The Respond-to-Desire Connected Customer Experience

How do you think David would feel about the following customer experience? Upon realizing that he needs a new cartridge, David goes online to his favorite retailer, types in his printer model, clicks to order the correct toner, and pays with the same click because his credit card number and shipping address are already stored. Two hours later, his doorbell rings and the toner is delivered. Though David is still in the driver’s seat for executing the transaction and performing almost every step of the customer journey, this transaction is associated with far less friction, so it is much more pleasant for David.

This is the idea behind a respond-to-desire connected customer experience: firms try to provide the customer with the desired product or service in the fastest, most convenient way possible. In terms of the customer journey, firms using respond-to-desire significantly reduce the friction from the moment a customer has decided on the desired option to the moment the customer receives the product. Moreover, these firms are able to provide the customer with exactly the desired option (only a single black toner cartridge, not the multipack). To understand the anatomy of a respond-to-desire connected customer experience, consider figure 4-2.

The figure divides the steps along the customer’s journey from latent need to the postpurchase experience that we introduced in figure 4-1 into two spheres. The upper half of the figure shows steps that are carried out by the customer, while the lower half captures steps that are carried out by the firm. Our toner example started with the customer realizing the printer had run out of toner. Note that the following steps have to happen regardless of whether the customer buys replacement toner online or goes to the local office supply store: the customer had to look at some available options (and avoid the confusion between different model numbers), the customer had to choose, and the customer had to place an order, be it at the physical or the virtual checkout.

From the perspective of the customer, what makes for a good respond-to-desire experience? One element is clearly the amount of effort expended; the less, the better! One-click checkout with a credit card on record is more convenient than going to the store. Customers like companies that listen carefully to what they want and respond to their desires quickly. Hence the name respond-to-desire.

For some respond-to-desire customer experiences, such as running out of toner, speed is the most important attribute the firm must master. For instance, being able to send a car within minutes is a critical attribute for customers of Uber or Lyft. For Airbnb, in contrast, the critical attribute affecting a customer’s happiness is the variety of options in style and price where the customer wants to visit. The speed of booking is important but not the key advantage propelling the use of the service.

FIGURE 4-2

The respond-to-desire connected customer experience

Amazon has been a pioneer in combining the order and payment process into “one click.” To further facilitate ordering, Amazon introduced Dash buttons, small Wi-Fi devices that can attach to the fridge, the washing machine, or the bathroom vanity. With the press of a button, items from bottled water to baby wipes can be reordered.

The Curated Offering Connected Customer Experience

How could the online toner-shopping experience be improved? Imagine that, after David logs in to his online account, the site suggests the correct toner cartridge based on his prior purchases, which eliminates the need for him to figure out the right type of toner for his printer. In addition, the site could also suggest reordering paper, even though David did not ask for any paper (but is about to run out—good catch!). This is what we call a curated offering connected customer experience. Amazon, for example, shows a “frequently bought together” selection and is able to make personalized recommendations, taking into account what the customer has purchased in the past and what bundles of items are often purchased together in the same transaction.

Respond-to-desire requires the customer to articulate a specific need. Sometimes, however, customers might not know exactly what they want, or it would take them considerable effort to figure out. In the curated offering connected experience, the firm becomes active in the customer journey earlier than in the respond-to-desire experience. While respond-to-desire requires customers to know exactly what they want, curated offering helps customers at earlier stages in the journey, searching for options and deciding on options. Take another example: a customer knows she wants to watch a comedy but might not know what new comedies have been released. In this case, a curated offering is very helpful. Netflix suggests comedies based on previous choices and choices of similar customers. In general, curated offering makes search outcomes much more personalized.

A curated offering thus customizes the firm’s response with a specific set of options. In doing so, this format can also anticipate needs. Figure 4-3 shows the sequence of events for the curated offering experience. Again, the activities performed by the customer are on top, with the firm’s activities on the bottom. As we can see by comparing figures 4-2 and 4-3, in the curated offering model, the firm takes a more active role in the search and selection process. Rather than expecting to receive a specific order, the firm surfaces options the customer wasn’t aware of and makes recommendations concerning which options might best fulfill the customer’s needs.

