Competing on Customer Journeys PDF (Harvard Business Review, November 2015)

SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT SPOTLIGHT ARTWORK Hong Hao, My Things No. 1, 2001–2002 Scanned objects, digital c-print, 120 x 210 cm 88 Harvard Business Review November 2015 ...

SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT SPOTLIGHT ARTWORK Hong Hao, My Things No. 1, 2001–2002 Scanned objects, digital c-print, 120 x 210 cm 88 Harvard Business Review November 2015  HBR.ORG Competing on Customer Journeys You have to create new value at every step. by David C. Edelman and Marc Singer November 2015 Harvard Business Review 89  SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT The explosion of digital technologies over the past decade has created “empowered” consumers so expert in their use of tools and information that they can call the shots, hunting down what they want when they want it and getting it delivered to their doorsteps at a rock-bottom price. In response, retailers and service providers have are thus becoming central to the customer’s experi- scrambled to develop big data and analytics capa- ence of a brand—and as important as the products bilities in order to understand their customers and themselves in providing competitive advantage. wrest back control. For much of this time, compa- Consider how one company, Oakland-based nies have been reacting to customers, trying to an- Sungevity, competes on its ability to shape the jour- ticipate their next moves and position themselves ney. At first glance, Sungevity looks like a typical res- in shoppers’ paths as they navigate the decision idential solar panel provider. But closer inspection journey from consideration to purchase. reveals that the company’s business is to manage the Now, leveraging emerging technologies, pro- end-to-end process of sales and custom installation, cesses, and organizational structures, companies coordinating the work of an ecosystem of companies are restoring the balance of power and creating new that supply, finance, install, and service the panels. value for brands and buyers alike. Central to this shift Sungevity’s “product” is a seamless, personalized is a fresh way of thinking: Rather than merely react- digital customer journey, based on innovative man- ing to the journeys that consumers themselves devise, agement of data about the solar potential of each companies are shaping their paths, leading rather home or business. Sungevity makes the journey so than following. Marketers are increasingly manag- compelling that once customers encounter it, many ing journeys as they would any product. Journeys never even consider competitors. One of us (David) experienced the Sungevity Streamlining the Decision Journey journey firsthand. The process began when he re- STREAMLINING THE DECISION JOURNEY ceived a mailing with the message “Open this to find out how much the Edelman family can save on START energy costs with solar panels.” The letter within CLASSIC JOURNEY contained a unique URL that led to a Google Earth CONSIDER image of David’s house with solar panels superim- EVALUATE posed on the roof. The next click led to a page with START NEW custom calculations of energy savings, developed JOURNEY from Sungevity’s estimates of the family’s energy THE LOYALTY LOOP use, the roof angle, the presence of nearby trees, BOND CONSIDER and the energy-generation potential of the 23 panels ADVOCATE the company expected the roof to hold. ENJOY BUY Another click connected David through his desk- top to a live sales rep looking at the same pages David CLASSIC JOURNEY NEW JOURNEY CLASSIC JOURNEY In the classic journey, consumers The newNEW JOURNEY journey compresses the was. The rep expertly answered his questions and in- In the classic engage journey, consumers in an extended consideration considerThe new step journey and compresses shortens or stantly sent him links to videos that explained the engage in an extended and evaluation consideration phase before either entirelythe considerthe eliminates step and evaluate installation process and the economics of leasing and evaluation entering into thephase loyaltybefore loop either reduces or step, delivering entirely directly customers versus buying. Two days later, Sungevity e-mailed entering or into the proceeding intoloyalty a new loop roundor into theeliminates loyalty looptheand evaluate locking David with the names and numbers of nearby home- proceeding into a new round of consideration and evaluation of steps, them within it. delivering customers consideration that may lead to andtheevaluation subsequent that directly into the loyalty loop owners who used its system and had agreed to serve may lead to the subsequent and locking them within it. as references. After checking these references, David purchase of a different brand. purchase of a different brand. returned to Sungevity’s site, where a single click 90 Harvard Business Review November 2015  COMPETING ON CUSTOMER JOURNEYS HBR.ORG Idea in Brief THE PROBLEM THE SOLUTION THE STRATEGY Digital tools have put shoppers Companies can use new Superior journeys feature in the driver’s seat, allowing technologies, processes, and automation, personalization, them to easily research and organizational structures to context-based interaction, compare products, place proactively lead rather than and ongoing