Tuesday August 23, 2005

Make money now. Ask them how.

The Design Council has news: The share prices of companies which invest in design performed up to three times better than the FTSE 100 Index over nearly two years in the run-up to December 2004. Full report available at their site.

Side note: they're referring to design as a verb, not a noun. Confused? Let's talk.

( Aug 23 2005, 04:08:56 AM PDT ) Permalink Comments [2]

Monday August 22, 2005

Recap: Experience Architecture at Harvard Graduate School of Design

Quick! What do training facilities for counterterrorists; a school for children with special needs; Eastern Mountain Supply retail stores; Faneuil Hall Marketplace; Kodak Headquarters; Paramount Studios; Gillette Field; the National Archives; the Museum of African American History and Sun Microsystems guest-facing centers have in common?

For three days in August 2005 the architects, media designers, brand strategists and others who have a role in crafting the experiences in these spaces put their collective heads together at Harvard's Graduate School of Design to talk shop. But the discussion wasn't about walls, plasma screens or form following function. The issue at hand is an emerging style of architecture referred to as "experience architecture" -- one in which function follows story, and the guest experience rules.

That's right: no conversations about specific styles, technologies or special effects. This was a group of mostly architects trying to crack a broader nut -- how to see, design and build "spaces" as a translation of a client's story.

In this brave new world, the architect or designer is translator, not a CAD expert. Early client conversations focus on content, ideas and emotions more than they do about load-bearing walls or permit applications. There's much more of a focus on business strategy, guest perceptions and customer goals than there is on matters of personal taste.

If you're reading this and you're thinking "sounds like brand strategy," you're getting warm. And if those three questions that Marty Neumeier made famous are running through your head, you're smokin'.

So. Is this architecture or brand strategy? I'd have to admit, as one of the few non-architects in the room for those three days (and the only one whose job lines up in a formal brand organization), the question certainly popped into my head for just a flash on the first day, me thinking this is brand work, reserved for brand people. But of course that's a reactionary, territorial move that gets us nowhere -- it just doesn't matter what role you're in or who's doing it. What matters is that the work is being done -- that the right people are on the right seats on the right bus. And here we were, making sure those seats were filled (labels be damned).

And so, over the course of three days presentations were given, conversations grew and ideas were born. It's why we do this, isn't it? Throughout this week, I'll be recapping some of the more resonant memes, probably in drive-by, bullet-point fashion, for the sake of sharing, openness and all that good stuff that you know Sun is about. In the meantime, you're encouraged to let me know what you think.

Before I drop off, though, it's apropos to close on the same note the conference just so happened to close -- which was a reminder to make our work inspiring. All of it. No matter what we do and how we do it.

Chances are you're reading this because you have a role in brand or experience design or something similar. If that's you, then you know most of us spend much of our time pondering how to make things like feature lists relevant to customer needs, noodling around with user profiles, brand strategies, and mashing it all together in the form of something that'll be desirable enough to buy. But at the end of the day -- just like so much architecture, interiors, even products and services -- none of it truly means much in the bigger picture.

That's why we point to places like the Sagrada Familia, the Grand Canyon or even the US Holocaust Memorial Museum as some of the most significant experiences on earth: because they connect us to something bigger. Whether that something is our own selves, humanity as a whole or a touch of the divine, these places lack any obvious signs of a "feature list." They're bigger than that. And we all crave those connections, don't we?

Our challenge as "experience producers" -- whether we're in software development, architecture, brand, or facilities management -- is to translate those features along similar lines. To stop selling stuff, to stop seeing things through the superficial lens that is merely bottom-line driven, to stop assuming anyone cares about Brand X. And to start understanding what really matters to your customers through the lens of something bigger.

Chances are most of us really are working on something that makes the world a better place. Once we've identified what it is, we can begin to tell that story in a meaningful way. Sounds mushy, but if you don't start with the ideal end in mind, you never get there. Good luck.

In the meantime, keep an eye on those companies and spaces I mentioned at the top of this entry. I have a feeling we'll all be seeing something interesting happening in the next 6 to 18 months.

( Aug 22 2005, 03:45:58 PM PDT ) Permalink Comments [0]

Monday August 01, 2005

BusinessWeek loves creativity.

