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Skeptics always want to know why they should invest in design. Even today, when the business landscape is teeming with success stories that celebrate design as a powerful strategic tool, the answer to this question is not well understood by the average businessperson—and understandably so. After all, design is notoriously difficult to define, tough to measure, hard to isolate as a function, and tricky to manage, making it challenging for many non-designers to comprehend.
An exploration into why companies that lead with design outperform the market.    
by JENEANNE RAE       

Skeptics always want to know why they should invest in design.  Even today, when the business landscape is teeming with success stories that celebrate design as a powerful strategic tool, the answer to this question is not well understood by the average businessperson—and understandably so. After all, design is notoriously difficult to define, tough to measure, hard to isolate as a function, and tricky to manage, making it challenging for many non-designers to comprehend.  

Over the years, many organizations have attempted to tackle this issue, eager to make a hard case that will make design-unconscious managers take notice. In 2005, the UK's Design Council discovered that every £1 spent on design led to more than £20 in increased revenue, £4 in increased profit and £5 in increased exports.1 An even earlier study, by Julie Hertenstein and Marjorie Platt, examined 51 firms in four industries, using 12 different measures of financial performance across five years, and concluded that firms rated as having good design were stronger on virtually all measures.  

Several years ago, Motiv Strategies began conducting studies on companies that were consciously using design as an integral part of their business strategy. While tracking the financial performance of these design-centric companies, we found they outperformed the S&P 500 by a significant margin.3 It quickly became clear that there is a correlation between investing in design and extraordinary stock performance.  

Seeing this work, DMI president Michael Westcott asked us to revisit the creation of an index that could be used to track how design-centric companies perform relative to the S&P 500 over time. Partnering with DMI on this effort, we devised a portfolio of 15 publicly traded US companies that made the cut for inclusion: Apple, Coca-Cola, Ford, Herman-Miller, IBM, Intuit, Newell-Rubbermaid, Nike, Procter & Gamble, Starbucks, Starwood, Steelcase, Target, Walt Disney, and Whirlpool. The results supported our previous findings. While the S&P grew 75 percent from 2003 to 2013, our Design Value Index grew an astonishing 299 percent.  

The fact remains that although these results show a powerful return on investing in design, the index does little to explain the how of this phenomenon. This article seeks to explain the various ways design can add significant value to large and small enterprises alike.    

The diverse companies comprising the DMI Design Value Index all understand the power of design, how to use it as a tool, and how to scale it in a way that will drive success for their businesses. So what is the value that broad deployment of design principles and methods brings to these companies? The following are eight ways in which design is helping these companies win big.    


Great design helps make products and services more aesthetically pleasing, more compelling to use, and more relevant in a world that seems to change at an ever-increasing pace. This is one reason the world is currently in love with Tesla Motors, which has given us drop-dead gorgeous cars that help save the planet and get 200 miles on one charge. Or think about how much of the public has been completely enamored with Apple products over the last decade.  The wow factor can also draw consumers into supporting certain companies over time. In the 1990s, for example, discount retailer Target faced increasing competition from similar stores such as Wal-Mart and K-Mart and realized it faced three options: "to specialize, to become the low-cost producer, or to differentiate," remembers Gerald Storch, Target's vice chairman at the time. The first choice would have crippled future growth; the second was already a battleground. So, the company decided to go with the third: differentiate through design.  That decision led to Target's domination of the mass merchandising market as Tar-zhay, the mass purveyor of stylish yet ffordable goods. It didn't miss the mark—thanks to its design ethos, which can be found in everything from its product offerings to its store layouts to its commitment to innovation. Indeed, companies like Apple and Target have raised the bar so high in their use of design that the public is more aware than ever of what good design looks like and what design-led companies are capable of producing. There is no doubt that this factor is showing up in company growth trajectories, as well as in their stock market results.    

People today want to connect with brands as extensions of themselves. We see them, hear them, and interact with them in more ways than ever before. Some of the most valuable work designers can perform lies in the interpretation of a company's brand elements and how customers connect with them.  "Connecting used to be, 'Here's some product, and here's some advertising. We hope you like it,'" says Nike CEO Mark Parker. "Connecting today is a dialogue." And Nike has put its money where its mouth is. Its spending on TV and print advertising has dropped about 40 percent in the past three years at the same time that its sales have increased to more than $25 billion—more than 30 percent greater than closest rival Adidas. How? Nike is going straight to where the customer is—the digital world.  Nike has carefully crafted a multichannel digital presence that not only fosters open communication with customers, but also encourages those customers to connect with each other. In 2010, the company launched Nike Digital Sport, a new division in charge of developing devices and technologies that help users track their personal statistics in whatever sport they pursue. By deepening relationships with (and among) its customers, Nike enables customers to amplify its signature "just do it" attitude. The result? Before, Nike could count its biggest brand audience as the 200 million people who tune in to the Super Bowl. Now, across all its sites and social media communities, it can match that figure any day.4 Nike continues to communicate the inspirational, active, can-do spirit that its customers crave across its product lines, and promotes it with platforms designed to amplify that energy.  

Design research emphasizes the use of empathy, an instrument for encountering the world as others might. The importance of this tool cannot be overstated. After all, no matter whether one designs products, services, or processes, consciously keeping the end users in mind helps to reveal inspiration for category- killing products, as well as lower the risk of failure.  Further, being the first to find and develop solutions to latent needs, which one can uncover by studying what people do, think, and feel, provides the opportunity for first- mover advantage, provided the company can commercialize and scale the insight uncovered.  In 2007, Intuit founder Scott Cook decided that his company wasn't innovating fast enough. He kicked off Design for Delight, a design thinking- based internal program intended to help Intuit development teams better understand customers' frustrations and desires so that Intuit could design solutions to meet them. This deep customer understanding eventually led to the development of SnapTax, a mobile app that allows users to complete their taxes in 10 minutes or less. Within three weeks of its launch, the app saw more than 350,000 downloads and remains wildly popular on the iOS App Store and the Google Play Store.  Identifying and capitalizing on the discovery of unmet needs leads to the perception of market leadership. If a company can do this systematically, that perception will become reality.    