innovation. To orders, and get doorstep follow customers on their achieve all this, companies delivery of their items. Sellers digital journeys. By making need to treat journeys like have largely been reactive, the journey a compelling, products, built and supported scrambling to position customized, and open-ended by a cross-functional team themselves where customers experience, firms can woo that’s led by a manager will find them. buyers, earn their loyalty, and responsible for the journey’s gain a competitive advantage. business performance. connected him to a rep who knew precisely where he can refer to the sequence of interactions consumers was on the journey and had a tailored lease ready for have before they achieve a certain aim—for instance, him. The rep e-mailed it and walked David through transferring cable service to a new address, or even it, and then David e-signed. When he next visited discovering and buying the right mascara. Many the website, the landing page had changed to track firms have become competent at understanding the the progress of the permitting and installation, with journeys their customers take and optimizing their fresh alerts arriving as the process proceeded. Now, experience with individual touchpoints along the as a Sungevity customer, David receives regular way. The more sophisticated companies have rede- reports on his panels’ energy generation and the re- signed their operations and organizations to support sulting savings, along with tips on ways to conserve integrated journeys (see “The Truth About Customer energy, based on his household’s characteristics. Experience,” HBR, September 2013). Still, firms have Starting with its initial outreach and continu- largely been reactive, improving the efficiency of ing to the installation and ongoing management of existing journeys or identifying and fixing pain David’s panels, Sungevity customized and auto- points in them. mated each step of the journey, making it so sim- We’re now seeing a significant shift in strategy, ple—and so compelling—for him to move from one from primarily reactive to aggressively proactive. step to the next that he never actively considered Across retail, banking, travel, home services, and alternative providers. In essence, the company re- other industries, companies are designing and refin- configured the classic model of the consumer deci- ing journeys to attract shoppers and keep them, cre- sion journey, immediately paring the consideration ating customized experiences so finely tuned that set to one brand, streamlining the evaluation phase, once consumers get on the path, they are irresist- and delivering David directly into a “loyalty loop,” ibly and permanently engaged. Unlike the coercive where he remains in a monogamous and open- strategies companies used a decade ago to lock in ended engagement with the firm (see the exhibit customers (think cellular service contracts), cutting- “Streamlining the Decision Journey”). Sungevity’s edge journeys succeed because they create new journey strategy is working. Sales have doubled in value for customers: Customers stay because they the past year to more than $65 million, exceeding benefit from the journey itself. growth targets and making Sungevity the fastest- Through our experience advising more than growing player in the residential solar business. 50 companies on journey architecture, infrastruc- ture, and organizational design; our deep engage- Getting Proactive ment with dozens of chief digital officers and more McKinsey’s marketing and sales practice has spent than 100 digital-business leaders worldwide; and more than six years studying consumers’ decision our research involving more than 200 companies journeys. The term (as explained in “Branding in on best practices for building digital capabilities, the Digital Age,” HBR, December 2010) broadly de- we have seen this shift unfold. And although it is scribes how people move from initially consider- still early, we believe that an ability to shape cus- ing a product or service to purchasing it and then tomer journeys will become a decisive source of bonding with the brand. More narrowly, the term competitive advantage. November 2015 Harvard Business Review 91 SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT Four Key Capabilities into simple, engaging, increasingly app-based Companies building the most effective journeys front-end experiences. master four interconnected capabilities: automa- Consider how Sonos, the intelligent connected tion, proactive personalization, contextual interac- music system, automates setup. The process used tion, and journey innovation. Each of these makes to involve threading wires throughout the house, journeys “stickier”—more likely to draw in and per- hooking up speakers to a computer, and creating manently capture customers. And although the ca- separate online accounts with music providers. pabilities all rely on sophisticated IT (see the sidebar Sonos streamlines setup with wireless speakers (just “New Journey Technologies”), they depend equally press a button to connect them) and an app that adds on creative design thinking and novel managerial music-streaming sources with a few taps and allows approaches, as we’ll explore later. users to select music, control volume, and choose Automation. Automation involves the digitiza- what