Innovation Toolbox:
Customer Journey - Know your solution
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The Innovation Toolbox Customer Journey - Know your solution By Ipower WP6 DTI - Danish Technological Institute
Content 6 AN INTRODUCTION 7 HOW TO USE THE TOOLBOX 10 THE CUSTOMER JOURNEY TOOL 12 CUSTOMER INCENTIVES 13 JOURNEY STAGES 14 TOUCH POINTS & STAKEHOLDER MAP 18 ACTIONS, THOUGHTS AND FEELINGS 19 EXPERIENCE CHART 20 MOMENTS OF TRUTH 22 CASE OF HEAT PUMPS 24 IMPROVE AND INNOVATE 25 REFERENCES AND FURTHER READINGS
An introduction Will the end users buy my new product or service? This question inevitably arises in every company developing and supplying new products – and it is not an easy question to answer. When those products are potentially smart grid oriented and targeted at domestic consumers that might be taking part in a possible future market of flexibility services, the question becomes even more difficult. With the uncertain future of the Danish smart grid, the “technology-push” driven development and the domestic consumers currently experiencing the maximum comfort of on/off electricity supply available 99.997% of the time, companies that don’t ask that question will be ill prepared for introducing their products and services to domestic consumers. In this series of innovation tools we provide knowledge, inspiration and process guidance for you to investigate and answer that question by yourself. To do that, we have created four user centered innovation tools each helping you to investigate different aspects of the question above. On top of that we supply two appendixes for further work: 1. Strategic Scenarios: which possible smart grid futures should my company prepare for? 2. Personas: What customer preferences should my products and services meet? 3. Customer Journey: What customer experiences do my existing products and services provide – and how can these experiences be improved? 4. Business Model Builder: What value propositions can my products and services offer – and how can my company profit from delivering that value? • Appendix 1: Nordic survey of smart grid projects: What have been studied and demonstrated already about domestic consumers in the smart grid? • Appendix 2: A guide to perform rapid and cost-effective tests of the business hypothesis behind your products and services. The tools have been developed as part of iPower, a ”Strategic Platform for Innovation and Research in Intelligent Power”, partly funded by The Danish Council for Strategic Research and The Danish Council for Technology and Innovation: www.ipower-net.dk.
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How to use the toolbox The four innovation tools are interlinked, and we suggest you apply the following approach for using them in your company:
1. Preparation phase: a. Map your customer journey: If you have existing product(s) on the market, use the customer journey tool to collect and structure insights about the user experiences provided by your products and services. This process can take anywhere from a few weeks to half a year. If you do not have an existing product on the market, familiarize yourself with the customer journey concept as preparation for the strategic business modeling game b. Read and start using the Personas and the Scenarios: Familiarize yourself with the personas and the strategic scenarios, and begin using these for innovation activities and strategic discussions in the company. All the persons who are to participate in the strategic business modeling game should be familiarized with the personas and scenarios first 2. Business model building game : a. Assign and prepare a gamemaster: Prior to engaging in the business model strategic discussion game, assign a gamemaster to read and understand the rules, the tools and the knowledge contained herein. The key function of the gamemaster is to facilitate the game, and he/she should be prepared for this and for answering questions from the other participants. b. Play the game: Start playing the strategic business model building game, taking departure point in the business model game board and the rulebook provided. The scenarios, personas and customer journey will be included in the game when instructed, and as the nature of the game is iterative, you may revisit all 4 tools several times, or simply play it through once for a start 7
3. Going further Test the developed business model: With inspiration from the two appendixes provided, test the developed business model in either a demonstration project or by conducting several rapid, low cost tests of the initial and ongoing interest for your business model.
