Customer Journey- Know your solution

Innovation Toolbox:

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The Innovation Toolbox

Customer Journey- Know your solution

By Ipower WP6DTI - Danish Technological Institute

Content6 AN INTRODUCTION7 HOW TO USE THE TOOLBOX10 THE CUSTOMER JOURNEY TOOL12 CUSTOMER INCENTIVES13 JOURNEY STAGES14 TOUCH POINTS & STAKEHOLDER MAP18 ACTIONS, THOUGHTS AND FEELINGS19 EXPERIENCE CHART20 MOMENTS OF TRUTH22 CASE OF HEAT PUMPS24 IMPROVE AND INNOVATE25 REFERENCES AND FURTHER READINGS

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Will the end users buy my new product or service? This question inevitably arises in every company developing and supplying new products

– and it is not an easy question to answer. When those products are potentially smart grid oriented and targeted at domestic consumers that might be taking part in a possible future market of flexibility services, the question becomes even more difficult. With the uncertain future of the Danish smart grid, the “technology-push” driven development and the domestic consumers currently experiencing the maximum comfort of on/off electricity supply availa-ble 99.997% of the time, companies that don’t ask that question will be ill prepared for intro-ducing their products and services to domestic consumers.

In this series of innovation tools we provide knowledge, inspiration and process guidance for you to investigate and answer that question by yourself. To do that, we have created four user centered innovation tools each helping you to investigate different aspects of the question above. On top of that we supply two appendixes for further work:

1. Strategic Scenarios: which possible smart grid futures should my company prepare for?2. Personas: What customer preferences should my products and services meet?3. Customer Journey: What customer experiences do my existing products and services pro-vide – and how can these experiences be improved?4. Business Model Builder: What value propositions can my products and services offer – and how can my company profit from delivering that value?

• Appendix 1: Nordic survey of smart grid projects: What have been studied and demon-strated already about domestic consumers in the smart grid?•Appendix2:A guide to perform rapid and cost-effective tests of the business hypothesis behind your products and services.

The tools have been developed as part of iPower, a ”Strategic Platform for Innovation and Research in Intelligent Power”, partly funded by The Danish Council for Strategic Research and The Danish Council for Technology and Innovation: www.ipower-net.dk.

An introduction

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How to use the toolboxThe four innovation tools are interlinked, and we suggest you apply the following approach for using them in your company:

1. Preparation phase:a. Map your customer journey: If you have existing product(s) on the market, use the custo-mer journey tool to collect and structure insights about the user experiences provided by your products and services. This process can take anywhere from a few weeks to half a year. If you do not have an existing product on the market, familiarize yourself with the customer journey concept as preparation for the strategic business modeling game

b. Read and start using the Personas and the Scenarios: Familiarize yourself with the perso-nas and the strategic scenarios, and begin using these for innovation activities and strategic discussions in the company. All the persons who are to participate in the strategic business modeling game should be familiarized with the personas and scenarios first

2. Business model building game :a. Assign and prepare a gamemaster: Prior to engaging in the business model strategic discussion game, assign a gamemaster to read and understand the rules, the tools and the knowledge contained herein. The key function of the gamemaster is to facilitate the game, and he/she should be prepared for this and for answering questions from the other partici-pants.

b. Play the game: Start playing the strategic business model building game, taking departure point in the business model game board and the rulebook provided. The scenarios, personas and customer journey will be included in the game when instructed, and as the nature of the game is iterative, you may revisit all 4 tools several times, or simply play it through once for a start

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3. Going furtherTest the developed business model: With inspiration from the two appendixes provided, test the developed business model in either a demonstration project or by conducting several rapid, low cost tests of the initial and ongoing interest for your business model.

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The customer journey is a tool that opens up the black box of customer experiences by systematically applying a design method to collect, structure and analyze the customer experiences provided by your product(s) and services. It maps the stages the customers go through as they experience your product and/or service, and it describes the experi-ences a customer has with your products/services and the emotional responses they provoke. It is a way of seeing things from the customer’s point of view and hereby identify the critical contact points where the per-formance of your products/services is most likely to either lead a customer to opt-out of – or to become an ambassador of – your product/service.

Customer Journey is a particularly useful tool to help identify the customers’ interac-tion with the product and/or service, their actions, thoughts and feelings, which can reveal opportunities for improvement and innovation in the customers’ experience. In its core, the customer journey helps you to ensure that every interaction between you and the customer is as positive as it can be.

Guide In literature, methods to perform customer journeys are endless; see e.g. Kimbell (2009) and Temkin (2010). Mostly the applica-tion areas refer to services untied to any physical products, e.g. public services to citizens. Only few cases use customer jour-neys on energy technologies, see e.g. British Department of Energy & Climate Change (2014), yet still we found no cases on custo-mer journeys on smart grid technologies in private households.

To give a simple example, a customer jour-ney for buying a cup of coffee could look something like this: A potential customer who is strolling down the street suddenly feels the urge for a cup of coffee. He starts looking for a coffee shop and spots your sign and façade, which gives

him the impression of having found a cozy café. As he enters the shop, the arrangement amplifies the coziness, but as his eyes find the counter – and the line in front of it – he immediately considers leaving for another place. Due to the atmosphere, he decides to stay, and as he advances through the line, he reads the apparently delicious menu and decides for a combination of a coffee and cake to suit his urge. Finally, arriving at the counter he starts ordering, but finds out the shop is out of the desired cake. As the remaining ones do not interest him, he settles slightly disappointed for a cup of coffee. After receiving the coffee, he realizes he is forced to sit outside, if he wants a table. As he has been walking for a long time and really needs a seat, he decides to brave the cold weather outside, and to his pleasant surprise the café provides both blankets and heaters, making it an excellent experience sitting there and watching the other pede-strians stroll by. The coffee turns out to be really delicious, and by the time he leaves the café, he makes a mental note to remember that place for the next time he’s nearby.

Concerning customer journey in a smart grid context we suggest a seven-step guide divided into three phases:Research1. Customer incentives 2. Journey stagesPrepare1. Touch points and stakeholder map2. Actions, thoughts and feelingsDo and evaluate1. Experience chart2. Moments of truth3. Improve and innovate

In the most challenging steps, we clarify the application of the customer journey using the case of heat pumps, and we have for-mulated step-wise ask-yourself questions to make it easier to get started with your custo-mer journey.

The customer Journey tool

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The case of residential heat pumpsThe case study of customer journey regar-ding residential heat pumps is based on data gathered in the Danish project named From wind power to heat pumps (in Danish Fra vindkraft til varmepumper) concluded in 2012. The project dealt with monitoring and remote controlling of (air to water or ground source) heat pumps in more than 300 households in rural areas in the Central Denmark Region. Our data consist of inter-view transcriptions with a minor share of the home owners participating in the project. The case study delimits itself to households supplied by ground source heat pumps.Please note that the case of heat pump is an example and it does not represent a compre-hensive customer journey analysis. Instead, the case points out the challenges when technology meets people in real life practi-ces and how the customer journey tool can break down challenges in a way that makes it possibly to identify the causes and accom-modate them.

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The customer pays you money for a reason. The reason tells you about the customer incentives. We divide incentives into custo-mer motivation and outcomes. Motivations for purchasing smart grid technologies may be modification in regulatory framework conditions, public subsidies, desire for fewer tedious household chores, desire to do something good for the environment or society, etc. Outcomes are customer benefits gained from using smart grid technologies such as cost savings, convenience/less strug-gling and comfort in everyday life, a green/better conscience, self-sufficiency and so on.

Questions to ask yourself:• What are the customer motivations?• What outcomes does the customer expect?

Customer incentives: ”The reason why it had to be right now was because there was a possible grant of 20,000 DKK [...] it was the scrapping scheme, it was bound to happen at some point or other, and I was very much in doubt whether we should shift to pellet boi-ler instead, but pellet boilers require some maintenance, and I could manage it today, but could I do it 10 years from now? ”

Customer incentives

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Your customers go through a number of stages as they experience your product and/or service. The stages (types and numbers) may vary depending on the product/service in focus. However, journey stages such as awareness, purchase, installation, operation, service and disposal or opt-out are com-monly used.

Questions to ask yourself:• What are the (most important) journey

stages?• Can we influence every stage?

Case of heat pumpsWe identify five stages that unfold the jour-ney that the customers go through as they experience the heat pump. That is awareness (prior to any information), the purchase phase (including research), installation, ope-ration, and service (non-compulsory). It is worth noticing that we divide the operation phase into manual control (in a non-smart grid scenario) and remote control (in a smart grid scenario) as customer experiences may differ due to operation mode.