plays in which room—all from a mobile device. tion and streamlining of steps in the journey that Proactive personalization. Building on the were formerly done manually. Consider the analog automation capability, companies should take infor- process of depositing a check, which used to require mation gleaned either from past interactions with a a trip to the bank or ATM. With digital automation, customer or from existing sources and use it to in- you simply photograph the check with your smart- stantaneously customize the shopper’s experience. phone and deposit it via an app. Similarly, research- Amazon’s recommendation engine and intelligent ing, buying, and arranging delivery of, say, a new TV reordering algorithm (it knows what printer ink you can now be a one-stop digital process. By allowing need) are familiar examples. But remembering cus- consumers to execute formerly complex journey tomer preferences is only the beginning; the person- processes quickly and easily, automation creates alization capability extends to optimizing the next the essential foundation for sticky journeys. This steps in a customer’s journey. At the moment a cus- may seem self-evident, but companies have only tomer engages (for example, by responding to a mes- recently started to build robust automation plat- sage or launching an app), the firm must analyze the forms expressly designed to enhance journeys. And customer’s behavior and tailor its next interaction consumers can readily see who does it well. Superior accordingly. Companies such as Pega and ClickFox automation, while highly technical, is something (a firm in which McKinsey has an ownership stake) of an art, turning complex back-end operations offer applications that track customers across many L’Oréal App Keeps Customers Coming Back—and Buying The Makeup Genius app, which allows users to virtually test 1a linkLeah’s friend texts her to L’Oréal’s cool new makeup, has been downloaded app, Makeup Genius. She 14 million times since its launch downloads it to her tablet, and her screen becomes a in 2014 and has driven more mirror reflecting her face. than 250 million virtual product Leah allows the app to trials. By making experimenting, scan her image. sharing, and purchasing seamless and fun, the company is rolling out a highly sticky 9 Appreciating how simple and useful the app 8 Aware of her preferences and previous journey that builds loyalty is, Leah becomes a loyal makeup purchases, the customer and advocate, app sends periodic to L’Oréal products. sending app links to recommendations a growing group of friends for other looks. Leah who share favorite looks continues to try out new and advice. looks and buy products. 92 Harvard Business Review November 2015  COMPETING ON CUSTOMER JOURNEYS HBR.ORG New Journey Technologies Underpinning the rise of competitive Three core technology developments in unstructured data, while machine learning journeys is the emergence of new particular have redefined how companies software such as R can mine huge amounts programming, data-access, and user- connect with their customers: of customer data and predict behaviors. interface technologies that enable Continuous connection capability. Pega and similar tools enable consistent, unprecedented tracking of customer Smart, connected products create personalized communication across behavior and personalized interaction. a permanently open link between channels. And Adobe and other companies Attribution tools, for example, can reveal company and customer, providing offer tools to manage and execute more which channels most strongly influence companies with a continuous stream complex workflows. consumers’ decisions and lead to of data about how individuals use the Widespread adoption of APIs. a purchase. Other technologies can products and thereby helping firms Application programming interfaces permit discern when and why customers jump customize and upgrade them—for example, disparate applications, including those across channels and devices as they shop; by fixing problems or adding capabilities. from different companies, to communicate. the programs can then deliver personalized New journey analysis and management APIs have been around for a while, but messaging that follows shoppers tools. ClickFox and similar systems track companies are only now starting to embrace accordingly. Interface design tools allow customer behavior across online and off- them to build integrated cross-company a mobile app or a website to change its line touchpoints, helping companies to customer journeys. For example, APIs allow function or appearance, depending on map and optimize journeys. Platforms such Delta Air Lines’ travel management app to where a customer is in his or her journey. as Cloudera allow companies to analyze seamlessly connect its customers with Uber. channels, blending data from multiple sources (such constantly learns which content and configura- as transaction and browsing histories, customer tion work best for each visitor and renders the site service interactions, and product usage) to create a accordingly, in real time. single view of what customers are doing and what L’Oréal’s Makeup Genius app takes these ca- happens as a result. This allows real-time insights pabilities a step further, allowing customers to about their behavior—in effect, isolating