modelH Update: Experience

Editor’s note: This article is an update on modelH, the dynamic co-creation forum created by Kevin Riley and Associates, Innovation Excellence, and Batterii where healthcare innovators from around the world are building a foundation for new business models in healthcare. Their goal is to co-create an open source business model canvas that applies specifically to the US healthcare system.

Learnings on Experience for the Business Model Canvas for Healthcare (modelH)

We just wrapped up our 10th business building block sprint on Experience. In summary, the sprint for Project 1.10 completed 3 objectives:

  • What questions to ask about Experience on the modelH canvas
  • Defining how to build Customer Experiences for healthcare companies
  • A look at how to measure Customer Experiences in healthcare companies

Word cloud for Project 1.10 Experience

1. Questions to Ask on the Canvas for the Experience Block

We defined the questions that should be added to our business model canvas for helping practitioners define their Customer Relationships:

  1. What is the lowest common denominator Experience your Customer Segment is looking for?
  2. Where does your Experience exceed these minimum expectations?
  3. Where does your Experience miss these minimum expectations?
  4. Which of your Key Activities drive your Experience?
  5. Which part(s) of your business model creates “hassles” for your Customer Segments?
  6. What makes it hard for your Customer Segments to find you?
  7. How do your Customer Segments feel about you?
  8. How easy is it for your Customer Segments to work with you?
  9. What keeps your Customer Segments from recommending your Value Proposition?
  10. What keeps your Buyers from shifting some or all of their business to another?
  11. How likely are the Buyers to consider purchasing more from you in the future
  12. Where are there hassles that keep Buyers from buying your Value Proposition?
  13. Where are there hassles that keep Users from using your Value Proposition?
  14. Where does your Value Proposition waste your Customer Segment’s time?
  15. Where does your Value Proposition require extra or unnecessary steps?
  16. Where does your Value Proposition waste your Customer Segment’s money?
  17. Where does your business model create confusion for your Customer Segments?
  18. Where does your business model generate avoidable risks?

modelH Update: Experience2. How Do You Build Your Customer Experience?

Customer Experience is how you create great engagements for consumers as they buy/use or even consider using your products and/or services. Great healthcare companies of the future must quickly become great customer experience companies today, and for the foreseeable future. This requires a comprehensive Experience building block in your business model that:

  1. Identifies the areas for change within the current business model,
  2. Defines the change(s) that must happen, and
  3. Helps the business block owners implement changes across the organization.

Even if your business is just a cog in a value chain, and/or you have no direct access to healthcare consumers – you must remember Porter’s sense of shared value. In the healthcare ecosystem, all business models have an impact on the User – good or bad.  You should know how your Value Proposition plays out in this larger picture, and help to build your own Experience building block to ensure it is a good one.

Fred Weirsema in his book How to Design a Great Experience highlights questions (listed below) for determining whether your business model (and the way you approach the market) is “in tune” with the customers you are trying to touch or impact (what Weirsema calls a Design Rule – the things a company must do to ensure it is attuned with its customers).

1.  Can my customer find me?

  • What is the top-level decision frame?
  • Does my company come up at the top of that list?
  • How does my company make sure our name appears at the top of the list?
  • Can customers find my company through the channel they prefer?
  • Can they discover my company thru several channels?
  • Are SEO and SEM efforts effectively managed – to match keywords?
  • What is the bounce or abandonment rate?

2.  When they find my company, is it unique? Is the impression memorable?

  • How do customers find their JTBD?
  • Does that tie into my company’s uniqueness?
  • Does my company build with an eye to new customers and what barriers they perceive?
  • Is the customer’s instant judgment about my company’s products and services positive?
  • Is my company’s website clear, reassuring, and confident?
  • Does the website remove barriers?

3.  Do my company’s processes get in the way of a purchase?

  • What is the abandonment rate online?
  • Does my company make it hard to buy, or does it bait and switch?
  • Has my company gone through a buy process step by step (exactly as the customer would) – and is it smooth and predictable or is it jolting?

