Time to Rethink How We Make the Products of the Future

Organizations are nothing without their paying customers. While so many businesses are busy focusing on earning new customers to demonstrate growth and progress, the pandemic taught us a valuable lesson: Your most loyal current customers are your key to resiliency.

Companies are shifting to subscription models, offering products as-a-service, regardless of their industry. Subscription models are a move from a transaction-based interaction to a long-term, incremental relationship, providing a continuous revenue stream. The as-a-service operating model also provides vital insights on customer behavior.

But to earn a customer’s commitment to subscribe long-term, you must create an experience with the product that outweighs the benefits the customer may gain through a stand-alone product transaction.

The ‘Experience Economy’

Traditionally, the customer had to buy a new product to get the latest feature upgrades, like buying a new phone for a better camera. Now, companies have broken this mold by switching to primarily software-based upgrades that deliver an enhanced experience without needing to replace the physical product. These companies have leveraged continuous delivery in their software product development to provide a continually improving customer experience. Today’s product experience is software-driven, meaning the experience is digitally delivered.

Product companies must embrace this change and build for digital continuum. Converging the physical and digital worlds should mirror changes in the software industry. Businesses should be creating products with the mindset that their lifecycle now extends beyond the transaction of physical product delivery. They will need to provide both software and physical updates and upgrades based on individual preferences and use cases. Subsequently, the design process needs to change toward making physical products as modular and extensible as software.

This is an opportunity to make to think, where the design cycle is revamped toward a long-term and sustainable physical product. Incorporating customizability and software-driven products into the design process yields four key customer experience improvements:

1. Ease of upgrade

With products designed to be upgraded wirelessly via software updates, traveling on site to make a purchase or for repairs becomes a less frequent occurrence. Updates to a vehicle, for example, are made over-the-air, like a software update pushed to your phone or computer – allowing you as the consumer to benefit from the new capabilities almost instantly. This provides continuous service and keeps the products from becoming outdated with legacy features. A software-based design also creates the potential for cost savings for both customers and organizations -- through a near-effortless process to keep products current. Consumers in the physical realm would reap the same benefits, and the modularity would make it easier to replace and upgrade parts independently of each other.

2. Relationship building

The increasing presence of software in cyber-physical products allows companies to collect an enormous amount of customer data in real-time. That means they’re understanding how customers are using these digitally embedded products, their primary needs, and any potential gaps that could be filled. With this data, organizations can make improvements instantly, adjusting the customer’s experience and tailoring it to their specific behaviors. Most products today lack this two-way communication capability -- and companies that aren’t leveraging this precise customer data are missing a golden opportunity to strengthen the relationship through a higher-quality experience.

3. Long-term loyalty

Creating convenient processes and building a strong relationship also earns trust, proving reliability, and securing loyalty. Why would someone purchase a new car from another company when sticking with the current company allows them to continue earning new upgrades and building on the consistency of the vehicle that has been intricately tailored to fit their needs and habits? When the customer is given more influence to improve their own product, it fosters a greater sense of transparency between them and the company. This setup builds a strong case for customer loyalty -- where companies can offer points and status to customers throughout the relationship. The vehicle isn’t just connected to other products such as the customer’s phone and applications. It’s connected to their lifestyle.

4. Sustainability

When you make to think, you’re choosing materials that are less damaging to the environment. Even if the cost of the physical product goes up, it’s a more sustainable product with longevity. Choosing the RIGHT materials is crucial.

But many of today’s products were built for functionality to keep costs down and to push multiple iterations of the product to increase revenue. They were not built with disposability in mind, as 80% of recyclability and disposability is decided at the design stage. But when companies make to think, the digital form of the product evolves as it is used, allowing the product to last longer, benefiting the environment through less frequent disposal of the physical parts.

Recent evolutions in technology are creating a model where product design is increasingly focused on the software capabilities embedded within the product itself. This is a catalyst for both environmental sustainability and high-quality customer experiences. When companies approach their product design, they should “make to think” -- protecting the planet and earning loyal customers in the process through the convenience and customized experience their software capabilities are able to provide.