It is said that gaining competitive advantage is one of the most important goals, or perhaps even the most important goal in business because it helps make sure your company is set to succeed. If a company has managed to build a competitive edge, i.e. set itself apart from its competitors, it goes without saying that none of the competitors have managed to offer an equivalent experience to their customers. In this blog post, we explore how service design can help companies gain a lasting competitive advantage.
Service design gives your company a competitive edge while setting you apart from the rest
A service design project often starts with defining whether the aim is to build a better competitive edge, or to improve a company’s competitiveness. Competitive advantage means the ability to create the best services and products on the market and standing apart from other companies in the same sector. If the goal of service design is to improve the company’s competitiveness, the efforts are more focused on, for example, the optimisation of individual processes and general business development.
The goal of improving your competitive edge is to stand apart within your own market segment as well as in the customers’ minds. By creating a unique concept, you gain a competitive edge and begin seeing changes in the following:
- Increased likelihood to buy. If you offer great experiences your customers will buy more of your products or services, which has a direct short-term impact on sales. One way or another you will start to see a positive trend in your sales.
- Increased customer loyalty. Irrespective of your sector and sales cycle length, by analysing your customer base and tailoring your products and services to meet their needs, you can see concrete signs of customer loyalty when the same customers choose your company more frequently than before.
- More room for price optimisation (better profit margins). Strategic and more long-term observations show that a designed concept, which significantly differs from the prevailing customer service models, presents the company with new opportunities for pricing its products and services. However, this requires the competitive edge of the new product or concept to have been so strongly differentiated from the competitors that the customer no longer directly compares the features of your product or service to those of a competing product or service. Improving your competitive edge in this way frees your product from the fierce price competition, as exemplified in Hellon and Musgrave’s “Baby” project.
- More effective Word of Mouth. Having your customers recommend your product or service to their friends and family improves your competitive edge. This also has a direct impact on point 1 of this list, meaning that likelihood to buy will increase as recommendations enable people to find and buy your product. If your customers are satisfied with your product or service, it is guaranteed that your customer loyalty and NPS (net promoter score) will improve too. After all, this is hardwired into human behaviour; recommendations and testimonials have a significant impact on the success of products and services. Read more about how we helped a well-known financial services company improve customer loyalty using service design.
Customer experience as a measure of competitive edge
How do you measure competitive edge or changes in it? The first metrics to consider when there’s any improvement in the four aforementioned areas are the ones monitoring customer experience.
Depending on your industry, there might and should be more than one of these to offer you a comprehensive overview of the status of your business. Customer experience has a direct impact on the success of your business, and it can be measured for example with NPS (Net Promoter Score) or CSAT (Customer Satisfaction Score) metrics, among others.
Excellent employee experience is a crucial element of building a competitive edge
Another indication of an improved competitive edge and successful differentiation from competitors is an improved employee experience. Excellent and improved services or products are easy to stand behind, and employees are more likely to be proud of the high-quality products or services their company sells. Happy and motivated employees can be seen as the oil in your machine who, through their own input, give more to the company and thus improve your competitive edge.
When the concept you offer to your customers is improved, it will almost always become better from the employees’ perspective as well. Moreover, success and the feeling of providing customers with added value fuels pride and engagement, resulting in an excellent employee experience.
Service design streamlines internal service processes by making them clearer and more convenient for the employees, too. As motivated employees working closely with the customers have a direct link to great customer experience, cultivating this relationship will make your company stand apart from the rest.
Take your customer experience to the next level with Hellon
The Hellon way of developing business operations through service design begins with an in-depth analysis of your company's current state. Together with you, we will look at your company's current situation and challenges from an organisational point of view. From start to finish, you will play an active role in the service design project.
Following the initial analysis, Hellon's service designers review the findings against their expertise to narrow down the research focus. By doing so, we gain a crystal-clear idea of the service design project’s targets while ensuring that we will be seeking answers to the right questions with the largest potential for impact.
When we are on the same page about where we are now and where we want to be in the future, we will delve into existing quantitative data, for example about customer satisfaction, in great detail. In this phase we often use machine learning models, our artificial intelligence solution AINO. By harnessing the power of data, we can find fertile ground for business growth and identify the most profitable areas for investment and development in the company. Learn more about Hellon AINO in the below video:
As a result of qualitative and quantitative research and validation we are able to compile a list of crucial and effective measures that combine high-quality service and business design, as well as quantitative data.
Hellon’s service design solutions are a perfect amalgamation of high-quality and human-centric design, data and business acumen. We are global pioneers of service design and know exactly what your company needs in order to produce unbeatable customer experiences and unique concepts that engage your customers. So don’t hesitate to get in touch to learn more about what Hellon could do for your company!
Below, you can also download our Service Design Procurement Guide, in which we discuss the things to consider when selecting a service design partner to work with: