Nathan Shedroff argues in his keynote address to the IxDA that we can no longer separate business, design, and sustainability. For companies it’s not just about products anymore.

What, then, is the intent behind consumption? We aren’t going to stop consumption. We can be taught not to be wasteful. New York City requires citizens to recycle or their buildings are fined. This requirement meant I needed to get educated about what should and should not be recycled. I found it unfortunate, when I moved away, that other cities in America are not also teaching this.

Meaning is the deepest connection that can be made between people or people & objects. Meaning is a hulu hoop around us that expands out to values, emotions, price, & features. Most buying decisions are based on emotional engagement.

There are 15 core meanings, such as, accomplishment, enlightenment, redemption, beauty, freedom, security, harmony, creation, duty, justice. We need to reframe “Less is More” to “More for Less” for everyone outside the sustainability & design worlds.

Interaction Designers are the most well posed to make meaning happen as we have models, research methods, comfort with ambiguity, are service orientated, and customer focused. Freedom and security can have different expressions based on prioritization & meaning.

Personally, I question that without some sort of business training, can designers speak the language of business so that they can be heard?

I first got introduced to the idea when I was working on a project for a large broadband provider in the UK. They wanted to update and make some changes to their broadband CD.  Unlike the US, providers in the UK do not send people out to help you set up your broadband, instead you are sent all the tools and expected to sort it out for yourself.  This CD is very successful amongst it’s users so we needed to be careful about how we changed the process.  The business wanted more people to sign up for an account with the company for various business goals. The current process requires the user to watch all the 3D videos which illustrate the entire process and once they get through it all (including some software installs) they then are told they are connected. Then they can sign up for a company account.

Now I don’t know about you but if I were told I was connected I wouldn’t be bothering with a form.  I’d be off to wander the internet. Thus I suggested that the process be changed so that as someone is installing the software then they are also able to sign up for an account. However, I needed to check with tech and with the company to make sure that the infrastructure was in place to support this. The PM felt this would potentially destroy the user experience but as you can see by Jesse James Garrett’s graph below the continuous experience which allows another process to start as you are waiting for another one to finish is a better and happier user experience:

This allows the user to keep working while waiting for something else to finish.  Also, in this case, it keeps the user there at the computer, as a captive audience. If they really were not interested they could also click the “not interested” button and go get a cup of tea.

This case demonstrates how the system / user experience can affect the view of the brand and the experience a user has with said brand. In this case, users love this CD and really like the products of this company.  If we as the designers of the experience create a negative experience for the user than we can also negatively impact the business.

This is what I have been thinking about lately and the reasons for wanting to write the paper and branding my thinking about this as “Customer Experience”.

The business question is how much satisfaction is good enough? (If you had 3 pizza parlors that all opened within the same neighborhood on the same day, and one had 90% satisfaction, another 95%, and the other 98% satisfaction the others (those under 98%) over time would loose thier customers and eventually be put out of business.)

It’s 5X more costly to recruite a new customer…. customers will buy a substitute product if they are dissatified with your produt… (ie If there was only one airline, Terrible Airlines, then they would choose to take the train or a bus.)

This observation would imply that higher satisfaction levels make a company more resistant to competitive moves.

This model proves (to Pete Babich) that continually improving customer satisfaction over time is the best way to go.

We all hear that successful innovation depends on creating value for customers. Repeatedly, we see that the key to creating value lies in designing meaningful experiences. But what does this jargon really mean? And more important, how does it impact us as innovators in business?

Companies innovate for two basic reasons. For those with established products or services, innovation is the Darwinian response to competition. We devote resources to improving and evolving our products because we have to so as to sustain and grow our core business. For new companies or initiatives, innovation is about creating entirely new ways of addressing human needs and inventing “what’s next.” Often this means generating new business models.

LIP SERVICE. While these two types of innovation might require different approaches, the point of all innovation remains the same: To create value for customers.

This idea isn’t exactly new. The concept has been promoted throughout the history of business. But it’s amazing to me, after 25 years of working with the world’s best companies, how regularly I see innovation subsumed by other concerns that move the priority away from the customer. The biggest, most common error corporations make is to focus too heavily on creating internal value.

