Today, we are proud to publish our first Service Design Case Study :-)
The Reserve Bank of India recently mandated that bank customers can use any ATM (not just their own bank’s) without any additional fee from April 1, 2009. Earlier, a bank would charge a customer anywhere between Rs.15 to Rs.50 for the use of ATMs belonging to other banks. This fee acted as a disincentive for customers to use the ATMs of other banks. In absence of this, customers will freely use any ATM.
When Bank A’s customer uses Bank B’s ATM, Bank B charges Bank A a usage fee of Rs.17-20. This was passed on to customers. Now that the bank cannot pass on this fee to the customer, it has to bear this cost for every transaction that its customers use another bank’s ATM for. A Bank with a small ATM network will be saddled with huge costs as customers start using the ATMs (of other banks) that are closer or more conveniently located.
“Influencing ATM Usage through Service Design” outlines how a bank can design its service to minimize the use of ATMs belonging to other banks by its customers. We analyze the different scenarios in which customers would use the ATMs of other banks and create a service model to deal with each scenario. We also studied the usage patterns and pain areas for customers in the current system to devise a new service that allows customers to record, track and account for cash expenditure, which otherwise appears as a single-line “ATM Withdrawal” entry in the bank statement, without providing any details of how the withdrawn cash was used.
We would love to have your comments and suggestions on the process, content and presentation of this case study. Please comment here or write to abhi@gutse.in
An old but interesting video of Seth Godin pointing out the ‘broken-ness’ of things… products, services, signage… He lists 7 common reasons why things are ‘broken’.
Most of the examples are funny and striking, but some are weak examples of ‘broken-ness’. I’d like to take an example to illustrate how we sometimes look for someone else’s “mistakes” to prove our point. But these ‘mistakes’ are in a context which needs to be understood.
Seth Godin shows the photograph of a pharmacy pill bottle meant for a dog. Apart from saying “DOG” in brackets after the name of the patient, the label has instructions like “alcohol may intensify the effects of this drug” and “use care while operating a car”
Yes, its funny that a bottle of pills for a dog has these messages. But, the reason why this is broken is not because of these messages (as Godin points out). The labels are pre-printed with these messages. So it is out of the pharmacist’s control to remove these irrelevant messages from a bottle of dog pills.
From a user experience point of view, this is broken because the pills are given in the same shape and size of bottles that are used for human prescriptions. Chances are that an old couple with dozens of prescription bottles might mix up pills and take the ones intended for their dog. An easy way to fix this is to put all prescriptions for animals in a bottle of a size and shape distinct from the normal bottles. This clearly indicates who the pills are meant for. And with a different bottle, a new label without the ‘funny messages’ might be in order.
I also discovered an interesting but now defunct blog called “This is Broken”. It has dozens of examples of services and products that are ‘designed’ badly.
More choice is good. Customers feel happy when they have a choice of brands, choice of flavours, choice of serving size, choice of delivery medium… But ‘choice’ has a diminishing marginal utility. After a point, every additional unit of choice decreases in utility or value to the consumer.
For instance, I drink 2 cups of coffee in the morning. This makes me happy. Three cups would be nice once in a while. But, I might not enjoy the fourth cup as much as the third. Or the fifth cup as much as the fourth. So the value or joy I derive from drinking coffee, keeps decreasing after the third cup.]
Similarly, it adds to my service experience if a bank offers 3 different (like, really ‘different’) types of bank accounts or if while booking a flight, I can choose between a veg/non-veg meal and a fruit platter. But sometimes, companies don’t take into account the basic principle of diminishing marginal utility while offering choice.
Kotak Bank offers 7 types of saving accounts, each of them identical to the other, except some minor differences.
To top this, the names of the accounts (Ace, Pro, Nova, Edge, Classic, Easy…) are hardly descriptive of who the account is for, what’s different about it, why should I choose it.
The multitude of accounts aren’t just bad for customer experience. It adds to the complexity of management, service delivery, back-end software and training for customer-facing staff.
Jet Airways allows you to choose from 27 (yes twenty seven!) types of meals including options like non-lactose, low-purine, bland-soft, low-sodium and a ‘Moslem meal’! I’m not even sure how many of these are actually available.
So why is more choice bad? and what is the ‘right amount of choice’?
When faced with too many choices, people prefer making no decision rather than a complicated one.
Post-purchase regret is more likely if a consumer feels that he could have fared better by making a different choice.
Failure to understand or see the difference between the many choices causes the consumer to get confused and feel vulnerable.
Creates unnecessary complexity without adding value to the customer experience.
The right amount of choice differs from service to service. But a simple rule of thumb is that an additional unit of choice should cater to the needs of a large enough customer group, should have 60%+ different features or should have a substantially different customer experience.