Not because it's fun. Because it's profitable, says the mag, which has a special report this week showcasing the value of creativity, design and business when properly mixed. Happy reading. ( Aug 01 2005, 07:02:09 AM PDT ) Permalink Comments [0]

Sunday July 31, 2005

Experience Architecture @ Harvard Design School

Headin' out to Harvard for Summer School next week. Looking forward to this conference, which Experience Manifesto pointed to a couple weeks back.

Experience Architecture
08/10/2005 9:00 am - 08/12/2005 5:00 pm

As clients require more integrated, content-driven environments, experience architecture is resetting expectations about both building performance and design practice. Responding to this marketplace, we will investigate the following topics: How can architects engage in—-and profit from—-this design approach? Do the values of experience design conflict with the intentions of good architecture? How can narrative structure and media technology enhance the meaning of the places we make?

You going? Let's meet up for a drink.

( Jul 31 2005, 02:17:59 PM PDT ) Permalink Comments [0]

Tuesday July 26, 2005

The revolution will be projected SMS.

Core 77 points us to Troika's Guerilla SMS Projector -- just imagine a few of these handheld projectors in the hands of four or five inspired artists. Or, okay, four or five hundred people with a any ol' cause. Wow.

( Jul 26 2005, 09:37:59 AM PDT ) Permalink Comments [0]

Tuesday July 19, 2005

Hiring "Theater People"

Two of the biggest challenges in any experiential-marketing environment is getting your staff to realize that:

a) your sales center is much more than walls, floor and a frenzy of marketing messages -- it's the physical face to your company, and sometimes a visit is a make-or-break opportunity; and

b) every member of the team is working on a production. Staff members are key players in the show, and their roles are much more significant than we traditionally acknowledge.

Peter Merholz and Jared Spool touch on this a little over in the latest Adaptive Path newsletter: Theater people also understand the difference between on stage and backstage, which in a consulting practice or a research business is actually very important.

A few good nuggets on research as well, tho most of it's for software and the web.

( Jul 19 2005, 11:35:17 AM PDT ) Permalink Comments [0]

Tuesday July 12, 2005

Article: Building the Better Guest Experience

Lots to talk about these days: Sun's HQ features a beautiful new executive briefing center, a refreshed cafeteria and a few cleaned-up lobbies. Later this week I'll give a recap of some of these new experiences, photos and all.

It should be stated, however, that each of these places, these environments, are much more than spaces...they're more than just furniture, paint and carpet. They're marketing tools. Relationship opportunities. They're branding zones, and whether or not you see them as such, they seriously affect your bottom line. Read on for more...

- - - - - - - - - - - - - - - - - - -

Building the Better Guest Experience by Noel Franus

Small changes can create a big shift in customer loyalty. Here's a simple approach for turning bad scenes into golden relationships (and profits). [Article originally published at MarketingProfs.com in late June 2005]

My cell phone sputtered out on me this week. This is never good, because any trip to the cell phone store for service issues is just about as enjoyable as licking a frozen flagpole.

We all loathe this store visit because the service reps can't or don't want to help. So we sit around, and the trip becomes a waste of time. Conversely, the cellcos hate seeing us because they're so un-streamlined that any customer issue creates a massive drag on their profits. Yep, we all lose.

Distracting your customers for fun and profit

But it doesn't have to be that way. In fact, it wouldn't be this way if they'd consider making one simple, feasible and very profitable change: distract me while I wait. And if you do it right, customers like me are more likely to be loyal—to the tune of at least $5 billion.

At least $5 billion, you say? Loyalty? Profits? You bet. Because this isn't about my little trip to the big cellco store in the strip mall. This is about differentiation in a commoditized market by leveraging an opportunity that's woefully untapped. This, my friends, is a story about brand building, and the bounty that comes to those who do it well.

Retailers have a choice: customers or cattle

Our tale does begin, however, in the cell phone store that I visited just outside Portland, Oregon.

I enter. Sales counter on the left, product displays on the right, service counter in back behind lots of unused, open space. Three tall chairs propped up against a wall in the back corner. The interiors have a consistent, clean red-and-black look, and the staff (also in matching branded outfits) seems affable and probably competent.

I approach the counter and we discuss the problem. Yep, I'll have to wait an hour. And that's their first big slam-dunk opportunity: treat me as a guest or as cattle while I wait. Unfortunately, they chose cattle: "Can you stand over there while we look into this?"

