FINEX Folio
By Reynaldo C. Lugtu, Jr.
Many technology companies and start-ups are disrupting incumbent industry players by providing better customer experience, thereby capturing significant market shares. Take for example Dollar Shave Club, which disrupted the razor market in the US in 2012, grabbing 30% market share from Gillette in just a few years by offering good enough blades through a direct-to-consumer selling via internet and mail order until it was acquired by Unilever for a reported $1 billion in cash.
How can Dollar Shave Club and other start-ups, despite their smaller operations and marketing budget, grab customers from existing market leaders? The answer is how obsessed they are with addressing customers problems by understanding their experience throughout journey of using and availing of a product or service.
A powerful tool we use in our consulting work to help understand the context of users is the customer journey map. It is a story designed to provide insights into the customer’s journey and to give an overview of the customer’s experience, i.e. the entirety of the interactions a customer has with a company and its products. This overall experience reflects how the customer feels about the company and its offerings.
There are eight major steps in the customer journey mapping exercise, namely:
1. Define your customer personas. These are fictional, generalized representations of your ideal customer types within your targeted demographic, attitude and/or behavior set that might use your offering. They help you understand your customers and prospective customers better, and make it easier for you to tailor content to the specific needs, behaviors, and concerns of different groups.
An example of a customer persona we always go through with our clients is the millennial customer persona, which for example can be giver a name Dan. He is 26 years old, finished college from a top university, a data analyst in a bank earning P70,000 a month, loves to travel, with a main goal in life to live his best.
2. Identify customer persona activities. This involves plotting the step-by-step stages of the customer’s interaction with the company. It ideally follows the buying cycle of a customer — awareness, consideration, decision, delivery and use, and loyalty and advocacy.
An example of Dan’s activities interacting with an insurance company would be: 1) looking for a life insurance policy for his parents; 2) saw an insurance brand in social media; 3) spoke to a friend who represented the insurance company; 4) bought insurance policies for his parents; 5) he went physically to the insurance company’s branch to file the insurance claim for his father’s death; 6) he is frustrated because it’s taken one week to get the claim
3. Identify primary touchpoints of the persona corresponding to each activity. Touchpoints are encounters that happen between your business and customers. Finding all the touchpoints is critical because each touchpoint leaves some impression and your main goal is to keep it up to the mark. These involve people and things that the persona has direct interaction with.
In the example above, the touchpoint for each stage are: 1) social media and friends; 2) social media; 3) friend who’s an agent and an insurance proposal; 4) insurance agent friend and insurance policy; 5) insurance claims staff and the claims system; 6) insurance claims staff.
4. Identify attitudes corresponding to the persona activities. These are feelings stated in the first person for the persona, which can give insights to your company on potential issues encountered by the persona.
In our example, when Dan expressed his frustration when the insurance claim took a week, his attitude may be, “Why the hell can’t this effing insurance firm process my claim immediately?”
5. Plot the graph of the persona’s experience curve. This corresponds to the attitudes and feelings for each activity of the persona, may it be happy, neutral, or sad. This will graphically show which where the company’s service shines and where it stinks.
Choose the top low points in the experience curve. This is where you choose and prioritize the top three lowest points. In our example, the lowest point is when Dan expressed his frustration when the insurance claim took a week.
6. Identify the needs your persona is not meeting due to these low points. This will help you understand the root cause of the low point in the experience curve. Maslow’s Hierarchy of Needs can guide you which needs are not being met. In the case of Dan, it’s the basic functional and moment needs of the persona which were not met.
7. Identify the impact to the persona and business. This is to evaluate consequence of not meeting the needs of the persona. In the case of Dan, the business impact would be Dan may shift to another insurance provider.
8. Redesign the new service by addressing the low points of the persona. This is where you need to evaluate how to address the low points of the persona in the experience curve. An approach that we use it to provide business executives with a list of innovative strategic tactics to choose from.
In our example, some of the tactics that can be employed to address Dan’s issue are process automation and experience simplification. These tactics can be further explored and detailed to understand how they can be executed.
Customer journey mapping can be a helpful tool in strategic planning exercise of a company, as it uncovers strategies and tactics to better serve its customers. In particular, it can also be a useful approach in broader digital transformation, efforts of an organization because, at its heart, is about adapting to changing consumer expectations.
Reynaldo C. Lugtu, Jr is president & CEO of Hungry Workhorse Consulting, a digital and culture transformation firm. He is the chairman of the Information and Communications Technology Committee of the Financial Executives Institute of the Philippines. He teaches strategic management in the MBA Program of De La Salle University.