What? Does that mean we shouldn’t innovate by leveraging assets like our technology, core systems, supply chains, financial structures, alliances, channel partners, etc.? No, these are all proven ways to strengthen companies, and we need to leverage them whenever possible.

But first, we need to focus on creating value for the customer — and only then leverage these other things in combination. While this might sound like common sense (and it is), the approach tends to get more lip service than commitment.

POOR TRACK RECORD. This isn’t because there aren’t smart, capable people working hard on it. It’s just that it’s fundamentally easier for companies to define what creates value for itself and its shareholders than for the customer. Reading the hearts and minds of ever more diverse customers is something altogether more slippery, especially when we are trying to divine information that only could or should exist in the future.

Isn’t that what market research does? Well, that’s what it has promised to do. The disciplines within market research do many things — important work like tracking, monitoring, evaluating — but only a tiny fraction of the industry actually focuses on providing customer insights to drive innovation and design.

And the poor track record by generalist market-research firms in this area is a testament to the difficulty in doing it well. What has emerged are a few hybrid companies that combine research and innovation consulting skills to fill the demand for customer-driven design.

“SWING FOR THE FENCES.” Those of us who have spent our careers in this specialty have learned that a focus on creating customer value is the single most powerful driver of successful innovation. We know that successful innovation isn’t just developing cool new products and services. It’s about creating higher-margin, higher-visibility, and high-velocity products that deliver a host of financial, functional, and perceptual benefits to the developer.

Creating customer value isn’t some soft West-Coast notion about making people feel good or delighted. It’s about hard-nosed business. Ultimately, it’s bottom-line performance and top-line growth.

So, how do you create customer value? My experience has taught me there are different kinds and levels of value. Most important, I’ve learned to “swing for the fences.” Don’t settle for designing a product that functions well at a good price. Instead, reach for one that delivers a meaningful experience.

EVERYONE HAS A STORY. But even when this is the intention, often here’s where the company strikes out — not understanding what the definition of “meaning” is, and how to apply it. Meaning is what humans create to construct a sense of reality. We are meaning-making machines. We constantly try to make sense of our life by forming a picture or story about reality.

The stories we create internally provide the background or context for our lives and are often not articulated externally. Yes, that’s right, reality is something that we actively construct, and each of us generates a slightly different version.

This individual sense of reality is what we base our values, goals, and aspirations on, and, in turn, those drive our preferences. In short, our own sense of meaning defines who we are as people and the things we value.

EMBRACING CUSTOMERS’ VALUES. In a developed, affluent world, a large percentage of purchase decisions are made to reinforce or express a sense of meaning. Put another way, we seek experiences that give our lives meaning or coherence.

For example, a young woman buys Ben & Jerry’s ice cream because she believes it delivers a meaningful experience. What creates her sense of meaning is “community, connectedness, authenticity, and justice.”

Ben & Jerry’s brand promise aligns with that. Their ice cream may not taste better, but she likes that they use part of their profits to promote peace and tackle other global problems. And she will consistently pay more for it. In this case, everyone benefits — including Ben & Jerry’s for choosing an innovative approach to marketing by closely embracing their targeted customers’ values.

MEANING COMES FIRST. The smartest and most successful innovators will create value by understanding meaning first. Then, they’ll design and coordinate their products, services, brand, channel, promotion, and pricing to deliver an integrated experience to fulfill that meaning.

The companies behind all products — even those considered commodities or industrial products — can leverage this approach.

Next in this column, I’ll explore how we can harness the idea of making meaning to drive innovation and describe the frontier of innovation research that’s providing the foundation for best-of-class innovators.

Darrel Rhea is CEO of the market-research firm, Cheskin, and a passionate spokesperson for the design research industry. A pioneer in incorporating market research into the brand-design and product-development process, Rhea is considered one of America’s leading strategic design consultants. He believes that creating empathy and compassion for human beings is the key to successful innovation strategy and has championed the use of consumer-research techniques to create compelling customer experiences that transform the marketing performance of all types of organizations.