User Experience

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

My name is Niko Nyman, and I’ve run a tiny company for 11 years. We do Rich Internet Application development. Meanwhile, I’ve co-written a book on social media and marketing, in Finnish. You can read more about me on my blog: http://www.nnyman.com/personal/ about/

User Experience
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Why do I talk about user experience? Because I truly believe good experiences can make the world a better place. In the Web 2.0 Expo Tim O’Reilly urged people to “work on stu! that matters”. I believe bad, meaningless experiences just won’t cut it.

Simply Experience
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

I want to talk about the experiences of everyone: consumers, customers, employees, competitors… people. How people who interact with your product, service or your company experience those interactions.

1. 2. 3. 4. 5.

What Experience Experience design Thinking about Experience Evaluating Experiences Value of Experience

ence is
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

So, what is experience?

Experience is

Subjective.

PERIOD.

First of all, experience is completely subjective.

Experience is

small things
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Experience is small things. It’s a heart in my co!ee.

Experience is

a great movie
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

It’s seeing a great movie.

Experience is

a pleasant surprise
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

A pleasant surprise is an experience. It’s receiving an unexpected letter. Stu! that triggers your emotions.

Experience is

a phone keypad you can feel
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Experience is tactile feedback, a phone keypad you can feel. (Unlike my iPhone.)

Experience is

using your phone for creating art
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Experience is finding unexpected uses for common objects. It’s stu! that triggers your mind. (This is a long exposure shot of drawing images in the air with the flashlight of the previously shown cheap Nokia phone.)

Experience is

BIG things
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Experience is

memories
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Experience is memories. This summer Club Unity, a club my friends have run for 12 years, had an event on a small island in front of Helsinki. They took a photo of 400 party-goers on the beach, then emailed the photo to each and every one. They made sure the night will not be forgotten.

Experience is

learning
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Experience is learning new skills.

Experience is

knowledge
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Experience is knowledge. The capability to combine what you’ve learned in meaningful ways.

Experience is

life experience
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

And experience is all this, accumulated over time. It’s life experience.

disconnected moments

The small moments you remember become more interesting and more memorable when you see the connections between those experience moments.

disdis connected moments

The small moments you remember become more interesting and more memorable when you see the connections between those experience moments.

Experience
A stream of disconnected, separate experiences, become a whole, continuously evolving Experience.

longevity

This idea of connected experiences underlines how important it is for product experiences to have longevity. The Wii is built on the experience of shared play. The experience is designed to last and grow better by time.

wow!

The rollout experience of Sony PS3 was designed to provide a great first impression by wowing users with great specs and lists of features. I hear the games are not that great. How long does the PS3 experience last?

BIG PICTURE
A wholistic experience is about making sure the big picture…

small details

…is reinforced by the small details.

Apple store in San Francisco by tanakawho on Flickr

Can Experiences be designed?

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

If to design is to “plan something with a specific intention”, then yes, experiences can be designed. You cannot create a blueprint for how an experience will unfold, but you can take measures to maintain the intent of providing a certain kind of experience through all you do.

User Experience design is a mindset

Experience design is more a mindset than a field of practice. Experience design is not something you apply to a product, it’s how you create a product.

Everyone should work on creating the intended experiences. Together! Everyone not only can, but will influence the experience of a company and their products. Everyone, from the packaging warehouse to HR, not only the designers. Experiences are (or should be) part of the company DNA.

management

Because everyone is involved, a company’s ability to create good experiences is a management issue. You need managers who can make the hard decisions required to enforce the intended experience materializes in the products.

human resources
And it is a human resources issue. Personnel issue. Human issue. You need great communications and true leadership.

culture

It is a culture issue. Employees need an environment that supports and guides them in creating the experiences the company wants to provide. You need a clear vision shared by all employees. You need to empower the employees to act towards the vision.

! !

Vision Maintain intent

Experience Design is: — creating a strong vision of intended experience — creating the necessary practices to maintain the intent

Practical notes on experience design

Mortality & User Experience - Slide (12) by ario j on Flickr

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Every time someone handles a product, uses a service, talks to someone at a company, they have an encounter with the company. Every encounter is an experience moment and builds the overall experience about the company and their products.

No active interaction is needed: If I see a McDonalds sign, I will have an encounter with the McDonalds brand, and it will a!ect the image of McDonalds I have in my head.

Most encounters with companies are forgettable, but some are remembered. The question is, how will you be remembered? If you had taken this photo, you might remember it was Emirates airlines that provided you with the memories of this breathtaking view.

It is most important to identify the encounters that form the experience you’re creating for people. You can call these encounters touchpoints, experience moments, service moments, interactions... depending on where you come from and what field you work in.

The next step is to link the encounters together, to understand the overall experience you’re providing. Service designers talk about the customer journey, and what are the service moments the customer goes through for a given service.

Hyundai in Finland has thought carefully about what is lacking in the Hyundai experience. They figured people have a hard time justifying their choice, after they have made the purchase. So, they actively provide the customers with rationale for choosing the brand.

Think of the full lifecycle of the product and all manifestations of the product and the brand.

Be aware of your experiences: 1—What happened? 2—How did I react? What was my subjective response? 3—Was the experience likely to be intentional/designed? 4—How does this experience a!ect what I think of the provider of the experience (a company, for instance)?

Be someone else. It takes great empathy to create a good experience. To create relevant experiences, you have to Forget everything you know and design for others. Align with the expected patience, level of interest, and depth of knowledge of your users. Talk in the users’ language.

Avoid sugar coating. If you think you’re helping yourself by putting lipstick on your product, you’re setting up yourself for failure. You’re raising expectations, and you know you will fail them. There are no shortcuts with experiences. Fix the problems, don’t hide them.

Think about design cues. Car manufacturers use design cues to maintain consistency in their range of car models. Think how design cues could be applied to experiences provided by a company. The idea, the intention remains, while the execution changes.

Virgin Atlantic doesn’t want to make their customer service sta! into service robots. They want to make them into service experts. Providing the customer experience is not about following a service manual to the letter, but making sure the customer has a good experience every time.

I’ve already said this but: involve everyone. By getting everyone involved you will help make sure the user expectations and the resulting experience are aligned. In practice, this could be about making sure marketing and design and engineering are talking to each other.

experience design
Realize that anything, even the smallest detail can be “experience designed”. My parents love movies. They have a dvd player/projector, which instead of a pause button has a “co!ee pause” button. The button pauses the movie and fades the screen white, illuminating the room.

Experience design can be a strategic question, too. The Apple experience is arguably very integrated, but teleoperators now control areas of the iPhone experience, providing sales and service; they control many of the encounters users will have with the iPhone. How does Apple manage this?

Apple store in San Francisco by tanakawho on Flickr

Evaluating Experiences
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

How do you know you have created a good experience? How can you quantify the user experience?

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

It’s a bit like asking “how much in love are you?” You know you are, but just how much?

no.

yes!

-3

-2

-1

1

2

3

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

You could create a poll asking quantifiable questions: is there enough holding hands? Does he bring home flowers often enough? Is there enough quality time spent together? Is there enough time spent… between the sheets? You can do this, but does it tell you how much in love you are?

Context / convenience
INCONVENIENT CONVENIENT

ATTRACTIVE

GOOD EXPERIENCE

Taste / appeal
UNATTRACTIVE

GOOD ENOUGH EXPERIENCE

BAD EXPERIENCE

Despite this, here’s my model. It has two axes: context, or convenience on the horizontal axis, and taste, or appeal on the vertical axis (things that draw you onto something). Imagine a dot in the center, then start moving it around according to how you feel about an experience.

Context / convenience
INCONVENIENT ATTRACTIVE CONVENIENT

GOOD EXPERIENCE

A few examples of what you could concentrate on to make an experience better on the horizontal axis. Right is better, left is worse.

INCONVENIENT ATTRACTIVE

CONVENIENT

GOOD EXPERIENCE

Implement only the absolutely necessary. Complete on features vs. Only the right features.

GOOD EXPERIENCE
Save users’ time. Waste of time vs. Time well spent. The route planning service Reittiopas transforms sometimes complex public transportation routes into a convenient and quick way to travel.

Let users be undecisive. Permanent vs Undoable. Dishwasher that can be paused or interrupted.

Fully detailed
INCONVENIENT ATTRACTIVE

Easy overview
CONVENIENT

GOOD EXPERIENCE

Help users get started quickly. Overwhelming with detail vs. o!ering an overview that is easy to grasp, and most importantly, easy to start with.

Incompatible
INCONVENIENT ATTRACTIVE

Compatible
CONVENIENT

GOOD EXPERIENCE

Play nice with other gizmos the user might be using.

Closed system
INCONVENIENT ATTRACTIVE

Open system
CONVENIENT

GOOD EXPERIENCE

Let users find creative uses. Be hackable, mashable, connectable. Build an API.

Complex to operate
INCONVENIENT ATTRACTIVE

Simple to operate
CONVENIENT

GOOD EXPERIENCE

Make it e!ortless to use.

In your face
INCONVENIENT ATTRACTIVE

Subtle

CONVENIENT

GOOD EXPERIENCE

Be subtle. Don’t shout at the user. Make your service as invisible to the users as you can.

Has me thinking
INCONVENIENT ATTRACTIVE

Doesn’t make me think
CONVENIENT

GOOD EXPERIENCE

Don’t make me think.

Effort in
Benefit out

Benefit out
CONVENIENT

Effort in

INCONVENIENT ATTRACTIVE

GOOD EXPERIENCE

Balance the e!ort and benefit for the users.

Not the right time
INCONVENIENT ATTRACTIVE

The right time
CONVENIENT

GOOD EXPERIENCE

Talk to the users only at the right time. Don’t engage users at an inappropriate time.

The wrong place
INCONVENIENT ATTRACTIVE

The right place
CONVENIENT

GOOD EXPERIENCE

Talk to the users only at the right place. Engage users where they want to be engaged with your products.

INCONVENIENT ATTRACTIVE

Taste / appeal
UNATTRACTIVE

BAD EXPERIENC

A few tips to increase the appeal of experiences.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Beautiful

Ugly
Make it prettier. Everybody likes beauty, whatever it means to them.

BAD EXPERIENC

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Interesting

Boring
Feed the users’ curiosity.

BAD EXPERIENC

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Pleasant

Unpleasant
Act nice. Unpleasant vs Pleasant. Rude vs. Friendly. Valid characteristics especially for service products.

BAD EXPERIENC

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Compassionate

Could not care less

BAD EXPERIENC

Care about your users. An attitude of “could not care less” vs. a compassionate attitude. Again valid for service. With a little creativity, extendable to user interfaces too.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

ATTRACTIVENESS

BAD EXPERIENC

Not designed vs. designed. Hire a big name designer. People buy plain co!ee mugs because they have been designed by someone whose name they know. Who cares? Most people do! We’re drawn to “design”.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

ATTRACTIVENESS

BAD EXPERIENC

Get the right people to use it. If Burberry doesn’t know what to do when the wrong people start using it, neither do I.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

ATTRACTIVENESS

BAD EXPERIENC

Bad reputation vs. Good reputation. Do everything you can to maintain your reputation. These are two Finnish banks. The one on the left recently merged with Danske Bank and screwed up everyone’s accounts for weeks. They tried to play it down at first and lost thousands of customers.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

ATTRACTIVENESS

BAD EXPERIENC

Make it exclusive. Too cheap vs. A!ordable.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Trusted

Not trusted
Prove your trustworthiness. Do you trust this product? Do you trust this company to deliver?

BAD EXPERIENC

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Trusting

Distrustful

BAD EXPERIENC

Trust your users. Does the company trust you? Are you being treated as a thief or as a valued customer?

INCONVENIENT

Tested and true

Never heard

UNATTRACTIVE

ATTRACTIVE

BAD EXPERIENC

Let people know others use and enjoy your services too. A product you’ve never heard of cannot have a bad reputation for you, but neither a good one. We tend to trust tested and true products.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Looks simple

Looks complex

BAD EXPERIENC

Make it look simple. This is about perceived complexity and simplicity. And looks can be deceiving.

INCONVENIENT

Seems to have all I need

Looks inadequate

UNATTRACTIVE

ATTRACTIVE

BAD EXPERIENC

Make it look like it does everything. Again, the reality might be di!erent. And another problem is, people often overestimate what they need, and get drawn to things that are more than they will every really need.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Available

Unavailable

BAD EXPERIENC

Make sure your product is available. It ba"es me how some music and small manufacturers’ prodcuts are often impossible to get. We have this thing called the internet where anything is one google search away, you know.

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Cheap or free

Too expensive
Make it a!ordable. Free samples. Buy two get third for free. Two for one. Coupons. Free is attractive.

BAD EXPERIENC

INCONVENIENT

The easy choice

One of too many
Be the first choice. Come first in Google search. Get the best spot on the store shelf.

UNATTRACTIVE

ATTRACTIVE

BAD EXPERIENC

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Different

Same
Be di!erent.

BAD EXPERIENC

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Safe

Dangerous
Be safe. Be extreme.

BAD EXPERIENC

INCONVENIENT ATTRACTIVE UNATTRACTIVE

Dangerous

Safe
Be safe. Be extreme.

BAD EXPERIENC

INCONVENIENT

Has personal meaning

Meaningless
Talk to people’s hearts, not their minds.

UNATTRACTIVE

ATTRACTIVE

BAD EXPERIENC

Context / convenience
INCONVENIENT CONVENIENT

ATTRACTIVE

GOOD EXPERIENCE

Taste / appeal
UNATTRACTIVE

GOOD ENOUGH EXPERIENCE

BAD EXPERIENCE

After plotting various characteristics on the graph, moving the imaginary dot around, you will have ended somewhere on the graph. The graph is calibrated by the users expectations, attitudes, previous knowledge, cultural background, etc. It’s completely subjective!

Why design experiences?

What makes experiences so valuable in business.

The New Fred Meyer on Interstate on Lombard by lyzadanger on Flickr

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

It’s easier than ever to create new products. There’s more competition than ever.

In fact, you can go to a website like alibaba.com to get anything manufactured in Asia, quickly and cheaply.

The New Fred Meyer on Interstate on Lombard by lyzadanger on Flickr

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

A product with a Superior Experience stands out. Experience creates competitive advantage. It’s not like the idea of experience as a di!erentiator is new. Jerry Gregoire, chief information o#cer at Dell said…

“The customer experience is the next competitive battleground.”
— Jerry Gregoire

1999
"The customer experience is the next competitive battleground." He said this in 1999.

95% agree
In fact, according to one study 95% of business leaders agree.

Perfection! Good experience

The problem I see is that most companies view their e!orts like this: Good enough experience means basic usability requirements are met, service exists, etc. Perfection is the extra mail “we’re working on”, finishing details etc.

Perfection! Good experience
Perfection! Good experience

This is how the users feel about the experience: Good enough means everything works smoothly. Perfection is that everything works automatically, transparently, with zero e!ort, and no waiting. It’s all about details!

Apple's worst product ever by albertus on Flickr

Growing dissatisfaction with products
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

For this reason I think there is a growing dissatisfaction with products. …which makes good experiences all the more important di!erentiator.The average user experience of products hasn’t probably gotten worse, we've just got more intolerant of bad experiences. Why?

Foobar Poster - The Internet by Sebastian Prooth on Flickr

EVERYTHING NOW
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

We have become used to instant gratification. We are used to having everything now. We’re intolerant to waiting.

And You Thought Airline Food Was Bad... by jochenWolters on Flickr

SHARE(BAD)EXPERIENCES
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

We can now share experiences easier — especially bad ones. The sharing of bad experiences fulfills an important role in the evolution of mankind, helping people avoid making the same mistakes someone else has made.

e il tempo passa...o forse no by confusedvision on Flickr

TIME
HAS BECOME
MORE VALUABLE
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

We’re intolerant of bad experiences because there’s simply too much to see, read, listen to — too much to experience. Products compete for the time of people. Time has become more valuable. Often the best experiences simply minimize needed attention.