In every relationship we have with providers of goods and services in our society, there is an inherent end-to-end experience. When designers get involved in creating experiences, they use techniques involving empathy to uncover and optimize for both functional and emotional customer needs. Different types of designers (interaction, brand, package, product, service, graphic, and so on) contribute at various stages of the process to, in the best cases, build a seamless, branded, and differentiated experience. By definition, this work connects various parts of the company that in many cases had not previously even met. This is a critical byproduct of the top design- driven companies and a key value-added secret that best-practice companies in the Design Value Index share.  Disney is one company that has built a successful business ecosystem around delighting customers. In particular, its park and resorts unit—which includes iconic attractions Disneyland and Disney World—has gained attention by pioneering the field of experience design. Disney's Imagineers, the creative force responsible for creating and developing its entertainment venues, include illustrators, architects, engineers, choreographers, lighting designers, show writers, graphic designers, and many more who are tasked with "making the magic." Every aspect of a customer's visit is thoughtfully designed to delight. Cast members (employees) are even trained on how to treat guests (customers) to the smallest details—for example, how to smile and wave. The intangible elements of the experience haven't been ignored, either: the ambient sounds along walking paths and the scent of cookies that wafts through the park help immerse visitors in a fantasyland determined to deliver on its promise of being "the happiest place on earth."  Its investments seem to be paying off. The park and resorts division has posted the fastest revenue growth of any of the company's five business units in the past year.    

Figure 2A $10,000 investment in our index of diverse design-centric companies would have yielded returns 228% greater than the same investment in the S&P over the same period of time. 

Recently, design thinking has become popular with organizations that face murky, complex issues that are hard to solve using traditional business best practices. By employing such design tools as empathy, creativity, and rationality, organizations are able to reframe problems in ways that forge new pathways toward innovative solutions. In other words, designers don't create solutions until they have determined the root issue, and even then, they pause first to consider the whole range of potential solutions.  IBM is working design thinking into its practices to build a new way of creating solutions for its customers. In addition to heavily recruiting designers and design experts, the technology giant recently launched an initiative to send product teams to Designcamp, a one-week design-thinking training camp at a brand-new studio in Austin, Texas, that was built for this purpose. Product managers, developers, and designers learn design-thinking techniques and put their new skills to use developing solutions for mobile, social, cloud, security, and big data.  What's so big about design thinking is that it allows all comers to tap the right/creative side of their brains to think in new ways, create new connections, derive new insights, and create innovative solutions. With creativity a lost commodity in many business settings these days, this practice builds that muscle.    

Good design is the difference between a complex, frustrating interaction and a delightful experience. It could be your car dashboard, your digital camera, or an app on your smartphone. Well-designed interactions can save us time, make us more productive, and even provide emotional support in practically everything we do. Think about this the next time you easily withdraw money from an ATM or, conversely, close a website in frustration because it is too hard to navigate. Clearly, customers are flocking to companies that have gained a reputation for well-crafted interactions.  Coca-Cola has mastered designing interactions that reinvent the way customers connect with its products, most recently evidenced by its recreation of the fountain drink machine. Marketed as "the refreshing new way to express yourself," the Freestyle, a touchscreen soda fountain, allows users to customize their beverages by dispensing different flavor options along with their selected Coca-Cola product.  The revolutionary machine allows for more than 100 drinks, a far cry from the standard 8-option fountain soda machine it is quickly replacing across the country. The company even rolled out an app designed specifically to help customers locate nearby Freestyle machines and share favorite drink combinations, among other activities. Not only that, but each machine maintains a data connection to Coca-Cola headquarters and uploads information about each drink dispensed and all supplies used in real time, which creates critical conduits for generating customer insights (not to mention managing inventory).    

With their special ability to understand and interpret people and cultures, designers are well suited to help their companies assimilate what is required to capture the hearts and minds of new types of customers, sometimes in new parts of the world.  Being in touch with both existing and potential customers has been an exceptionally successful tactic for Aloft, Starwood's newest hotel concept. Despite a tough market for the hospitality industry, Aloft has opened 75 locations in just over four years and plans to open more than 30 more within the next few years, thanks in large part to thorough understanding of its target customers.  Conceived as an interactive, trendy hotel for plugged-in young travelers, Aloft is designed to evoke an energetic atmosphere that encourages guests to socialize, rather than immediately retiring to their rooms. Its super- modern style and pioneering initiatives in music and technology have generated significant press—and business. The franchise's explosive growth since opening its first location in 2008 helped to fuel Starwood's 54 percent climb in stock prices emerging from the recession. Simply by using intimate customer knowledge, Starwood was able to identify and fill an unmet desire in younger travelers for a hotel experience that fit their lives, as well as broaden the entry point to its brand, making it possible to engage a wider variety of customers and cultivate long-term loyalty.  In our recent recessionary environment, it is remarkable for a company to exhibit the leadership to develop and invest so heavily in an entire new category. Armed with the confidence of knowing its customer so well, one can see it would be less of a stretch for management to think boldly and take big risks in search of big returns.    

Design can also make great strides to help get the cost out of manufactured goods through rethinking the ways and means by which products come together. Procter & Gamble, best known for its household brands such as Tide and Pampers, has recently developed a process to develop plastics that are thinner, cheaper, and more environmentally friendly than the industry standard. It is estimated that this new technology could save the company up to $1B a year. Companies that harness design to curb costs can thus double design's financial impacts by managing the bottom line while simultaneously growing the top line.    

These eight categories are just some of the many ways design can be used as a strategic business tool to increase sales and market share, build wider margins, and drive customer delight. But this list is not by any means exhaustive. Although the role of design within organizations can be difficult to define, it is clear that giving design a seat at the table adds significant value that helps differentiate and elevate companies beyond the norm and deliver tangible business results.     

