For years Harley-Davidson’s CEO argued that they sold an experience, and the bike just happens to be a fundamental part of that experience. One of their execs is quoted as saying “What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.” Eventually the board got on board the company concentrated on the goal of delivering this very specific experience and annual revenues grew from $1.5 billion in 1996 to $4.6 billion in 2003 and net income grew from $143 million to $761 million over the same period. Their bikes are technically unsophisticated and don’t represent good value for money compared to other manufacturers, but when you buy a Harley-Davidson it’s not just the bike you’re buying into.
What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.
It’s bearing all this in mind that I’ve been giving serious consideration to what we do at Marque. Our digital offering comprises 6 developers in our Glasgow and New York studios augmented by specialist subcontractors and the designers throughout the rest of our company. Effectively we’re a small digital agency working within a larger cross discipline branding consultancy. As with most digital agencies we sell time, and as most of my team are developers we make profit by charging clients by multiplying the number of days we estimate it will take to make something by our daily rate.
But times they are a changing. A few months ago we hired Cameron, a phenomenally talented Rails developer. Anyone that’s worked with Rails will be quick to admit it’s no replacement for PHP, but I realised that some of our PHP projects would suit Rails better. For certain projects Cameron can achieve in one week, what one of my PHP developers takes 3 weeks to achieve. As technologies improve, our efficiency as developers will also improve, allowing us to do more grunt work faster. This obviously has significant implications if our business model is to charge for the days it takes to make stuff.
As technologies improve, our efficiency as developers will also improve, allowing us to do more grunt work faster.
The maturing of the open source movement is another factor to consider. We recently created an online game for the Edinburgh International Fringe Festival which came with the old duo of tight budget and open brief. We discovered Box2D – a physics engine that an enthusiastic ActionScript programmer had ported from the C++ code that one of the World of Warcraft programmers had made open source and posted on SourceForge. Building on top of Box2D allowed us to create a highly polished experience that one year ago I would have said was unfeasable within the budget as I would have had to allocate a couple of months just to crack the physics for the game.
What is going on here? We are getting better at making better stuff for our clients and in the process we are evolving a business model that makes less money. Good for clients, but not good for the long term health of our industry. The conclusion I’ve come to is that the stuff we do in order to win the work – the stuff we tend to give away for free – is exactly where we offer the most value, and is where we have the most opportunity to grow.
We are getting better at making better stuff for our clients and in the process we are evolving a business model that makes less money.
At Marque our focus is on user experience. Actually, every digital agency that makes good stuff is also focussed on user experience, whether they realise it or not. Alex at Dog Digital told me last week about one of their clients that has spent vast sums on a web based system to automate what is a complex set of logic. Now their customers can phone, quoting a reference they’ve seen in a newspaper, and the call centre operator can type the reference into the system and give immediate results to the caller. When Alex heard this he asked why they didn’t build a website to give the public access to the system so that instead of waiting on hold they could just type in the reference and get the results themselves. This seems so obvious with hindsight, but I’ve come across countless instances of this lack of vision.
Companies like Accenture have been sending their consultants into organisations to spot opportunities like this for years, and you can bet that they charge handsomely for their conclusions. We do similar consultations on our client’s operations but generally it’s done for free or cheap with a view to scoping a tangible project with billable hours. And here’s the thing – I believe we are often in a better position than management consultants to consider our clients’ operations and the resulting user experiences.
When Lou Gerstner joined IBM in 1993 as CEO it was a behemoth facing extinction.
Tom Peters suggests in the book Re-Imagine that we reconsider where we offer value to our customers and any areas of our business where we are not best in class we farm out to someone that is the best. This may sound extreme but consider the experience of others. When Lou Gerstner joined IBM in 1993 as CEO it was a behemoth facing extinction. His CV included spells at American Express and McKinsey & Company where he concentrated on business operations to deliver better customer experience. And this is exactly what he brought to IBM, with a focussing on IT services with a bias towards the internet, famously introducing the mantra that they should always supply their customers with the best hardware, even if that hardware was not made by IBM – a strategy that explains why your ThinkPad has a Lenovo badge on it and how IBM generated $10.8 billion income from $98.8 billion last year.
Consider the luxury Princeville Resort in Hawaii which was created by owner Starwood honestly considering what value they bring to the creation of a luxury hotel. As a result they own the brand, the customer data, a process for creating memorable guest experience and management contracts. No staff work for Starwood. Starwood don’t own the property or do the laundry. The gym is supplied and staffed by the best private gym company. The result is a hugely successful holiday destination.
