Choosing Where to Invest In Customer Experience Innovation: The Art of Tradeoffs


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When asked if customers would like to have more exciting products, faster delivery, lower prices, OR friendlier service, the answer is always YES.

The challenge of customer experience excellence isn’t whether to improve products, people, process, or technology. The challenge is to identify which product, process or technology improvement will produce the greatest benefits for your core customer segments. Those critical customer cohorts consist of individuals who will not only drive present day profits but also emerging groups that will shape profits into a sustainable future.

The “big idea” of this blog is TRADEOFF. Every customer-focused decision represents a choice between competing options that will likely drive different benefits for different people at different costs.

Extraordinary customer experience brands spend a considerable amount of time learning about their core customer segments. (What do they value? Where do they go for information? How do they spend their days? Etc.) In addition to having a demographic and psychographic understanding of their core segments, leaders at these companies directly solicit qualitative and quantitative feedback from those core segments through questions like…

If we could only change one thing about our product (e.g. deliver it a day earlier or keep delivery the same but lower the price by $5) which would you rather do?

Based on the information they glean from this strategic listening, these leaders develop trial options to see if what customers “say” they want proves to be what they “really” want. If the brand tries the faster delivery option for example, but it doesn’t have the desired sales or loyalty impact, those leaders reverse course to explore other trial possibilities before they make an enterprise-wide modification.

Sometimes, speed-to-market considerations require brands to even TRADEOFF how much time is taken to listen to customers or other stakeholders. Should we go slower and miss a market opportunity or go faster with only part of the stakeholder picture?

In April, Starbucks launched a limited-time product that sought to capitalize on an online unicorn-themed food trend. The new drink called the Unicorn Frappuccino changed flavors and colors when stirred (going from a purple sweet/fruity taste to a pink tart flavor). The beverage was well-positioned to appeal to young, core Frappuccino drinkers and even to non-coffee drinking consumers.

Fueled by much social media buzz and the scarcity of very limited product availability (the product was crafted from April 19th to April 23rd or until supplies lasted in the US), the Unicorn Frappuccino connected with its target markets and sold resoundingly. But the tradeoffs made to get this product to market quickly showed some downsides – one of which was the meteoric demand and another the complexity of drink preparation.

In fact, one barista, Braden Burson was so distraught after his first day filling Unicorn Frappuccino orders that his online rant encouraging customers to NOT order the drink became a viral sensation in its own right. The magical nature of the Unicorn Frappuccino also did not protect Starbucks from a lawsuit being filed against it by the owners of a New York City coffee shop, The End Brooklyn.   According to the 10 million dollar lawsuit, The End Brooklyn began selling a similar Unicorn Latte four months before the Starbucks Unicorn Frappuccino made its debut.

So what do you think, did Starbucks leaders make the right tradeoffs in the Unicorn Frappuccino launch? Were the benefits in marketing, energy, existing customer excitement, and new customer trial worth the downside risks?

More important, how are you weighing the tradeoffs in your efforts to meet the needs, engage, and delight your core customer segments?

Republished with author's permission from original post.

Joseph Michelli, Ph.D.
Joseph Michelli, Ph.D., an organizational consultant and the chief experience officer of The Michelli Experience, authored The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company and the best-selling The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary.


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