Jeneanne Rae is the founder and CEO of Motiv Strategies, an innovation strategy firm. For more than 20 years, she has served as a consultant to dozens of global corporations, including Procter & Gamble, Johnson & Johnson, Microsoft, Pepsi, and AIG. Her expertise includes innovation, design integration, customer experience, and growth strategy.

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innovationbusiness designcustomer experience
Move over, Google. According to a new ranking, Sanofi, FedEx, and Apple are among the world's most creative companies. The analysis was done by ViewsOnYou, a site for employees and hiring departments to match up personality fit in businesses. Users log in with their LinkedIn and Facebook logins, review themselves by key personality traits — including measures of creativity, ambition, and appetite for risk — and then invite their peers to review them, too. Several standard psychological models are used to assess employees, such as the five-factor OCEAN model that measures openness, conscientiousness, extraversion, agreeableness, and neuroticism.
Tens of thousands of professionals around the world have reviewed themselves, creating employee snapshots for hundreds of large companies, including Google, Goldman Sachs, KPMG, and Walmart.

According to ViewsOnYou, the following 25 companies have the most creative employees in the world:

1. Sanofi Industry:
Drug manufacturer Headquarters: Paris, France

2. Toyota Motor Corporation Industry:
Auto manufacturer Headquarters: Toyota City, Japan

3. Grant Thornton Industry:
Accounting services Headquarters: Chicago, Ill., U.S.

4. Qualcomm Industry:
Communication equipment Headquarters: San Diego, Calif., U.S.

5. FedEx Corporation Industry:
Delivery services Headquarters: Memphis, Tenn., U.S.

6. Apple Industry:
Electronics Headquarters: Cupertino, Calif., U.S.

7. CBC Television Industry:
Media Headquarters: Toronto, Canada

8. Universal Music Group Industry:
Music Headquarters: Santa Monica, Calif., U.S.

9. Viacom Industry:
Media/Entertainment Headquarters: New York, N.Y., U.S.

10. Qatar Airways Company Industry:
Travel services Headquarters: Doha, Qatar

11. Costco Wholesale Corporation Industry:
Discount goods Headquarters: Issaquah, Wash., U.S.

12. Smith & Nephew Industry:
Medical equipment Headquarters: London, U.K.

13. Verizon Communications Industry:
Telecom services Headquarters: New York, N.Y., U.S.

14. Cathay Pacific Industry:
Travel services Headquarters: Lantau, Hong Kong

15. Virgin Group Industry:
Diversified travel, telecom, financial services Headquarters: London, U.K.

16. Intel Corporation Industry:
Technology Headquarters: Santa Clara, Calif., U.S.

17. Colgate-Palmolive Company Industry:
Consumer goods Headquarters: New York, N.Y., U.S.

18. Marks and Spencer Industry:
Department stores Headquarters: London, U.K.

19. The Boeing Company Industry:
Aerospace and defense Headquarters: Chicago, Ill., U.S.

20. Eli Lilly and Company Industry:
Drug manufacturer Headquarters: Indianapolis, Ind., U.S.

21. Warner Music Group Industry:
Music Headquarters: New York, N.Y., U.S.

22. News Corp Industry:
Media Headquarters: New York, N.Y., U.S.

23. Volvo Car Corporation Industry:
Auto manufacturer Headquarters: Gothenburg, Sweden

24. Alcatel-Lucent Industry:
Communication equipment Headquarters: Paris, France

25. Merck & Co. Industry:
Drug manufacturer Headquarters: Whitehouse Station, N.J., U.S.

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innovationbusiness design
“What brands really ‘get it’ when it comes to customer experience today?” What company has so seamlessly integrated its online and offline experience that it never feels like two different companies? I’m looking right at Burberry. Sure, Nike has combined its products and digital applications into a singular holistic experience, allowing you to track your athletic endeavors big and small, and Dove and Tide drive as many consumers to the website as they do to the shelves they live on.
During a keynote talk I delivered in London last week, I was asked the question: "What brands really 'get it' when it comes to customer experience today?"This wasn't a naïve question. It came from one of the 100 senior marketers from the strongest global brands in the world. The question extends beyond great digital customer journeys—Zappos, Peapod, Travelocity or AirBnB— and great physical customer spaces, BMW, Southwest or Virgin.

What company has so seamlessly integrated its online and offline experience that it never feels like two different companies? I'm looking right at Burberry.

Sure, Nike has combined its products and digital applications into a singular holistic experience, allowing you to track your athletic endeavors big and small, and Dove and Tide drive as many consumers to the website as they do to the shelves they live on. The Cosmopolitan Hotel in Las Vegas helps you feel like you're there even when you are shivering in Chicago, while AMC's The Walking Dead allows you to participate in the zombie apocalypse online while your heroes take care of "live" walkers on Sunday nights.

But the brand that is truly doing the best right now at blurring the physical and digital worlds is Burberry.

The historic transformation of Burberry is well documented in many interviews, case studies and the like, including HBR's "Burberry's CEO on Turning an Aging British Icon into a Global Luxury Brand." In a nutshell, Burberry underwent a seven- year transformation from an underperforming, marginalized, over-licensed, decentralized brand, to becoming one of the most beloved and valuable luxury brands in the world, tripling sales in five years. It transformed from a stodgy, beige trench coat company to one of the leading voices on trends, fashion, music and beauty, all while redefining what a world class customer experience should be, digitally and physically.

Angela Ahrendts, CEO of Burberry and soon-to-be head of Apple AAPL Retail, articulated this best when describing Burberry's London flagship store. "Burberry Regent Street brings our digital world to life in a physical space for the first time, where customers can experience every facet of the brand through immersive multimedia content exactly as they do online. Walking through the doors is just like walking into our website. It is Burberry World [their website] Live." Chief Creative Officer/Brand Czar (and incoming CEO) Christopher Bailey also recently declared that Burberry is as much a content-driven company as it is a leading fashion icon.

