Outcomes-Based Experience Design


Chris O'Leary

Bridging the Gap Between Customer Experience and Business Outcomes

by Chris O’Leary, COO, Customer Innovations, Inc.

In the 25 years we’ve been helping companies design customer experiences, one of the consistent challenges has been to estimate the business impact of specific experiential improvements.  The fact is that many customer experience (CE) programs simply fail to make a compelling argument about the business value that will be generated by specific CE innovations. In the absence of a compelling business justification, executive support and sponsorship may be weak or even absent, orphaning the CE program and robbing it of the executive leadership it needs.

In their efforts to generate a business justification, Customer Experience (CE) managers frequently try two approaches.  Neither approach has been consistently effective in earning senior management support and sponsorship.

First, they may choose to rely on generally held beliefs about the value of customer satisfaction, engagement or Net Promoter Scores (NPS).  Often, this reliance highlights a correlation between these indices and some business outcome (e.g., revenue growth or market share), but treats it as though it was a causal relationship. (see: Keiningham et al., “A Longitudinal Examination of Net Promoter and Firm Revenue Growth,” J. Marketing, Vol. 71  July, 2007, pp. 39-51)

In addition to the confusion of correlation and causation, we’ve also seen many cases in which high satisfaction or NPS scores actually co-exist with declining revenues, market share, and profitability.  These measures reflect how customers feel about the company and not how the company may make customers feel about themselves.  As a result, they are poor predictors of how customers will actually behave.

The second approach, of course, focuses on generating cost savings and efficiencies, most often at the service touch points.  Unfortunately, service efficiency is almost always more important to the company than to the customer, and efforts to streamline or automate the touch points typically end up working against the quality of the overall customer experience.  (See:  The Customers’ Experience Does Not Happen at Your Touchpoints).

What is needed is a fundamentally new approach to focusing and justifying investments in customer experience innovation, one which directly addresses the core challenge of connecting specific experiential innovations with measurable business objectives.

For some time, we have been using a new approach to CE business justification called Outcomes-Based Experience Design, which represents a 180-degree change from common practices:

  • Rather than trying to justify potential CE innovations by predicting or projecting hoped-for business outcomes, this approach starts by clearly defining the desired measurable business outcomes and working backward to identify the innovations required to generate those outcomes.
  • Rather than relying on self-reported satisfaction, loyalty and NPS scores, this approach targets concrete business and customer behavior outcomes, both of which are measurable at the individual and the aggregate level.  Satisfaction, loyalty and NPS are interesting, but should NEVER be used to justify investment in experience innovation!

Rather than competing for attention, funding and time with other business initiatives, this approach anchors CE to the existing strategic priorities, which is where CE should have been all along.

Figure 1: Outcomes-Based Experience Design

As illustrated in Figure 1, the Outcomes-Based Experience Design approach introduces a new measurable outcome, Behavioral Outcomes that connects Experiential Outcomes and Business Outcomes.  Linking Experiential Outcomes and Business Outcomes in this manner enables CE program leaders to define and measure the specific business value that is being created, and this provide a rigorous business justification.

The model works in two directions.  The first direction, going right to left, illustrates the design relationship. When designing the experience innovation, one starts with the business outcome of interest, then determines the specific customer behavior that needs to be influenced, and then designs the specific experiential interventions that are required.

Second, the model illustrates the causal relationship going left to right.  The only way that CE innovation can create a business benefit is by influencing a specific change in customer behavior and choice-making.  The difficulty in business justification discussed earlier arises from the fact that it is so difficult to predict how customers in general will respond to different CE innovations, and even more so for specific groups of customers,

Outcomes-based Experience Design generates a host of critical benefits.  First and foremost, it positions CE innovation as a tool for achieving the priorities of executives and senior managers, NOT competing with those requirements.  Second, it provides metrics and measurability at each stage of the causal relationship.

Third, it allows companies to invest only in those innovations that will influence the target customer behavior, and stop investing in potentially expensive initiatives which may not matter to customers or for which they are not willing to pay.  Identifying (and terminating) uneconomic CE investments will often fund new investments that are far more impactful and that generate meaningful business benefits.