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The customer Journey tool The customer journey is a tool that opens up the black box of customer experiences by systematically applying a design method to collect, structure and analyze the customer experiences provided by your product(s) and services. It maps the stages the customers go through as they experience your product and/or service, and it describes the experiences a customer has with your products/ services and the emotional responses they provoke. It is a way of seeing things from the customer’s point of view and hereby identify the critical contact points where the performance of your products/services is most likely to either lead a customer to opt-out of – or to become an ambassador of – your product/service. Customer Journey is a particularly useful tool to help identify the customers’ interaction with the product and/or service, their actions, thoughts and feelings, which can reveal opportunities for improvement and innovation in the customers’ experience. In its core, the customer journey helps you to ensure that every interaction between you and the customer is as positive as it can be. Guide In literature, methods to perform customer journeys are endless; see e.g. Kimbell (2009) and Temkin (2010). Mostly the application areas refer to services untied to any physical products, e.g. public services to citizens. Only few cases use customer journeys on energy technologies, see e.g. British Department of Energy & Climate Change (2014), yet still we found no cases on customer journeys on smart grid technologies in private households. To give a simple example, a customer journey for buying a cup of coffee could look something like this: A potential customer who is strolling down the street suddenly feels the urge for a cup of coffee. He starts looking for a coffee shop and spots your sign and façade, which gives 10
him the impression of having found a cozy café. As he enters the shop, the arrangement amplifies the coziness, but as his eyes find the counter – and the line in front of it – he immediately considers leaving for another place. Due to the atmosphere, he decides to stay, and as he advances through the line, he reads the apparently delicious menu and decides for a combination of a coffee and cake to suit his urge. Finally, arriving at the counter he starts ordering, but finds out the shop is out of the desired cake. As the remaining ones do not interest him, he settles slightly disappointed for a cup of coffee. After receiving the coffee, he realizes he is forced to sit outside, if he wants a table. As he has been walking for a long time and really needs a seat, he decides to brave the cold weather outside, and to his pleasant surprise the café provides both blankets and heaters, making it an excellent experience sitting there and watching the other pedestrians stroll by. The coffee turns out to be really delicious, and by the time he leaves the café, he makes a mental note to remember that place for the next time he’s nearby. Concerning customer journey in a smart grid context we suggest a seven-step guide divided into three phases: Research 1. Customer incentives 2. Journey stages Prepare 1. Touch points and stakeholder map 2. Actions, thoughts and feelings Do and evaluate 1. Experience chart 2. Moments of truth 3. Improve and innovate In the most challenging steps, we clarify the application of the customer journey using the case of heat pumps, and we have formulated step-wise ask-yourself questions to make it easier to get started with your customer journey.
The case of residential heat pumps The case study of customer journey regarding residential heat pumps is based on data gathered in the Danish project named From wind power to heat pumps (in Danish Fra vindkraft til varmepumper) concluded in 2012. The project dealt with monitoring and remote controlling of (air to water or ground source) heat pumps in more than 300 households in rural areas in the Central Denmark Region. Our data consist of interview transcriptions with a minor share of the home owners participating in the project. The case study delimits itself to households supplied by ground source heat pumps. Please note that the case of heat pump is an example and it does not represent a comprehensive customer journey analysis. Instead, the case points out the challenges when technology meets people in real life practices and how the customer journey tool can break down challenges in a way that makes it possibly to identify the causes and accommodate them.
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Customer incentives The customer pays you money for a reason. The reason tells you about the customer incentives. We divide incentives into customer motivation and outcomes. Motivations for purchasing smart grid technologies may be modification in regulatory framework conditions, public subsidies, desire for fewer tedious household chores, desire to do something good for the environment or society, etc. Outcomes are customer benefits gained from using smart grid technologies such as cost savings, convenience/less struggling and comfort in everyday life, a green/ better conscience, self-sufficiency and so on. Questions to ask yourself: • What are the customer motivations? • What outcomes does the customer expect?
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Customer incentives: ”The reason why it had to be right now was because there was a possible grant of 20,000 DKK [...] it was the scrapping scheme, it was bound to happen at some point or other, and I was very much in doubt whether we should shift to pellet boiler instead, but pellet boilers require some maintenance, and I could manage it today, but could I do it 10 years from now? ”
Journey stages Your customers go through a number of stages as they experience your product and/ or service. The stages (types and numbers) may vary depending on the product/service in focus. However, journey stages such as awareness, purchase, installation, operation, service and disposal or opt-out are commonly used.
”Someone asks what we have and then I say geothermal heating, and they say Well, what is it, does it work, and how does it work? How it works I don’t know in detail, but it works, there is a good heating and the tap water is fine. It’s not something we debate or discuss back and forth [..] it simply is there.”
Questions to ask yourself: • What are the (most important) journey stages? • Can we influence every stage? Case of heat pumps We identify five stages that unfold the journey that the customers go through as they experience the heat pump. That is awareness (prior to any information), the purchase phase (including research), installation, operation, and service (non-compulsory). It is worth noticing that we divide the operation phase into manual control (in a non-smart grid scenario) and remote control (in a smart grid scenario) as customer experiences may differ due to operation mode.
Manual control operation
Awareness
Purchase
Installation
Service Remote control operation
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Touch points & stakeholder map A touch point is every interaction between the (potential) end user and products or services or information about these, provided by your company or other stakeholders in the value chain behind your offering. Each stage can contain several touch points. In regard to smart grid technologies customers meet various stakeholders (in different touch points) on their journey, as they experience your product. The map identifies the most important stakeholders at every touch point and it reveals their impact and influence in each journey stage.
Questions to ask yourself: • What are the touch points in each stage? • Who are the stakeholders and how do they influence the touch points?
Case with heatpumps Stages
Stakeholders
Touch points and functions
Awareness
Written media; television and radio; websites
If they know, most people know about heat pumps through media, particu larly from written media such as news papers, weekly magazines and tecnical journals.
Friends; family; neighbors; col leagues
People in a social group are likely to influence each other. Many people are aware of heat pumps due to the peer effect in their social groups.
Local craftsmen
To non-technical people local crafts men have influence on the diffusion of awareness to heat pumps as they are seen as technical authorities.
Industry; utilities; industry as sociations;
Heat pump industries have interest in spreading the words of heat pumps. However, it is not the primary source of information to homeowners without educational, professional or interest linkages to the industry.
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Stages
Stakeholders
Touch points and functions
Purchase
Manufacturers
The manufacturer designs and produces the heat pump. Some people may have preferences for choosing a manufacturer over another depending on performances (COP), price, well-known brand etc.
Wholesale traders Local craftsmen; other retailers
The wholesale traders distribute heat pumps from manufacturers to local craftsmen and other retailers. Local craftsmen and other retailers sell the heat pump often in combina tion with dimensioning, installation and maintenance services.
Electricity distribution companies
Converting the heat supply from oil boilers or natural gas boilers to a heat pump in households releases subsidies, as the electricity distribution compa nies buy the energy savings. It does not happen automatically, and the house owner has to apply for such subsidy arrangements.
Banks
In most cases, the purchase of a heat pump necessitate a bank loan. The ob tainable interest rate influences the overall return of investment, hence the attractiveness of purchasing a heat pump.
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Stages
Stakeholders
Touch points and functions
Installation
Municipalities
Before installing a ground source heat pump the municipality has to permit it due to the risk of noise pollution for neighbors.
Manufacturers
Often a manufacturer is an invisible stakeholder in the installation phase. However, they are important as their design of commissioning and user interface in combination with the installer’s product insights are of importance to an easy and fast instal lation
Plumbers
The plumber, a local craftsman, installs and commissions the heat pump.
Stages
Stakeholders
Touch points and functions
Manual control operation
Electricity traders
The electricity traders are characteri zed by their function to supply electri city. It may be the electricity distri bution companies or another company
Manufacturers
In manual control operation mode the design of user interface and an easy-going user guidance are impor tant and to homeowners in order to optimize the heat performance wit hout contacting a plumber.
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Stages
Stakeholders
Touch points and functions
Remote control operation
Electricity traders
The electricity traders supply elec tricity as in manual operation mode.
Aggregators
Aggregators may be the electricity trader or another company that seeks to sell flexibility services by remote controlling the operation of the heat pump according to electricity prices.
Manufacturers
In the remote control operation mode, manufacturers become more invisible, as the aggregator regulates the heating pump in regard to electricity prices, grid overload, comfort boundaries, etc.
Plumbers
The plumper performs service checks and may repair the heat pump if it is broken.
Manufacturers
The heat pump design affects the ease to perform services and repairing.