Blue Apron, or one of the similar meal-kit providers we discussed in chapter 2, is a powerful example of curated offering. Think about how Blue Apron’s curated offering differs from a respond-to-desire experience. A respond-to-desire experience would have saved you from needing to run an errand by enabling you to order online and have products delivered to your house. In fact, home delivery services for groceries have witnessed dramatic growth. All of them share the principle of “you order, we deliver.” Though this is better than spending your time in a supermarket checkout line, the burden of finding recipes, choosing one, and creating the shopping list still lies with you as the customer. And you are still stuck with the extra ingredients that did not fit the recipe’s portion sizes. In contrast, for many customers, relying on Blue Apron to organize the meals and portion sizes is more convenient, more fun, and also healthier, creating a higher-quality service compared with a respond-to-desire experience, not to mention a buy-what-we-have approach. (For another example of curated offering, see the sidebar.)

FIGURE 4-3

The curated offering connected customer experience

The Coach Behavior Connected Customer Experience

Returning to our printer example, neither respond-to-desire nor curated offering solved a basic problem: the customer realized the need to buy new toner only after the toner ran out. The firm waited for the customer to take the initiative, to start the interaction. Unfortunately, in many cases, customers are late in taking the initiative, causing inconvenience.

How can we help customers remember earlier? Perhaps the retailer could have already sent the customer a reminder to reorder last week. Such a reminder might have been based on past purchasing behavior—the customer bought toner roughly every eight weeks, and now it has been seven weeks since the last order. While reminding the customer to reorder toner, perhaps the retailer could also remind the customer to run the cleaning function on the printer to keep print quality high—another action customers know they should be doing but don’t. Either way, the firm serving the customer is more proactive than in the previous two connected customer experiences.

We call this type of connected experience coach behavior. There are many instances in which people would like to engage in certain actions, but inertia and decision biases get in the way. We would like to lose weight, but we have a hard time sticking to a healthier diet. We want to become more fit, but we can’t stick to our workout regimen. We need to take our medications, but we are forgetful. With coach behavior, the firm takes on a parental role and coaches the customer to change behavior. In the customer journey, it acts one stage before curated offering kicks in. It activates customers’ awareness of their own impending needs.

In figure 4-4, we have illustrated the coach behavior connected customer experience. Since most of the time it is a behavioral change that is desired (rather than the purchase of a discrete good or service), we have changed the labels in some of the steps. Rather than recommending a set of options, the firm recommends that the customer take a particular action (or reminds the customer to do so). The customer then decides which action to take, and ideally behavioral change ensues.

Notice how the customer experience in figure 4-4 puts more emphasis on the firm taking action. While the customer ultimately takes action (takes the pill, avoids the burger, goes to the gym), the firm watches over the customer, knowing what the customer needs now and in the long run—not just what the customer wants right now. As with the curated offering, such knowledge might come from observing many customers, or from what the customer has previously told the firm. Imagine a coach behavior experience in which a customer, to maintain a diet, tells his bank to block his credit card whenever he is within one hundred feet of a fast-food restaurant. In a respond-to-desire customer experience, the customer would get that cheeseburger whenever he desires, in the most convenient way. But the customer also knows that he would regret it twenty minutes later. So, a good coach behavior experience is indeed somewhat parental.

FIGURE 4-4

The coach behavior connected customer experience

We know that creating behavioral change can be difficult; otherwise, all of us would easily stick to our New Year’s resolutions. Peer pressure is a potent tool in this regard. As a result, a number of firms offering coach behavior experiences also facilitate the creation of peer-to-peer networks in which participants can celebrate their efforts (“I did 12,000 steps today!”) and encourage each other. By borrowing tools developed by game designers to make online games engaging, if not addictive, many firms are using “gamification” to create behavioral change. Participants collect points and badges, and engage in friendly competition against themselves and peers to accomplish their behavioral goals. We will come back to these networks in chapter 7. (For more examples of coach behavior, see the sidebar.)

