Since I often refer to the famous quote, “the road to Hell is paved with good intentions” I was intrigued by an article in today’s Wall Street Journal entitled, “When Good Deeds Turn Bad” by Jefffery Zaslow. (Don’t ask my why the WSJ titles it one way in the paper edition and then titles it - “Doing Bad by Doing Good” - in the online edition. Also, don’t ask me why the search function on their website is so awful - that’s a topic for another post!) Anyway…

The article is a good one for anyone involved in service design. Zaslow points out a number of examples of people with good intentions, but bad results. While many of the examples are from the world of charity, the lessons directly apply to business and the design of services. From the article:

‘Most of us want to be effective, he says, “to make the world better. But before you help people, you have to ask them, ‘What do you need? What do you want?’” Every day, we see reminders of the limitations, and even the dangers, of good intentions. In Haiti, U.S. missionaries who said they only wanted to save orphaned children ended up arrested on child-trafficking charges. In Asian countries hit by the 2004 tsunami, residents still shake their heads over the warehouses filled with unusable donations, including winter coats and stiletto shoes. And earthquake-ravaged Chile is sure to receive its share of “useless aid” in the days ahead.

And from another section:

Ms. Hogan tells of going to a village in Peru where an aid group brought in tourists to help build public toilets. The group ran out of money and time, the tourists ended their volunteering vacations, and the toilets were never completed. The aid group had thought access to restroom facilities was needed to boost living standards, Ms. Hogan says. “But when I asked people in the community what they wanted, they said, ‘What we really needed was irrigation, and to have our bridge fixed, so we could take our goods to market.’” The never-completed toilets were gaping holes that had to be covered. Villagers feared their children would fall in.

We see these types of well-intentioned efforts all the time among businesses. At best, the companies really do (mistakenly) believe that they are working in the best interest of their customers. At the worst, the companies actually seem to have a sub-conscious contempt (see our previous post) for their customers and the very people who will be using the service. Either way, it comes down to a simple (almost too simple?) bottomline: JUST ASK.

This is what we do for our service design clients via ethnographic research; we go out and talk with their customers (internal or external) and have conversations. We observe, engage and ask questions. Then we compile those findings and bring them back to reveal what people want. This works for everything from service design, to volunteering, to parenting and spousal relationships.  It’s absolutely amazing what you can learn when you put aside what you think is right, and just ask.

In our service design practice, we triangulate the trends of business, technology and society to predict for our clients where things might be in one, three or five years. (Okay, five years is a very long time.) So we’re always gratified when those predictions come true and here’s one we’ve been talking about for years: car monitoring to reduce insurance rates.

In effect, would you make a deal with your car insurance company that you promise not to go over the speed limit, in exchange for a 10% decrease? How about 15 or 20%? In order to prove that, would you be willing to let the insurance company install a small device on your vehicle that tracked your speed? Maybe you get one or two chances, but then the third time you speed - bing - you lose the discount.

Well, that future is here. Progressive Insurance has announced the My Rate Program, which provides a small device that plugs into your car’s on board computer. The device tracks things like when and how you drive your car including acceleration, hard braking, etc. and then sends that data back to Progressive wirelessly. (The system is not based on GPS, so it’s not tracking where you go but still, we can imagine that in a future generation.)

Let’s take this one step further: How about a deal where you promise your life insurance company not to text or talk on the phone while driving, in exchange for a very big discount? After all, that behavior has shown to increase the likelihood of accidents by a factor of four. After an accident, it would be a simple matter for the insurance company to compare the time of airbag deployment with your cell phone bill to determine if you kept your promise. If not, no health care for you or no death benefits for your loved ones. Would you take that deal?

There is a saying that “everything in life is a trade-off,” and with advances in technology these types of automated trade-offs will start to permeate our relationships with service providers and impact pricing options. Watch for these trends in everything from insurance to mortgages to TV and shopping. It’s one thing to have privacy taken away from you, but it’s quite another thing to trade it for cash. So what’s your “break-point,” at which you would give up details of your private life in exchange for a discount? 10%, 30%, 80%? Everything’s negotiable.

Should companies protect consumers from themselves? That’s the question raised in the recent case of the teenager in California who, once added to his Dad’s Verizon Wireless account, ran up a bill of $22,000 by downloading over 1.4 gigabytes of data on his cell phone. Dad did not have a data plan, so…. as the meter ran (and ran and ran) Verizon was charging Dad by the byte.

In this particular case, Verizon agreed to waive the fee after the story got a ton of press. But typically, on an “oops I made a mistake” case like this, Verizon will split the charge with the customer. (So, Dad would still be on the hook for $11,000!)

The website The Consumerist raises the question: why not create a fail-safe system that would alert a customer if there was an unusual spike in their usage? Credit card companies have done this for years, mostly related to preventing fraud. But is it the job of a corporation to prevent customers from spending too much money on their goods or services? How about sellers of luxury goods or automobiles or casinos? Should companies become their “brother’s keeper?”