The move towards selling user experience in digital agencies isn’t anything new. Four years ago Microsoft took me to their developer conference, Mix, in Vegas where I got to meet lots of very important people working for some very large organisations and the thing that struck me most was how many people said they worked in UX. I tolerated this for a few hours until I had to admit that I didn’t know what UX stood for. I’m sure most people now know it’s a confusingly conceived acronym for ‘User eXperience’, but back then it was a revelation to me to discover not only what UX stands for, but that every significant digital agency had a UX department.
I had the good fortune to be asked to speak to the Experience Design team at Adobe in San Francisco last month. It was exhilarating to find a team of about 90 people dedicated to the user experience of Adobe’s software. This is a team that is growing in both numbers and stature with an aggressive recruiting policy that attracts the best minds around today – the creators of both Newsmap and the Spectra Visual Newsreader to name but two.
I blame Jakob Neilsen
The best thing about this shift of emphasis is that it requires little retraining. If you’re a successful web designer or you have a proven track record creating RIAs then you are already a UX expert. I have witnessed a reluctance for British designers to embrace user experience and I think this is because we are so good at usability testing, in particular with an emphasis on accessibility where the designers often feel their creativity is being hampered by ‘the wheelchair brigade’. I blame Jakob Neilsen for this when he claimed all Flash to be bad, instantly alienating a large number of designers who reacted by failing to embrace usability. Yes accessibility and more general usability are important aspects of UX, but so is delivering joy and creating wow.
Last month I attended UX Week, a conference in San Francisco organised by Adaptive Path, one of the world’s foremost user experience consultancies. Most of the people I met had UX Designer for the job title on their business cards but they came from a diverse group of industries from banking to healthcare and software to car hire. In the keynote, Don Norman (who originally coined the term user experience while working at Apple in the 90s) stated that ‘good design is worthless without good operations’, citing Apple’s original iPhone – a device lacking in features considered essential for such an expensive phone. It’s camera is awful and doesn’t shoot video, you can’t forward a text message and it’s data transfer is slow without 3G.
But Apple succeeded by getting the user experience right. The iPhone works because it is a cohesive system where it’s easy to get online, easy to buy music, easy to sync with your computer and easy for third party companies to build compatible hardware. This not only aids the success of Apples hardware but provides a significant revenue stream as 10% of the sale of every product with the little ‘Made for iPod’ logo goes to Apple.
at core we’re an IT and marketing company – we just happen to have a lot of cars
Don also gave the battle cry for more experience experts in upper management which was echoed by Scott Griffith — Chairman and Chief Executive Officer of Zipcar who explained that their success was all down to a belief that ‘the experience is the brand’, a statement held high by all in company. Instead of a product marketing department Zipcar has an Experience Team. He explained that “at core we’re an IT and marketing company – we just happen to have a lot of cars.”
Griffith’s presentation reassured me that as digital creatives we are indeed some of the best placed people to help develop business processes throughout organisations and not just build the products recommended by business consultants.
I’m not suggesting that we will be getting rid of our developers, but if we don’t allow them to evolve, our businesses will suffer in the future. As advances in technology commoditise our offering our developers must move up the food chain, moving us into new markets. A couple of years ago our digital team made websites and the occasional screen saver, but now we spend most of our time developing applications. Last year we built a complex, robust desktop application that’s now been used to sell about $1 billion of property. Its importance isn’t so much that it was built in 3 months by a team of web developers, made possible by the beta of Adobe Air but that we are now selling products as opposed to the time required to make products.
This means the cost of the product is in direct relation to its value to our clients as opposed to the effort involved in making it, something we have struggled with in the past with our email marketing software, Blab. We invested hundreds of man hours developing the first two versions of Blab, but to create an installation for a new client took only a few hours to set up, making it less straight forward to work out how much to charge. But last month we made the decision to shelve our code base and use Blab branded MailBuild instead.
reprint your company business cards and swap Web Designer for Experience Designer
This was a significant jump to make, as it required us to consider where we bring value to our clients. What we found was that make Blab as feature rich as MailBuild would take months of work and then all we’d have is a MailBuild clone which would require continual development to keep up. It turned out that the software itself isn’t why our clients pay Marque for email marketing, but our ability create a user experience that consistently delivers a high response rate by creating relevant content that is beautifully presented and optimised to avoid spam filters, and is sent out at the optimum time of day and week for each specific audience.
So go on, reprint your company business cards and swap Web Designer for Experience Designer. Just by changing the name of your job should be enough to remind your clients where the value is that you are adding to their organisation.