The Automatic Execution Connected Customer Experience

Let’s revisit the printer story one more time. This time, imagine that the printing is going well when the doorbell rings. David is surprised to see a box delivered. He doesn’t recall having ordered anything. Inside the box is a toner cartridge. How odd, he thinks. He resumes printing, and his computer alerts him that his printer is about to run out of toner. Only then does he remember that when he bought the printer, he gave the printer company permission to automatically send more toner as it ran low. David just experienced an automatic execution connected customer experience. Once the firm is authorized to take care of something, the firm automatically gathers information and fulfills the need, often before the customer had realized that the need has arisen. This is shown in figure 4-5. This diagram is almost the opposite of the respond-to-desire flow in figure 4-2. Here, almost all activities are controlled by the firm because the firm knows what the customer needs and when. This is somewhere between Big Brother and loving mother.

Delivering such a connected customer experience can be difficult. Unlike in the case of curated offering, the lack of customer involvement in the decision-making steps of the customer journey makes errors more possible. True, customers who go online and search for a book on baby names are likely to be future parents. But should a retailer send them a crib and diapers based on this information alone? Making automatic execution connected customer experiences work requires increasing the bandwidth of the information flow that moves from customers to firms.

With the increasing connectivity of objects through the Internet of Things, more and more of these automatic relationships based on continuous information flows will become possible. The printer example is real. HP has a program called Instant Ink that works exactly as we described. In this case, HP ships replacement toner to customers once their printers send out a “low ink” signal to the company. Brother has a similar program called Brother Refresh, where customers can decide whether they want the company to send the ink or leave the fulfillment to Amazon.

FIGURE 4-5

The automatic execution connected customer experience

Soon our refrigerators, sensing that the weight of the milk container is very low, will be able to reorder our milk for delivery by tomorrow morning. (Of course, the fridge also checked our calendar to make sure we were not going on vacation starting tomorrow and wouldn’t need the milk.)

Other already-existing examples of automatic execution connected customer experiences are in the realm of medical intervention. Fall-detection sensors are small medical devices for seniors who are at increased risk of falling. Early generations of this technology followed the principle of respond-to-desire. A senior in need of help could press a button on a wearable device, activating an emergency call anywhere in the apartment or house. This was clearly addressing an important unmet need, as previously, a senior who fell down the basement stairs might have needed urgent medical attention but was unable to move and reach the phone. That is why the latest fall-detection devices have switched to an automatic execution relationship. Sensors in the device detect the fall and are able to take action automatically, even without the involvement of the patient. (For another example of merging curated offering with automatic execution, see the sidebar.)

The Information Flow from Customers to the Firm

A central aspect in creating new connected customer experiences is to design the information flow between the customer and your firm. After all, it is this information that allows you to recognize your customer’s needs and to identify the optimal solution. We find it helpful to think about five dimensions to describe this information flow:

1. The trigger of the information flow, which could be the customer or the firm
2. The frequency of the information flow (episodic vs. continuous)
3. The richness or bandwidth of the information flow (low vs. high)
4. The customer effort associated with this information flow (low vs. high)
5. The information processing that is required to infer the right product or service solution in response to the customer need (the customer might explicitly express which product or service she wants, or the appropriate product might be inferred by the firm)

You need to make decisions along these five dimensions before you can turn to the technical aspects of building a connected strategy, such as smarter devices or increased communication bandwidth. This is summarized by table 4-1.

TABLE 4-1
Information flow dimensions for different customer experiences
		Buy-what-we-have		Respond-to-desire		Curated offering		Coach behavior		Automatic execution
Trigger of information flow		Customer		Customer		Customer		Firm		Firm
Frequency of information flow		Episodic		Episodic		Increased		Continuous		Continuous
Richness of information flow		Low		Low		Medium		High		High
Customer effort to send information		High		Reduced		Reduced		None		None
Information processing to find preferences		All preferences expressed explicitly by the customer		All preferences expressed explicitly by the customer		Firm makes recommendations to the customer		Firm attempts to drive very specific customer action		Firm autonomously takes action for the customer

At the beginning of the chapter, we introduced the buy-what-we-have customer experience, illustrated by the customer’s painful journey from the late realization of toner shortage, to a painful ordering process, and finally to the reception and usage of the product. This experience was not part of a connected relationship. The episode was triggered by the customer’s realization that the printouts were of poor quality. The only information flow took the form of a customer purchase (and even that took a detour by going through a retailer). And it was left entirely to the customer to decide that purchasing toner for the JetPro 6978 was the right solution for his printing needs.