Hotel Marqués De Riscal by brockleyboyo on Flickr Apple's worst product ever by albertus

Growing SATISFACTION with experiences
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

On the other hand, there’s a growing satisfaction with experiences. People are willing to invest in experiences. And not only for Gehry designed hotels, but even the smallest experiences which reduce e!ort.

Old people tell me that as people grow they find more things to worry about — it can almost feel like the world is breaking apart. Good experiences make daily existence easier, and therefore are craved for. Trendwatching.com talks about “daily lubricants”.

Italy by Kazze on Flickr

SHARING makes

experiences more valuable

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

We’re more satisfied with experiences because digital media has enabled us to share experiences, without actually having to experience them together. Sharing is important because sharing makes experiences more valuable.

by ~RAYMOND on Flickr

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Like they say: you’ll always have Paris…

Oct 21, 2008 N. Nyman Oy niko@nnyman.com

…but not those shoes you wore.

The funny thing about concentrating on experiences is that it doesn’t cost much, but the returns can be huge. - It’s just a mindset after all.

Cost of creating a bad experience

Cost of creating a good experience

The cost of creating good experiences vs. the cost of creating bad experences are almost equal. It takes virtually the same e!ort to create a good experience than a bad experience. While you’re doing something, why not do it well?

Value of a bad experience

Value of a good experience

The value for the user is immensely di!erent. Your business model is how you translate the value provided to users into profit.

I’m not delusional about the power of experiences: Despite Apple’s superior focus on experience, Nokia will still kick Apple’s ass in the mobile phone market when comparing profit. But in many industries the balance of power is di!erent.

experience lived up to their promises?

chase. (See Figure 1)

FIG. 1: BUSINESS DYNAMICS ARE BETTER FOR CUSTOMER EXPERIENCE LEADERS
Customer experience index relative to industry average
First quartile Likelihood to consider another purchase from provider compared to industry average
6.0% 2.1%

Second quartile

Third quartile

Fourth quartile

-3.0%

y

or mer e

Reluctance to switch business away from provider compared to industry average

-8.9% 6.8% 1.1%

-4.0% -11.2%

g.
Source: North American Technographics® customer experience online survey. Q3 2007

Research shows that there is a remarkably close correlation between good customer experiences and customer loyalty. The customers of companies who provide good experiences are more likely to buy again from the same provider, and more reluctant to switch over to competitors.

Good experiences win customers’ hearts. At most extreme cases, good experiences create customers who love you. The advertising agency Saatchi & Saatchi talk about lovemarks, companies and products that transcend brands.

Experience
Oct 21, 2008 N. Nyman Oy niko@nnyman.com

Remarkable experiences leave a mark — whether the experience is remarkably good, or remarkably bad. These memories are mind-share, essentially brand equity, the capital of brands.

I have a dream…

I dream of a day when products fullfill my needs without a glitch, when I am being served swiftly, compassionately and with understanding, by humans and computers alike. Not because I’m a designer and I like good experiences but because good experiences make the world a better place.

I have a dream…

Good experiences help us do more good. Good experiences help us feel better about what we’re doing. Good experiences free us to spend more time on the important things and less on the mundane. Don’t make another useless fully ajaxed web2.0 product. Make the future better.

Thank you.
N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

Mine! Stolen (it’s promotion for the movie, you know: check out Wall-E, I hear it’s great) http://www.flickr.com/photos/mikewade/ 2532758930/ I have no idea where this came from.