I will leave the rest of the storytelling to others, but what Burberry has done with its customer experience is definitely worth teasing out. Where do great brand-driven customer experiences start? Here are five steps to consider, using Burberry to illustrate each:

Declare what your brand will stand for. This one was easy for Burberry's new leadership team, led by Ahrendts back in 2006. It all tied to getting back to the glamorous fashion roots that had movie stars and the rich and famous in the 50s and 60s proudly showing off their Burberry trench coat and, in effect, selling the coat for the company—what we call "earned media" today. Trench coats represented less than 20% of their sales in 2006 and the "coat as fashion" trend exploded in the mid-2000s. Harking back to the romance of Burberry in a modern world became the brand's mantra, and "being the leading, globally relevant, luxury British brand" became the brand's aspiration. When you choose very purposeful words like leading, globally, relevant, luxury and British, you have, in effect, chosen the hallmarks of what your experience has to deliver upon.

Choose a target wisely. When Burberry began to relaunch their brand and truly own their new positioning, it would have been easy to choose the middle-aged man who probably already owned an old trench coat as a target. If they had gone that route, though, 2% annual growth would have continued to be the norm.

However, Ahrendts and Bailey broke free of tradition and declared they would build a brand, product and experience aimed at Millennials. Bailey stated, "Most of us are very digital in our daily lives now. Burberry is a young team, and this is instinctive to us. To the younger generation who are coming into adulthood now, this is all they know." While it can be unfair to group them all together, more often than not Millennials are the influencers, tastemakers, official critics and reviewers in society today. They also happen to be incredibly brand loyal as a collective whole, with an increasingly attractive level of disposable income. If delivered well, this target would pay dividends to Burberry for years to come.

Design an experience that delivers your brand promise to the target audience. Once the first two objectives were in order, developing an experience became directionally straightforward. It's not a simply a matter of fixing broken links in the customer journey, it is about understanding the customers' needs and motivations and designing an experience that best meets that need. For the most part, high-end fashion had been about the fashion house telling you what the latest fashions were and ordering you to like it/buy it.

Burberry looked at the target customer and realized that Millennials are more influenced by peers than by anything that a fashion house might have to say. And discovery, advocacy and sharing among communities do a lot of the heavy lifting of brand-building. While a company can make a potential customer aware of its brand, current consumers and advocates help sell it.

One customer journey innovation is Burberry's The Art of The Trench, described as "a living celebration of the Burberry trench coat and the people who wear it." This platform successfully positions the customer as a hero, and provides a forum for him or her to proudly show off their trench coats and individual styling via selfies posted on Instagram or Pinterest. Thousands of selfies have been posted, with comments, likes and dislikes and the opportunity to shift any one of those pictures into a purchase.

Burberry also recognized that music is so interwoven into customers' lives that it created Burberry Acoustic, a platform for new British bands looking to get a break. A few years ago, you might have seen Jake Bugg before he made it big or The Daydream Club posting videos on the Burberry Acoustic website that streamed to Burberry stores around the world. Burberry's authentic dedication to giving young British bands an opportunity to break through, using all of its multi-media platforms, is not only on-brand but plays right into the Millennial sweet spot of getting access to music in unique and innovative ways.

Create a branded experience, branded signature touchpoints and the organizational alignment to empower employees to bring the brand to life in unique and surprising ways.

Online, Burberry created Burberry Bespoke, which allows you to design your own customized coat by choosing from hundreds of different options, from the buttons on the outside to the lining in the inside. In the store, many products are lined with an RFID tag that, when triggered, will launch a video about its craftsmanship. A dress taken into the changing room may trigger a runway video showing this jacket/dress combination on a model.

Can't afford a Burberry jacket yet? How about throwing a Burberry Kiss to a loved one? Burberry Kisses is a collaboration with Google that allows users to kiss their touch screens and send their lip prints to loved ones—no purchase necessary. It's a valuable entry point that whets consumer appetites that will be satisfied immediately or down the road with a Burberry purchase. Music and kisses are free of charge and build good will for a loyal customer down the road.

Internally, Burberry invests in organizational alignment and brand engagement, sending out monthly webcasts, weekly videos and previews of ad campaigns before they launch. According to Ahrendts, "Knowledge is power. So the more the associates know about the strategy, about what's coming, the better. Everyone talks about building a relationship with your customer. I think you build one with your employees first."

Continue to innovate the experience and the brand

Last Fall Burberry launched its first ever men's cologne called Burberry Brit Rhythm in a totally non-traditional way—through global music events and digital media. "Inspired by the energy of live music" helped propel Rhythm to become one of Burberry's most successful new product launches.

And in January, Burberry launched The Burberry Beauty Box in Covent Garden, a new concept space where shoppers can enjoy an exclusive collection of beauty products and accessories. Inside, you can go to the Digital Nail Bar to help virtually select the right nail shade for your skin tone while Burberry Acoustic music is playing in the background and a Millennial sales person helps you put together your perfect Burberry Gift Box.

I wonder if, for just one day, we can rename Burberry to Blurberry, to teach others how to get it right?

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customer experiencecustomer service
Not so long ago, every business assumed that the keys to success were the highest quality product, the best value for the buck, and the best customer service. Now all we hear about is providing the best “customer experience.” Exactly what is that customer experience that every modern marketer is talking about, and how do you measure it?
A recent article in the Harvard Business Review "The Truth About Customer Experience" defines it as your customer's end-to-end journey with you, not just the key touchpoints or critical moments when customers interact with your organization. Customer experience is the cumulative impact of multiple touchpoints over time, which result in a real relationship feeling, or lack of it.

The advent of social media and real-time interactive feedback via the Internet allows every customer to build and expect a relationship with your business, rather than just touchpoints. Yet we are all still learning what that means, in terms of hard business practices.

I like the insights outlined in the new book "Summit," by F. Scott Addis, who is an experienced business executive and recent Inc. "Entrepreneur of the Year" finalist. He ties business success and your personal summit to elevating your customers' experience with the following specific recommendations and key differentiators:

Listen to the individual customer. Every relationship requires listening, as well as talking. You have to hear your customer's dreams, goals, passions, and aspirations. That opportunity for your customers to talk and be heard is pleasurable and memorable, and defines their customer experience, more so than just satisfying business touchpoints.

