
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Four Key Capabilities
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
into simple, engaging, increasingly app-based
front-end experiences.
Consider how Sonos, the intelligent connected
music system, automates setup. The process used
to involve threading wires throughout the house,
hooking up speakers to a computer, and creating
separate online accounts with music providers.
Sonos streamlines setup with wireless speakers (just
press a button to connect them) and an app that adds
music-streaming sources with a few taps and allows
users to select music, control volume, and choose
what plays in which room—all from a mobile device.
Proactive personalization. Building on the
automation capability, companies should take information gleaned either from past interactions with a
customer or from existing sources and use it to instantaneously customize the shopper’s experience.
Amazon’s recommendation engine and intelligent
reordering algorithm (it knows what printer ink you
need) are familiar examples. But remembering customer preferences is only the beginning; the personalization capability extends to optimizing the next
steps in a customer’s journey. At the moment a customer engages (for example, by responding to a message or launching an app), the firm must analyze the
customer’s behavior and tailor its next interaction
accordingly. Companies such as Pega and ClickFox
(a firm in which McKinsey has an ownership stake)
offer applications that track customers across many
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Companies building the most effective journeys
master four interconnected capabilities: automation, proactive personalization, contextual interaction, and journey innovation. Each of these makes
journeys “stickier”—more likely to draw in and permanently capture customers. And although the capabilities all rely on sophisticated IT (see the sidebar
“New Journey Technologies”), they depend equally
on creative design thinking and novel managerial
approaches, as we’ll explore later.
Automation. Automation involves the digitization and streamlining of steps in the journey that
were formerly done manually. Consider the analog
process of depositing a check, which used to require
a trip to the bank or ATM. With digital automation,
you simply photograph the check with your smartphone and deposit it via an app. Similarly, researching, buying, and arranging delivery of, say, a new TV
can now be a one-stop digital process. By allowing
consumers to execute formerly complex journey
processes quickly and easily, automation creates
the essential foundation for sticky journeys. This
may seem self-evident, but companies have only
recently started to build robust automation platforms expressly designed to enhance journeys. And
consumers can readily see who does it well. Superior
automation, while highly technical, is something
of an art, turning complex back-end operations
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L’Oréal App Keeps Customers Coming Back—and Buying
Do
The Makeup Genius app, which
allows users to virtually test
makeup, has been downloaded
14 million times since its launch
in 2014 and has driven more
than 250 million virtual product
trials. By making experimenting,
sharing, and purchasing
seamless and fun, the company
is rolling out a highly sticky
journey that builds loyalty
to L’Oréal products.
6 Harvard Business Review November 2015
friend texts her
1a linkLeah’s
to L’Oréal’s cool new
app, Makeup Genius. She
downloads it to her tablet,
and her screen becomes a
mirror reflecting her face.
Leah allows the app to
scan her image.
Appreciating how
9
simple and useful the app
is, Leah becomes a loyal
customer and advocate,
sending app links to
a growing group of friends
who share favorite looks
and advice.
Aware of her
8
preferences and previous
makeup purchases, the
app sends periodic
recommendations
for other looks. Leah
continues to try out new
looks and buy products.
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Three core technology developments in
particular have redefined how companies
connect with their customers:
Continuous connection capability.
Smart, connected products create
a permanently open link between
company and customer, providing
companies with a continuous stream
of data about how individuals use the
products and thereby helping firms
customize and upgrade them—for example,
by fixing problems or adding capabilities.
New journey analysis and management
tools. ClickFox and similar systems track
customer behavior across online and offline touchpoints, helping companies to
map and optimize journeys. Platforms such
as Cloudera allow companies to analyze
unstructured data, while machine learning
software such as R can mine huge amounts
of customer data and predict behaviors.
Pega and similar tools enable consistent,
personalized communication across
channels. And Adobe and other companies
offer tools to manage and execute more
complex workflows.
Widespread adoption of APIs.
Application programming interfaces permit
disparate applications, including those
from different companies, to communicate.
APIs have been around for a while, but
companies are only now starting to embrace
them to build integrated cross-company
customer journeys. For example, APIs allow
Delta Air Lines’ travel management app to
seamlessly connect its customers with Uber.
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Underpinning the rise of competitive
journeys is the emergence of new
programming, data-access, and userinterface technologies that enable
unprecedented tracking of customer
behavior and personalized interaction.