One final note:  This model is effective only if we understand how and why customers behave as they do.  Without the ability to link individual characteristics to the decisions and choices a customer makes, there is no way to design experiential interventions that will be effective in influencing the target behavior.  More important, there is no way to assure that  an experiential intervention targeting undesired customer behavior (e.g., attrition), will not adversely affect desirable customer behavior (e.g., retention, growth).

The necessary foundation of Outcomes-Based Innovation, therefore, is the ability to understand how and why customers make the choices that they do, and to use that information to influence those choices.  The scientific and methodological basis for this understanding has been previously discussed here (Getting Beneath the Voice of the Customer) and here (Customer Experience:  Beyond Better Sameness); practical challenges and applications will be discussed in the future.

Experience Miner: Creating Profitable, Evocative Experiences

Most of the time and money organizations invest on customer experience is wasted…

… because they focus on how the organization “delivers the experience”…

… rather than on how customers actually “HAVE the experience”…

… and how those experiences influence behavior!

Most customer experience efforts are based on touch-point oriented approaches that define the experience in terms of a customers’ interactions with the company.  These approaches are inherently company-centric and, at best, lead to improvements that create “better sameness.”  The fact is:

Customers’ experiences do not just happen at your organizations’ touch-points.


Evocative Experiences… The Experiences that Matter

An experience is evocative when it positively and profitably influences:

  • What people think (cognitive outcomes)
    • What they remember about their experience
    • The story they tell themselves and others about their experience
    • The distinctions they draw that differentiate what you did for them
  • How people feel (affective outcomes)
    • How doing business with you makes them feel about themselves
    • How the way they feel about themselves drives how they feel about you
    • What specific emotional states and triggers motivate behavior
  • What people do (behavioral outcomes)
    • Making additional purchases
    • Diversifying what they buy from you
    • Telling stories about their experience with you
    • Recommending you to others
    • Behaving more cost effectively
    • Adopting new product, service, or process offerings

Four Characteristics of an Evocative Experience

  1. Are immediately simple to understand and easy to navigate. The vast majority of peoples’ experiences are accomplished using a combination of “gist processing” and “automatic behavioral scripts.” Well-designed experiences fit easily with the mindsets and natural behaviors people have for the problem they’re trying to solve. Note: As a result of being designed around automatic behavioral scripts, evocative experiences can have a surprising subconscious influence on behavior.
  2. Offer innovative solutions to peoples’ latent problems. Well-designed experiences start with a deep understanding of what people are trying to accomplish and provide solutions to problems, accomplish goals, and address needs that people may not even realize they have or be able to easily describe. These innovative solutions almost never occur at the existing company touch-points.
  3. Tell a compelling and memorable story. People perceive, interpret, and recall their experiences using stories. Well-designed experiences tell a story that has a clear and distinctive message that resolves conflict using a small number of high-contrast, signature experience elements. These signature experience elements get people’s attention and are perceived as a meaningful differences in kind… rather than incremental differences in degree.
  4. Trigger specific emotional states that influence behavior. The most influential experiences are designed to influence how people feel… not about the company… but about themselves. The specific emotional state(s) associated with the experience are chosen as the precursors to the behavior the experience is intended to generate.

Creating Evocative Experiences

In order to create evocative experiences you must start with an “experiencer-centric” rather than “company-centric” definition of experience.   We define an experience to be:

Experience:  A person’s cognitive, affective, and behavioral reactions… across the end-to-end process they follow… in order to realize a desired state, satisfy needs, and accomplish goals that are important to them.

This is fundamentally different than the typical company-centric definition:  Customer experience is the sum or all interactions a customer has with a supplier of goods or services, over the duration of their relationship with that supplier.

Experience MinerTM and the Design of Evocative Experiences

The objective of any product, service, or experience design is to profitably and powerfully influence how people think… how people feel… and, most importantly, how people act.   Most organizations’ efforts fail to achieve this objective because they focus on how their organization “delivers” an experience rather than how people actually HAVE experiences.  As a result, organizations routinely over-invest in incremental improvements that deliver “better sameness” at the existing touch-points.  In the course of doing so, these organizations miss the fact that customers’ experiences don’t just happen at their touch-points.   Although these investments may have a marginal impact on reported satisfaction, they often don’t lead to any measurable change in behavior in the face of changing customer needs, priorities, expectations, and alternatives.  In order to positively influence customer behavior, experiences must be designed and delivered with a deep understanding of how people actually HAVE experiences.  For more information on this, see:  Getting Beneath the Voice of the Customer

Experience MinerTM provides a rigorous way of capturing and analyzing the most critical aspects of the way people think, feel, and act  on their experiences.  Built on 25 years of research into the cognitive, affective, and behavioral basis of experience, it provides the specific insight required to focus design and delivery efforts on the areas of greatest influence and financial return.   Experience MinerTM is used to describe the key elements for each target customer personae.  This insight is used to 

…design evocative experiences from the mental model of the experiencer.