Barry Schwartz, an American psychologist has written extensively about this and a few years back published a book titled “The Paradox of Choice: why less is more”. Here he gives a talk about how the increase in choices has made us paralyzed and dissatisfied rather than freer and happier: www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html
Nine out of ten respondents to an Accenture survey report having left atleast one service provider in the last year due to poor service.
Accenture recently released its fourth Customer Satisfaction survey with a special report on ‘Customer-centricity’ in India. It has some revealing findings about what Indian customers care about, about their loyalty to service providers, what they do when they have a problem… Here are some highlights:
90% of the respondents have left atleast one service provider due to poor service Wow! 90% is a lot. Globally, the figure is 67%. The higher India figure is aided by greater choice and fewer entry-exit hurdles. 15 years back you had to wait for 3 months to get a telephone connection. Today, you can get 5 mobile connections in about 2 hours. This shift in power from the ’supply side’ to the ’demand side’ is something that a lot of companies (both private and government services) are yet to come to terms with.
Banks, Internet services and mobile operators were switched most commonly This is very obvious. Services that have become ‘commodities’ are the ones that will have the least customer loyalty and will be the easiest to switch. With number portability on the cards, mobile operators will see and even greater outgo of customers swayed by marketing messages and promotions. Incidentally, these three services are also the ones where the margins and profitability are constantly under pressure. When a service doesn’t offer anything unique, it is impossible to be consistently profitable in a buyers market.
45% respondents switch service providers because of a better price, 71% because of poor experience Yes, Indians are price-concious. But they aren’t pound foolish, penny-wise. Increasingly, if a customer is generally happy with a service, he is less likely to go price shopping or change services for a small price differential. People have less time which they want to spend with their families and doing things that interest them. But if you make their lives difficult, they’ll walk.
52% respondents believe their expectations are never or rarely met Are the expectations too high or are the services just out of tune with customers really want. A little of both. Companies will at some point have to say ‘itne paise mein itnaich milega’. But before that, they needs to spend time understanding how customers use their services and create service models that address these needs. There is little focus on designing services and experience in India right now.
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85% customers call a helpline for assitance, 68% send an email, 47% visit a website and only 31% visit a physical location
While this survey is revealing, it must be taken with a pinch of salt. One, it is limited in size. The number of respondents is around 300. Two, most respondents are reffering to customer service, not ’service experience’. But, customer service comes into picture when there is a flaw in the service model. Three, this survey probably represents a very narrow class of Indian consumers. I don’t think it is really reflective of what a rural mobile customer thinks or how he acts.
Redesignme.com is an interesting new platform that allows companies to harness the imagination and ideas of hundreds of people to create new products and services.
The idea is very simple. A company posts a ‘redesign’ project outlining the scope, limitations, expectations etc… Users who are interested in the area submit their solutions/ideas and the community rates and discusses each suggestion. Finally the company selects the best ideas and rewards them with points that can redeemed to buy products on the same site.
I guess most people are not doing it for the points. The website appeals to people who believe they have the ‘next great idea’. Real Companies posting real projects makes it a lot more ’serious’ than abstract discussions. Going by the activity on the site, there are a lot of people who are willing to put in a lot of effort (illustrations of schemes, 3D mock-ups…) to participate in the development of products and services.
For companies, it is a great way to harness the potential of what is fashionably called ‘crowdsourced innovation’. From 100 ideas, a company might actually find something that is really useful. Coming from ‘consumers’ rather than ‘consultants’, the ideas might reflect real needs though they sometimes lack a ‘business case’.
Today, we have an article from our first guest writer, Navin Boricha, Partner at MeriMaaCinema.
A restaurant, is a restaurant, is a restaurant, right? You go there … order some stuff … they serve you … you eat … you go home !!! How different can this get? Yet, for a few years now, a chain has been pushing the envelop on this. Here’s a first hand account of the ‘Crazy Noodles’ experience.
The first thing to hit you on your maiden trip to Crazy Noodles, would be the bright (borderline fluorescent) pink and green interiors. The walls are adorned with rather large pictures of delighted customers, in (increasingly common) black and white. The loud music in the background belongs to the standard ‘pop’ variety – but it does seem to have a skew, which contributes towards making the atmosphere very lively. Graphics on the table tops, inquire: “We hope you have left your table manners at home”.
The menu is (by now predictably) an oddly stretched rectangle. The waiter comes in with a weird plate with what looks like mint, but he squirts some liquid on it from a syringe and seconds later the mints expand into two tissues (unpredictably) ready to use. By now you are already expecting something crazy to happen – and the glasses of water, which come next, once again do the trick. The glasses have rather unconventional spherical bottoms, and rather than sitting on your table, they totter perilously. Eventually even the cutlery used for serving food is unconventionally shaped.
