If you start with “useful” as a first principle, then you automatically place customer need and experience first, writes Wolff Olins’s Mary Ellen Muckerman.

The closer you are to your customers, the more relevant your product will be and the more likely you make it for people to choose you. It may seem obvious, but the gap between those that do and those that talk is widening, despite the immediate bottom-line benefits. But more than this, companies that put usefulness at the heart of what they do become part of their customers’ lives. Engaging with customers then becomes an ongoing conversation, rather than the stop-start involvement that characterized the 20th century. This makes it much easier for customers to come back, and keep coming back.

Who are you for?

Usefulness is best achieved by thinking about everything as user experience. If you start with “useful” as a first principle, then you automatically place customer need and experience first. And you’re less inclined to get lost in your own jargon, product-development silos, or legacy.

Financial services like Zopa or the recently launched Simple (first known as BankSimple) are taking customer needs into account by addressing the frustration associated with the traditional banking system. Zopa shifts control away from conventional banking by encouraging peer-to-peer lending. And Simple creates a user-experience layer on top of standard bank partners that is more human, more modern, and more transparent. It speaks to customers in terms of personal savings goals and cuts through the jargon of the banking industry.

Designed to evolve with life

My experience tells me that the smartest approach to getting this right is to borrow from the playbook of user experience (UX). While this is often associated with the Web, consumers who experience good UX online don’t switch off their expectations when they switch off the computer.

The principles and theories of UX have created a new normal in terms of brand delivery and interaction. They state that how people actually use your product is much more important than how it was intended to be used. So engaging your consumer in ongoing, iterative product development is more valuable than holding out for a “perfect” product launch. It is far better to get started in a live environment and be prepared to change fast around the needs of the user. As a result, consumers need to know what to expect from your product, as well as what you expect from them. This means they need openness and transparency from you. If they make choices online based on honesty and credibility of comments, forums, and communities, they’ll expect you to be a part of that same engaged and involved culture.

Today’s most successful ”useful” organizations are oriented around this ethos. Their feedback loops (listening to their customers) and iterative releases (frequent launches) make them more fluid, responsive, and relevant than their competitors. The height of this relationship is co-creation, where consumers are engaged to create the product or services themselves.

Walgreens provides a good example of how a business can evolve through customer feedback. From its beginnings as a local Chicago pharmacy more than a century ago, Walgreens became the largest drugstore chain in America. But by 2010, they were yearning to reposition themselves as leaders in wellness. Rethinking what it means to be a community pharmacy in the 21st century, Walgreens invited their customers into the process. Consumers were given tours of Walgreens’s redesigned pharmacy prototypes and asked to share their hopes and fears about their personal health.

Walgreens found that consumers were looking for simple, engaging, everyday ways to take better care of themselves. The company used that information to deliver an experience that reflected their commitment to staying useful to customers—the ”health and daily living” store format, which the company took from concept to in-market pilot in record time. The stores integrated new roles, digital tools, and spaces to help customers live healthier everyday lives. A desk area in front of the pharmacy brings Walgreens pharmacists out from behind the counter so they can consult with patients one on one. Private consultation rooms provide additional space for immunizations, blood pressure readings, and other services. Web pickup services allow customers to shop online, and self-serve touch-screen kiosks let them quickly refill their own prescriptions. Customers also have access to a staff member called a Health Guide, who is equipped with an iPad app loaded with health tips and frequently asked questions. The new store format has been introduced in 20 stores in the Chicago area, and Walgreens is converting all its stores in the Indianapolis market.

Don’t always ask the audience

Being useful doesn’t always mean asking the focus group. It’s fair to say that customers don’t always know what they want. Customers now play an increasingly equal, participatory, and critical role in brand and business. But co-creation should not be accepted as a default solution to every challenge. Even when consumers do know what they want, empowering them to create it might not result in the most impressive solution. Observing consumers is usually a more effective way of discovering unmet or poorly met needs, and can reveal hacked solutions that suggest real opportunities of how to be useful in the world.

Let’s look at M-Pesa, whose founders witnessed people in Kenya using pay-as-you-go mobile phone minutes as currency. In response, they launched a branchless banking service that allows customers to transfer money, pay bills, and make withdrawals via their mobile phones. Within two years, it was conducting two million transactions a day, and 66% of Kenyans had used it at least once. Co-creation on its own often leads to small and valuable improvements, but it takes a bigger vision to build an extraordinary business. Anticipation and observation, although riskier, hold out the promise of making yourself truly useful at a higher level.

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3 Case Studies

Be More Like Apple

Think how you can be useful in areas that are not necessarily in your core but still drive customers to your business.

Apple’s ascendance during the past decade has distinguished it as a company that takes its own point of view into the market and then creates new customer needs (and therefore value) by improving devices that already exist in that market. By combining hardware, software, and services in a unique and useable way, it has built entirely new ecosystems of value from previously nonexistent customer demand.

Take the iPad, for example. Demand for the first-of-its-kind tablet skyrocketed after its launch, selling 300,000 tablets in the U.S. alone within the first 24 hours of sale. Two years later, the iPad continues to dominate the market, accounting for a reported 97% of all online Web traffic coming from tablets.

Be More Like M-Pesa

Look for ways that customers are navigating around obstacles and build a business out of that.

M-Pesa is a branchless banking service that uses mobile technology, and is currently available in Kenya, Afghanistan, and Tanzania. M-Pesa designed for people in rural areas where banking services are
scarce. Its founders observed that Kenyan locals were trading mobile minutes as currency. So they created a service that offers money transfers, bill payments and withdrawals—all through mobile phones. It is also creating adjacent services: M-Health, an agribusiness, and M-Farm which allows farmer co-ops to buy products via SMS and pay via M-Pesa.

Be More Like Zopa

Consider how you can connect your customers directly to one another. And have them create mutual value.

Zopa is the world’s first peer-to-peer money lending service. Addressing head-on the hassle and hidden fees associated with the banking system, it connects borrowers and lenders directly, creating a level of control and customer service unmatched by traditional banks. Zopa reduces lending risks by grouping together borrowers with similar track records and spreading borrowing requests across multiple loaners. The company gained more than 130,000 members within just two years of launch.

This story is part of Wolff Olins’s Game Changers report. Read the rest here.

Source: Fast Company