moments try on makeup virtually and delivering ever-more- when the company can influence the journey—and personalized real-time responses. The app photo- permits customized messaging or functionality (for graphs a customer’s face, analyzes more than 60 example, immediately putting a valued traveler on characteristics, and then displays images showing an upgrade list). The retailer Kenneth Cole reconfig- how various products and shade mixes achieve dif- ures elements on its website according to a visitor’s ferent looks. Customers can select a look they like interaction with the site over time: Some people see and instantly order the right products online or more product reviews, while others see more images, pick them up in a store. As the app tracks how the videos, or special offers. The company’s algorithm customer uses it and what she buys, it learns her 2 The app asks if she’d like to “try on” 3lookSheto taps on each see it overlaid on 4 When she decides to buy, buttons offer her a individual products or a her own face. Another choice of retailers. She complete look. She opts tap shows the products selects Amazon and for the latter, and the needed to achieve it. places an order. app instantly displays a gallery of photos showing made-up models. 7of herself She considers a picture with that look. 6the Aappfewalerts days later, Leah 5 When her order arrives and she reopens The app tells her what to a new style she the app, it has proactively additional products she might like, basing its reconfigured to give her needs to achieve it. She recommendation on her instructions on applying taps to buy. preferences and those of the makeup. similar users. November 2015 Harvard Business Review 93 SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT HBR.ORG Best practitioners aim not just to improve the existing journey but to expand it, adding useful steps or features. preferences, makes inferences based on similar cus- And they prototype new services and analyze the re- tomers’ choices, and tailors its responses. L’Oréal has sults, aiming not just to improve the existing journey created an enjoyable experience that quickly and but to expand it, adding useful steps or features. seamlessly leads the customer along the path from A journey innovation may be as simple as consideration to purchase and, as the degree of per- Starwood’s introducing a prompt for ordering room sonalization increases, into the loyalty loop (see the service after a guest uses a key, remembering previ- exhibit “L’Oréal App Keeps Customers Coming Back— ous orders and using those as the initial options. Or it and Buying”). With 14 million users already, the app may be more sophisticated, expanding a journey by has become a critical asset both as a branded chan- integrating multiple services into a single straight- nel for engaging with customers and as a fire hose of through customer experience. Delta Air Lines’ mo- incoming information on how customers engage. bile app, for example, has become a travel manage- Contextual interaction. Another key capability ment tool for almost every aspect of an airplane trip, involves using knowledge about where a customer from booking and boarding to reviewing in-flight is in a journey physically (entering a hotel) or virtu- entertainment to ordering an Uber car upon land- ally (reading product reviews) to draw him forward ing. Kraft has expanded its recipe app to become a into the next interactions the company wants him to pantry management tool, generating a shopping list pursue. This may mean changing the look of a screen that seamlessly connects with the grocery delivery that follows a key step, or serving up a relevant mes- service Peapod. Key to these expanded journeys is sage triggered by the customer’s current context. For often their integration with other service provid- example, an airline app may display your boarding ers. Because this increases the value of the journey, pass as you enter the airport, or a retail site may tell carefully handing customers off to another firm can you the status of your recent order the moment you actually enhance the journey’s stickiness. land on the home page. More-sophisticated versions enable a series of Capabilities in Practice interactions that further shape and strengthen the Let’s return to Sungevity to see how it combines journey experience. Starwood Hotels, for example, these four capabilities to create a valuable and is rolling out an app that texts a guest with her room evolving journey. number as she enters the hotel, checks her in with From initial customer contact to installation a thumbprint scan on her smartphone, and, as she and beyond, Sungevity has automated most steps approaches her room, turns her phone into a vir- of the journey, including collecting and integrating tual key that opens the door. The app then sends customer data, calculating energy use, and creating well-timed and personalized recommendations for personalized visualizations of the panels on a roof. entertainment and dining. Crucial here is sophisticated use of APIs (application Journey innovation. Innovation, the last of the interfaces) to pull data from other providers, such four required capabilities, occurs through ongoing as Google Earth and the real estate service Trulia, experimentation and active analysis of customer to assemble a picture of the