Exploit your product and service differences. A memorable experience has to have something different from the norm. You must be able to highlight these differences between your products and services, and those of your competitors. If not, you are part of the crowd, and no relationship can be built.

Demonstrate the value of your offering. The first step in being able to demonstrate your value is being willing to find out what your customers want or need. This will create a connection with them, which demonstrates more value than price or quality. You create a loyal customer that wants to buy from you, and will recommend you to others.

Show your passion and creativity in every solution. This active discovery mindset searching for new questions drives real innovators away from more of the same. They fundamentally become value seekers; they look for value in every experience, in every conversation. They don't seek prescriptions, they seek possibilities.

Demonstrate your personal commitment. When in contact with customers, focus 100 percent on them, and do all you can to determine and meet their needs. Remember, customers are the reason you do what you do. Give them the respect and results they deserve and they will tell others about your good work and your business.

Shoot for the customers' hearts. Engagement and an emotional connection will make a customer relationship the driving force for loyalty and differentiation. Move from customer friendliness to customer charisma. A business with charisma gives the customer something very special, and they want to tell others about it.

Once you know how to improve your customers' experience, you need to also know how to benchmark it. Remember the old adage, "If you can't measure it, you can't manage it." So how do you measure customer loyalty and relationships? One new metric now commonly used is called the Net Promoter® Score (NPS).

This works by asking your customers for feedback, and dividing them into three categories:

Promoters. Loyal enthusiasts who keep buying from you and urge their friends to do the same.

Passive. Satisfied but unenthusiastic customers who can be easily wooed by the competition.

Detractors. Unhappy customers who feel trapped in a bad relationship.

The formula for the Net Promoter® Score is the percentage of customers who are detractors, subtracted from the percentage who are promoters (NPS=P-D). Legendary companies like Amazon and Costco operate with an NPS between 50 to 80 percent. But the average venture sputters along at an NPS of only 5 percent to 10 percent, or even negative.

Maybe it time for all of us to focus more on the customer experience. There is other evidence that companies with the highest customer experience typically grow at more than double the rate of their competitors. The inverse case is that you can lose you competitive lead very quickly by focusing on the wrong things. Have you checked your customers' experience lately?

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business design
By Joe Ayoub
There was a time when the bigger and more established a company was, the more assured it felt in terms of staying power in the market. But those days are long gone, and today it's how much innovation a company embraces that decides whether it stays relevant or perishes. What this means for businesses is that no matter how big they are, if they want to survive, they need to think like a start-up.
By Joe Ayoub

A start-up by nature is constantly on its toes, harboring a hunger to wake up each morning and perform better than the day before. There's a flexibility to their way of thinking which means every aspect of the organization's strategy is open to question and can be easily superseded if a better idea is brought to the table.

Established businesses may still ask themselves why they would need to change things, but the answer is very clear: today's business landscape is a far cry from that of fifty years ago. Back then the average age of a Fortune 500 company was somewhere around 75 years; today the lifespan is closer to a mere decade before a company goes out of business or gets bought out.

What's changed is the pace of consumerism: we're living in an age where consumers are always hungry for more – everything from content to apps to games – and are looking to consume them simultaneously. Technology, the driver of this rampant consumerism, has also brought with it the ability for any innovation, whether patented or not, to be replicated within a short space of time, even months. Ultimately this is what is pushing companies to be innovators – they cannot stop in world that does not stand still.

But there's an additional impetus that businesses should be feeling in this call to think like a start-up. In the wake of the financial crisis, the world entered an era of zero growth. Companies have to face the reality of this era, of pressures on margins, and of pressure from consumers demanding constant new ideas in the market. Their only way to survive is to stay relevant, and innovation is the engine that will not only do that but keep them ahead of the curve and in front of their competition.

Once the need to think like a start-up has been acknowledged, a business also needs to know how to implement it. This is not about appointing one person in charge of innovation, but rather instilling a holistic culture throughout the organization. This requires commitment from top management who should be heavily engaged and act to unite all employees in this push for creativity. To get there, businesses need to take a comprehensive look at the business, the brand value proposition and the employees – and formulate a clear vision and central strategy. Questions that need to be answered include which products/services to retain and which to divest, and which processes need to be reviewed to meet objectives fast.

Bringing the focus back to Lebanon, we are all aware that the country is going through yet another crisis period. But at times like this the situation can be viewed as a problem or an opportunity. From Brandcell's standpoint we are advising our clients to look at it as an opportunity to take a small step back and redefine their business for growth. It's not enough to think sales are down and to try to resolve this with promotions and discounts that will only send one signal to consumers: that you are in panic mode. Instead, now is the time to benefit from the lull to rethink every element of your business proposition and to discover how many new ideas you can create, and how many new resources you can make available to jumpstart your business when this crisis is over. Therefore having the ability to continuously unlearn and learn again is the trademark of successful companies.

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Design thinking can be a powerful approach that helps organizations break through their limiting assumptions of what is possible. It creates deep empathy and gets us out of the abstract debate over ideas in meeting rooms, to a place where we can collaboratively create and test tangible concepts. The theory is great, but getting to implementation is often difficult. Why is that?
When one of us (co-author Glenn Fajardo) started organizing the TechSoup Asia Program Design Session, an event that convened leading social innovation professionals in Southeast Asia to collaboratively prototype new ways of using technology for social impact, he decided to use design thinking for the first time. He encountered questions and worries that we think most first-timers have. The first was:

"OK, so I'm convinced that using design thinking is a good idea. I think I understand what it is after reading Tim Brown and Jocelyn Wyatt's article "Design Thinking for Social Innovation," and it sounds great, but I'm not sure how to put it into action."

Since then, we have experimented with using design thinking in several projects. Based on our collective mistakes and experiences, particularly in organizing two recent events in Southeast Asia (Changeweekend and the TechSoup Asia Program Design Session), it's clear that it's not always easy to put the theory of design thinking into practice.

