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\nBrands are increasingly building a service wrapper around their core products to unlock new revenue streams and grow or protect profit margins. Accelerated by the pressures of Covid-19 and enabled by digital, brands are trying to respond to the ongoing challenge of commoditisation by moving from transactional to long-term value driven relationships with customers. Service brands \u2013 whose primary offer is an intangible outcome rather than a physical product \u2013 are naturally better positioned to excel in this new reality, sometimes even redefining the categories in which they operate.<\/p>\n
The strength and resilience of service brands<\/strong><\/p>\n Being a service brand doesn\u2019t automatically inoculate your business from commoditisation. Rather, service brands tend to possess a more customer-centric organisational mindset, a more robust technology infrastructure, and greater operational flexibility due to the inherent nature of delivering outcomes rather than physical products. In effect, service brands tend to have the raw materials to become experience-driven businesses.<\/p>\n Together, these traits affect the relationship service brands have with customers, i.e. the length, breadth and depth. Consider a robo-investment brand like Betterment\u2014 the customer journey stretches over years (length), spans numerous touchpoints (breadth) and deepens over time as more customer data is generated (depth). If customer experience is a canvas, service brands tend to have a bigger one, with more opportunities to provide value, delight, educate and entertain. It\u2019s no surprise that service brands tend to have been early adopters of CX principles like personalisation and seamlessness.<\/p>\n Such relationships also necessitate a robust digital ecosystem. From communication, to content, to transactions. Forrester notes organisations that use technology to make a meaningful difference to people\u2019s lives grow 4x faster than their competitors. All brands should consider their tech architecture as the foundation for value-adding CX.<\/p>\n Find inspiration from category-defining leaders<\/strong><\/p>\n \u2022 Wise is a service brand that originated in a highly commoditised category.<\/p>\n With 10 million customers, a reported 70% growth in revenue, doubling profits YoY from March 2020, and a recent valuation of $5 billion , Wise (formerly TransferWise) is a fintech unicorn truly deserving of the title. Wise combines frictionless customer experience with category-beating low fees and speed for international money transfers. But the brand\u2019s mission statement, \u201cMoney without borders\u201d, has acted as a powerful North Star for its recent expansion into new services . The statement describes an outcome, and the company\u2019s newest services\u2014like banking accounts designed for people who live, work and travel all around the world\u2014tightly align to that outcome. Brands looking to strategically expand their services should start with a clear mission; what is the outcome you want to deliver for your customers and the world?<\/p>\n \u2022 Domino\u2019s is a product brand in a fairly commoditised category.<\/p>\n The 2000\u2019s were a rough decade for Domino\u2019s. But a bold move to re-invent their entire offer from ingredients to delivery has since paid off. Besides making the pizza more edible, Domino\u2019s focused on a core need: their customers want to get pizza with as little effort as possible. They pioneered the real time pizza progress tracker, allowing customers to worry less about when it might arrive. Their AnyWare platform allows customers to order from an ever-expanding list of channels with as little as a click of the \u2018Easy Order\u2019 button. Designing an effortless, user-centric delivery experience has helped Domino\u2019s revenue grow from $1.6B in 2010 to $4.1B in 2020, (Papa John\u2019s revenue grew from $1.1B to $1.8B in the same period) . Brands should ask themselves, \u2018how could we make the experience around our core offer meaningfully better for customers?\u2019<\/p>\n \u2022 Peloton is a premium brand which straddles both products and services.<\/p>\n Peloton was never just a stationary exercise bike. But now it\u2019s fair to say they\u2019ve created a fitness ecosystem to rival the likes of Nike. The expansiveness of their offer makes them difficult to categorise. It\u2019s digitally enabled exercise equipment, it\u2019s a virtual fitness coach, it\u2019s a streaming service for fitness content, it\u2019s a social platform\u2026 Motley Fool contributor Neil Patel sums it up, \u201cPeloton sells hardware that is differentiated by software.\u201d The ecosystem combines data, content and community interaction to make the customer experience feel empowering and addictive . Brands that want to expand their offer should think strategically about their digital ecosystem; is your tech stack fit to deliver truly category-defining experiences?<\/p>\n All three brands have expertly used customer experience design, branding and technology to deepen the relationship they have with customers and win market share.<\/p>\n How to add value to your offer by designing meaningful experiences<\/strong><\/p>\n 1. Take inspiration from your brand purpose and identity.<\/strong> What outcomes does your brand ultimately hope to deliver for your customers and what tends to get in the way? Brainstorm service experiences that deliver on your promise. Even small changes, like using less jargon in website copy, can make a significant difference.<\/p>\n 2. Co-create to ensure the experience delivers on core-customer needs.<\/strong> Co-creation workshops are hugely valuable because they bring the perspective of end users into the design process at the conceptual stage. This invariably uncovers new ideas for features and functionality, but just as importantly, it exposes misconceptions early in the process. It\u2019s likely that at least some of your initial hypotheses about what customers need, or how they\u2019ll interact with an experience will need rethinking.<\/p>\n 3. Ensure your tech stack is future-fit.<\/strong> Designing a future-proofed technical architecture can require significant investment. Prototyping and testing can help ensure new experiences and services will actually deliver the return on investment needed to justify their cost. Flexibility is key; at Rufus Leonard we frequently recommend the MACH approach (Microservices, APIs, Cloud Native and Headless CMS) because it allows you to choose the best of breed technologies, add elements independently to enable rapid innovation and carry out upgrades\/maintenance more efficiently and cheaply.<\/p>\n All brands have the opportunity to think like a service brand by putting customer experience and outcomes at the heart of their growth strategy. Purpose, empathy, and tech infrastructure are the keys to creating differentiated and meaningful experiences that can come to define a category.<\/p>\n
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Cierra Dobson is strategy director at design and technology agency