Service
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Actions, thoughts and feelings Gathering insights into customer’s actions, thoughts and feelings is not easy, as you need to intervene with them. However, it is the most important part of the customer journey. There are several ways to gather the data needed, e.g., questionnaires, information from value chain stakeholders and entering into dialogue with your customers. The latter being the most time-consuming approach (ranging from few weeks or months to half a year depending on customer volume and level of detail), but also giving the deepest insights. A good place to start is by asking your customer service department to systematically collect feedback from customers according to the customer journey you can outline for your products. Questions to ask yourself: • How and from whom will you gather the data needed in the customer journey? • Do the customer experiences correspond to the customer incentives?
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Purchase: ”Of course we have asked people to make us an offer to do it, and for one of the offers we called him right away and said that we thought it was a bit expensive, and just my saying so immediately made him cut down the price by 10,000 DKK - which I think is not being trustworthy. It is not a trustworthy partner in any case.” Installation: ”Now we are rather ignorant here, and the first who came just to look at the installation, he was from the firm where we bought it. He started out by asking for an instruction manual.”
Experience chart In order to operationalize the customer insights you will need to interpret and, even more important, understand the findings regarding their actions, thoughts and feelings. The experience chart helps you to do so in each of the journey stages corresponding to specific touch points. Either you can interpret insights by yourself or you may ask the customers to rate their experiences as you intervene with them. We suggest you to scale the customer experiences into the categories positive, neutral and negative, as it is not easy to differentiate experiences in a more elaborated scale scheme, neither for you nor for the customer.
Manual operation: ”But in daily life, it’s not something you think about, other than I think it’s cool with this floor heating all over, but in principle it could just as well have come from a district heating plant if the house had been located elsewhere” Remote operation: ”I believe that I could quickly disconnect the cable if they abuse it [...] I think that is ok, because it’s just part of an experiment”
Questions to ask yourself: • How can you differ experiences in one journey stage and touch points from another? • Who will interpret the findings into the experience chart?
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Moments of truth Moments of truth are the critical points when initiatives, activities and performances are most likely to succeed or fail according to the customer experiences and their motivations and outcomes. In other words: Moments of truth are the touch points which make the difference between a happy customer and an unhappy non-customer. Mapping the moments of truth helps you find inappropriate touch points and the stakeholders responsible for the customer inconvenience. Questions to ask yourself: • In what touch points do moments of truth occur - what have you found in your research? • What stakeholders influence those touch points?
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Service: ”The two rooms in there we think actually have been too warm. My husband has tried himself. We haven’t really had as much help with the unit out there as we had been promised by the firm we got it from.”
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Case of heat pumps
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Improve and innovate Apply the insights into your organization in order to improve bad customer experiences and start focusing on bad experiences in touch points in which moments of truth occur. To do so, you will need to locate the department and persons responsible for the touch points and start ideating on how to accommodate bad experiences. With several stakeholders across the value chain of smart grid technologies it may not be your organization that causes bad experiences in the customer journey. In that case you will need to enter into dialogues with your value chain stakeholders or even the industry as such.
Stage
Touch point
Purchase
Questions to ask yourself: • How can you accommodate bad experi ences and/or commercialize on great expe riences? • Who can you ally with to improve the bad customer experiences? Case of heat pump Heat pumps are one of the most promising smart grid technologies. Yet still large-scale phase-in of heat pumps (both manual and remote control operation) faces serious challenges that need to be addressed by stakeholders in the value chain, as the following few examples indicate: Suggested solutions
Influenced stakeholders
Customers ask Huge difference for quotation on offers from different vendors
Definition of price in force; Education of installers to provide better offers
Manufacturers; wholesale traders; retailers; local craftsmen
Installation
Installation and commissioning of the heat pump
Establishment of alliances to increase plumbers brand specialization
Manufacturers; plumbers; industry associations
Service (non-compulsory)
Customers Customers are adjust the heat not serviced as pump settings promised
Development of new user interfaces; Performancebased revenue streams
Manufacturers; plumbers
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Challenge
Non-specialized plumbers
References and further readings British Department of Energy & Climate Change, 2014: Energy Companies Obligation (ECO) Customer Journey Holmlid & Evenson, 2008: Bringing Service Design to Service Science, Management and Engineering Kimbell, 2009: The turn to service design Liedtka & Ogilvie, 2011: Designing for Growth: A Design Thinking Tool Kit for Managers Temkin, 2010: Mapping the Customer Journey
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