Longing for a taste of the good ol’ days? The John W. Hartman Center for Sales, Advertising & Marketing History at Duke University just posted thousands of television commercials created or collected by the D’Arcy Masius Benton & Bowles (DMB&B) advertising agency, from the 1950s to the 1980s. From American Express to Vicks VapoRub, they’re all here. (Did not remember the spots for Fluffo Shortening, but they’re all here too!)

Click here to jump into the time machine.

From Wikipedia: “DMB&B was established in November 1985 by the merger of the Benton & Bowles (B&B) and D’Arcy-MacManus Masius(D-MM) advertising agencies. DMB&B created the original Santa Claus icon for a Coca-Cola ad, as well as the slogans “This Bud’s for you” for Budweiser and “Melts in your mouth, not in your hands” for M&Ms. They were acquired by Publicis and closed in 2002.”

These ads reminds us of simpler days, when advertisers could simply blast a clever message out through the limited media channels (NBC, CBS, or ABC) over and over and over, to win the hearts and minds of American consumers.Today, the challenge is much complex and requires actually listening to consumers and speaking with them, as opposed to at them.

Unfortunately, we’ve seen too many current-day ad agencies who are still stuck in the time machine, longing for the “good ol’ days.” This is where service design can help.

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

We recently came across an amazing service designed for kids; a Brooklyn, NY storefront appears to cater to outfitting superheros for his/her next crusade. The shelves are lined with tools of the trade – invisibility paint, capes, deflector bracelets, and bottles of chaos and anti-matter. Customers are treated as real superheroes throughout every facet of the customer experience – and take an oath when they leave the store not to share trade secrets with “villains.”

An actual business generating real revenue, this novel idea actually creates a comfort zone for the real business in the back-room; a non-profit creative writing and tutoring center called 826NYC.

Imagine students, who are hesitant at best when their parents sign them up for extra help (equaling extra homework.) Now they enter a cool and unique storefront, and get to the tutoring center through a secret bookcase in the back wall. What kid wants to walk into a storefront that says “Tutoring Center?”

826NYC is the second in a series. A pirate supply store called 826 Valencia, located in San Franscisco, was the first tutoring/creative writing center and was the brainstorm of Dave Eggers, author of the Pulitzer Prize finalist novel “A Heartbreaking Work of Staggering Genius.”

Since then, sister sites have popped up all over the country with different themed storefronts. Seattle has a space traveler theme and 826 Michigan is a robot supply and repair shop.

Many times, we assist our clients in finding new service design concepts in the most obvious places. This story also shows that sometimes you have to “zig” when logic would tell you to “zag.” Kudos to Dave Eggers and everyone involved with his tutoring program for thinking differently in order to help kids bridge the gap between their own inner hero and their schoolwork.

Click here to see a Dave Eggers discuss this project at the 2008 TED conference.

Pricing levels and methods are an important part of service design. Especially when you are changing them for a pre-existing service. That’s why it was interesting to see the awkward way in which Ryanair, the Irish discount airline, is handling their most recent announcement.

In a move to further automate their service, Ryanair, the Dublin-based budget airline announced it would introduce a $7.50 USD on-line check-in fee per passenger, per flight on new bookings. In addition, they plan to fine customers $60 USD if they do not print out their boarding passes prior to arriving at the airport. The airline hopes to shut down al of its traditional check-in desks at 146 airports by October 1st.

The move will eliminate about 100 jobs at Irish airports and Ryanair is set to save millions of pounds by ending its contracts with check-in services at European airports. Ryanair says the proposal will help passengers avoid “time wasting queues and delays.”

We’re all for that, but why charge a customer to check-in online if a) you are realizing dramatic cost-savings in the process and b) it’s the only way they can use your service?

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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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The App Store for the iPod has been getting a lot of attention, but another intriguing aspect of the iPhone has gone relatively unnoticed. During the recent preview of the iPhone 3.0, Apple announced that they would be opening up the 30-pin connector at the base of the device for third-party hardware accessories (and software apps that can take advantage the inter-connect).