Experience Miner Toolset

The Experience MinerTM toolset consists of the following seven elements, each designed to fill in a critical piece of insight required to design experiences that influence behavior.

Goal Space MappingTM Describes the desired states and situation-specific goals that motivate and direct the experience for each key persona

Experiential TemperamentTM – Profiles how temperamental differences influence the way people are drawn to and engage with novelty seeking, harm avoidance, social orientation, and persistence

Framing Metaphors – Surfaces the underlying physical metaphors people use to interpret, evaluate and act on their experiences in the relevant domain(s).

Experiential ConstructsTM – Identifies the most common, learned distinctions that enable people to recognize, categorize, differentiate, and form expectations.

Emotional States and TriggersTM –  Surfaces the emotional states and specific triggers across the lifecycle of the experience highlighting areas of uncertainty, stress, frustration, etc…

Experiential PathwaysTM – Maps the end-to-end set of activities and choice points that people follow in pursuit of their goals… including the unwritten rules and automatic behavioral scripts people apply along this pathway.

Experiential Choice DynamicsTM – Describes the situation-specific choice processes that people follow, as well as, how they construct preferences and make decisions that influence their behavior.

Most of the time and money organizations invest on customer experience is wasted…

… because they focus on how the organization “delivers experiences”…

rather than on how customers actually “HAVE experiences” and how those experiences influence their behavior!

Putting the “Customer” in Customer Experience Efforts

We’ve reached the point where most business leaders understand that their organization’s ability to effectively acquire, retain, and improve the profitability of customers is a direct result of the nature and quality of the experience those customers have.

There is, however, a fundamental problem with both the literature and management practice surrounding customer experience.  The issue is that most business leaders and management gurus focus on how companies “deliver” experiences rather than how people actually HAVE experiences. Without understanding how customers HAVE experiences, companies often end up wasting lots of time and money on improvements that don’t generate a real return because they don’t fit with and influence how customers think, feel, and act.

If you do a scan on customer experience literature, you’ll find that virtually all of the definitions start something like this:  “A customer experience results from a set of interactions between an organization and a customer… ”   In addition, most of the discussion refers to an experience as if it is a characteristic of a company.  For example, people discuss the “Disney experience” or the “Starbucks experience” or the “BestBuy experience.”   All of this represents a highly company-centric perspective.

This company-centric perspective is deeply misguided.  It often encourages business leaders to make expensive improvements that are, at best, perceived by customers as “better sameness.”  At worst, these expensive improvements go unnoticed by customers who are too busy dealing with their own priorities and their own lives to pay attention to the fine details of their interactions with the business.

Over the past 25 years, we’ve worked with and studied businesses that have effectively innovated and differentiated the experience their customers have… and, as a result, have measurably improved the acquisition, retention, and profitability of those customers.   Based on this work, there are a couple of counterintuitive things we’ve learned:

  • Companies don’t have customer experiences; only customers do. The customers’ experience takes place in one place and one place only; in the mind of the customer. That experience consists of how a customer thinks and feels across the entire behavioral path they follow in pursuit of one or more goals that important to them. Talking about a company’s “customer experience” represents a very large step in the wrong direction. It’s a company-centric way of trying to be customer-centric. (See: Whose Experience is it Anyway?)
  • Casting customers in the role of “customer” can be limiting. This is a subtle distinction with profound implications. When you consider a person or organization to be a “customer,” it’s very easy to have your focus be on what you do to serve that customer. In the course of doing that, you may not look beyond that customer role to gain a much deeper and broader perspective on who they are, what’s important to them, what they’re trying to accomplish beyond the scope of your business. The fact that they’re a customer of your business doesn’t constrain the end-to-end experience THEY’RE having.
  • Customers’ experiences don’t just happen at your touch points. In fact, we’ve seen that the most important elements of the experience don’t happen at your touch-points at all. They happen at the non-touch-points. We’ve observed that touch-point oriented approaches end up leading to incremental improvements in the service quality that either seem like “better sameness” or, worse, go unnoticed. This is one of the reasons why it’s exceptionally easy to make uneconomic improvements in the experience. Alternatively, we’ve seen that companies that can develop a deep and comprehensive understanding of what customers experience at the non-touch-points generally uncover competitively relevant ways to differentiate the experience in a way that gets the customers’ attention. (See:  The Customers’ Experience Does Not Happen At Your Touchpoints!)
  • You can’t fundamentally shift the experience by tweaking surface level cues. The experience customers have with any business is a product of complex and deeply entrenched culture, legacy effects, and unwritten rules that drive the real behavior of the organization. For example, I’m writing this on-board a Delta flight from Atlanta to Los Angeles. Delta’s been promoting the new “Delta Experience” which includes cosmetic updates to their website, changes in their pricing policies, a new highly confusing boarding process, more contemporary music during boarding, along with a couple of “signature cocktails,” and a few other peripheral cues. Do you think these surface-level improvements have had ANY deep positive effect on the overall experience customers are having? Focusing on surface-level cues is a little like hacking at the leaves rather than striking at the root of the issue. In reality, most organizations are strongly predisposed towards the experience their customers are currently having. Unless you get to the root of how deeply entrenched organizational behavior influences the customer experience, you couldn’t possibly know enough about what to do to intervene and positively shift the experience. While those cues are an important, they are insufficient. On their own they are the proverbial “lipstick on a pig.”
  • How customers feel about your business is a side effect of how their experience with your business makes them feel about themselves. If your business makes customers feel great about themselves they’ll, in turn, feel great about your business. Understandably, most business leaders want to influence and measure how customers feel about their business. This strikes me as similar to a line you might overhear on a date… “but enough about me… what do you think about me?” Very often a company can consider their interactions with a customer successful if that customer’s orders were taken, problems resolved, and questions answered. In fact, many customer satisfaction surveys simply ask customers to give the company a report card on how well they feel the company did all those things. However, in many ways companies leave the customer feeling disrespected, devalued, stupid, or frustrated. This is one of the reasons why the concept of hospitality in business is so powerful (see: No Matter What Business You’re In… You’re in the Hospitality Business).
  • The most common customer experience approaches don’t consider how customers actually HAVE experiences. If they did, they would recognize that the vast majority of the experiences people have are subconscious. In most cases, people experience the world using something that can be called “gist processing.” In other words, they get a general sense for what’s happening without having to pay attention to all the details. In most cases, this gist processing leads to the execution of “automatic behavioral scripts.” Alfred North Whitehead said it best, “Civilization advances by extending the number of important operations which we can perform without thinking about them.” Our ability to navigate the majority of our experiences on automatic pilot frees us up to focus our relatively limited train of conscious thought on the small number of things that seem most important to us.

In general, the best strategy we’ve found includes the following components:

  1. Design for Gist Processing. At the base level, you need to understand the perceptional process and basic constructs customers apply to navigate most of the experience relying on gist processing and automatic behavioral scripts.   When a customer enters a bank branch, checks into a hotel, enrolls with a health insurance provider,  etc… they have a set of constructs they’ve learned from past experiences and that operate within a perceptual framework that enables gist processing.  Experiences designed based on this perceptual framework and set of experiential constructs become inherently easy to navigate.    We use process called Experiential Construct Elicitation to surface and understand the constructs that are applied by different customer personae.
  2. Deliver Signature Experience Elements. This is all about getting the customers’ attention using a small number of high contrast and differentiated “signature experience elements.”   These signature experience elements catch customers by surprise, are perceived as a difference in kind compared to what they expected, and contribute to the brand story we want the experience to tell.  If you listen to customers talk about the Starbucks experience, the Whole Foods experience, etc…, you’ll see that customers consistently refer to a small set of experience elements that stand out for them as being the defining elements of the experience.  While you can spend a lot of time getting lots of details correct in the experience, having a small set of signature elements are the kinds of things that really resonate with and influence customers.

So, in summary, the essential message is… you need to understand how customers’ HAVE experiences before you can possibly know what to do to influence their experience… and ultimately, their behavior.

The Customers’ Experience Does Not Happen At Your Touchpoints!

