This document discusses service design within the automotive retailing industry. It describes how service design can be viewed as a system of thoughtful customer interactions. The document then discusses a case study of OpenRoad Auto Group, where service design was used to shift power to customers and create a more comfortable dealership experience. This included innovative merchandising displays, internet kiosks, a lounge area, and relocating customers during service. The service design strategies contributed to a 28% increase in OpenRoad's sales within one year.

1. Would you like
service with that?
An Exploration into Service Design
Strategy within Automotive Retailing
Brand Experience Series, Summer 2008
By Chris Bedford and Anson Lee
Karo Group

2. Table of Contents
2 Service as a System of Customer Experiences
3 Beginning to Solve the Problem
4 Case Study: OpenRoad Auto Group
6 Innovation and Service Design
Industry
Automotive, Retail
Authors
Chris Bedford, Anson Lee
Keywords
Automotive, service, design, retail, experience economy,
Openroad, Toyota
Abstract
Service design is a system of thoughtfully executed customer
interactions. Chris Bedford and Anson Lee explain that it is
Copyright permission
Design Management Institute
a discipline that has been around for some time, becoming
Reprint #08191BED38 a critical element in what is now referred to as the experience
economy. In this context, they analyze a spectrum of design
This article was first published in
Design Management Review Vol. 19 No. 1 strategies they developed for an auto dealership in Vancouver
All rights reserved. that, within a year of execution, contributed to a 28 percent
increase in sales.

3. >> ThE InCREASED COMPETITIOn fOR customers But what exactly is service design? And how
and customer loyalty drives organizations is it different from what we currently term
and brand managers to constantly revisit the experience design? The truth is that one is an
question of what customer service means extension of the other, as has been described
and how to best deliver “good service” in the so well in Joseph Pine’s and James Gilmore’s
variety of venues and contexts in which custom- popular book, The Experience Economy1.
ers seek product or advice, or interact. Perhaps
Pine and Gilmore argue that everything can be
the strongest evidence that service design is
commoditized, and therefore to keep customers
worthy of our renewed attention was howard
loyal there needs to be an emotional connection
Schultz’s letter to customers earlier this year
between the goods and the services companies
as he announced his return to Starbucks as
provide. It’s precisely this connection that we
CEO and his promise to make “the Starbucks
call the “experience.” The Danish Design Centre
experience as good as it has ever been and
offers a particularly useful definition of
even better…in the way stores look, in the way
service design:
people serve you, in the new beverages and
products we will offer.” Service design as a term generally refers to
design of systems and process around the idea
While service design is obviously not a
of rendering a service to the user. The typical
new concept, it has become increasingly
medium for presenting the service is through the
relevant over the past decade. The economy
business of commercial or noncommercial entities
has shifted dramatically toward growing
(for example, pizza delivery, public healthcare,
customer demand for a level of personalized
airlines). Very often, the service element is
service that has been lost to big-box retailers,
attached to a physical product or offering, but
discounters, and volume merchandisers who
at times it can be purely an intangible offering:
sacrificed most, if not all, aspects of customer
for example, legal consultation2 .
service in the pursuit of greater profits from
low margin products. Most service is deployed through what
are commonly referred to as touch points.
Yet, as history has taught us, price is both the
These could be in the form of virtual interfaces,
lowest common denominator and the worst
physical interfaces, and people. for example,
differentiator, driving companies to move back
in a bank the touch points are the ATM machine,
toward a service model and a more human
credit card, printed statement, call center repre-
connection. Thus the need for designing better
sentative, branch office, online bank, and so on.
service and services.
BRAnD ExPERIEnCE SERIES Summer 2008 1