”Someone asks what we have and then I say geothermal heating, and they say Well, what is it, does it work, and how does it work? How it works I don’t know in detail, but it works, there is a good heating and the tap water is fine. It’s not something we debate or discuss back and forth [..] it simply is there.”

Journey stages

Remote control operation

Manual control operation

Awareness Purchase Installation Service

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Case with heatpumps

Stages Stakeholders Touch points and functionsAwareness Written media; television and

radio; websitesIf they know, most people know about heat pumps through media, particularly from written media such as newspapers, weekly magazines and tecnical journals.

Friends; family; neighbors; colleagues

People in a social group are likely to influence each other. Many people are aware of heat pumps due to the peer effect in their social groups.

Local craftsmen To non-technical people local craftsmen have influence on the diffusion of awareness to heat pumps as they are seen as technical authorities.

Industry; utilities; industry associations;

Heat pump industries have interest in spreading the words of heat pumps. However, it is not the primary source of information to homeowners without educational, professional or interest linkages to the industry.

Touch points & stakeholder mapA touch point is every interaction between the (potential) end user and products or ser-vices or information about these, provided by your company or other stakeholders in the value chain behind your offering. Each stage can contain several touch points. In regard to smart grid technologies customers meet various stakeholders (in different touch points) on their journey, as they experience your product. The map identifies the most important stakeholders at every touch point and it reveals their impact and influence in each journey stage.

Questions to ask yourself:• What are the touch points in each stage?• Who are the stakeholders and how do

they influence the touch points?

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Stages Stakeholders Touch points and functionsPurchase Manufacturers The manufacturer designs and

produces the heat pump. Some people may have preferences for choosing a manufacturer over another depending on performances (COP), price, well-known brand etc.

Wholesale tradersLocal craftsmen; other retailers

The wholesale traders distribute heat pumps from manufacturers to local craftsmen and other retailers. Local craftsmen and other retailers sell the heat pump often in combination with dimensioning, installation and maintenance services.

Electricity distribution companies Converting the heat supply from oil boilers or natural gas boilers to a heat pump in households releases subsi-

dies, as the electricity distribution companies buy the energy savings. It does not happen automatically, and the house owner has to apply for such subsidy arrangements.

Banks In most cases, the purchase of a heat pump necessitate a bank loan. The obtainable interest rate influences the overall return of investment, hence the attractiveness of purchasing a heat pump.

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Stages Stakeholders Touch points and functionsInstallation Municipalities Before installing a ground source heat

pump the municipality has to permit it

due to the risk of noise pollution for neighbors.

Manufacturers Often a manufacturer is an invisible stakeholder in the installation phase. However, they are important as their design of commissioning and user interface in combination with the installer’s product insights are of importance to an easy and fast installation

Plumbers The plumber, a local craftsman, installs

and commissions the heat pump.

Stages Stakeholders Touch points and functionsManual control operation Electricity traders The electricity traders are characteri

zed by their function to supply electricity. It may be the electricity distribution companies or another company

Manufacturers In manual control operation mode the design of user interface and an easy-going user guidance are important and to homeowners in order to optimize the heat performance without contacting a plumber.

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Stages Stakeholders Touch points and functionsRemote control operation Electricity traders The electricity traders supply elec

tricity as in manual operation mode.

Aggregators Aggregators may be the electricity trader or another company that seeks to sell flexibility services by remote controlling the operation of the heat pump according to electricity prices.

Manufacturers In the remote control operation mode, manufacturers become more invisible, as the aggregator regulates the heating pump in regard to electricity prices, grid overload, comfort boundaries, etc.

Service Plumbers The plumper performs service checks and may repair the heat pump if it is broken.

Manufacturers The heat pump design affects the ease to perform services and repairing.

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Gathering insights into customer’s actions, thoughts and feelings is not easy, as you need to intervene with them. However, it is the most important part of the customer jour-ney. There are several ways to gather the data needed, e.g., questionnaires, information from value chain stakeholders and entering into dialogue with your customers. The latter being the most time-consuming approach (ranging from few weeks or months to half a year depending on customer volume and level of detail), but also giving the deepest insights. A good place to start is by asking your customer service department to syste-matically collect feedback from customers according to the customer journey you can outline for your products. Questions to ask yourself:•How and from whom will you gather the data needed in the customer journey?•Dothecustomerexperiencescorrespondto the customer incentives?