But, alas, there is no "there" there. What is is a corner of the room with the three tall chairs, no table, no reading material, nothing. Stark. Uncomfortable. I can't even check email with my phone, for obvious reasons. If you're into branding, marketing or customer loyalty in any sense, I'm sure the danger lights are flashing through your head by now.

Paying the price for a negative experience

Moments like this matter because they affect the bottom line—with this company's 700 retail stores and an average of 30 customers a day (my estimate) stuck in the Waiting Zone, that's 7.5 million negative experiences that they're creating each year (based on a 360-day year). And each one presents one more reason to jump to a competitor. Once you start to do the math on the possible revenues lost, you realize that this is potentially brutal to their bottom line.

Four small things that could make a big difference

Four simple tactics this and any retail services environment can use to reduce the risk of a negative experience (operations issues aside):

• Provide a comfortable space. A couch or coffee table is the first step you can take in shifting the mood from annoyed to relaxed. (Relaxed customers usually shell out more money than annoyed ones.) Investment: $2,000 (furniture).
• Do you have any coffee? A little java goes a long way toward making customers feel like valued guests. Get a decent coffeemaker and good beans. Or outsource the opportunity to a local brandofcoffeebucks that people know and enjoy. Investment: $1,000 per year (coffeemaker and supply).
• Dish up the fishwrap. For less than a buck a day, you can give them something to read or watch while they pass the time. Newspapers and magazines can keep those rambunctious customers under control. Investment: $100 per year (daily news and magazines).
• Nothing but net. Most people are missing out on work while they're in the store. Give them wi-fi, give them access to information, give them back their productivity, give them back their time. Investment: $700 per year (wireless router and high-speed Internet).

If this sounds a little like what some hotels and airlines are doing with their personal services and first-class lounges, you're on the right track. And this isn't just a retail pipedream—Oregon's Umpqua Bank recently opened a "lifestyle" retail storefront in downtown Portland, complete with Internet stations, free café-quality coffee (and beans to go), reading materials and comfy chairs. After one year, new-account revenues at the branch were four times that of Umpqua's initial expectations, and now their upscale-retail concept is being designed into other branches statewide. (See additional reading for details.)

What's the cost for these little improvements? $3,800 per year, per store. Total investment for all 700 stores: $2,660,000 in the first year, $1,260,000 per year (excludes furniture) after that.

Millions of hearts, billions of bucks

What's that investment worth? That's where our $5 billion enters the picture. Until now we've looked at lessening risk. But if you create a space people actually enjoy (rather than one they merely find inoffensive), then you're adding value to your offering, fostering a passion for your brand and increasing long-term profits.

If, for example, I have a great time during my customer service visit—slurping the coffee and getting real work done while I wait—I have one more reason to stick with my cellco.

For everyone like me who stays with this big cellco for one more year, either because we had one more reason to stay or one less reason to leave, then all 7.5 million of us spending $50 each month will put another $4.5 billion in their coffers. Extend that relationship to five years, and we're talking $22.7 billion in additional revenues. Not bad for an investment of just over $1 million per year.

The cost of doing nothing

Just for fun, let's compare the cumulative difference between five years of customers retained based on this ($22.7 billion additional) and five years of customers lost ($22.7 billion lost).

That number: $55.4 billion. And that's based only on typical service-only revenues each month—this doesn't include product upgrades, service upgrades or growth from word of mouth that are givens in any good customer-loyalty franchise. Make sure you're sitting down if you dare to run those numbers.

More approaches to boosting customer loyalty

Why stop there? Let's explore a few other small changes that could vastly improve the revenues in any similar retail space. Be warned: we're going beyond simple cosmetics now. But just barely.