4. Service as a System of the latest information technologies. however,
they are probably the least powerful in
Customer Experiences changing a passenger’s feelings toward an
If we think of service design as a complete airline, as the brand equity they build is easily
system of considered customer interactions, lost when baggage drop lines are excessively
then all of sudden the role of design and the long, security is backed up, and their luggage
need for design thinking and design strategy lands in a different city than they do. When you
become increasingly important for the market consider the many factors involved, especially
success of service brands. Unlike many in qualitative situations, it becomes harder
products and most packaged goods, services to control quality and for organizations to
are often intangibles, and the characteristics of manage outcomes.
good service can be defined quantitatively Service design is therefore a highly relevant
and qualitatively, tangibly and intangibly. concept when thinking about improving an
organization’s brand. To think about service
design is to think on a higher plane and not
at the level of the design of a specific product,
>> design is tothink abouta service
environment, or interaction. Instead, think
“…to of a customer existing within a system of
think on higher experiences—and ask how all these things
plane and not at the level of the work together and in support of one another.
design of a specific product, Staples is a company that has used service
design to differentiate itself in the market
environment, or interaction.” through its “easy button” program. The easy
button started out as an advertising and
Consider an airline that lets you book your brand-building campaign centered around
tickets and print your boarding passes online, the small to medium-size business owner and
provides a flight that leaves and arrives on the “customer pain” involved in the time-
time, gives you a seat that is comfortable, consuming task of procuring office supplies
serves food that is palatable, and provides and equipment. The advertising campaign,
an experience that feels safe, delivered by which features a physical red button that when
helpful and understanding attendants. These pushed says, “That was easy” (Staples’
are all goals that need to be considered brand promise), signifies the exceedingly
within an overall system that we refer to well implemented and executed service design
as service design. initiative that has enabled the company to
At the same time, companies all too often use deliver on the “easy” promise. Doing so was
specific initiatives to bolster a brand that are no simple task, as it required a strong focus
tied to only one facet of a customer’s experi- on staff training to design the desired human
ence. The problem with this approach is that interactions, as well as the technical ones.
a single element in and of itself will not change As an example, instead of sales associates
the customer’s overall perception of the asking the proverbial “Can I help you?”
organization. when customers enter the store, Staples
for example, airport check-in kiosks and web staff associates are trained to ask “What
check-ins are efficient and make good use of can I help you find today?” The focus is on
BRAnD ExPERIEnCE SERIES Summer 2008 2

5. the service economy, the service or means by
which value is rendered for a customer is still
>> for“…the greatest opportunity
differentiation comes from
a valid driver of an overall experience and
deserves consideration. This raises questions:
how does one engage in service design? And
designing and delivering a better why is it so challenging? Choosing to look at
the subject of service design from the perspec-
dealership experience, not from tive of business processes enables the entire
leveraging the automotive brand.” organization to revisit the way it is structured to
deliver services to its customers, and to explore
solving specific customer needs in a personal which tools, training, and metrics are required
way. The program has not only symbolized to ensure continuous management of the
customer needs but also led to innovative new customer experience.
products and outstanding market success. The
philosophy of maximizing buying convenience
extends into the physical and online shopping Beginning to Solve the
experience as well. Staples redesigned its Problem
stores to be smaller and less cluttered. Shelving
The larger your organization, number of
systems were made lower in the front of the
products, or venues involved in rendering
store, affording better visibility to the spaces
a service, the more complex this system
in the rear and periphery. It developed
becomes. however, without the broader view
specialized websites to target specific types
of the continuum of customer experiences, your
of corporate buyers. The tedious task of
efforts may be patchy and have little effect on
collecting receipts, barcodes, and forms to
your organization and its overall brand success
apply for manufacturer rebates is handled
in the market. To begin to develop a picture
through a service called EasyRebates, which
of your service offering and system, it is useful
electronically submits all product and purchase
to explore a variety of interconnected design
information to the manufacturer for processing.
disciplines.
The easy button eventually evolved into a
mini-desktop application that allows customers
to make orders and query Staples.com without
having to visit the website. The only customer
complaint was that pushing the easy button
on the website didn’t respond with the audio
payoff! After more than 15 years in business, >> “Second, the design had to
support the dealership’s new
Staples realized that low prices weren’t good
enough—the key to really differentiating itself sales vision, which intended
was to design an easy shopping experience.
to shift the power and control
But perhaps the real proof that this service is
well-designed is the fact that the company from the sales associates to the
now gets twice as many compliments as it customer—something that
does complaints.
was almost unheard of in the
While Pine and Gilmore suggest that the automotive retailing world.”
experience economy actually evolved from
BRAnD ExPERIEnCE SERIES Summer 2008 3

