Data Analytics & AI

The value of strategic UX: Combating commoditization

What is Strategic UX?

User experience (UX) activity, when it’s done well, should have a strategic impact on a business. You likely already conduct usability tests, interviews, wireframing, and many other UX activities in order to make a measurable impact on individual projects.

This UX activity typically yields returns at the level of implementation: an improved journey flow here, a more intuitive interaction there. This is all extremely valuable.

However, strategic excellence in user experience works at a higher level.

When executed well it can create a new value curve, that in turn creates an inflection point, changing the way people behave and act. Expectations about experience are then reset.

This kind of impact can be measured and are direct indicators of your business’ success.

So, based on all this, how do we define Strategic UX?

“UX activity and thinking that has a measurable impact on KPIs, the bottom line, or other company-wide indicators of success.”

What is commoditization?

Commoditization is (broadly) the process by which goods or services become indistinguishable from each other in terms of their features.

This means they start being seen as ‘commodities’ to consumers – with prices driven down and scant margins to enjoy as a result.

An easy example is the humble pencil. For most people, a pencil is a pencil, and any company’s pencil does the job when you need to write or sketch.

It is difficult to compete on price in this mature market.

A company would have to work incredibly hard to differentiate their brand of pencil from another, so that enough people would deliberately seek out their brand when making a purchase.

Commoditization is a threat to many markets today, due to factors such as dramatically increased global competition (thanks to the reach of the Internet) and the exponential decline in the costs of many key technologies – from solar panels to drones to Bluetooth chips.

Energy, healthcare, cable services, mobile, and many other markets are also under threat.

They need to strengthen their differentiating features, and fast, to stay relevant.

Excellence in experience to combat commoditization

The beauty of an excellent experience is that it is incredibly hard to copy. This is music to the ears of product owners, who thrive on differentiating factors.

Sure, you can copy a product’s features, or a service’s attributes. Many do, and quickly.

This ‘feature leap frogging’ is being played out in social networking apps, mobile phone development, and other prominent markets all the time.

And in the digital space, it’s easier and quicker than ever. The latest functionality is a short-term differentiator at best!

But all is not lost. Because the experience of and around a product is woven deeply into its fabric.

And this is very hard to replicate. It is not only the design, presentation and interaction, it also encompasses how it matches our needs and desires; the naturalness and emotion of how we interact with it; the familiarity across touchpoints; and over time – the comfort and effectiveness of customer service.

Often, an excellent experience means something just ‘feels’ better – much to the annoyance of those wishing to copy it, or challenge it!

The easiest example is the iPhone, launched 10 years ago in 2007.

Some people just didn’t get why it was successful— “No camera! No 3G!” they cried. And the consequences of that mindset are exemplified by the demise of Blackberry’s handset division, and many others left in the wake.

Time after time, people make choices based on the excellence of the experience. And one company that gets this—because of their smartness, and sheer necessity—is Spotify.

Spotify: Differentiating streaming music through strategic UX

When Apple Music launched in 2015, Spotify suddenly had a large and threatening competitor in the streaming music space.

Apple Music’s collection was larger and they had an extraordinary customer reach through their ecosystem, combined with deep pockets to play the long game.

It’s easy to see how commoditization could drive out Spotify. So, what made their music streaming service different?

The answer is: experience. And it turned out that Spotify had been laying the foundation for experience differentiation years before Apple Music came on the scene. They had been planning a new sort of experience: music discovery.

Discovering new music is a core part of today’s music experience. And it’s one we’ve started to take for granted. If you’re not sure if you agree, consider BPI research , that shows the easy discovery of new music is important to 90% of paying streamers.

Now let’s look more closely at Spotify and their discovery experience

How do we decide what we “like”, let alone have technology help us in that process?

We humans like new things. Especially when it comes to music. We know that listening to music is pleasurable.

Discovering new music can be even more pleasurable, especially if the new music is in our favourite style or genre.

Neuroscience revealed the brain’s reward system, and the influence played by certain neurotransmitters, pathways and structures.

Further research identified different regions of the brain within the reward system, that increase in activity, trigger more rewards, when we perceive a stimulus, such as new music that we like.

In helping people discover new music, Spotify is therefore supporting human pleasure-seeking behaviour at a neurological level. This is both profound and revolutionary, and represents a value innovation that can be exploited.

There are patterns in our listening habits that help provide insight into music we will like. But identifying those patterns requires a high degree of technical skill and machine learning expertise.

Get it wrong, and you end up with frustrated users distrusting your service and switching off. Get it right, and you have an experience differentiator that is hard to mimic, and a devoted customer base.

Interested in finding out more? Visit the Nomensa team on stand #204 at this year’s TM Forum to request a copy of their ‘Journeys with Unicorns: Excellence in User Experience’ white paper.


    About The Author

    Founder & CEO - Nomensa

    An experience strategist, Simon has inspired and transformed numerous organisations, strengthening their connections with their audiences and increasing user engagement. His understanding of technological advances and behavioural psychology alongside his business acumen allows him to guide people to think differently and create and implement future-proof strategies that make a measurable difference. Simon is one of the most respected thinkers in his industry, having been involved in ‘digital’ and UX since the start and has played a fundamental role in shaping it. Combining his background in human psychology, biology and cognitive science alongside cumulated insights gained over the past 20 years he also established one of the largest independent UX agencies in Europe. Simon has an intuitive understanding of how to integrate technology into the everyday through intelligent design that optimises human experiences. Coining the phrase ‘Humanising Technology’ back in 2001, Simon is passionate about reinforcing the belief that digital technology should be both usable, accessible and engaging whilst delivering exceptional experiences. He has turned the traditional view of digital design on its head, focusing on people’s emotions and experiences to reshape how organisations can engage with their customers more deeply, meaningfully and ultimately more profitably. As a thought-provoking futurist and invigorating keynote speaker on how technology and human experiences should have a symbiotic relationship, Simon’s high-level thinking and in-depth research and whitepapers amplify future visions and inspire audiences to be present and prepared for the changing commercial opportunities ahead.

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