This is a big deal. Why? Because now, this “device” can talk to other “devices.” Imagine all types of input or output devices, from blood pressure or glucose monitors, to breathalyzers, to biometric or security devices. This list goes on and on, for both consumers apps as well as very focused B2B applications. The great thing is that Apple already has an installed base of 30 million devices with a very powerful (and ever-growing) developer base with over 25,000 applications deployed to date.

Hardware and software, products and services. The lines are blurring more and more – all requiring more refined service design.

J.P. Morgan Chase & Co. , the new owners of Washington Mutual, Inc. are undoing the roughly $1 billion branch make-overs that WaMu implemented in about 900 branches. The radical design was called "Occasio," which means "favorable opportunity" in Latin, and was even patented by WaMu to keep other banks from using it.

The re-think replaced bank-teller windows with free-standing counters and cash-dispensing machines to create a warm and fuzzy retail-banking strategy. Apparently, the design was implemented by a retail design firm that also designed the Disney retail stores. But the question is: did they have experience with service design? Designing a space in which people deal with their money is far different than buying plush toys.

When WaMu customers walked in the door they saw a "concierge desk" where an employee would direct them to tellers standing in the middle of the branch. Since Occasio tellers didn’t handle cash, customers who wanted to withdraw money had to take a slip of paper from a teller to a cash dispenser, entering a numerical code.

Other banks have tried but failed to reinvent the traditional branch concept. In the late 1990s, First Union Corp., now part of Wells Fargo & Co. , launched "Future Bank," emphasizing video kiosks and electronic banking over traditional teller transactions. It was a flop, hurting the Charlotte, N.C., bank’s revenue and fueling a customer backlash that took years to mend.

Even the J.P. Morgan executive charged with dismantling Occasio had his own flirtation with one-on-one teller stations earlier this decade when he ran the retail business at Chicago-based Bank One Corp. "We thought it would be more engaging for customers to be close to the teller," he said. "It just didn’t work."

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…)

eBay seems to be learning the hard way that improving the products you have can be better for business than expanding into new arenas. The Wall Street Journal reports that the one time Internet star is scaling back on its attempts to venture into the new products market, instead leveraging their established dominance in online auctions.

eBay’s model was simple. Individuals with an attic full of “antiques” they didn’t want, could create an online auction to sell their treasures to the highest bidder. EBay’s primary functional role was to serve as the auction forum and to monitor buyers and sellers, insuring complete transactions.

eBay’s dominance in that market gave it the necessary leverage to purchase online payment portal PayPal in 2002 and Internet telephone service Skype in 2005. PayPal has been and will continue to be a powerful source of revenue for eBay. Skype, which offers a service well outside of eBay’s core competency, has yet to produce profit for the company.

These purchases represent good and bad ways of expanding a business to create new revenue streams.

PayPal was a logical purchase, given the fact that the online auction participants want a fast, secure way to transfer money. This is a great service for making the auctions run better for everyone involved.

Skype on the other hand is a service that offers low- or no-cost voice and SMS transmission via the Internet. Auction participants don’t need to chat with one another; they need to move their treasures quickly.

Creating new services that leverage your existing products is much more likely to create new revenue streams for your company, than venturing into completely unknown territory.

Last week during my service design workshop for Inc. Magazine, I cited the study from Bain Consulting in which 80% of executives from large public corporations believed that they were providing "outstanding customer experiences" to consumers. I asked the group of privately-held company CEOs to guess what percentage of customers actually agreed that statement. People called out "30%," "20%," "15%!" It was like a reverse auction. And yet nobody even came close to the dismal truth that only 8% of customers agreed that they had an outstanding customer experience. You could actually hear a collective gasp in the room when I told them that the number was 8% and that the execs had missed it not by a factor of two or three but by a factor of 10!

I’ve been thinking a lot about this disconnect within large corporations. Why does it exist? I have a couple theories, and the first revolves around the old saying, "familiarity breeds contempt." It’s tough to nail down who first said that, either Aesop in a fable or St. Augustine ("vulgare proverbium est , quod nimia familiaritas parit contemptum.") And while this saying is most often associated with individuals and inter-personal relationships, I think it’s true for companies and their customers. In traditional marketing there is a mad rush to get new customers, as opposed to really understanding the customers you have, which in turn, would help you attract more customers. (more…)