We agree with Brown and Wyatt that "most [people] stop short of embracing the approach as a way to move beyond today's conventional problem solving," and that "one of the biggest impediments to adopting design thinking is simply fear of failure." However, to better understand how we might help more social innovators with "design doing"—actually applying design thinking—we need to better understand how people learn to use it effectively.

Learning "design doing" is experiential and social

There are already good learning materials available online, including the The Stanford d.School Bootcamp Bootleg and the HCD Toolkit. So what makes it tricky to learn and teach design thinking in a way that helps people embrace it more fully? These current materials might provide some sense of security and help, but are toolkits and workbooks enough?

Written materials alone cannot capture all the nuances of design thinking because the approach involves a structured approach with a lot of unstructured elements. Design thinking, like jazz, requires an appreciation for improvisation; learning how to apply it is an experiential and social activity.

Like learning to ride a bicycle, it is experiential. You cannot learn how just by having someone explain it to you—you have to actually try to do it yourself to find your own balance. You also need to practice to get better.

You can also increase your understanding by observing and interacting with more advanced practitioners—in this way, it is social. You enhance your understanding by practicing with your peers, sharing perspectives, and giving each other feedback.

This learning combination of the experiential and the social means thinking of design as craft rather than design as a codified process or design as an outcome. Think "knitting circle" rather than "classroom."

From knowing to doing

As an example, let's look at just one part of design thinking: how to prototype. A prototype is a simple simulation of the experience of a new product or service—a simulation that a user can interact with. It is often quick and dirty, and it makes an idea tangible and real. Prototyping helps you surface questions about the desirability, usability, and feasibility of your idea. Iteratively making and testing a series of prototypes can help you gain a deeper understanding of your users and help you refine your solutions.

We've seen anxiety from newcomers about making their first prototypes. They understand the concept of a prototype, why making a prototype can be useful, and how others have made prototypes. But the part about them actually making a prototype themselves…scary!

We saw this in the first design challenge for Changeweekend, where participants were tasked with developing new ways for currently unbanked populations to gain greater access to financial services. As we dived into a 45-minute session to create the first prototype, panic ensued:

"Aaaaack! Now what? I understand what a prototype is supposed to do, but not how to make one."

"Prototyping is for creative people. I'm not creative."

"Aren't there more detailed process steps? Tell me what to do next, not just 'start building.''

After about 10 minutes of spinning, and with some prodding from the facilitators ("You won't learn it until you do it..."), one small group finally started to build a "business in a box" prototype out of cardboard and construction paper.

As they started to engage in the experience of prototyping, they overcame considerable fear and inertia, despite feeling like they didn't really know what they were doing.

Conversations broke out: "I like what you did with this. Can you tell me more about your thought behind it? What if I tried this too?" The richness of the learning increased with the social interactions throughout the event, as participants had a chance to iterate and get feedback from their teams, other teams, the event facilitators, and other invitees who work in social enterprise development.

Once they started to work experientially and socially, and as their creative confidence grew, participants were able to start applying prototyping to their own design challenges, ones they face in their day-to-day work. One group took an idea for a "charity gift card" and started building prototypes that it could actually put in front of its intended users. This practice led to significant changes to the organization's business model, to the product offer itself, and to the product's presentation.

What's needed to support more design doing?

Even if you're just getting started, you might be surprised at the kind of help you can find. Try reaching out to your networks. Try posting to the Stanford Crash Course Facebook page. LinkedIn has several design thinking forums, such as Design Thinking, a subgroup of the Industrial Design group, and another (separate) group that is also called Design Thinking. Use these resources to find information and—more importantly—to connect with people. Let people know what you're trying to do and ask for their advice.

Gawad Kalinga Design Session at Playhouse MINT College in Manila. (Photo by Issa Cuevas-Santos)

We also believe that there's both a need and an opportunity here for more experiments around how to create systemic support for learning design doing. One could imagine a spectrum of modes for learning (varying in their degree of direct support of the experiential and the social) that lie between reading manuals online and signing up for a formal course on the topic.

One of the most significant challenges we see is enabling beginners to interact in real-time with experienced hands, in ways that are substantive, scalable, and sustainable. Though it wasn't by design (no pun intended), we saw some promise in something that happened after the TechSoup Asia Program Design Session: Several participants who experienced design doing for the first time during the event took that experience back with them and held design sessions where they were based. Organizations that did this include ASSIST and Gawad Kalinga in the Philippines, and ChangeFusion and OpenDream in Thailand. As a result, many more people were able to access experiential and social learning experiences that included interaction with (newly) experienced hands. In the future, one idea is to more explicitly build in an "each one teach one" expectation of participants.

What do you see as the barriers to introducing and applying design thinking in your organization?

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business design
Brands are not things they’re emotional experiences. Creating these experiences, and the use value they offer customers, is the result of an integrated creative process of design.
Everywhere you look in the marketplace there is revolution and disintegration. Few marketing organizations have successfully navigated through the disruptive forces of globalization and commoditization. Wave after wave of technological innovation comes upon us more rapidly, engulfing us, confusing us more profoundly. There are two fundamental realities marketers face in this brave new world:

-  Ideas are now more valuable than process
-  Move up the value chain or be cast aside

Through all this creative destruction the dead wood is being cleared from the system, making way for more innovative players to take hold and prosper. Many once beloved and dominant brands have surrendered their leadership position to scrappy startups who offer more. Amazingly, the rules of the game change in real time even as we all play along. Improvisation, once shunned by corporate organizations, is now considered an essential strategic business skill.

Yet, through all this disruption and confusion, it's an exciting time full of opportunity for those big thinkers and dreamers who view it as such. If you're a marketing executive charged with defining the perception of competitive advantage for your brands, the implications of this disruptive age are of significant importance to your own future.

Creating relevant and differentiated value for people is less and less derived from the attributes of product features and benefits, and more from the quality of the experience customers have through their association and engagement with your brand.

A focused fanaticism to create enormous value.

