How to achieve a balance in Matierial and Customer outcomes

I am always surprised when I review a strategy or business cases for customer-centric organisations and see benefits and outcomes focused on material outcomes alone. In my view, material and customer outcomes should be represented as two distinct aspects of business performance, each with its focus and implications.

Customer Outcomes

Material Outcomes

These are tangible and often quantifiable results related to a company's operations and processes. These outcomes focus on factors such as cost reduction, production efficiency, and resource utilisation. Material outcomes are often internal-facing and deal with the "how" of a business's operations.

Material Outcomes should have a direct impact on the operational efficiency and profitability of the business. Achieving a positive material outcome can result in cost savings and increased productivity.

They are centred around the satisfaction and value experienced by the customers or end-users of a channel, product or service. These outcomes relate to a company's offerings' perceived benefits, usability, and overall experience. Customer outcomes are external-facing and focus on the "what" and "why" of customer satisfaction.

Customer Outcomes are therefore determined by how you successfully meet your customers’ needs in the tasks they are trying to execute, which creates value in their lives.

As a leader in design, supporting the business in defining customer outcomes is an important role that helps realise both business and customer value. It also assists in the approach taken to prioritise and deliver the outcomes and assess the level of engagement that design needs to support in the delivery of the initiative.

How I talk to describe the difference.

Material Outcomes

Are typically using operational metrics and KPIs that assess aspects like cost savings, production speed, product turnover and resource costs. They are also usually quantitative and objective in nature.

Customer Outcomes

Are aligned with customer needs, which is usually the way a customer will talk to successful outcomes. I tend to use the Jobs-to-be-done framework to define this, which allows you to focus on the needs of the customer during the interaction they are having with your organisation and what they are trying to execute in engaging with your company. This also provides a unique but consistent lens that can be applied across a channel, product or service.

These are traditionally measured in lagging indicators using customer-centric metrics and feedback mechanisms. Like Customer Satisfaction Scores (CSAT), Net Promoter Scores (NPS), Customer Feedback, User Engagement and Retention Rates. But you can also, especially in digital channels, associate these with things like Bounce Rates, Active Users, Return Rates, Conversion Rates, Share of Wallet and others depending on your organisation’s offerings. A top tip for product professionals is to engage with your data and analytic teams. In my experience, there is more data available than you can imagine making them an essential partner in this process!

The way to apply this is to ask:

• Who is the customer?

• What is the task that they want to complete?

By defining the customer/market as the “Job executor” with a functional “Job To Be done”, you define outcomes that are based on your customer’s needs.

Remember, we are not asking what my product does but what job the customer is trying to get done. This allows you to understand the complete needs of your customer and may also lead to discovery and innovation - i.e. holes in the offering and improvement in the delivery of the service.

“People don’t want a 2cm inch drill bit; they want a 2cm hole”

A customer outcome should be broken down into the following four key factors.

• Direction - what is the change the customer expects: Increase, decrease

• Metric - how would the value be represented to them: time, speed, accuracy

• The object of Control - what is the activity they are wanting to achieve: aligning to the Job to be done

• Contextural Clarifier - how it integrates into their lives

Putting this into practice for a Music Listener using Apple Music whilst doing exercise at the gym.

As a fitness enthusiast, I want to minimise the time it takes to get access to the songs I am interested in listening to while working out.

Let’s see how these could appear in relation to the same initiative.

As a business, you want to digitally improve the ability for customers to self-serve as they Explore, Select and Apply for your simple banking products and services.

• Material Outcome
  Reduce interactions with bankers for new simple products by 30% and provide “Straight Through Processing” (STP) of the applications, which will result in a saving of $9.1 million over 3 years in optimisation of the workforce and sustainable operations, where 60% of savings are achieved in year 1.

• Customer Outcome
  Improving the ease of exploring and selecting products that meet my business needs and goals, allowing me to select the best product for my business.
  Note that getting this right, it will probably lead to a decrease in bounce rates, increased conversion rates, and an increase in “share of wallet” which will equate to increases; in revenue, market share and growth.

In closing, material outcomes pertain to a business's internal and operational aspects, while customer outcomes are centred on the external, customer-centric aspects. Both are essential for overall business success, and organisations need to balance and prioritise their efforts to achieve a sustainable competitive advantage.

Ultimately, aligning material outcomes with positive customer outcomes is a key goal for businesses seeking to thrive; that will create a point of difference in your industry and set your delivery and operational teams up for success.

If you are interested in learning more or need support writing a customer-centric business case, let me know.