4.  Does my company send unintended messages?

  • Is the boilerplate type of message giving off a legalese gotcha moment?
  • Has my company considered how its actions will be perceived?

5.  Are my company’s products and services intuitive?

  • Do customers need an instruction manual to navigate your company’s processes?
  • Does my company build on the Minimal Viable Product (MVP)?
  • Do my company’s processes, products and services keep with what is expected?
  • Have I avoided unwanted, advanced, or too many, options?

6.  Does my company’s approach to the market have threaded channels?

  • Is “same customer – same data” readily and consistently available?
  • Are my company’s messages and behaviors synchronized?
  • Does my company’s treatment and approach stem from our unique brand promise?

3. How Do You Measure Customer Experience?

It seems plausible that you should identify and know your Customer Segments before you create products and services for them. Likewise, once you have products and services tailored especially for them – you create winning Experiences for them through the various Channels and Customer Relationships. The flow can be seen visually here.

modelH Update: Experience1.  Customer Segment Development – know your customers, (who they are, and what they want) and most importantly learn their values.

2.  Value Proposition Management – create value that your customers perceive because it effectively solves their jobs-to-be-done.

3.  Customer Behavior Management – understand your customers health needs and comprehension so you can directly and indirectly mange them.

4.  Customer Experience Management – know how your customers want to experience your products and services and create favorable engagements for them as they discover, consider, buy and use them.

This section is about measuring Experience as a business function. In as much, we should not just rely on the standard Net Promoter Score or Customer Satisfaction Score and call it a day. We must add revenue and cost elements into Experience measures because it is 1) a prudent thing to do for all business functions, and 2) critical for identifying how components of Experience drives overall revenue and impacts overall costs.

When Experience is implemented properly across a business model, it will produce:

  1. An agreement and a common understanding regarding the importance and impact of Consumer Experience across all business efforts and business outcomes. (Strategy)
  2. A clear mapping and organizational (entire workforce) understanding of the Consumer Experience Journey across all touch points. (Culture)
  3. A set of Consumer Experience guides incorporated into all products, channels and messages. (Brand)
  4. A defined Consumer Experience Team organized around successful and consistent strategy execution. (People)
  5. A common model and process for using and ensuring Consumer Experience principles across the organization. (Process)
  6. An established set of Consumer Experience metrics that include revenue generation and cost consideration/understanding/containment. (Financial)
  7. A set of Consumer Experience metrics focused specifically on experience accountability across the organization. (Customer)

Consumer Experience Success Indicators

The following measures are across the key dimensions of a company and its business model:

Strategy

A measure indicating how well Consumer Experience is embedded into the corporate strategy.

  • A clearly defined, agreed to, and commonly understood Consumer Experience strategy
  • A clearly defined Consumer Experience plan of implementation (change agenda)
  • A defined maturity curve (that defines current customer experience) for how Consumer Experience will create value for the company

Culture

A measure indicating how much Consumer Experience is emphasized as a critical area by all employees/internal stakeholders.

  • A measure of overall organizational effectiveness related to Consumer Experience (e.g. Number of employees who have consumer experience as a key area of focus in their individual performance plans)
  • A shared executive measure for collaborating on Consumer Experience initiatives
  • Shared measure (connection) with Customer Development/Sales group
  • Shared measure (connection) with Channel Owners
  • A single Consumer Experience measure in the annual company performance scorecard (KPI – key performance indicator)
  • A Consumer Experience dashboard with agreed upon metrics that is widely communicated to internal stakeholders and actively managed by the senior team

Brand

A measure indicating the alignment of Consumer Experience with your company’s brand promise.

  • A measure for Customer Brand Loyalty
  • A measure for Brand Experience
  • A measure for “likelihood to recommend”

People

A measure indicating the development of the roles that lead and drive continuous improvement for the Consumer Experience function.