Design, in all its disciplines (product, process, environment and communication) is a strategic business imperative. For the entire enterprise to receive its benefit in the marketplace, design is the differentiator not a decorative act.

Design and the process of "design thinking" has added billions of dollars worth of market capitalization to those enterprises that understand its significant power and higher purpose to engage and delight customers in ways never before possible. In every leading company, design has become the soul of enterprise strategy.

You don't have to look very far to see brands that apply this principle with phenomenal results–Apple, Nike, Starbucks, Google, Patagonia, BMW, Herman Miller, Target, Gillette, Virgin – every one of these enterprises are absolute fanatics about design and its importance to their business strategy.

Whatever the product or service enterprise, you'll find design fanatics at the very top of leading organizations–fanatics who value design as the driver of competitive advantage.

Design leaders are not bound by the restrictions of the competitive plane (think cost and commoditization), when they are free to grow and expand by leveraging the love (think passion and devotion) customers have for their offerings.

Bake your marketing into big dreams.

These days, the stakes grow ever higher for marketers. Nothing is more destructive to success than clawing your way to the middle, to the common, to the good enough. It takes big, uncommon dreams to design beloved products, design beautiful environments and design rich customer experiences people love.

The biggest dreamers of all are designers and design thinkers. It's their inherent nature to dream. In many ways, marketers ought to think more like designers and dream the seeds of a bigger, brighter future regardless of the naysayer and quantitative non-believers.

Dreams require imagination. Market leaders always have big dreams. Design lights their way forward. The idea economy is especially kind to the dreamers who utilize the discipline of design as an inspiration force for manifesting much loved customer experiences into the real-life marketplace.

The functionality or usefulness of a thing is not enough to create devotion to it. The current battle in the smart phone category and the demise of the original category leader proves the point. Nowadays everything "works"! Everything is good!

It's far better to place resources on designing excitement, surprise, delight, passion and uniqueness. Think about, and create beauty. Forget product and service attributes, instead, design experiences people love and share. Bake your marketing into your big dream.

Make your next product innovation an opportunity to design an experience that people can't live without. Dream big. Never let the metrics of short-term demands weaken the resolve of a big dream still in the "goo" of creation. Creativity is a process not an event. There is no more room in the marketplace for me-too anything– dream dramatically different!

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awards + recognitionexperience designcustomer service
Today’s consumers are confronted with countless choices and a multitude of information to consider when they buy products or services. Traditional promotional methods like advertising in magazines or on TV are no longer as effective as before. How can a company help their brand stand out? What will make their brand communication effective? In light of these questions and many others, brand experience has emerged as an innovative and compelling way to build a brand in the minds of consumers.
What is brand experience and experiential branding?

Brand experience can be thought of as sensations, feelings, perceptions, and behavioral responses evoked by brand-related stimuli. The more powerful the experience is, the stronger the brand impression. Brand experience also affects consumer satisfaction and loyalty; it allows the brand to sell products at a premium and to create competitive entry barriers.

Experiential branding is a process by which brands create and drive sensory interactions with consumers in all aspects of the brand experience to emotionally influence their preferences and to actively shape their perceptions of the brand. Interactions involve communication, brand space, and product and service elements. These elements work together to affect brand equity.

How does brand experience build brand equity?

The combination of all interactions with communication, brand space, and product and service elements, make up a customer's brand experience. The customer will then form a brand evaluation and perception based on these interactions. This is what builds brand equity in the consumer's mind, and it is composed of four key dimensions: differentiation, relevance, esteem and knowledge. Various experiential branding methods impact different dimensions of brand equity, which must be carefully considered by marketers or brand managers when utilizing these methods.

In this article we will discuss the four dimensions of brand equity, and provide specific examples of experiential branding for each one, in order to discover how this creative branding activity can be used successfully.

Differentiation: Perceived distinctiveness of the brand

Differentiation is a brand's ability to stand apart from others, and to gain consumer choice, preference and loyalty. It is the degree to which consumers find a brand unique. A compelling and memorable brand experience can attract customers' attention and maintain their interest, and therefore contribute to brand differentiation.

In recent years, companies like Nokia, Apple, Barbie, and Gucci have opened flagship stores in China to provide more consumer-brand interaction opportunities. The newly-built Barbie Store in Shanghai is a 6-floor megastore with a spa, design center, café and interactive activities designed for girls. It became a hot spot in Shanghai very quickly, with thousands of girls now visiting the store every day. The branded experiences provided by the Barbie store will undoubtedly serve to differentiate the brand from others.


Flagship stores are one way that companies can connect and interact with customers to participate in experiential branding. They are also places to display limited edition products and unique service experiences, which can communicate the companies' culture and brand values in ways traditional media cannot.

Relevance: Personal appropriateness of the brand

Relevance refers to how meaningful a brand is to their target consumers. Relevant brands are both appropriate and appealing. Niche and growing brands may choose to focus first on differentiation and then on relevance, whereas leading brands will excel on all four dimensions.

Adidas Brand Center in Beijing is both experiential and meaningful for customers, so it contributes to brand relevance. The retail center features a range of interactive zones including miCoach Core Skills, the recently launched miOriginals, mi Adidas, a juice bar, a dedicated 'Urban' area for exhibitions and events, a basketball court on the rooftop, a Concierge Desk and a children's area. As you can see, there are products and interactions offered for Adidas' various targeted market segments, ensuring that the customer's experiences of the Adidas brand are highly relevant.


Esteem: Regard for the brand

Esteem measures the degree to which the target audiences regard and respect a brand—in short, how well it is liked. When companies grow larger and become more mature, brand esteem becomes more and more important. Today, companies often use indirect experiential branding methods to build brand esteem. One way to do this is through the Internet and social networking websites.

With the recent popularity of social networking services (SNS) such as Facebook, Twitter, Kaixin001, Renren, and many more, forward-thinking companies place their brand inconspicuously in the pages, games, and posts, of these sites. SNS websites are a new media which stimulate increased interaction with users. In the first half of 2009, Kaixin001 became China's most popular SNS with over 83 million registered. Brands, media agencies, and organizations have used different approaches to connect with the community and target its netizens. An impressive and representative case is Lohas juice. It successfully promoted its brand in the popular SNS game "Kaixin Garden". Through this interactive game, the juice brand not only promotes its products, but also portrays a lifestyle and an attitude which influences the customers' brand perception.