Roll the credits
Probably stole this one too. http://www.flickr.com/photos/andystoll/ 2394547280/ www.clubunity.org

Thank you.
N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

http://www.flickr.com/photos/emeryjl/388610729/

http://www.flickr.com/photos/activeside/157793329/

http://www.flickr.com/photos/soylentgreen23/491093601/

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

http://www.flickr.com/photos/28481088@N00/2457465195/

http://www.flickr.com/photos/whatsarahsaid/2451365979/

http://www.flickr.com/photos/pochateca/305999085/

http://www.flickr.com/photos/stuckincustoms/2297555157/

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http://www.flickr.com/photos/whatsarahsaid/ 722567289/ http://www.flickr.com/photos/ario/317208966/

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

http://www.flickr.com/photos/ario/317208966/

http://www.flickr.com/photos/hamedmasoumi/2118909538/

http://www.flickr.com/photos/obd-design/2374030181/

http://www.flickr.com/photos/21541790@N00/2784028242/in/pool-a380_on_board

Nicked from netcarshow.com

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

http://www.flickr.com/photos/whatsarahsaid/2112678233/

http://www.flickr.com/photos/jbcurio/1681490961/

http://www.flickr.com/photos/netwalkerz/2921918865/

http://www.flickr.com/photos/bcorreira/2143129022/

http://www.flickr.com/photos/sillyjilly/254654062/

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Mine! http://www.flickr.com/photos/shapeshift/ 356637239/ http://www.flickr.com/photos/hazel-jane/2481627394/

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

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http://www.flickr.com/photos/cgc/416101950/

http://www.flickr.com/photos/lopez_roderick/1428681866/

http://www.flickr.com/photos/auro/262810153/

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www.reittiopas.com Ok ok, I stole this one too from Google. Actually all of these:

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

http://www.flickr.com/photos/mulad/183111670/

http://www.flickr.com/photos/london/44070187/

http://www.flickr.com/photos/sudarkoff/2928742614/

http://www.flickr.com/photos/lyza/49545547/

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alibaba.com www.altabikes.no

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

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http://www.flickr.com/photos/sebastianprooth/315686462/

http://www.flickr.com/photos/polytropia/445334910/

http://www.flickr.com/photos/confusedvision/104967819/

http://www.flickr.com/photos/martyworld/157466781/

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N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

http://www.flickr.com/photos/digitalink/2368971420/

http://www.flickr.com/photos/an_untrained_eye/2102196106/

http://www.flickr.com/photos/arimoore/2922539993/

From Apple press photo library

From Nokia press photo library

S4B

STRATEGY FOR BUSINESS

ISSUE 29 Summer 2008

The next competitive BATTLEGROUND?
With customer experience receiving more attention than ever before, we explore the impact on the bottom line.
The basic concept of customer experience is now widely understood. In sectors as diverse as local government, retail and financial services, there is an agreement that functionality and price are no longer enough. Instead, organisations are beginning to focus on improving all of the interactions that customers have with them. It is a trend that was discernible back in 2003, when Beyond Philosophy found that 71% of business leaders saw customer experience as the next competitive battleground. By 2005, 95% had come round to this view. So have investments in improving customer experience lived up to their promises?

Roll the credits
The bottom line The latest studies suggest that customer experience has rightly become a priority. According to Forrester Research, there is a remarkably close correlation between good customer experience and customer loyalty. Forrester’s Customer Experience Index (CxPi) ranks 112 US firms for their ability to deliver a good customer experience. Significantly, customers of the firms in the top quartile were 6% more likely to make additional purchases than the industry average. Customers of those in the bottom quartile were 8.9% less likely to make another purchase. (See Figure 1)
First quartile Second quartile Third quartile Fourth quartile
6.0% 2.1% -3.0% -8.9% 6.8% 1.1%

FIG. 1: BUSINESS DYNAMICS ARE BETTER FOR CUSTOMER EXPERIENCE LEADERS
Customer experience index relative to industry average

Likelihood to consider another purchase from provider compared to industry average

Very few senior executives regularly interact with their customers or monitor the quality of customer interactions to make sure the situation is genuinely improving.

Reluctance to switch business away from provider compared to industry average

Fujitsu Strategy For Business, issue 29 Summer 2008

Thank you.
N. Nyman Oy Niko Nyman niko@nnyman.com www.nnyman.com

-4.0% -11.2%

Source: North American Technographics® customer experience online survey. Q3 2007

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