This is the seventh piece in the 10x10 series by the innovation firm Method. Read the previous pieces and more about the series here.
The Hybrid Product-Service
From pill bottles that send SMS reminders to picture frames that receive email attachments, the ability to embed information in everything around us is profoundly affecting the products we use in our daily lives. New product categories like networked appliances and wearable sensors are combining more than just industrial design with software design ? they are combining the information age and the service economy. In an era when consumers expect products to be more than tangible objects, brands need to think with a service mindset to enhance their offering and connect with their customers in more personal and immediate ways.
Brands are already taking advantage of the latest technology to offer their customers tangible goods that offer intangible services. Barnes & Noble has created such a hybrid product-service with the Nook, which mimics the traditional service model of in-store shopping and assistance from sales associates. The Nook has now converged shopping and reading into a single device, while also offering recommendations and assistance in other ways. Barnes & Noble, like Amazon before them, have materialized their service offering into a consumer product that has in turn increased their revenue 21 percent.
So how can brands known for physical products, not services, engage their customers like the service industry does? How will designers of physical and digital experiences create products that make this possible? To create these service-age gadgets, we must look at the methods used in Service Design, a discipline that is quickly coming into the spotlight.
Borrowing from Service Design
In 2007, Apple Computer, Inc. officially dropped "Computer" from their name. Today, they are the world's largest music retailer, accounting for 25% of all music sales in the US. Driving this success is the iPod, which has become an iconic example of a hybrid product-service. Owning an iPod also means owning a suite of Apple services: the iTunes Store, Genius recommendations, and multiple support channels. This approach has proven successful ? to date, nearly 300 million iPods have been sold.
Nike's technologically enhanced running shoes and accessories help you become a better runner. Fiat's Eco:Drive application uses data from your car to create a map and deliver tips that help you drive more efficiently. Such examples are only a glimpse into the opportunities that can emerge when service thinking is applied to the latest product designs.
It is no secret that services, even for manufacturing organizations, can be the key differentiator between competition and the primary generator of income. Customer loyalty depends on good service; not only do customers expect it, but it is part of their values. Recent economic and environmental turmoil is shifting people from passive consumers of products to active co-creators of experiences.
Products designed for the service age will capture diverse revenue streams and deepen engagement and loyalty by delivering more value. When seeking service innovation, some of the world's most recognizable brands have benefited directly from service design, including Virgin Atlantic, Bank of America, and the BBC. What service designers have recognized is that a brand's direct competition should not be the main reference point for any strategy. Instead, the brand must reflect the people involved in the service ? both those consuming and delivering. There are four key methods to crafting smart services that executives, entrepreneurs, and designers alike should be aware of.
1. Look at Both Sides
Currently, strong user-centered design focuses on the outside-in. This method attempts to form an empathetic understanding of the users of a product in order to uncover new needs and opportunities. However, services differ from products in that consumption happens at the very same moment as production, making the producer of equal importance to the consumer. For that reason, services must also be designed from the inside-out and engage stakeholders involved - from the executive to the sales associate - in creating the service experience. One solution is using co-design sessions.
Co-design sessions are intended to encourage people on all sides of the service (the customer, producer & stakeholder) to share experiences and expertise, engage with other parts of the organization, and envision creative ideas. Co-design sessions are a forum for this, often through the use of games and creative activities. Role-playing can be used to act out people's perceptions of a service. Sending participants into the field with a camera can help draw observations and structure insights for discussion.
The goal is to understand not only what people desire, but how the producers can effectively deliver the service.
2. Will This Work?
Prototypes discover where a design works and where it fails. The desired fidelity of any prototype is "just enough" so that when it fails, the failure is early and, with any luck, cheap. With "experience prototyping," service designers strive for active participation of users and stakeholders and a backseat role for themselves.
Take for example a concept for a service that is a partnership between a public library and local hotels. Hotel guests can access local knowledge through the library and have books, CDs, and DVDs waiting at their hotel room upon arrival. This supports the library's mission and is a premium service that hotels can offer. But would hotel guests actually use this? What material would they be interested in? Would hotel staff be able to manage the responsibilities?
To prototype this concept, service designers would simulate the experience in an existing hotel. Hotel guests would be given welcome packets with a curated library catalogue, order forms, tourist information, and a feedback form. The receptionists would have a selection of library material, and inside each item are other props made by the service designers: a check-out card and custom bookmarks with related tourist sights. The prototype runs for a few days with hotel staff playing along. Hotel guests must believe the service is real. The designers will observe the experiences, collect feedback, and involve themselves only when necessary.
In designing the next generation of digital devices, the experience is more than the sum of interactions, and prototyping the experience will be crucial.
3. Map the Journey
Services are comprised of many individual, and often intangible, touchpoints that happen over time and space. Because of this defining characteristic, service designers need to map out the formal elements of the producer's work on the "back stage" with the customer experiences of the 'front stage,' and the role of the "actors" on each side.
Consider the customer journey with Virgin America. Despite being known for their attention to service online and in-person, there are also several non-brand interactions that influence the travel experience: security checkpoints, delays on the runway, pesky seat neighbors. Service designers must consider these moments because they affect the overall experience but cannot be controlled. The design choices made should be continuous and prescriptive, but have enough flexibility so that one flaw does not have repercussions on the rest of the experience. After all, no trip to the airport is perfect, and Virgin would not want to be responsible for experiences over which they have no control.
Service blueprints, touchpoint matrixes, and customer journey maps are useful tools for breaking down services into sequences. These maps explore individual roles of producers and customers while also identifying opportunities for innovation or improvement. They also prioritize ideas, plan next steps, and maintain a consistent vision.
4. Tell the Story
Traditionally, video scenarios and storyboards are tools designers use to communicate how a concept works. Service designers, however, are adept at using these tools to tell authentic and compelling stories about the people using the service. Their stories focus on the value of the concept and the nuanced experiences people have with it.
The hotel-library service example involves several touchpoints that need to be designed and communicated but there is more to the service than just that. To communicate the true value, a video about the service would feature librarians, hotel staff, and hotel guests sharing their experience in their own words. Although scripted, it is based on real-life scenarios uncovered during research. Video is a compelling storytelling tool for explaining the features that comprise a service along with perspectives of the people involved on all different sides.
Today's devices are no longer things that people interact with but instead platforms that allow people to interact with each other and these are the stories that designers need to tell.
In recent years, interest in service design has escalated as companies begin to recognize that innovating their service offering is the best opportunity to create competitive advantage. Product oriented brands must use these principles to deliver not just great customer-service experiences, but consumer products that enable entirely new services. In the post-digital world where processors are embedded in everything around us, these opportunities should not be underestimated, especially when the outcome is customer loyalty, brand engagement, and increased revenue.
Method is an award-winning, international product, service, and experience innovation firm. 10x10 is a series of thought pieces written by Method that explores 10 emerging, industry-challenging topics. Read more about 10x10 here.