• Assign me one problem solver. It's the account-exec approach. If (in the case of the store I visited) your store has enough greeters milling about, why not divvy them up to ensure that each customer us greeted by one person—who's accountable for that customer's in-store experience?
• One shot or two? Rather than having coffee or other beverages simply available, your staff can take orders and personally deliver to the customers lounging about. Now you're moving from offering a good experience to something that's downright upscale. If you execute properly, your upscale experience allows you to charge upscale prices. (If you're spotting a pattern, it's spelled c-o-n-c-i-e-r-g-e.)
• Let me play with your products. If I'm really bored, I'll poke around. Cell stores have all those phones on display—what a sales opportunity —but they're locked to a display board. Nobody can actually play with them. If you're in the high-tech retail biz, you'll want to unlock your sleekest, sexiest products, place them on the coffee table and turn them on. Let customers dial up their friends and make sales calls on your behalf. Let them convince themselves that they need these babies, no sales pitch required.
• Charge extra for club-level service. What would the service have to be like if you actually charged people to come in and have you fix their phones? Pretty darn amazing. But that's the type of environment we're describing here anyway, so it's not unreasonable to imagine two classes: basic (free, no amenities, one-hour wait), and first class ($20 per visit, goodies aplenty, 30-minute turnaround). Suddenly your service operation is a profit center of its own.

OK, I get it. But is all this really necessary?

All right. So it's a lot to absorb for a simple customer-facing space. "Is all this really necessary?" you wonder. "Why can't I just focus on making money?"

For marketers in any commodity retail service, this is exclusively about making money. Here's why:

• It's cheaper to retain a customer than it is to attract a new one. Such is the case here, and this isn't just a cheap investment. It's downright miniscule.
• Customers in this business don't stay because they're loyal. (Know any people who love their cell company?) They stay because they're lazy. Motivate them enough to leave, and they will. On the other hand, if you motivate them to be loyal they'll tell their friends (who'll tell their friends). That's cash in the bank today, tomorrow and for the foreseeable future.
• The cell-phone market is increasingly commoditized. And now, with number portability, it's easier than ever to switch to a competitor that simply offers a better deal. Cell carriers can no longer differentiate on features, price or plans.

Obviously, these suggestions apply to a limited part of the marketing world: cell stores. However, the ideas behind them apply to any type of customer experience or interaction. If you're responsible for your customers' happiness, chances are you have an opportunity to create your own best-imaginable, rich experiences that need not cost an arm and a leg.

Whatever you do, don't just sit there with limited-profit space, focused on today's numbers rather than tomorrow's viability. Providing memorable moments will help your brand become one that customers truly appreciate. With an investment this tiny, there's so little to lose. And in the case of at least one large cell-service provider, $5 billion (at the very least) to gain.

Additional reading:

The Experience Economy, B. Joseph Pine II, James H. Gilmore

Umpqua Bank Case Study, Ziba Design.

( Jul 12 2005, 09:38:54 AM PDT ) Permalink Comments [2]

Friday July 08, 2005

Branded audio: the bad and the bizarre

I'm a big fan of audio as an extension of brand -- it's a sorely undertapped way of communicating with customers in a possibly very resonant way. Emphasis on "possibly," because as with all media, it's very easy to screw things up. Let me rephrase that: it's very easy to add to the litter to the audiosphere.

And for some reason the web is rife with such examples today. Here we go:

-- Talking wine labels.
-- Personalized orgasmic ringtones.
-- Last and least: Talking toilet paper.

It's days like these that I'm embarrassed to be part of a marketing organization, any marketing organization. I can only promise you that the audio branding project I'm working on is far more interesting, useful and exciting than any of this dreck.

Except for perhaps the orgasmatones...wait, they don't have a "Noel." Looks like I'll just have to be "Flynn." Oh baby. Happy Friday.

( Jul 08 2005, 09:40:30 AM PDT ) Permalink Comments [0]

Carp make the heart grow fonder.

Any hotel can say they're all about customer service. Any hotel can offer me Starbucks in the morning (despite a crappy coffeemaker and powder creamer...pfft). And any hotel can claim to have the world's most comfortable beds.

But that'll only get you so far. After all, not every hotel can offer me the koi pond in the morning off my balcony. But this morning that's exactly what the Sheraton Palo Alto did. And I thank you for it, dear Sheraton. (Perhaps I'll even forgive you for the dairy-mateTM).

( Jul 08 2005, 08:01:04 AM PDT ) Permalink Comments [0]

Wednesday June 29, 2005

We're live at marketingprofs.com

Good news: my latest article has finally been published over at MarketingProfs.com. It's nice to get that branded-environments-for-fun-and-profit train rolling, but the bad news is that it's one of their premium content articles that you have to pay for.