customer. Data analy- needs, technologies, and services in order to spot sis allowed proactive personalization that targeted opportunities to extend the relationship with the cus- David with customized information such as costs, tomer. Ultimately, the goal is to identify new sources timeline, and anticipated breakeven and savings, all of value for both the company and consumers. available across multiple channels, including e-mail, Best practitioners design journey software to en- Sungevity’s site, and customer reps. Contextual in- able open-ended testing. They continually do A/B teraction capabilities allowed Sungevity to serve the testing to compare alternative versions of message right content in the right channel for each of David’s copy and interface design to see which works better. interactions—for example, using APIs to track the 94 Harvard Business Review November 2015 SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT HBR.ORG THE NEW JOURNEY MANAGEMENT ORGANIZATION CHIEF SCRUM TEAM MEMBERS EXPERIENCE DESIGNERS conceptualize the look and feel OFFICER / CHIEF of the journey and shape its user interfaces. DIGITAL OFFICER DEVELOPERS build the software for apps, websites, and automated journey steps. DATA ANALYSTS track customer interactions JOURNEY and crunch the data to understand individual PRODUCT JOURNEY customers’ behavior and measure the effects MANAGER PRODUCT STRATEGIST MANAGER of manipulating journey variables. OPERATIONS MANAGERS oversee the back- end support for each piece of the journey, from the supply chain to frontline sales and customer service. SCRUM TEAM SCRUM TEAM SCRUM TEAM MARKETERS provide customer insight and ensure that brand standards are embedded throughout the journey—for instance, in all aspects of targeting and personalization. Scrum team members DESIGN DEVELOPMENT ANALYTICS OPERATIONS MARKETING have dotted-line relationships with their functions. panel installation by the company’s local contractor The Rise of the and then regularly updating David’s landing page Journey Product Manager with the latest status. Technology smarts are necessary but not sufficient Sungevity is continuing to pursue journey in- for designing competitive, continuously improving novation, using what it knows about its customers journeys; companies also need new organizational to extend the journey into energy storage and con- structures and types of management. We have servation services. Not long ago, such activity might worked with many “digital native” firms that have have been a generic upsell, blanketing a customer had the luxury of building organizations optimized segment with pitches for a new offering. Today the from the outset for creating effective journeys—and outreach can be to a single individual, and the strat- their experience offers lessons for traditional firms. egy not simply to sell another product but to invite We have found that traditional companies are most customers to take the next step on their personalized successful when they focus on selected high-value journeys. With granular data on each household’s journeys and create dedicated teams to support energy use and habits, Sungevity can advise people them, drawing from across the firm’s functions. one-on-one about managing their energy consump- While we’ve seen many different organizational tion, and it can recommend a tailored package of models for product-managing journeys (and an array products and services to help them reduce their de- of titles for the executives involved), they generally pendence on the grid and reap savings. To this end, have a similar structure (see the exhibit “The New the firm will soon offer batteries from the German Journey Management Organization”). supplier Sonnenbatterie to store surplus electric- Overseeing all of a firm’s interactions with cus- ity generated by the solar panels. It is also creating tomers is someone in the role of chief experience customer dashboards that track energy production officer, a relatively new position in the C-suite. and use. Ultimately, the firm plans to integrate its Chief digital officers are also starting to have this services with home-management networks that top-level responsibility. Typically reporting to this can automate energy conservation (adjusting lights executive is a journey-focused strategist who helps and heating, for example) according to decision guide decisions on which journey investments and rules that Sungevity develops with each customer. customer segments to focus on; he or she prioritizes Another project is to create conservation-oriented current journeys for digital development and spots customer communities. opportunities for new ones. 96 Harvard Business Review November 2015 SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT HBR.ORG Holding Journey Managers Accountable Just as conventional product management depends on close tracking of carefully chosen metrics, “product managing” a journey requires tracking both familiar and specialized metrics that gauge progress and performance. In addition to move through the journey, to spot unusual customer behaviors (such as detouring or abandonment at providing an array of information about journey investments a critical touchpoint), and to discern what attracts and ROI, the right metrics permit accountability. new customers—or dissuades them from