Attribution tools, for example, can reveal
which channels most strongly influence
consumers’ decisions and lead to
a purchase. Other technologies can
discern when and why customers jump
across channels and devices as they shop;
the programs can then deliver personalized
messaging that follows shoppers
accordingly. Interface design tools allow
a mobile app or a website to change its
function or appearance, depending on
where a customer is in his or her journey.
t
New Journey Technologies
constantly learns which content and configuration work best for each visitor and renders the site
accordingly, in real time.
L’Oréal’s Makeup Genius app takes these capabilities a step further, allowing customers to
try on makeup virtually and delivering ever-morepersonalized real-time responses. The app photographs a customer’s face, analyzes more than 60
characteristics, and then displays images showing
how various products and shade mixes achieve different looks. Customers can select a look they like
and instantly order the right products online or
pick them up in a store. As the app tracks how the
customer uses it and what she buys, it learns her
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channels, blending data from multiple sources (such
as transaction and browsing histories, customer
service interactions, and product usage) to create a
single view of what customers are doing and what
happens as a result. This allows real-time insights
about their behavior—in effect, isolating moments
when the company can influence the journey—and
permits customized messaging or functionality (for
example, immediately putting a valued traveler on
an upgrade list). The retailer Kenneth Cole reconfigures elements on its website according to a visitor’s
interaction with the site over time: Some people see
more product reviews, while others see more images,
videos, or special offers. The company’s algorithm
The app asks if
2
she’d like to “try on”
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individual products or a
complete look. She opts
for the latter, and the
app instantly displays a
gallery of photos showing
made-up models.
She considers a picture
7of herself
with that look.
The app tells her what
additional products she
needs to achieve it. She
taps to buy.
on each
3lookSheto taps
see it overlaid on
When she decides to
4
buy, buttons offer her a
days later,
6the Aappfewalerts
Leah
When her order
5
arrives and she reopens
her own face. Another
tap shows the products
needed to achieve it.
to a new style she
might like, basing its
recommendation on her
preferences and those of
similar users.
choice of retailers. She
selects Amazon and
places an order.
the app, it has proactively
reconfigured to give her
instructions on applying
the makeup.
November 2015 Harvard Business Review 7
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
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Best practitioners aim not just to improve
the existing journey but to expand it,
adding useful steps or features.
And they prototype new services and analyze the results, aiming not just to improve the existing journey
but to expand it, adding useful steps or features.
A journey innovation may be as simple as
Starwood’s introducing a prompt for ordering room
service after a guest uses a key, remembering previous orders and using those as the initial options. Or it
may be more sophisticated, expanding a journey by
integrating multiple services into a single straightthrough customer experience. Delta Air Lines’ mobile app, for example, has become a travel management tool for almost every aspect of an airplane trip,
from booking and boarding to reviewing in-flight
entertainment to ordering an Uber car upon landing. Kraft has expanded its recipe app to become a
pantry management tool, generating a shopping list
that seamlessly connects with the grocery delivery
service Peapod. Key to these expanded journeys is
often their integration with other service providers. Because this increases the value of the journey,
carefully handing customers off to another firm can
actually enhance the journey’s stickiness.
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preferences, makes inferences based on similar customers’ choices, and tailors its responses. L’Oréal has
created an enjoyable experience that quickly and
seamlessly leads the customer along the path from
consideration to purchase and, as the degree of personalization increases, into the loyalty loop (see the
exhibit “L’Oréal App Keeps Customers Coming Back—
and Buying”). With 14 million users already, the app
has become a critical asset both as a branded channel for engaging with customers and as a fire hose of
incoming information on how customers engage.
Contextual interaction. Another key capability
involves using knowledge about where a customer
is in a journey physically (entering a hotel) or virtually (reading product reviews) to draw him forward
into the next interactions the company wants him to
pursue. This may mean changing the look of a screen
that follows a key step, or serving up a relevant message triggered by the customer’s current context. For
example, an airline app may display your boarding
pass as you enter the airport, or a retail site may tell
you the status of your recent order the moment you
land on the home page.
