Taking a holistic view
By Jaime Moreno, Founder and CEO of Mormedi. This article was originally published in the 148 issue of New Design Magazine.
When I founded Mormedi 23 years ago, I focused on using design as a strategic tool in the creation of innovative products. It didn’t take very long to figure out that it was not enough just to design an attractive product to be successful.
In order to create a successful product, you need to consider design at a system level, looking at the entire user experience.
Product, services, and software all have to work together to achieve a specific outcome. It’s never about only one of them, but their combination. To create an excellent product and customer experience requires focusing on the enablers, such as the tools, people, and processes that surround them.
Design is key in the articulation of this flow and in the creation of an amazing customer experience. Today, when you buy a product it is never really about the object in isolation, it is about the purchase process, the customer support that you receive when you have an issue, and so on.
If we look at Apple, of course they design beautiful products, but what makes the real difference compared to other brands, is the strong ecosystem and services that they have created around their products. Consider the Apple Watch. You may or may not like the look of it, but clearly what makes the difference to people are all the services that Apple has around the watch: by measuring your vitals, such as blood oxygen and pulse, it has the capacity to predict health issues; or you could use it with a virtual trainer to get fit, and you can track your fitness in real time. Design has played a key role in the development of this solution offering. The Apple Watch is not just a product; it is a tool that allows you to have access to a large number of services.
If we look at the evolution in sales of smart watches in the last five years, we can see that there was a lot of hype in the early days (around 2016) with many entrants, including companies like LG. Today only a few brands, such as Apple and Garmin, are able to achieve sustainable growth, and the reason is that they offer real value around the use of the product with an extensive number of services.
On the other hand, let’s have a look at Lexus.
More and more people are leasing cars rather than owning them. Automotive industry margins have been eroding year after year. And many automotive OEMs make much bigger margins on aftersales and financial services than from new vehicle sales.
When Toyota created Lexus, they realized from the beginning that it was not enough to design and make an amazing car to win in the premium brand segment. Lexus was one of the first car manufacturers to correctly identify that many customers did not want to take care of their car. Therefore, they came out with a completely new value proposition: Lexus started offering a 3-year warranty, with maintenance included in the price for the first 3 years. Today, many OEMs offer those services as well, as they have realized that selling a car is not only about the car itself but the services that they give you on top.
The automotive industry has evolved quite a lot since then. It is said thar more than 50% of the drivers today do not want ownership of a car anymore; they just want access. Nowadays, most OEMs offer you 3 years of maintenance included, but you can also pay a monthly fee and trade the car in every 1-2 or years. So OEMs are not selling a car anymore, they are offering you a mobility service.
Some brands, like BMW, understood the value of this type of service and went further. For example, when you buy an electric car, they offer you a petrol-powered family car for a small amount of money during the holidays. Cadillac & Porsche have also made attempts to commercialize their cars based on a monthly subscription, with no long-term commitment.
Therefore, from my perspective, it is very clear that you cannot design a product anymore without thinking at a system level. You must look at the entire user experience and take into account all the touchpoints that a customer is going to have with your brand, whether physical, digital, or intangible (service).