engaging. Journey managers must be able One airline we work with measures To build successful journeys, these managers to answer financial questions: What its effectiveness in helping customers rely on “scrum teams” of specialists from across IT, can we afford to invest in journey navigate the journey for rebooking analytics, operations, marketing, and other func- development? What new sales or and resuming travel when a flight tions. The teams are execution-oriented, fast, and revenue do we need to generate? is canceled. The airline gathers an agile, constantly testing and iterating improvements. What is the variable cost per abundance of data about rebooked Collectively, the team members work to understand customer or action that we can afford customers, including the percentage for each journey? They also need to who have downloaded its mobile customers’ wants and needs at each step of the jour- assess customer satisfaction with the app, and of those, the percentage ney and make taking the next step worthwhile. They entire journey and with interactions who boarded their new flight without ask questions such as “What types of functionality, at specific touchpoints. any live help. It also ascertains the look and feel, and message will propel customers to Because individual touchpoints percentage who provided a mobile the next step?” and “How does the timing of prompts may be handled by different phone number or e-mail address, and affect customers’ responses?” Pursuing answers to functions or partners (for example, of those, the percentage who opened questions like these, teams enter into rounds of de- an appliance sale could involve an their notification of a rebooked flight, velopment, piloting iterative digital-journey proto- affiliate store agent, a call-center and of that subgroup, the percentage types, analyzing operational and customer-use data, sales rep, credit underwriters, and who boarded without help. In and then measuring the impact on customer behavior installers), the performance of these addition, the airline calculates produced by each tweak to the journey. players must be measured and the percentage of passengers tracked so that they, too, can be held who boarded the first alternative Nordstrom is one company that has used this accountable. Other metrics should flight suggested to them. The team scrum-team approach. To enhance the journey track the journey’s ROI by calculating analyzes each of these metrics across around shopping for sunglasses, for example, the ongoing costs of delivering the tiers of frequent-flier value and ticket a team set up temporary camp in the retailer’s flag- journey, the revenue and profits price in order to optimize the costs ship store and launched a series of weeklong experi- it generates, and the impact of and revenue associated with this ments to perfect a new app. The app was envisioned continual innovations to the journey. journey for each customer. to guide customers through the selection process by matching sunglasses styles with their facial char- acteristics and preferences. Right in the store, team Sitting at the center of the action for a given members mocked up paper prototypes of the app journey is new type of leader, the “journey prod- and studied how shoppers tapped on them, as if uct manager.” People in this role (more commonly using a live version. Throughout the process, they called “solution managers,” “experience managers,” asked customers which app features seemed help- or “segment managers”) are the journey’s economic ful, unnecessary, or distracting. On the basis of that and creative stewards. They have ultimate account- feedback, the team’s coders built a live version of ability for its business performance, managing it the app for customers to test, making real-time as they would any product. And like other product adjustments as they received more input. After managers, they are judged according to how well a week of tweaking, they released it on tablets to they meet an array of product-specific measures, the store’s sales associates, who use it alongside including journey ROI (see the sidebar “Holding customers to help them choose sunglasses. Journey Managers Accountable”). Typically, journey managers bring scrum teams Guided by the firm’s business priorities (for ex- together on-site (as Nordstrom did) or in war rooms ample, growing market share, increasing revenue, for design sprints, in which teams pitch new journey and improving customer satisfaction), they explore paths and features and then develop, test, and scale ways to expand and optimize the journeys they’re prototypes. Experiments may focus on anything responsible for, increase their stickiness, engage new from designing landing pages and devising live chats partners, fend off competitors, and cut costs, particu- with reps to optimizing back-end processes and im- larly through digitizing manual processes. More oper- proving “experience flow” (how a customer moves ationally, it’s their job to understand how customers from one journey step to another). 