The respond-to-desire connected customer experience was primarily one of reducing the friction associated with the transaction. This could be accomplished via a simple ordering interface (e.g., one-click shopping), conveniently located sensors (e.g., Amazon Dash buttons), or voice recognition (e.g., Google Assistant). All of this dramatically reduces the customer effort compared with ordering via cumbersome websites, telephone, or mail or making a trip to the store.

While the curated offering connected experience also relies on the customer as the trigger of the transaction, it puts the firm in a more active position of helping the customer figure out a solution to her needs. Central to this is the recommendation process. Based on past purchases (the customer spends two hours per day streaming World War I documentaries) or expressed preferences (“I really like Bollywood movies”), Netflix can make recommendations to the customer on how to fulfill her entertainment needs. This recommendation process requires data about the customer, increasing the need for information frequency and information richness. The more the firm knows, the better a recommendation it can make. Technical challenges for this connected relationship include a strong recommendation technology. Moreover, firms need to deal with the demand for privacy by customers, as became obvious when Google was criticized for reading through its customers’ Gmail accounts to improve targeted advertising.

Because overcoming customer inertia is one of the main benefits of the coach behavior connected relationship, we cannot rely on the customer to be the trigger for transactions. Instead, the trigger point is moved to the firm. That has consequences for the other dimensions as well. The firm needs to be receiving information from the customer all the time so that it doesn’t miss the right moment to take action. In this case, the connection to the firm is always on, and customers send information to a firm continuously and quite often autonomously. You could say the firm is automatically “hovering” over the customer. For instance, a customer’s Fitbit is continually gathering information, using the customer’s smartphone as a relay device to automatically send information to a health care provider or the customer’s personal trainer. The technical challenge for this connected relationship lies in enabling cheap and reliable two-way communication between customer and firm, reflecting the fact that communication in this case has to happen 24/7.

Finally, as we move to automatic execution, the firm takes on all responsibility for finding the right solution to the customer’s needs. There is an important difference between a fall sensor that waits for its user to press an alarm button and a device that issues a distress call based on the reading of an accelerometer. The sensor has to be read continuously and ideally transmits information in real time so that even in the rare event that the device is damaged in a fall, help can still be sent without delay. Technically, this raises the bar for the ability to correctly infer the right product or service for the customer based on the automatically transmitted information. Recommending a bad movie or reminding a male patient to make a gynecology appointment might lead to customer annoyance. Shipping a Brother cartridge to the user of an HP printer, in contrast, has more significant costs associated with it, but even these costs are small when compared with the damage done by a failure to call a much-needed ambulance.

The Different Domains for Different Connected Customer Experiences

While we are excited about the emergence and possibilities of new customer experiences related to automatic execution, we want to stress that we do not see them as the best solution to all problems or for all customers. In other words, connected relationships are not always becoming better as you move from the left to the right in table 4-1.

Customers differ in the degree to which they feel comfortable if things begin to happen automatically around them. An experience that is magical for one person might be creepy to another. One person might find it delightful that Disney sends them an automatically created picture book of their last visit to Disneyworld. Another customer might find it invasive. Not only do customers differ in what value drivers (or pain points) are particularly salient to them, but they also differ in the degree to which they are comfortable with sharing data and having the environment around them act on that data. Understanding which connected customer experience is best suited for a particular customer is as important as understanding the particular needs of this customer. Transparency and the ability of customers to opt in or opt out is key in this respect. Unless you have asked the customer whether it is OK for you to collect data, and unless you have explained very clearly how you will use this data and how this use will create value for the customer, you run the big risk of alienating rather than delighting your customers.

In sum, each of the four connected customer experiences has its own merits and works well in specific-use cases and for particular customers:

Respond-to-desire  works best when customers know what they want and the firm is capable of providing it quickly. The problem is that fulfilling a random customer request, such as “I want to eat a bacon cheeseburger now, even though I am in a vegetarian restaurant and it is three o’clock in the morning,” can be costly or impossible. The firm’s essential capability is an operational one: fast delivery, flexibility, and exact execution. Customers who like to be in the driver’s seat, having full control, like respond-to-desire.

Curated offering  makes sense when customers don’t know exactly what they want because they don’t know all the available options. In this setting, a firm can delight its customers by finding them a product best suited to their needs, and also gain efficiency benefits by proactively steering them toward something that can be easily provided. The key capability here is the recommendation process. Customers who like to make the final decision but still value advice benefit from curated offering.

