Why and how to create metrics that introduce customer-centricity as a real strategic theme. Measuring value for customers in terms that are both relevant for customers and for businesses.
Introduction to our workshops on metrics for customer centricity
1. Itziar Pobes & Silvia Calvet
RELEVANT METRICS FOR
YOUR STRATEGIC DECISIONS
2. AGENDA OF THIS TALK
Hi!
Metrics about value for customers
[Theory & little practice]
Your waste projects
[I worked for 7 years with the waste management authority in Barcelona]
3. A SIDE PROJECT
THAT GREW BIG
HOW DO DIGITAL BUSINESSES MEASURE THE VALUE THEY DELIVER?
HOW CAN A SERVICE PERSPECTIVE PUSH TOWARDS REAL CUSTOMER CENTRICITY?
WORKSHOP WITH ROSENFELD MEDIA
4. “THIS THING WE HAVE GOING FEELS SO
SHALLOW AND STALE. I’D LIKE TO GO DEEPER,
EXPLORE NEW THINGS, AND MAKE FRESH
CONNECTIONS. REALLY FIGURE OUT WHAT
MATTERS, YOU KNOW? YOU’RE SO HYPER-
FOCUSED ON MONEY, AND THE BOTTOM LINE,
AND... I GET IT, I REALLY DO. WE ALL HAVE TO
PAY THE BILLS. BUT DON’T YOU THINK THERE’S
MORE TO LIFE? I DO”
SARAH MASON
5. CUSTOMER CENTRICITY IS VOID
Three realizations
STRATEGY IS DEFINED BY METRICS
DESIGNERS DON’T SPEAK METRICS
Full of sound and fury, but it doesn’t reach strategy
Metrics about value for customers are poor, if you’re lucky
Their knowledge is lost in translation
7. THE SELECTION OF PERFORMANCE
METRICS IS BASED ON POWER
Instead of accurately reflecting how
the organization, its customers and
and its context actually work
Bias 1
8. ORGANIZATIONS ONLY CONSIDER ‘VALUE’
—AND MEASURE— WHAT THEY DELIVER
While they forget the value that
customers actively co-create
Bias 2
9. ORGANIZATIONS TRUST FACTUAL
AND QUANTITATIVE KNOWLEDGE
But they don’t fully understand or
know how to use qualitative
insights —meaning
Bias 3
12. CURRENT LOGIC: VALUE CHAIN
WAREHOUSE
FACTORY
SUPPLIERS SHOP
CONSUMER
THE VALUE IS CREATED BY 'THE COMPANY'...
AND THE CUSTOMER DESTROYS IT!
Icons by: Itim2101, Freepik & Monkik.
Humaaans by Pablo Stanley
VALUE-IN-EXCHANGE
14. Value Creation Spheres by Grönroos and Voima, 2013
Iconos de Freepik and Geotatah. Humaans by Pablo Stanley
WHERE IS VALUE CREATED?
+
THE CLIENT
CREATES VALUE
—FOR HERSELF OR FOR
OTHERS— WHEN USING THE
SERVICE AS A RESOURCE
INTERACTION
PRODUCTION
INDEPENDENT
VALUE-IN-CONTEXT
Avoid depending on her family
Continue with her life
POTENTIAL VALUE
REAL VALUE
REAL VALUE
16. Plan Review
Retro
Value Creation Spheres by Grönroos and Voima, 2013
Iconos de Freepik and Geotatah. Humaans by Pablo Stanley
WHERE IS VALUE CREATED?
INTERACTION
PRODUCTION INDEPENDENT
POTENTIAL VALUE
REAL VALUE
REAL VALUE
Can cook in a small space
Can eat
home-made
Learns
Easier shopping
Impresses with
her cooking
17. VALUE IS ALWAYS CO-CREATED
Please, don’t ever talk about ‘delivering value’ again
Or add ‘potential’
18. CUSTOMERS AREN’T PASSIVE
[OR NEEDY]
They do have needs, but also resources!
And they actively integrate them in value
for themselves or for others
19. YOUR PRODUCT IS A RESOURCE
For value integrating activities by the customers
Focus on integrating better with their context & their other resources!
[= a service]
20. Plan Review
Retro
Value Creation Spheres by Grönroos and Voima, 2013
Iconos de Freepik and Geotatah. Humaans by Pablo Stanley
WHAT VALUE GETS MEASURED?
INTERACTION
PRODUCTION INDEPENDENT
POTENTIAL VALUE
REAL VALUE
REAL VALUE
Can cook in a small space
Can eat
home-made
Learns
Easier shopping
Impresses with
her cooking
22. HOW DO WE KNOW THAT [SHE FEELS] SHE IS LEARNING
AND THAT THIS IS VALUABLE TO HER?
Icons by Freepik. Humaans by Pablo Stanley
- Ethnographic or
generative research
- Other qualitative studies
- Mobile ethnography
- Surveys and other
quantitative self-
reporting
- Behavioral metrics
- A combination of
several?