More-sophisticated versions enable a series of
interactions that further shape and strengthen the
journey experience. Starwood Hotels, for example,
is rolling out an app that texts a guest with her room
number as she enters the hotel, checks her in with
a thumbprint scan on her smartphone, and, as she
approaches her room, turns her phone into a virtual key that opens the door. The app then sends
well-timed and personalized recommendations for
entertainment and dining.
Journey innovation. Innovation, the last of the
four required capabilities, occurs through ongoing
experimentation and active analysis of customer
needs, technologies, and services in order to spot
opportunities to extend the relationship with the customer. Ultimately, the goal is to identify new sources
of value for both the company and consumers.
Best practitioners design journey software to enable open-ended testing. They continually do A/B
testing to compare alternative versions of message
copy and interface design to see which works better.
8 Harvard Business Review November 2015
Capabilities in Practice
Let’s return to Sungevity to see how it combines
these four capabilities to create a valuable and
evolving journey.
From initial customer contact to installation
and beyond, Sungevity has automated most steps
of the journey, including collecting and integrating
customer data, calculating energy use, and creating
personalized visualizations of the panels on a roof.
Crucial here is sophisticated use of APIs (application
interfaces) to pull data from other providers, such
as Google Earth and the real estate service Trulia,
to assemble a picture of the customer. Data analysis allowed proactive personalization that targeted
David with customized information such as costs,
timeline, and anticipated breakeven and savings, all
available across multiple channels, including e‑mail,
Sungevity’s site, and customer reps. Contextual interaction capabilities allowed Sungevity to serve the
right content in the right channel for each of David’s
interactions—for example, using APIs to track the
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
HBR.ORG
JOURNEY
PRODUCT
MANAGER
DEVELOPMENT
ANALYTICS
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SCRUM TEAM
OPERATIONS
panel installation by the company’s local contractor
and then regularly updating David’s landing page
with the latest status.
Sungevity is continuing to pursue journey innovation, using what it knows about its customers
to extend the journey into energy storage and conservation services. Not long ago, such activity might
have been a generic upsell, blanketing a customer
segment with pitches for a new offering. Today the
outreach can be to a single individual, and the strategy not simply to sell another product but to invite
customers to take the next step on their personalized
journeys. With granular data on each household’s
energy use and habits, Sungevity can advise people
one-on-one about managing their energy consumption, and it can recommend a tailored package of
products and services to help them reduce their dependence on the grid and reap savings. To this end,
the firm will soon offer batteries from the German
supplier Sonnenbatterie to store surplus electricity generated by the solar panels. It is also creating
customer dashboards that track energy production
and use. Ultimately, the firm plans to integrate its
services with home-management networks that
can automate energy conservation (adjusting lights
and heating, for example) according to decision
rules that Sungevity develops with each customer.
Another project is to create conservation-oriented
customer communities.
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DESIGN
SCRUM TEAM
JOURNEY
STRATEGIST
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SCRUM TEAM MEMBERS
CHIEF
EXPERIENCE
OFFICER / CHIEF
DIGITAL OFFICER
PRODUCT
MANAGER
9 Harvard Business Review November 2015
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THE NEW JOURNEY MANAGEMENT ORGANIZATION
DESIGNERS conceptualize the look and feel
of the journey and shape its user interfaces.
DEVELOPERS build the software for apps,
websites, and automated journey steps.
DATA ANALYSTS track customer interactions
and crunch the data to understand individual
customers’ behavior and measure the effects
of manipulating journey variables.
OPERATIONS MANAGERS oversee the backend support for each piece of the journey,
from the supply chain to frontline sales and
customer service.
MARKETERS provide customer insight and
ensure that brand standards are embedded
throughout the journey—for instance, in all
aspects of targeting and personalization.
MARKETING
Scrum team members
have dotted-line
relationships with their
functions.
The Rise of the
Journey Product Manager
Technology smarts are necessary but not sufficient
for designing competitive, continuously improving
journeys; companies also need new organizational
structures and types of management. We have
worked with many “digital native” firms that have
had the luxury of building organizations optimized
from the outset for creating effective journeys—and
their experience offers lessons for traditional firms.
We have found that traditional companies are most
successful when they focus on selected high-value
journeys and create dedicated teams to support
them, drawing from across the firm’s functions.
While we’ve seen many different organizational
models for product-managing journeys (and an array
of titles for the executives involved), they generally
have a similar structure (see the exhibit “The New
Journey Management Organization”).