Coach behavior  is of the most value for latent needs that customers are aware of but have a hard time pursuing themselves, because of inertia or some other behavioral reason. Yes, the customer wants a bacon cheeseburger, but once reminded of his cholesterol levels, he is willing to order a salad. For this to work, the firm needs to have a deep understanding of customers’ needs. This is often based on a rich information flow from the customer to the firm via automated hovering. It also needs to balance keeping the customer engaged and loyal with being parental and restrictive. Customers who do not mind sharing personal data if they see a clear payback in terms of being able to achieve personal goals are willing to engage in a coach behavior customer experience.

Automatic execution  should be the connected relationship of choice only if the firm is able to understand the user so well that it is better positioned to make purchase (or other) decisions than the user herself. It also requires a setting in which mistakes are not too consequential. Customers who are comfortable with having a continuous data stream from themselves (or their devices) to a firm and who trust that the firm uses the data to fulfill their needs at a reasonable cost will be the most open to an automatic execution customer experience.

TABLE 4-2
Domains of application for the four connected customer experiences
Type of connected customer experience		Description		Key capability		Works best when		Works best for
Respond-to-desire		Customer expresses what she wants and when		Fast and efficient response to the incoming orders		Customers are knowledgeable		Customers who don’t want to share too much data and want to be in control
Curated offering		Firm offers a tailored menu of options to the customer; final choice rests with the customer		Making good recommendations		The set of options is large, potentially overwhelming for the customer		Customers who are fine sharing some data but still want to have final say in decisions
Coach behavior		Firm nudges customer to adjust her immediate preferences, either to obtain some larger goal or to reduce fulfillment costs		Understanding latent customer needs and how they are (not) related to the immediate actions		Customers have inertia and other biases keeping them from achieving what is best for them		Customers who do not mind sharing personal data and an environment that influences their behavior
Automatic execution		Firm monitors, then executes the fulfillment process without action from customer		Monitoring the customer and translating incoming data into action		Customer behavior is very predictable and costs of mistakes are small		Customers who do not mind sharing personal data and having firms making decisions for them

Table 4-2 summarizes the connected experiences alongside the domains for which they are best suited and the capabilities a firm needs in order to create these customer experiences.

Recognize-Request-Respond: A Broader View of Satisfying Customer Needs

When we ask managers to list the drivers of willingness-to-pay of their customers, their main focus is usually on tangible and intangible aspects of their products or services, such as quality attributes and brand. Obviously, these are important factors, but the willingness-to-pay of a customer can be influenced by a much broader set of drivers. Every transaction your customer has with you is actually an entire journey, and at every step of this journey there is an opportunity to either delight your customer or have your customer suffer a pain point. We find it helpful to distinguish three phases of the customer journey: recognize—the part of the journey where a latent need of the customer arises and either the customer or the firm is made aware of it; request—the part of the journey where the need is translated into a request for a solution to the particular need; and finally respond—the part of the journey where the customer receives and experiences the solution.

Our research into connected strategies has revealed four distinct approaches that firms use to reduce the friction of this customer journey—in other words, four different connected customer experiences. These customer experiences are distinguished by what part of the customer journey they affect. The respond-to-desire connected customer experience starts at the point in the journey when a customer knows precisely what he or she wants. The firm’s goal is to make it as easy as possible for the customer to order, pay for, and receive the desired product in the desired quantity. The curated offering customer experience acts further upstream in the journey by helping the customer find the best possible option that would fulfill his or her needs. Both respond-to-desire and curated offering can only work if customers are aware of their needs. Firms creating a coach behavior customer experience help their customers at exactly that part of their journey: they raise awareness of needs and nudge the customer into action. Lastly, when the firm is able to be aware of a customer need even before the customer is aware of it, it is possible to create an automatic execution customer experience, where the firm solves the need of the customer proactively.

We want to reiterate that automatic execution should not be seen as the most desirable customer experience for every transaction. Customers differ in how much agency they prefer, and for some transactions the risk of getting it wrong with automatic execution outweighs the benefits. While technologists might see automatic execution as nirvana, good old-fashioned customer understanding is necessary to offer the most relevant experience to your customers, which may require you to create a range of connected customer experiences.