98 Harvard Business Review November 2015 SPOTLIGHT ON DIGITAL CUSTOMER ENGAGEMENT HBR.ORG While the best journey product managers work customers to keep them engaged. Analysts within in this way to continually refine existing journeys, the broader work group focus on narrow segments they’re also looking at the bigger picture, introduc- of the user base, typically zooming in on different ing larger-scale innovations that extend the journey countries to understand how usage patterns vary. and increase its value and stickiness. Consider, for This tracking extends to the level of the individual, example, how one of our clients, a global consumer revealing what recipes a given customer tries, how electronics company, is developing and marketing a often she uses the cooker and the app, and which app new countertop cooker. The product has program- features she uses—all of which allows continuing mable compartments that can be controlled by an innovation and personalization of the journey. app, allowing customers to simultaneously cook dif- The move from selling products to managing ferent parts of a meal. This creates opportunities to a permanent customer journey has required master- build an array of services that help customers get the ing the four capabilities that all companies will need most from the cooker. to compete: automation (in this case, the ability to Although the firm had long experience with control the cooker from an app); personalization product design, as it began adding connectivity to (offering tailored recipes); contextual interaction its products, management realized that it knew rela- (changing the app interface as customers move from tively little about creating services to enhance them. purchasing ingredients to cooking); and journey Recognizing that it would need a new structure for innovation (adding new recipes, online purchase designing and managing such services, the company capabilities, and community). created a global experience-innovation team, led by In perfecting these capabilities, the firm has a new-business-development executive and sup- made the continuing customer journey as much ported by a product design executive. Essentially a part of the brand as the cooker itself—and as impor- serving together as chief experience officers for the tant a source of value. Leveraging its new journey- new services envisioned, these executives oversee all focused managerial structure, the company is now of the firm’s connected-product initiatives and super- developing service-based journeys for other home vise the journey product managers (or “innovation health and household management products. leaders”) in charge of these programs. The cooker’s journey product manager was THINKING ABOUT the customer journey as a product tasked with creating various related services (help is leading to a major shift in how product invest- with meal planning, ingredient purchasing, and ments are determined, prioritized, funded, and meal prep) and building the journeys that would measured. Increasingly, firms will be focusing on deliver them. With his scrum team of designers, how an investment improves the economics of de- programmers, operations managers, and market- livering products and journeys to a customer seg- ers, the manager has led the development of a ser- ment—and how powerfully it reinforces engage- vice that provides recipes through the cooker app, ment—rather than just how it drives sales or reduces tracks what customers make, and then personalizes costs. Particularly for companies that are somewhat suggestions over time. The team is now developing distant from customer transactions, such as con- weekly meal-planning apps, and it has partnered sumer-goods makers and B2B firms, this requires with food producers to create recipes and offer dis- developing fundamentally new skills and structures count coupons for key ingredients. Ultimately, the for gathering and analyzing customer data, interact- team plans to support a customer community whose ing with customers, and focusing on the experi- members create and share their own recipes. ence design along with product and creative design. To do all this, the team scrutinizes data flowing Today, winning brands owe their success not just to from the app: what percentage of customers down- the quality and value of what they sell, but to the load it, how many register, how (and how often) superiority of the journeys they create. they use it, how cooker use and meal type vary by HBR Reprint R1511E geography, and, for those who stop using the app, at what point they defect. This data informs the team’s David C. Edelman is a global leader in digital marketing and sales at McKinsey & Company. tuning of the app’s navigation and prompts, along Marc Singer is the director of McKinsey’s global with the meal ideas and incentives the firm provides customer engagement practice. 100 Harvard Business Review November 2015 Copyright © Harvard Business Publishing. All Rights Reserved. This content is intended for individual research use only, subject to the following: Unless permission is expressly granted in a separate license, this content may NOT be used for classroom or teaching use, which includes teaching materials, electronic reserves, course packs or persistent linking from syllabi. Please consult your institution's librarian about the nature of relevant licenses held by your institution and the restrictions that may or may not apply. Unless permission is expressly granted in a separate license, this content may NOT be used in corporate training and/or as corporate learning materials. 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