Knowledge: Understanding of What the Brand Stands For

Knowledge determines whether there is a true understanding of what a brand stands for. Brand awareness is a sub-component of knowledge. The level of brand knowledge is a signal of the company's past performance, as well as a foundation for its further development. Positive and accurate understanding of the brand amongst target consumers results in brand loyalty. However, it is not enough for a brand to tell consumers what their brand means, they have to show them, and what better way to do this than through brand experience.

This is what Nokia is doing with its global customer service and experience center in Shanghai, which opened in August, 2009. The center provides hardware repair and software services to users of its mobile phones. The Shanghai experience center is a place for customers to learn more about their Nokia cellphones and experience what Nokia brand stands for. Helping their customers develop a deep and comprehensive understanding of their company will help Nokia consolidate their customer loyalty and brand equity.



As mentioned above, experiential branding, a creative branding process through customer experience, contributes to brand differentiation, esteem, relevance, and knowledge, and therefore is an effective way to build brands. Through interactive technologies, innovative retail spaces, and indirect online brand communication methods, consumers can now see, touch, hear, taste, and smell brands in ways they never could before. Flashy advertising and price-slashing product promotions are often not sustainable methods for brand building. Experiential branding, with the objective of building brand equity, has emerged as a promising and viable alternative.

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experience designcustomer serviceconsumer brands
Service design is of immense use to companies that are looking for ways to enhance their customer's experience while using their product or service so that these customers have no reason to look elsewhere for the same product or service. 
There are many techniques used by service designers in order to make this happen and customer journey mapping is one of them. Simply put, it is a visual representation of the actual user experience of a particular company's service. Being user centered, customer journey mapping provides these companies with excellent information about what gaps exist in the service they are providing and this provides them with the opportunity to use other service design techniques to fill in the gaps.

Journey mapping is usually done over a period of time in order to get a clear understanding of what the customer encounters when he or she starts or attempts to use a particular company's service. It will plot all the different touch points that occur when a customer is offered a service. Every aspect of interaction, including gestures, is very important and should therefore be plotted accordingly in order to have the most accurate journey map as possible.

The best journey maps have lots of personal data and insights because this is the foundation of a successful interaction. It also makes it very easy for the analyst to get a better picture of what customers are really looking for and what they actually receive. There are many human beings involved, and therefore the map has to be humanized as much as possible. While successful interactions give lots of useful information, failed ones are also very important because they give plenty of insight into what should be corrected urgently because it is driving customers away.

Many companies do not even know what the correct touchpoints are when their customers come to interact with them. As a result, they put in a lot of effort in the wrong places while they neglect certain important areas. Many steps also involve a duplication of effort whereas there are many more that do not even add any value to the experience. Journey mapping is therefore an essential tool to help them find out what these touchpoints really are so that they can work upon them. It is also possible to use this as a starting point for redesigning services so that interactions can be greatly enhanced. This is also an excellent way around which training programs can be designed. Many companies also use this tool in order to plan their strategies more effectively.

Companies need to keep changing their services in order to keep pace with changing customer requirements. This can only be done effectively with the help of customer journey mapping and other principles of service design. They are usually very simple and easy to implement but the results they offer are very powerful indeed. There are many companies that offer service design consultancy because of the growing awareness of how important this field is in today's world.
business designbusiness strategy
We live in a region where it is safe to say that the majority of well-established companies and family businesses tend to be resistant to change. Yet, as businesses wake up to the need to realign strategy with evolving markets and market trends, and as branding becomes recognized for its power to increase revenue, change is increasingly on the agenda.
by Joe Ayoub

Change from within

There is a simple truth universally acknowledged among branding experts that any change made to a brand will almost always end up bringing about internal organizational changes as well. This is particularly true when a change in brand strategy or a repositioning of a brand takes place. If we take some examples from the global marketplace, we can refer to Nike, which two years ago announced plans to implement a full range of management and organizational adjustments. These plans went hand in hand with the brand's strategy to move its global strategy away from a product-driven company toward being a consumer-focused group. Or, in the United Kingdom, when Barclays Bank decided to reshape its services around the customer — the end result entailed changes not only to the products offered but also to the delivery of service, training of staff  and so on.

The point is that today a brand is no longer purely a symbol that acts as a reassurance or sign of good quality for the customer; today a brand is a holistic entity that ties its external customer offerings with how it organizes itself internally. Therefore any change made on the 'outside' (in how the brand interacts with customers) will almost always necessitate change on the inside.

Resistance is futile

Even if this restructuring is not apparent at the time change is initiated, it will soon become so. As a company conducts business in line with the new strategy, little by little it will realize which aspects of the organization no longer work and which need some adjustment. This is not something that can be resisted. Even if a company chooses not to restructure internally to reflect its new positioning, the reverberations will make themselves felt, building momentum until the business is struck by a metaphorical tsunami.

I would like to note here that almost all of Brandcell's clients with whom we have worked on their brand strategy are today facing the need to rethink their organization.

That is not to say that repositioning or changing strategy poses a risk; quite the contrary. When a brand effects change of its own accord, it is a positive thing to be embraced. For it to succeed, however, this new direction needs to engage all elements of the company. Employees need to be involved in and engaged with the change, so that it can be reflected in their future behavior. It is essential for businesses to be aware of this need, to take things gradually and account for them at a certain point. They need to consider their internal managerial changes in terms of restructuring and re-engineering, knowing that just as in chess, when you move one piece on the board it has an impact on the greater picture.

Ultimately, a change in brand strategy signals a desire to adapt to the customers' needs. With this in mind, the goal can't be reached simply through superficial means, such as redesigning a logo or creating a new tag line. In the end it is about realizing that brands are becoming agents of change for the companies themselves.

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