Overseeing all of a firm’s interactions with customers is someone in the role of chief experience
officer, a relatively new position in the C-suite.
Chief digital officers are also starting to have this
top-level responsibility. Typically reporting to this
executive is a journey-focused strategist who helps
guide decisions on which journey investments and
customer segments to focus on; he or she prioritizes
current journeys for digital development and spots
opportunities for new ones.
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
HBR.ORG
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Sitting at the center of the action for a given
journey is new type of leader, the “journey product manager.” People in this role (more commonly
called “solution managers,” “experience managers,”
or “segment managers”) are the journey’s economic
and creative stewards. They have ultimate accountability for its business performance, managing it
as they would any product. And like other product
managers, they are judged according to how well
they meet an array of product-specific measures,
including journey ROI (see the sidebar “Holding
Journey Managers Accountable”).
Guided by the firm’s business priorities (for example, growing market share, increasing revenue,
and improving customer satisfaction), they explore
ways to expand and optimize the journeys they’re
responsible for, increase their stickiness, engage new
partners, fend off competitors, and cut costs, particularly through digitizing manual processes. More operationally, it’s their job to understand how customers
10 Harvard Business Review November 2015
move through the journey, to spot unusual customer
behaviors (such as detouring or abandonment at
a critical touchpoint), and to discern what attracts
new customers—or dissuades them from engaging.
To build successful journeys, these managers
rely on “scrum teams” of specialists from across IT,
analytics, operations, marketing, and other functions. The teams are execution-oriented, fast, and
agile, constantly testing and iterating improvements.
Collectively, the team members work to understand
customers’ wants and needs at each step of the journey and make taking the next step worthwhile. They
ask questions such as “What types of functionality,
look and feel, and message will propel customers to
the next step?” and “How does the timing of prompts
affect customers’ responses?” Pursuing answers to
questions like these, teams enter into rounds of development, piloting iterative digital-journey prototypes, analyzing operational and customer-use data,
and then measuring the impact on customer behavior
produced by each tweak to the journey.
Nordstrom is one company that has used this
scrum-team approach. To enhance the journey
around shopping for sunglasses, for example,
a team set up temporary camp in the retailer’s flagship store and launched a series of weeklong experiments to perfect a new app. The app was envisioned
to guide customers through the selection process
by matching sunglasses styles with their facial characteristics and preferences. Right in the store, team
members mocked up paper prototypes of the app
and studied how shoppers tapped on them, as if
using a live version. Throughout the process, they
asked customers which app features seemed helpful, unnecessary, or distracting. On the basis of that
feedback, the team’s coders built a live version of
the app for customers to test, making real-time
adjustments as they received more input. After
a week of tweaking, they released it on tablets to
the store’s sales associates, who use it alongside
customers to help them choose sunglasses.
Typically, journey managers bring scrum teams
together on-site (as Nordstrom did) or in war rooms
for design sprints, in which teams pitch new journey
paths and features and then develop, test, and scale
prototypes. Experiments may focus on anything
from designing landing pages and devising live chats
with reps to optimizing back-end processes and improving “experience flow” (how a customer moves
from one journey step to another).
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One airline we work with measures
its effectiveness in helping customers
navigate the journey for rebooking
and resuming travel when a flight
is canceled. The airline gathers an
abundance of data about rebooked
customers, including the percentage
who have downloaded its mobile
app, and of those, the percentage
who boarded their new flight without
any live help. It also ascertains the
percentage who provided a mobile
phone number or e‑mail address, and
of those, the percentage who opened
their notification of a rebooked flight,
and of that subgroup, the percentage
who boarded without help. In
addition, the airline calculates
the percentage of passengers
who boarded the first alternative
flight suggested to them. The team
analyzes each of these metrics across
tiers of frequent-flier value and ticket
price in order to optimize the costs
and revenue associated with this
journey for each customer.
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Journey managers must be able
to answer financial questions: What
can we afford to invest in journey
development? What new sales or
revenue do we need to generate?
What is the variable cost per
customer or action that we can afford
for each journey? They also need to
assess customer satisfaction with the
entire journey and with interactions
at specific touchpoints.