  • Hiring the VP of Consumer/Customer Experience who has the ability to impact organizational strategy and operational processes
  • Designing, developing the Consumer Experience roles and responsibilities
  • Hiring the Consumer Experience Team

Process

A measure indicating the clarity and utilization of the Customer Experience process.

  • Publication (communication) of a documented Consumer Experience Process
  • A documented Consumer Experience Standards Guide that is referenced throughout organizational processes and policies
  • A Customer/Member Journey Map that outlines how organizational roles and responsibilities impact each point on the journey map
  • Completion of regular Experience Audits for all channels, touchpoints, and communications
  • Implemented Experience Improvement Plans for top prioritized channels
  • Evidence of ongoing measurement of, and reduction in, cycle-time for Consumer Experience Projects

Financial

A measure indicating the effect that Customer Experience has on corporate financial performance.

Revenue (attributable to Consumer Experience)

  • Wallet Share
  • Customer Profitability
  • Customer Lifetime Value
  • Market Share
  • Average Revenue per Customer
  • Number of New Customers acquired each period
  • Value of New Customers
  • New Sales Driven by Word of Mouth

Costs (attributable to Consumer Experience)

  • Customer Retention Rate
  • Customer Churn Rate/Number of Lost Customers
  • Value of Lost Customers
  • Cost to Serve Customers (total service and support costs)
  • Cost to provide differentiating value (perceived as what competitors do not offer)
  • Cost to Satisfy Customers by channel (email, chat, online, telephone, in person)
  • Ratio of Cost to Serve / Total Revenue

Customer

A measure indicating the Customer Experience and its affect across the customer lifecycle.

Single Measures

  • Customer Effort Score (CES)
  • Customer Experience Index (CXi) score
  • Customer Value Management (CVM) score
  • Customer Loyalty Score
  • Likelihood-to-recommend score

How easy is it for customers to find you?

  • New/Existing customers by channel  (examples below)
    • Phone calls can be tracked using Google provided phone number
    • Digital click thru on SEO versus SEM
    • Bounce rates on keywords
    • retail visits and revisits
  • Multi-channel decision making by segment and number of touchpoints used Time thru touchpoints used (channel completion rate and average time in channels)
  • Random survey reports from customers

How easy is it for customers to stay with you?

  • Reluctance to Switch score
  • Win-back After Loss (number/percentage)
  • Random survey reports from customers

How do customers feel about you?

  • Brand Trust Indicator
  • Emotional response survey
  • Random survey reports from customers
  • Perception of your company/organization by competitors

How well do customers listen to you?

  • Call center data (if applicable/available)
  • Customer compliance indicators
  • Customer understanding of your communications

How easy is it for customers to work with you?

  • Speed of application/entry process
  • Speed of issue resolution process
  • Number of customer complaints
  • Number of customer kudos
  • Customer satisfaction with specific touch points

What is Next?

Next up, we are going to look at Project 1.11, 1.12, and 1.13 — Key Activities, Resources, and Partners.

Interested in what we are doing?

Step up to the plate and get involved. We are getting close to the end of our modelH project, so get involved today before it’s too late!

image credit: successwithcrm.com
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modelH – Health Model Co-Creation Forum (part 1)Kevin Riley is an entrepreneur, healthcare executive, and business model innovator who works with start-ups and legacy companies across the healthcare industry. He founded and was CEO of a national health care retail company, has played leadership roles for national retail health start-ups, and served as the first Chief Innovation Officer of a major insurance plan. In 2006 he started Kevin Riley & Associates Health Model Innovation to help companies with the convergence of health care and the consumer.

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3 Responses to modelH Update: Experience

  1. Pingback: Innovation Excellence: How Do You Measure Custo...

  2. Pingback: Innovation Excellence | modelH Update: Experien...

  3. Hello,
    nice development on the ‘Business Model Generation’ of Osterwalder and Pigneur, but why not mentionning your source ?
    http://www.businessmodelgeneration.com/book

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