Purchase: ”Of course we have asked people to make us an offer to do it, and for one of the offers we called him right away and said that we thought it was a bit expensive, and just my saying so immediately made him cut down the price by 10,000 DKK - which I think is not being trustworthy. It is not a trust-worthy partner in any case.”

Installation: ”Now we are rather igno-rant here, and the first who came just to look at the installation, he was from the firm where we bought it. He started out by asking for an instruction manual.”

Actions, thoughts and feelings

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In order to operationalize the customer insights you will need to interpret and, even more important, understand the fin-dings regarding their actions, thoughts and feelings. The experience chart helps you to do so in each of the journey stages corre-sponding to specific touch points. Either you can interpret insights by yourself or you may ask the customers to rate their experiences as you intervene with them. We suggest you to scale the customer experiences into the categories positive, neutral and negative, as it is not easy to differentiate experiences in a more elaborated scale scheme, neither for you nor for the customer.

Questions to ask yourself:•Howcanyoudifferexperiencesinone journey stage and touch points from another?•Whowillinterpretthefindingsintothe experience chart?

Manual operation: ”But in daily life, it’s not something you think about, other than I think it’s cool with this floor heating all over, but in principle it could just as well have come from a district heating plant if the house had been located elsewhere” Remote operation: ”I believe that I could quickly disconnect the cable if they abuse it [...] I think that is ok, because it’s just part of an experiment”

Experience chart

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Moments of truth are the critical points when initiatives, activities and performan-ces are most likely to succeed or fail accor-ding to the customer experiences and their motivations and outcomes. In other words: Moments of truth are the touch points which make the difference between a happy customer and an unhappy non-customer. Mapping the moments of truth helps you find inappropriate touch points and the stakeholders responsible for the customer inconvenience.

Questions to ask yourself:•Inwhattouchpointsdomomentsoftruth occur - what have you found in your research?•Whatstakeholdersinfluencethosetouch points?

Service: ”The two rooms in there we think actually have been too warm. My husband has tried himself. We haven’t really had as much help with the unit out there as we had been promised by the firm we got it from.”

Moments of truth

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Case of heat pumps

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Apply the insights into your organization in order to improve bad customer experiences and start focusing on bad experiences in touch points in which moments of truth occur. To do so, you will need to locate the department and persons responsible for the touch points and start ideating on how to accommodate bad experiences. With several stakeholders across the value chain of smart grid technologies it may not be your orga-nization that causes bad experiences in the customer journey. In that case you will need to enter into dialogues with your value chain stakeholders or even the industry as such.

Questions to ask yourself:•Howcanyouaccommodatebadexperi ences and/or commercialize on great expe riences?•Whocanyouallywithtoimprovethebad customer experiences?

Case of heat pumpHeat pumps are one of the most promising smart grid technologies. Yet still large-scale phase-in of heat pumps (both manual and remote control operation) faces serious chal-lenges that need to be addressed by stakehol-ders in the value chain, as the following few examples indicate:

Improve and innovate

Stage Touch point Challenge Suggested solutions

Influenced stakeholders

Purchase Customers ask for quotation from different vendors

Huge difference on offers

Definition of price in force;Education of installers to pro-vide better offers

Manufacturers; wholesale tra-ders; retailers; local craftsmen

Installation Installation and commis-sioning of the heat pump

Non-specialized plumbers

Establishment of alliances to increase plum-bers brand spe-cialization

Manufacturers; plumbers; indu-stry associations

Service (non-com-pulsory)

Customers adjust the heat pump settings

Customers are not serviced as promised

Development of new user interfaces; Performance-based revenue streams

Manufacturers; plumbers

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References and further readingsBritish Department of Energy & Climate Change, 2014: Energy Companies Obligation (ECO) Customer Journey

Holmlid & Evenson, 2008: Bringing Service Design to Service Science, Management and Engineering

Kimbell, 2009: The turn to service design

Liedtka & Ogilvie, 2011: Designing for Growth: A Design Thinking Tool Kit for Managers

Temkin, 2010: Mapping the Customer Journey

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