A specific space and
time, a situation
A set of unique actors
with unique reciprocal
links among them
23. “MOST PEOPLE ARE SIMPLY UNAWARE
THAT THERE IS A QUALITATIVE,
INDUCTIVE LOGIC THAT IS JUST AS
LEGITIMATE AS A QUANTITATIVE,
DEDUCTIVE METHOD.”
SAM LADNER
DIFFERENT ONTOLOGIES
& EPISTEMOLOGIES
WHAT
KNOWLEDGE IS
WHAT
THINGS ARE
24. QUAL & QUAN APPROACHES
ROLE OF THEORY
IN RESEARCH
ONTOLOGICAL
ORIENTATION
EPISTEMOLOGICAL
ORIENTATION
QUANTITATIVE
Deductive,
testing of theory
Objectivism
Natural science /
positivism
QUALITATIVE
Inductive,
generating theory
Constructionism Interpretivism
Quan and quan approaches explanation by Sam Ladner, 2019
Social reality is constructed: based
on interpretations humans make
Thick description of
context and actors
VALUE IN CONTEXT HAS A
LOT TO DO WITH MEANING
And the process by which
people construct social reality
26. - Standard ValConRIA test
- Quality of life outcome scales and other similar devices in very lucky lines of business
- Creating your own metrics
HOW DO YOU MEASURE VALUE-IN-CONTEXT?
27. - Standard survey with 26 questions
and 7 levels [Lickert scale]
- Allows benchmarking
- Applicable as a whole or per
service moment/stage
STANDARD
METRIC
[VALCONRIA]
ValConRIA de Löbler & Hahn, 2013.
Survey by Löbler & Hahn
DOESN’T SUBSTITUTE
GOOD QUAL & NOT
APPLICABLE ON A
REGULAR BASIS
28. - Knee pain present during day
- Painful inability to straighten knee
- Changed job due to knee
- Considering job change due to knee
A VERY LUCKY LINE OF BUSINESS
HEALTH AND QUALITY OF LIFE OUTCOMES SCALE
Very “medical”
Activity limitations
- Knee slowing you down
- Avoid turning/twisting/sideways moves
- Interference with travel
- Interference with sleep
- Interference with work
- Interference with hobbies, etc
- Interference with family life
- Interference with social activities
- Interference with doing errands
Emotional functioning
- Time spent thinking about knee
- Angry or annoyed
- Downhearted and low
- Worried about knee worsening
- Embarrassed or self-conscious
- Bad temper or grumpy
- Frustrated
- Worry about future
- Worry about money
- Think that you are getting old
Also “social”
29. “KPI DEVELOPMENT HAS TO START
WITH YOUR STRATEGY AND THE
OBJECTIVES THE BUSINESS IS
AIMING TO ACHIEVE”
BERNARD MARR
Creating your own metrics
30. - Match value-in-context with strategic goals
- Select value-in-context that is relevant to measure
- Translate a qualitative insight or a description of value-in-context into a strong and feasible
measure
CREATING YOUR OWN METRICS
EASY!
31. “VALUE IS ALWAYS UNIQUELY AND
PHENOMENOLOGICALLY
DETERMINED BY THE BENEFICIARY IN
THE RESOURCE INTEGRATION
PROCESS, FRAMED BY INDIVIDUAL
AND CONTEXTUAL CIRCUMSTANCES”
VARGO & LUSCH, 2008
SOUNDS ELUSIVE
32. “MEASUREMENTS ARE USED TO
SUPPORT DECISIONS, AND THE
THING BEING MEASURED MUST BE
DEFINED IN TERMS OF OBSERVABLE
CONSEQUENCES THAT RELATE TO
YOUR DECISION IN A PARTICULAR
WAY”
DOUGLAS W. HUBBARD
KEY TRANSLATION
35. - Let’s start by drawing them on paper
- Map the value streams or the activities in your journey
- Once you’re finished, brainstorm potential value for customers [in-use & in-context]
- It’s easier if you go activity per activity
- There might be many in some activities
- It’s better if you can recall your research and use your existing insights
10’ to create a shitty first draft of your value spheres
CAN YOU CREATE THE VALUE SPHERES OF YOUR
PROJECT?
36. - Match value for customers with the strategic goals of your client
- The relationships might not be obvious
- Think about what might contribute to reaching that goal
- Try to come up with an argument to support why this value is related to your client’s
strategy
- Select a few values that are worth measuring
5’ to select 1-3 values worth measuring
WHICH VALUE IS WORTH MEASURING?
37. - Describe the value in action from the subjective perspective of the customer
- Describe what you could perceive as an external observer from your client’s organization with
each sense
- Translate each observation into a comparable and objective
measurement
- Rate each measure for strength and feasibility
20’ to select create your first measure
HOW DO WE TRANSLATE IT INTO A METRIC?
In Mural:
outline 5