Actually, we would suggest a middle ground. When signing up new customers, Verizon should provide the account owner with the option of being notified in case of a spike in usage or fees. They could even offer levels of 100, 200 or 500 percent over normal. These are (or should be) simple variables that can be plugged into their management systems that in turn, would add a great deal of value to customers, if they chose to participate.

(And no, Verizon - you shouldn’t charge for the alert service. Use it as a point of differentiation!)

We just added four new PDF case studies to our website, which can be found on our client list page. These include case studies about:

- ColorQuick, a software company developing game-changing technology in the printing industry. Our ethnographic research turned up new and compelling benefits for their target market.

- BlackGold BioFuels, an energy technology company that has a patented system for converting waste products into high quality bio-diesel fuel. We helped them design new services that support the technology product, as well as innovative new business models for rolling out their products and services.

- A major hotel chain and our work with them on designing new service revenue opportunities related to rapid developments in the Connected-TV space.

- A major luxury retailer and a series of card sort exercises we did for them related to a new product design initiative.

Also, after a number of requests from our business partners, we created a one-page executive summary about Frontier Service Design that can be downloaded here.

Read, learn and enjoy!

We heard a story the other day from a large infrastructure service company that has over a thousand field service personnel on the road on any given day, around the country. One of the senior executives did a ride-along with one of these long-time employees and heard an interesting story.

“You know, I’ve been driving this van for about 16 years now, going to people’s homes to help them out, or going to troubleshoot at one of our field facilities. For years, I always felt that I was part of a bigger team of people, you know? I’d be driving along and I’d hear the dispatcher coming over the radio calling out assignments to different techs. I’d hear those voices go back and forth and I’d have a feeling for what was going on around me, you know? So, if maybe Jim got assigned to a big issue about a mile away and it was raining, I might swing by there to see if he needed help. Or I might check in with him on the radio. But ever since we got these GPS systems and smartphones a few years ago, I just get text messages from central dispatch telling me where to go next. I go through an entire day never hearing any human voices of people I work with anymore, and frankly, I feel like I’m out here all alone. In fact, I don’t even feel like I’m part of the company anymore.”

The beauty - and terror - of service design is that it all revolves around people. Certainly, we want to leverage technology to make every process run more smoothly but we also have to keep in mind the collateral damage incurred by such choices. In order to provide an outstanding customer experience, service personnel need to feel as though they are part of a larger mission, and community. How has technology disintermediated your employees from your own company and culture?

We have posted four new videos today which cover a range of topics related to service design. Click here to check them out.

My wife goes to our local bank to make a deposit in the ATM. The rain has soaked the deposit envelopes stored outside. She walks into the branch to let someone know. She approaches the teller line, where there is a short line. A woman sitting at a nearby “Customer Service” desk asks brightly, “Hi, is there something I can help you with?”

“Yes, actually. I wanted to make a deposit at the ATM outside - but all the envelopes are wet from the rain.”

“Hmm. Okay, thank you! I’ll tell Bill to replace them at three o’clock…” She smiles and returns to her paperwork.

My wife looks at her watch. It is one o’clock. She replies, “Well, I think there might be some people who will want to make a deposit over the next two hours…”

The woman looks up with an expression of consternation. “Well, I’m not changing them!”

Without missing a beat, my wife replies, “OK, well if you give me some envelopes, I’ll just put them out there.”

Now the woman behind the desk is perplexed. “Uh no, wait. I, uh, can’t have you do that…..”

The woman puts down her pen, gets up from the desk and approaches my wife. “I have an idea - I’ll just take your deposit and process it myself! I’ll be right back…”

With that, the woman disappears behind the counter for nine minutes. The wet envelopes stayed in their holder that day, and surely the next time it rains they will get wet again.

Is this an example of poor customer service? A crashed user experience? A broken golden rule? Actually, it’s a multi-part service design challenge that points out the importance of understanding “service eco-systems.” From the culture of the bank to service protocols to customer touchpoints to the physical layout of the ATM and building - everything is inter-connected. Service design looks at the big picture to make things better not only for customers, but also for employees. Everybody wins.

Now if you’ll excuse me, I have a call to make…

A big part of our business is working with companies to understand the changes that technology - and specifically broadband - can bring to their business. There is probably no better example of this than the coming wave of “Connected TV” in which consumers will be able to connect their high speed broadband connection (via wire or wireless) directly to their HDTV set. The net result is the ability to watch any Internet video on a big, crisp screen from the comfort of your couch or favorite easy chair.

There is a lot of great content on the Web that will just never make it onto a cable channel. Whether it’s big-idea speakers from the TED conferences, or “how to” videos from Instructables, or independent films from Atom, I want to watch this long-form content on my TV, not my PC.