But is this place only gimmicks? What about the core product – the food? Well apart from the predictable twist in naming the dishes, the food is of a consistently good quality, it is priced moderately, served in generous portions and there are some ‘Crazy’ specials on the menu for the adventurously inclined.
The architects of the Crazy Noodles experience could have overdone the ‘crazy’ bit, but they have balanced the fine line between memorability and annoyance. For instance there is nothing crazy about the staff. As is customary in ‘Chinese’ restaurants in our country, the staff is primarily North Eastern. They are polite and genial, and even volunteer to tutor you in using chopsticks if you are in the mood for it.
Search for ‘Crazy Noodles’ on MouthShut.com and you’ll find a young housewife’s laudatory review, actually titled ‘Crazy Kiya Re”. All in all, Crazy Noodles is a fine example of a finely crafted customer experience layer, around the core of a well made and right priced product.
And oh yes, just one more thing … at a pre-appointed time, all the staff suddenly gather in a small group … the track changes to ‘Here comes the Hotstepper’ … and they all break into a well choreographed, small jig.
By now, the sneers of even the most cynical customers had made way for a broad smile :-)
Can the price of a branded product like mineral water be regulated by consumer courts? And if so, can the price cap be based on the cost of manufacturing? Is differentiation only at the level of manufacturing process? What about brand value, packaging, customer experience, positioning?
A judge of the Delhi Consumer Court recently issued a diktat to mineral water manufacturers to cap the price of their products at Rs.12. The reason in his own words:
Stating that the differential pricing above Rs 12 was “unfair trade practice”, Justice JD Kapoor, head, Delhi State Consumer Disputes Redressal Commission, said: “The process of converting ordinary water into mineral water is the same (for all bottlers) and the quality or purity is also the same.”
First, it goes against the basic principles of a ‘market’ economy to cap the price of a product. A manufacturer is free to price his products as he likes (actually, at a level where he thinks there will be enough demand). Consumers are free to buy the product if they see enough value in it at the price the manufaturer has set. If not, they won’t buy it and the manufacturer will be forced to reduce the price or will go out of business.
But for a moment, lets consider the judge’s argument, assuming that it is ok to regulate the price of mineral water. He suggests that if the process of making mineral water is the same and if the quality of the product is the same, then the price too should be the same. What about other economic factors? I might be running an ineffiecient operation, my old plant might cost more to run, I might be paying my employees more than the bare minimum wage…
More importantly, what if a product is positioned as premium or niche (as TATA Tea has tried to with Himalaya*) through packaging and branding? Doesn’t the packaging add to the experience of the product? Doesn’t the brand have any value? (incidentally, the TATA brand is valued at about $5.5 billion)
If this judgement is upheld by higher courts, it will open a can of worms. There are hundrerds of products and services (where the actuall process of production is identical) that are differentiated based on intangible attributes like packaging, brand, ambience, experience… Will coffee cost the same at Barista and Coffee Day? Will airlines be forced to cap their prices? (may be at Rs.12!)
Unfortunately, TATA Tea, the defendant in this case has chosen to take an equally narrow ground of appeal, claiming that because their water is sourced from the Himalyas, it should be allowed to charge a premium. They should be defending their fundamental right to set price.
Tata Tea had appealed for keeping the Himalaya brand mineral water’s price at Rs 20 a litre, as it was sourced from the Himalayan springs, while other mineral water brands used water taken from borewells. “It is immaterial whether mineral water is obtained directly from springs or through any other source,” said Justice Kapoor, while suggesting that the company should brand its packaged water as ‘spring water’ and not ‘mineral water’, as it otherwise could mislead the consumer.
It would help many a consumers if the consumer courts actually did something about the implementation of their earlier order that forbids stores (on the railway station, at multiplexes…) from selling products over their MRP. While the court passed this order more than 2 years back, it is yet to be enforced and we are sold Rs.12 mineral water for Rs.15 anyway!
*I do not particularly like the packaging of Himalaya or their attempt at building a brand story. Its very mediocre considering the amount of money they would have spent.
31volts, a Netherlands based Service Design firm recently invited practioners to define Service Design in a line. Some entries that I like:
Good service design is the process of deliberately crafting our experience and delivery of services, to make them more valuable for the people that use and provide them. – Nick Marsh
Service designers work with companies and governments to orchestrate their encounters with people. – Jeff Howard
“Hopefully we’ll end up with a diverse list of examples that help out in those elevator rides or in the moments when someone at the bar asks you what you do for a living…”
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More importantly, what if a product is positioned as premium or niche (as TATA Tea has tried to with Himalaya*) through packaging and branding? Doesn’t the packaging add to the experience of the product? Doesn’t the brand have any value? (incidentally, the TATA brand is valued at about $5.5 billion)