And there's the quandry. On one side, it's a great publication. On the other, my copyright is non-exclusive, and I'm a big believer in information being free. So if you'd like to read it but don't have an account, you should either a) get one; or b) email me directly (noel dot franus at sun dot com) and I'll send you a PDF. And after about two weeks I'll post the piece here.

( Jun 29 2005, 08:32:24 PM PDT ) Permalink Comments [1]

Tuesday June 21, 2005

Experience it yourself

Experience Manifesto has dug up some obvious but necessary research by Jack Morton on consumers and experiential marketing. Well worth the read -- here's a snippet:

11 out of 14 consumers said their preferred means of learning about new products/services was by experiencing it for themselves or by hearing about it from someone they know, as opposed to TV, radio, print, mail or the Internet.

Grain of salt: JM's research was done in an online survey.

Second grain of salt: I'm hoping we're all clear on the difference between letting people "experience something for themselves" and marketers telling, screaming, insisting that people really really really need to "experience something for themselves." It's a Goofus vs. Galant thang.

( Jun 21 2005, 09:15:36 PM PDT ) Permalink Comments [0]

Wednesday June 15, 2005

Warning: addiction to napkin sketches can kill creativity, value

I have to admit, I'm tempted to start sketching things out as soon as an idea pops into my head. We're all probably similar in that respect: we ideate, then we filter things down and fixate on one concept.

When it comes to large, expensive corporate, institutional or spaces, though, that sort of addiction or inflexibility probably isn't a good thing, given the value that thoughtful design research can provide prior to any design work. Seattle Library architect Joshua Prince-Ramus explains more in FC:

OMA took a collaborative approach that can be used in any industry. The process began with a three-month journey to brainstorm how to build the first 21st-century library. OMA, LMN, and library representatives traveled to 20 other libraries in North America and Europe and met with technology executives and futurists to talk about what's next for books. They held seminars with librarians to understand how architecture could help them work better. They didn't begin to think about design until the research phase was completed.

On the tours, they noticed how many libraries had been designed with what Prince-Ramus calls a "shotgun" approach, creating universal spaces that could be used for anything. That flexibility made the rooms generic. Librarians also told the architects about the difficulties that came with interdisciplinary research. The result of that conversation: the "mixing chamber." Resembling a trading floor, it merges the library's research spaces into one central area.

( Jun 15 2005, 08:22:36 AM PDT ) Permalink Comments [0]

Visualization: going deep

My Dream Home (Fast Company) -- one customer's experience with an architecture shrink.

Perhaps I should explain: Olson Zaltman's The Zaltman Metaphor Elicitation Technique "probes beneath the surface to reveal "what people don't know they know" - the underlying motivations that influence a person's decision to buy a product or form an opinion. Because approximately 95% of all thought occurs in the unconscious, most of these factors are missed by traditional research methods."

( Jun 15 2005, 08:03:40 AM PDT ) Permalink Comments [0]

Wednesday June 01, 2005

Reactrix: wild interactive environments

I'm not a fan of billboards (visual clutter, dinosaur media). Not wild about the mall (commited urban snob). And I'm seldom excited about noise for noise's sake (give me relevance or give me death...er, money!). All that said, Reactrix is a company that's heavily involved in all three, and I'd have to say this stuff is pretty compelling: they offer a large-scale, interactive hook with major sex appeal for retailers, clubs, or anyone looking to stop people dead in their tracks.

Me, I can't help but brainstorm where that could go: massive projection art, Burning Man installations, or (forgive me) huge-format, outdoor collaborative spaces (imagine a "live wiki" in times square). Primitive ideas, I'm sure, compared to what the rest of you could come up with. Do share...

Anyway, my friend Elaine has recently been hired to direct research for them, and needless to say I can't think of many more compelling jobs than hers. Congrats Elaine! (PS: I'll be in the Bay Area in the next 1-2 weeks. Hope you have room in your schedule for a tour ;-)

( Jun 01 2005, 08:15:43 PM PDT ) Permalink Comments [0]

Tuesday May 31, 2005

Tomorrow's workspace?

Siemens announces their desktop of the future.

Beautiful! Some terrific potential here. Just don't let those software and hardware teams work on separate islands...otherwise you wind up with your own, personal 12x4 version of TimesSquareAndLasVegasAllRolledIntoOne in your face.

( May 31 2005, 10:30:14 AM PDT ) Permalink Comments [3]