22 June 2007

Innovation in experiential services – an empirical view

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Innovation in Services
The recent “Innovation in Services” paper by the UK Department of Trade and Industry (DTI), contains a long chapter by LBS researchers Chris Voss and Leonieke Zomerdijk, entitled “Innovation in experiential services – an empirical view“.

The introduction to the paper is already indicative of the angle taken in this publication:

Research conducted for this report emphasises the importance of nontechnological innovation in the economy. One of the findings is that the full utilisation of technology often requires firms to use it in an innovative way and this is often accompanied by changes in the skill mix and organisational changes. Knowledge of the customer, i.e. the ‘demand side’ of the equation is particularly important as many services are simultaneously created and consumed at the same time.

The chapter itself deals with experiential services and the customer journey approach:

This chapter examines innovation in experiential services. These are services where the focus is on the experience of the customer when interacting with the organisation, rather than just the functional benefits following from the products and services delivered. The report is based on a continuing research programme on experiential services at London Business School. It draws on a recent case-based study of eight design agencies and consultancies and nine successful experiential service providers. The report addresses the question of how do experiential service providers innovate, in particular the content and the process of innovation including organisation for innovation. Studying innovation in experiential services facilitates wider reflection on the subject of service innovation.

The research found that experiential services are often designed from the perspective of the customer journey rather than as a single product or transaction; the service is seen as a journey that spans a longer period of time and consists of multiple components and multiple touchpoints. The journey perspective implies that a customer experience is built over an extended period of time, starting before and ending after the actual sales experience or transaction. During a customer journey, numerous touchpoints occur between the customer and the organisation or the brand. These touchpoints need to be carefully designed and managed. The research shows that innovation takes place at each of these touchpoints as well as of the overall journey itself.

Download paper (pdf, 1.5 mb, 198 pages)

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