Innovation in Experiential Services - An Empirical View

copies (URN 07/989) can be ordered via the search facility at 2 Executive Summary This report 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. In particular 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 of innovation 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. The customer journey perspective differs from the current models and frameworks describing service innovation, as it clearly shows the central role of the customer in innovation and design, as opposed to for example a central role of technology. In addition, the scope of the journey perspective is much broader than traditional models, for example it includes aspects such as building anticipation and facilitating transport to the core experience. Finally, the journey perspective integrates the common distinction between service product innovation and service process innovation, as a journey has elements of both. Another finding from the research is that innovation takes place in five distinct design areas that directly or indirectly influence the customer experience: the physical environment, the service employees, the service delivery process, fellow customers and back office support. Although these areas are relevant to any service, they generally do not receive the same amount of attention as experiential service designers …