In an earlier post I mentioned that touchpoint mapping is a relatively useless approach for making significant improvements in the customers’ experience.  Unfortunately, touchpoint mapping is also the most frequently used approach… either followed by companies on their own or recommended by consultants who claim expertise in customer experience design.   The most important thing to realize is that… the most influential elements of the customer experience often occur at the non-touchpoints with your business.  As a result, touchpoint mapping doesn’t lead to anything more than incremental improvement that, for the customer, amount to “better sameness.”

In most situations, the lifecycle of the customers’ experience follows something that roughly approximates this simplified picture:

Above and Below the Surface Experience

Of course, the details look different for each situation.  However, in most cases, an organization’s touchpoints with the customer include:  sales contacts, ordering activities, fulfillment activities, and problem resolution.  As you see, the customers’ process includes a lot of other things that have a substantial impact on their overall experience.  In addition, customers often have to integrate products and services they get from you with the products and services of other organizations in order to address their needs.

For example, one of our recent clients is a leading jewelry store chain.  Like many retailers, there is a natural tendency to think about the customer experience from the perspective of “things that happen in the store” or, increasingly, “things that happen on a website.”  However, for most jewelry stores,  70% of the customers are “male gift givers.”  For these customers, the experience is really defined by the end-to-end process they go through when they give a gift that makes a meaningful contribution to a “relationship bank account” with someone that matters a lot to them.

The customer is certainly affected by what happens in the store… but major parts of the experience have little to do with the store.  They may think about an upcoming event, like a birthday, anniversary, graduation, or holiday.  Although many male gift givers put off actually buying anything until just about the last minute, they typically engage in a “semi-conscious consideration of options” for what to buy.  These customers have unwritten or implicit “rules of thumb” that influence how they shop.  For example, “do a quick pass through three of four stores, then return to buy the best I find… or… “spend two months salary on an engagement ring.”  There are also very significant portions of the experience driven by how they give the gift, how the recipient reacts both initially and over time after receiving the gift.  If the gift giving experience does not go as planned, there are many cycles of highly emotional reactions for both the gift giver and the recipient.  One of these that is particularly important is the experience that precedes having to return an item… which many stores make very stressful.

These are just the highlights.  There’s actually quite a bit more.  In this case, the parts of the experience that happen outside the store are the primary determinants of the quality of the experience for the customer.  If a jewelry store were to focus on understanding and improving what happens in the store and/or online interactions, the best they’ll come up with is better sameness.  The opportunity for a creative jewelry chain is to leverage insight into those portions of the customers’ experience that are “below the surface.”  This provides insight that can help not only improve what happens at the “above the surface” touchpoints, but also provides insight into related services that address customers’ unarticulated or unmet needs at the non-touchpoints.

Your Company Doesn’t Have a Customer Experience; Only Your Customers Do!

Probably the best place to open up a dialog on the uncommon wisdom about customer experience is an observation that… the minute you start talking about “our company’s customer experience” you’ve taken a giant step in the wrong direction.

The fact is… your company doesn’t have a customer experience… only your customers do. 

These customers are trying to accomplish some set of goals that are important to them.  Some of their goals may be clear… some may be quite fuzzy.  In order to accomplish their goals, customers do things that make sense to them given their memories of past experiences and their beliefs about the current situation.  While they are doing those things, they react rationally and emotionally to what happens.  THEIR experience may or may not include interactions with your company.

After 25 years of helping companies design outstanding customer experinces, we’ve found that it is impossible to make meaningful improvements without getting the full, end-to-end picture on the CUSTOMERS’ experience.  Without this full, end-to-end picture, at best, you wind up making relatively minor, incremental improvements in the existing set of touchpoints.  If the customer is actually able to perceive any improvement at all, it often just feels like better sameness.

For example, if you’re a moving company, the traditional touchpoints involve contracting with customers to pack up, pick up, and move their stuff from one location to another.  The customer, on the other hand, is having a “family move experience” that is only partially dependent on the limited set of activities traditionally handled by moving companies.  A mover interested in significantly improving the customers’ experience would benefit from finding ways to meet many of the customers’ “below the surface” needs that occur at the non-touchpoints.

This leads to another point of “uncommon wisdom”… touchpoint mapping is a useless activity if the objective is differentiating the customer experience… will have to get to this in another post.