While this has huge impact for consumers, it will fundamentally change the relationship that HDTV manufacturers have with their customers. To date, the consumer’s “relationship” is with their cable provider. Historically, the TV manufacturer simply sold a big piece of glass, diodes and plastic and that was it. Less than 5 percent of consumers even sent in the warranty card.

But with the advent of connected-TV, the consumer electronics companies now find themselves in need of service design. Because now they have a very tight connection with the consumer and the revenues from services over the life span of the product will far exceed the revenues from the hardware. After all, there’s got to be some way of organizing and navigating the ever-growing mass of video content that is out there which in turn will lead to a wide variety of other value added service.

This is why we’re excited to be working with AnySource Media. They essentially empower the HDTV manufacturers with a four-pillar platform that brings Internet video to HDTV. These pillars include the embedded software that resides in the HDTV, pre-negotiated video content deals, an advertising platform that dynamicaly matches viewers and contextual ads, and a backend data center that ties this all together.

Connected TV is a “tipping point” technology. You’re already seeing the first few models come with many more to follow in 2010. I predict that by 2012, we’ll all be reminiscing about the “old days” when you couldn’t access your favorite show from the cloud, on demand.

This is not about watching more TV - this is about watching better TV, which means content you want, when you want it.

An interesting experiment in service design is unfolding this week as Starbucks and McDonalds aim their marketing cannons at each other. Starbucks is taking out full color, full page ads to tout their entire product/service/experience. The initial ad, launched today, covers quality (they only use the top 3% of available beans), Fair Trade (good karma), employee training, and health benefits to all employees who work over 20 hours. The last paragraph covers the user experience side: "Oh, and a little bit of the price of a cup of Starbucks coffee helps furnish the place with comfy chairs, good music, and the right atmosphere to dream, work and chat in. We all need places like that these days."

And in the other corner we have McDonalds, launching their "McCafe" brand on TV, radio, the Internet and in print. (Is it me, or do those billboards make the product look like plastic?) But watch out Starbucks: McDonalds is on a tear, particularly in this economy. They are a massive marketing machine, not to be trifled with. But the real questions is: Should Starbucks really be all that concerned with McDonalds? How many people do you know that are loyal to both those brands? Is Ralph Lauren concerned about Old Navy?
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Last week we were asked by an upcoming online retailer to re-think the service design of their online returns process for merchandise. This company sells clothing and have a very liberal returns policy, modeled after Zappos . They really want you to be happy with the fit, so they have no problem if you need to make an exchange for a different size or product. The problem is, the actual process of making the return is a hassle.

For most consumers, the traditional process breaks down into these key steps once they decide to make a return or exchange: Go to the website, look up your order, request a "return merchandise authorization" (RMA) which triggers the merchant’s systems to know that the merchandise is coming back and to prepare a return shipping label.

Now UPS or FedEx or USPS gets pulled into the loop. UPS does a pretty good job of interfacing into merchant systems, but they still have to open a new window in your browser to display the return shipping label, which you then have to print. If the merchant uses FedEx, they have to actually "pass you over" to FedEx to print your label and then FedEx has to "pass you back" to the vendor. It is a major case of "process interuptus." The whole customer experience falls apart.

For some systems, you can print the label once or twice or else have to start over. Don’t accidentally close the window before you print, or you have to go back to square one. Then you have to fold or cut the label and use multiple strips of packing tape to tape the new label over the old label. (Don’t have packing tape? Then run to the store!)

Some retailers include a return shipping label inside the box to begin with. Typically, this is part of an 8.5" x 11" crack-n-peel sticker sheet on which the original shipping label was printed, as well your bill of lading/invoice and the return label. But this is a waste of resources because that large label is expensive and unnecessary, and in most cases, people don’t actually need to do a return.

So, here’s a better way. We came up with a solution we call the "reversible shipping label" that UPS and FedEx could simply integrate into their business logic to make everything much simpler for their customers - and their customer’s customers. The fact is that no one (except the final recipient or their housemate/officemate) actually reads the text that is written on the labels. Every step of the package’s journey is controlled by the machine-readable bar code. The label is scanned numerous times, from the time it is picked up (from your home, office or a drop box) to every key checkpoint in the logistics network, right up until the moment the recipient signs for it. So…..

A consumer should be able to go online, tell the merchant they want to send the item back and then the merchant would trigger the "reversible shipping label" with UPS or FedEx. This way, all the customer would have to do is seal the box up as is, and have it picked up (or drop it off.) The original "ship-to" information on the original label is simply reversed. The original recipient is now the shipper and the original shipper is now the recipient.

The fact is that the logic is in the NETWORK, not the physical label. So why force the customer to go through all the messy hassle of dealing with printers, paper, tape, scissors, etc.? Let the machines do what machines do well, and let people get back to shopping online and doing more productive things with their time.

(That is, unless of course, the merchant wants to make returns a hassle. But that’s a different topic for another service design blog entry…)