Because individual touchpoints
may be handled by different
functions or partners (for example,
an appliance sale could involve an
affiliate store agent, a call-center
sales rep, credit underwriters, and
installers), the performance of these
players must be measured and
tracked so that they, too, can be held
accountable. Other metrics should
track the journey’s ROI by calculating
the ongoing costs of delivering the
journey, the revenue and profits
it generates, and the impact of
continual innovations to the journey.
rP
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Just as conventional product management depends on close
tracking of carefully chosen metrics, “product managing”
a journey requires tracking both familiar and specialized
metrics that gauge progress and performance. In addition to
providing an array of information about journey investments
and ROI, the right metrics permit accountability.
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Holding Journey Managers Accountable
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SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT
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HBR.ORG
customers to keep them engaged. Analysts within
the broader work group focus on narrow segments
of the user base, typically zooming in on different
countries to understand how usage patterns vary.
This tracking extends to the level of the individual,
revealing what recipes a given customer tries, how
often she uses the cooker and the app, and which app
features she uses—all of which allows continuing
innovation and personalization of the journey.
The move from selling products to managing
a permanent customer journey has required mastering the four capabilities that all companies will need
to compete: automation (in this case, the ability to
control the cooker from an app); personalization
(offering tailored recipes); contextual interaction
(changing the app interface as customers move from
purchasing ingredients to cooking); and journey
innovation (adding new recipes, online purchase
capabilities, and community).
In perfecting these capabilities, the firm has
made the continuing customer journey as much
a part of the brand as the cooker itself—and as important a source of value. Leveraging its new journeyfocused managerial structure, the company is now
developing service-based journeys for other home
health and household management products.
Do
No
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While the best journey product managers work
in this way to continually refine existing journeys,
they’re also looking at the bigger picture, introducing larger-scale innovations that extend the journey
and increase its value and stickiness. Consider, for
example, how one of our clients, a global consumer
electronics company, is developing and marketing a
new countertop cooker. The product has programmable compartments that can be controlled by an
app, allowing customers to simultaneously cook different parts of a meal. This creates opportunities to
build an array of services that help customers get the
most from the cooker.
Although the firm had long experience with
product design, as it began adding connectivity to
its products, management realized that it knew relatively little about creating services to enhance them.
Recognizing that it would need a new structure for
designing and managing such services, the company
created a global experience-innovation team, led by
a new-business-development executive and supported by a product design executive. Essentially
serving together as chief experience officers for the
new services envisioned, these executives oversee all
of the firm’s connected-product initiatives and supervise the journey product managers (or “innovation
leaders”) in charge of these programs.
The cooker’s journey product manager was
tasked with creating various related services (help
with meal planning, ingredient purchasing, and
meal prep) and building the journeys that would
deliver them. With his scrum team of designers,
programmers, operations managers, and marketers, the manager has led the development of a service that provides recipes through the cooker app,
tracks what customers make, and then personalizes
suggestions over time. The team is now developing
weekly meal-planning apps, and it has partnered
with food producers to create recipes and offer discount coupons for key ingredients. Ultimately, the
team plans to support a customer community whose
members create and share their own recipes.
To do all this, the team scrutinizes data flowing
from the app: what percentage of customers download it, how many register, how (and how often)
they use it, how cooker use and meal type vary by
geography, and, for those who stop using the app, at
what point they defect. This data informs the team’s
tuning of the app’s navigation and prompts, along
with the meal ideas and incentives the firm provides
11 Harvard Business Review November 2015
THINKING ABOUT the customer journey as a product
is leading to a major shift in how product investments are determined, prioritized, funded, and
measured. Increasingly, firms will be focusing on
how an investment improves the economics of delivering products and journeys to a customer segment—and how powerfully it reinforces engagement—rather than just how it drives sales or reduces
costs. Particularly for companies that are somewhat
distant from customer transactions, such as consumer-goods makers and B2B firms, this requires
developing fundamentally new skills and structures
for gathering and analyzing customer data, interacting with customers, and focusing on the experience design along with product and creative design.
Today, winning brands owe their success not just to
the quality and value of what they sell, but to the
superiority of the journeys they create.
HBR Reprint R1511E
David C. Edelman is a global leader in digital
marketing and sales at McKinsey & Company.
Marc Singer is the director of McKinsey’s global
customer engagement practice.
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Permissions@hbsp.harvard.edu or 617.783.7860

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