What is the Return On Investment (ROI) when you invest in experience design?
I’ve been asked by quite a few people to tell more about “The Umami Strategy” — the book I published back in 2020. I don’t know how it works but it is easier for me to write books than write about the books :) Fortunately, other people ask me to answer their questions about it in a written form. So, I would like to share with you what I wrote to the journalist from Forbes Women about where “The Umami Strategy” sits with respect to business.
For years, there has been an established way of reaching customers. It seems not to be working too well anymore. What innovations can be introduced in product promotion?
Two decades ago, reaching out to customers gave you a good chance of “catching” them, i.e. convincing them to buy a given product or solution. Unfortunately (or maybe not:) the Internet messed things up. It helped us share our opinions through something called the “word-of-mouth”. And so it came to a situation where reaching the customer became only half of the success. The other half today is to build such a positive and at the same time unique experience while using a given product or solution that the customer wants to tell others about it.
Yet, the ways of reaching customers didn’t change much. This means that the cost of advertising (whether it is radio or television advertising, as it used to be or Internet advertising, as it usually is now), is constantly rising and at the same time advertising alone does not guarantee success. But positive online feedback, especially in large quantities, definitely increases the chances of success. This is known as organic growth. Not only is it inexpensive (or even free), it is also more reliable, because as customers we are more likely to trust other customers than advertising. For such organic growth to take place, the promises made through advertising and communication must translate into reality, i.e. customers must feel that the customer experience promised to them has actually been delivered.
And this is where the troubles begin. Just a few years ago, there was a belief that if you occasionally offered the customer a “wow” effect, i.e. a one-off positive surprise, the matter would be settled. An example of such a “wow” effect is, for example, a birthday card. The problem is that a “wow” effect is a very expensive way to achieve nothing. This is due to three reasons. Firstly, customers are looking for a pattern of business behavior that consistently stands out and a one-off “wow” has no chance of building such a conviction. Secondly, as people and customers, we all succumb to the effect of positive adaptation, i.e. we get used to good things. This means that what was exceptional yesterday is the new normal today. And thirdly, we remember our experiences not in “bullet points” but in the form of a story from some stage of interaction with a given company or product (for example, from the period of on-boarding or contract renewal), and such a story must have three key points: the first impression, the peak moment (that is, the memorable positive experience during the interaction), and a good ending of a given process or a given phase of the relationship between the customer and the company. Without addressing these three points, it will be difficult to build a relationship with customers that they will want to tell others about.
In your book “The Umami Strategy” you write about the use of experience design as a strategic aspect of business. What is this actually about?
The fact that designing good quality solutions is important hardly needs to be explained, especially looking at the demand for UX, CX and product designers on the job market. Translating the often operational work of a designer to a strategic level is more difficult though. This is because the executive at many companies, while often convinced that customer experience is a key part of their company’s strategy, don’t have the tools to translate that conviction into a strategic plan. I spoke to the CEO of one of Poland’s largest companies about this some time ago. He said that his education had prepared him to think strategically about finance, business and technology but not about customers. This is probably not surprising insofar as not so long ago there was little thinking about customers. Today, the lack of such thinking is a gigantic business risk.
Because I have worked for years with many companies in Poland and abroad (large corporations, mid-sized companies and startups) in the area of experience design, I myself have struggled with this educational problem. Many of my business partners at the management board level, often simply did not know how to strategically capture what experience design should be about in their company. Over the years I’ve helped them grasp this, and the resulting knowledge became the basis for writing “The Umami Strategy”.
The approach itself is actually quite simple and consists of four steps. Firstly, it is necessary to understand what customers are saying about the company and its offerings today, i.e. to collect and analyze the stories they share about it with others. On this basis, you can identify what is important to customers, what arouses positive emotions in them and what they see as the company’s differentiators. In the next step, the knowledge gathered should be used to define an experiential vision, i.e. how the company wants to build a long-term relationship with its customers through its purpose. The third step is to select a few differentiators, or in other words, to determine what experience characteristics the company is betting on. The final step is to create metrics to monitor whether the vision and differentiators are being noticed by customers and generating positive stories to drive organic growth. Seemingly simple, but often requiring long-term thinking to build a response with customers as opposed to a more short-term focus on current profit.
Is “The Umami Strategy” likely to be adopted by entrepreneurs?
First of all, it is necessary to realize that the customer experience is always there, regardless of whether it is designed for or not. This means that regardless of whether an entrepreneur consciously creates an experience or not, there will be an experience and customers will talk about it. Because, if I were to use a comparison, a purchase based on a marketing promise is like a wedding, and an experience is like a marriage. Sure it’s not always rosy, but the point is that at the end of the day everyone feels like they have a good relationship.
There are already quite a few companies that use the umami approach in their business operations — from large corporations to startups. But it’s not easy for the reason that the experience strategy is a counterpoint to business-financial strategies. This is because customer trust is built over time, hence it is difficult to expect a jump in sales from quarter to quarter. But if you think about how high the cost of acquiring new customers is, investing in maintaining satisfaction of those who already interact with a given company and supporting them as a natural source of promotion pays off more in the long run.
At the same time, betting on experience design increases employee satisfaction. Well, because everyone wants to be proud of what they do, right? And if a company offers a place where solutions are created that are liked and valued by customers, the motivation to work for many people significantly increases.
However, I should probably warn you that this is not a simple ploy that can be implemented in a few months. It is a strategic shift in the way an organization thinks, acts and sets goals.
The book does not seem to be aimed at everyone, who do you think should read it?
It is certainly not aimed at companies that create solutions that have nothing to do with people. But if the customer is a person, whether an individual or a business partner, then offering a good unique experience will ensure that the company is remembered positively. And that, in turn, means that the next time you choose a solution or a provider, the memory of such an experience may make you be chosen again (without having to ‘sell’ your services).
If I were to make a recommendation as to who might want to use “The Umami Strategy”, I would suggest it to companies that want to build market uniqueness based on a good reputation among customers. I would also suggest it to companies and entrepreneurs who feel they need to change something in their market approach. I am convinced that it will give them new insights and inspire a new business approach.
How do you get customers to change their habits and reach for what is new on the market?
There is probably more than one way to do this, which you can look for in studies on behavioral economics. But is it about making the customer reach for the novelty or about making them emotionally attached to the brand? A few years ago, I spoke to the designers of Apple’s in-store experience. Apple, with their hallmark experience which is that they challenge the established truths, have taught their customers to expect novelty in products but also in how they are served in their flagship shops. It has even gotten to the point that when a company does not introduce something new for a long time, customers are disappointed. This is because if a brand consistently shows them that it is bold and innovative, then these customers will be open to new products and willing to try them. If, on the other hand, the brand is conservative, any major change may be perceived as too radical. All this stems from the fact that we, as customers, form perceptions about brands and their solutions and then expect the brand to ‘behave’ in accordance with these perceptions. So it is hardly surprising that customers are distrustful of change if a company made them accustomed to a lack of it.
Let me come back to your question about how to encourage customers to change their habits. The latest neuroscience research shows that our brain accepts change in small steps. Therefore, if a given company focuses on a few key characteristics of the experience and consistently introduce them to subsequent solutions, processes and tools it will “teach” customers that certain non-standard solutions are acceptable. On the other hand, if it acts similarly to its competitors, it is hardly surprising that customers’ brains refuse to accept novelties that differ from their ideas and habits.
What would be your advice to entrepreneurs?
There is a report prepared every year by the advertising agency HAVAS, which is called the Meaningful Brand Report. For years this report has shown that if about 75% of the brands in the world disappeared today, nobody would notice. It is not about big bankruptcies that reverberate, but about quiet disappearances from the market. The reason for these results is that the typical customer-brand relationship is a transactional one in that the customer stays with a company as long as it is the cheapest or most convenient (or both). If a cheaper or more convenient competitor appears, the customer leaves with no regrets.
This relationship affects the average “lifespan” of a company, which, according to research published on the Statista portal, is around 20 years today (compared to 36 years in 1980 and 32 in 1996). This is a downward trend resulting from increasing competition due to the fact that technology allows many solutions to be created ever faster and at lower cost, in other words, cheaper and more convenient competition is appearing ever faster.
There is a remedy for this, namely to build an emotional relationship with customers. An emotional relationship means that a given customer is willing to stay with a brand even if cheaper and more convenient competition appears, because the brand addresses his needs beyond the pragmatic solution (such as a bank account, a new piece of furniture or a telephone subscription). This type of relationship can only be created by consistently building an experience that will differentiate the company in the marketplace. So, if I had any advice, it would be to focus on differentiators and to consistently build them in every aspect of customer interaction. Because advertising is a promise that a company makes. Experience, on the other hand, is the fulfillment of that promise, and whether customers are willing to stay with a brand for longer or jump to the next solution that appears on the market like the proverbial butterfly depends on its fulfillment.
Aga Szóstek, PhD is an experience designer with over 19 years of practice in both academic and business world. She is an author of “The Umami Strategy: stand out by mixing business with experience design”, a creator of tools supporting designers in the ideation process: Seed Cards and the co-host in the Catching The Next Wave podcast.