Pivoting, disruption, and the customer experience

What can we learn about innovation and the customer experience from companies that pivot during periods of significant disruption?

COVID-19 and global economic upheaval have made innovation more important
than ever. Organisations and companies that recognise the inflection point provided by COVID-19 as an opportunity to innovate around their customers are the ones that will defy the laws of gravity.

The most successful growth companies adopt the following customer experience best practices:

1. Identify the pivot
2. Understand the customer journey
3. Think like a designer
4. Create unique and relevant customer experiences

Identify the pivot

What happens when your industry structure collapses and no longer supports your business model? You pivot. That is, you make one or more changes, grounded in deep customer learning, to find a better business model. These changes might involve product features, new or changed market segments, pricing, new channels, or even new partnerships. A sophisticated version of the pivoting process involves redefining customer experiences by gaining new insights into customer mindsets and behaviours. Each experiment provides feedback on what to keep and what to remove as the company pivots around the customer.

When business models are significantly disrupted, pivoting isn’t optional, it’s essential. Companies that understand their customers not only survive but thrive by pivoting in time:

• YouTube commenced business as a video-based dating service, with the slogan “Tune in, hook up”. However, by better understanding what users were actually wanting to do on the site, share videos of themselves going about their daily lives, YouTube pivoted to hosting online videos and found a large growth market in a highly profitable segment.
• With a number of top London restaurants facing the very real prospect of insolvency due to the impact of COVID-19, many, including Michelin Star restaurant Hakkasan, have embraced the previously unthinkable idea of home delivery. The restaurants reached out to their loyal customers to ask them if they would purchase meals via home delivery, what meals they would like on the menu, at what times of the day they would likely order and what their average spend would be. By partnering with Deliveroo, many London restaurants have not only survived but early indications are that many have actually increased revenue whilst also reducing costs (no front of house staff needed).

Understand the customer journey

Successful companies have a deep understanding of their customers’ behaviours and mindsets. They empathise with the journeys that customers take in order to interact with their products and services. The customer journey is the sum of touchpoints and experiences that customers go through when interacting with an organisation. By empathising with customers, employees and other end users, companies can look beyond the narrow definition of their offerings and consider the customer’s total experience.

Growth companies embrace tools like customer journey mapping and co-creation workshops to create new customer insights and value. The aim is to simplify the customer journey by removing “pain-points” (a problem that a customer is experiencing in interacting with a company) and “moments-of-truth” (a point in the customer’s journey where they must decide to continue or opt out of the process). The insights gained by empathising with the customer’s journey lead to rapid prototyping and hyper-personalised experiences that create and capture value.

Rolls -Royce launched R² Data Labs, an acceleration hub for data innovation, as a new service line using Artificial Intelligence to create new service propositions for customers. By co-creating value across their customer’s innovation ecosystems, R² Data Labs can partner with their customers to help them innovate around their own customers. This has become known as focusing on the customer’s customer.

Think like a designer

The World Economic Forum recently identified “analytical thinking” and “creativity” as two of the top three future skills needed to succeed in Industry 4.0. Pivoting successfully requires rapid innovation, deep customer insights and the exploration of new technologies. Designers begin with the end user in mind and work backwards to the technology. Traditional business thinking focuses on finding the single correct solution to a problem. Design thinking requires a new set of tools. Instead of solving problems, design thinkers look to find new problems. By immersing themselves into the mindset of the customer, Designers are able to empathise with them and develop solutions quicker. Instead of pivoting to enhancing a product or service, design thinking enables teams to pivot around the experience. This provides as shift from competing on value to making the competition irrelevant using hyper-personalised experiences.

When GE sought a solution to improve the diagnostic imaging experience for children they turned to design not engineering for the solution. By empathising with the child’s experience, and creating an “Adventure Series” (think pirate ships and space exploration), GE Industrial Designers were not only able to remove the anxiety that the children were experiencing, but were also able to improve the parent and radiographer experience at the same time. GE was also able to develop a new ROI model for their customers as the reduced need for anaesthesiologists meant more patients could get scanned each day, significantly improving the financial returns of investing in diagnostic imaging.

Create unique and relevant customer experiences

“Customer experience” has become a commonly used term in recent years, but like “creativity” and “innovation” it is actually difficult to find one universally accepted definition, even though creating unique customer experiences is seen by CEOs worldwide as a key way to differentiate their businesses from the competition. The secret of a good experience isn’t the range of features on offer, it is a recognition that the experience can begin long before a purchase has even been made. The customer’s experience is the sum total of all the experiences, good and bad, that a customer has. The creation of customer value has moved from focusing on a product’s features to understanding the experience that a customer wants from interacting with your brand.

Importantly, companies are also pivoting in order to stay relevant to their customers. Audi, for example, has recognised that car ownership, particularly in drivers aged 20-35, is declining rapidly. This is attributable to many factors including increased traffic congestion, a shift towards the development of autonomous vehicles and increasing levels of carpooling. It is clear to Audi that in the near future many people might not want to own a car but they will still want to “own the experience”. By launching Audi on demand, Audi has created a hyper-personalised and relevant experience that enables customers to choose the car they wish to drive, for as long as they need it and book it all online.

Adopting these four best practices can help any organisation pivot, innovate and create unique customer experiences, even in the most testing of times. For companies currently weathering the global coronavirus storm and looking to find a way forward over the coming months, this process is as critical as ever.

Dr. Andrew MacDonald is Director of the International Centre for Financial Services at The University of Adelaide.

Dr. Andrew MacDonald is a leading consultant in the areas of customer experience, design thinking, innovation and business development. He is delivering Designing the Customer Experience, Leading the Customer Experience, Innovating with Design Thinking and Pitching and Presentation Skills Masterclass.