6. The key is to start with a solid definition and Case study:
a clear understanding of the problem you’re
trying to solve. Customer experience mapping, OpenRoad Auto Group
or the process of storyboarding and documenting Service design in many ways also involves
the variety of possible scenarios with detailed meeting previously unmet customer needs.
interactions and outcomes, is a useful means Consider the case of OpenRoad Auto Group,
of probing and uncovering opportunities to in Vancouver, Canada. This is a dealership
design a better service. This technique requires brand Karo Group helped to create. The
that all aspects of the customer experience real work began with the recognition that the
be connected by a set of specific services problem OpenRoad was trying to solve lay
and include all the customer touch points. not in selling more cars but rather in provid-
Visual identity and brand language indicate ing better service. Most dealerships fail to
relationships throughout the organization, recognize that their job is not to create the car
reminding employees, as well as customers, brand and the car experience; that’s the job of
of the presence of a larger system. the car manufacturer. (In fact, in many cases the
The experiences customers have are the direct customer has already decided which vehicle
result of their personal interactions with staff, he or she wants to buy before setting foot in
products, services, and technology-based the dealership.) Thus the greatest opportunity
delivery systems, such as websites, kiosks, and for differentiation comes from designing and
voice automation. new research in behavioural delivering a better dealership experience, not
science suggests that what matters most in the from leveraging the automotive brand.
service equation is customer perception. This This required a huge shift in thinking that
reminds us that service design is about atten- necessitated a total organizational change
tion to detail, as even a staff member’s failure in the company (figure 1). What we set out
to say “thank you” can leave the customer with to design was a new kind of dealership, one
a perception of inferior service. Looking for with strong street appeal that would increase
opportunities to influence positive perceptions foot traffic. We also needed to integrate the
should be part of the service design process. sales and service areas and to take customer
service strategy to a new, higher level. To do
Strong, Employee all this, we had to address a variety of strategic
Trusting, Satisfaction,
Team-based
Culture
Loyalty &
Productivity
business issues.
first, the dealership wanted to maximize the
available floor space in order to generate the
Growth & OpenRoad Consistent,
Quality highest sales per square foot possible—without
Profitability
Facilities Service
sacrificing the customer experience. This
meant rethinking all aspects of merchandising,
as well as formulating a variety of customer
Customer Customer
Loyalty Satisfaction experience scenarios. Second, the design
had to support the dealership’s new sales
vision, which intended to shift the power
figure 1. Karo considered how the service design for and control from the sales associates to the
OpenRoad, a car dealership, could encourage behaviours and
cultural changes that would lead to the creation of excellent
customer—something that was almost unheard
customer experiences and drive growth, as well. of in the automotive retailing world. Third, and
BRAnD ExPERIEnCE SERIES Summer 2008 4

7. figure 2. Visually interesting displays, including a system figure 3. Internet kiosks give customers access to pertinent
of stacking cars outside the showroom, welcome and engage information and support the buying habits to which customers
new customers, as well as maximize floor space. are already accustomed.
most important, was to create a comfortable same way as one would find information in a
experience that encouraged customers to museum or interpretive center.
spend more time in the dealership and discover
As we’ve already stated, service design requires
more about OpenRoad.
a full consideration of the customer’s needs in a
What we developed was an innovative retail variety of scenarios. In keeping with this idea,
environment never before seen in the market: we designed a coffee lounge, complete with
one that supported informed product decisions automotive reading, resource materials, and a
at all levels of sales and service. The curb 300-gallon aquarium and kids’ play area that
appeal came from a system of stacking cars ensured children’s entertainment while their
on the outside of the showroom that served parents spent unpressured time considering
both as innovative merchandising and fulfilled a purchase decision. (Consider that, from a
our goal of maximizing available floor space consumer’s viewpoint, the purchase expense
(figure 2). Long, curved windows created of a car is second only to that of buying a new
an expansive view of products and options. home). The showroom floor features three
We posted the OpenRoad Auto Group vehicle displays with moving-image screens
“experience promise” at the door so that when and reflective floor tiles that create a sense of
customers entered, they immediately knew color and motion (figure 4). In addition to other
they, not the sales associates, were in control vehicles on the floor, these displays create a
of the buying decision. focal point for customers, generate a desire
for discovery, and bring the OpenRoad brand
We introduced the idea of Internet kiosks that
experience to life.
allowed customers access to information that
would assist them in their buying decisions It is after the car is bought and paid for that
(figure 3). We designed the retail displays to most customers really get to know their
be informative and educational in much the dealership—and, ironically, this is when
BRAnD ExPERIEnCE SERIES Summer 2008 5

8. customers frequently have their worst
experiences. The service design strategy
for OpenRoad was quick to take this into
consideration, relocating the customer from
the greasy service bays to the showroom café.
Instead of forcing customers to wait in the back
of the shop and to drive their vehicles out of
the service bay, OpenRoad now encourages
customers to settle their accounts in the comfort
of the showroom while an attendant brings
their car around for them.
The results of this service design strategy
have been nothing short of remarkable.
They contributed to a 28 percent retail sales figure 4. Vehicle displays on the showroom floor offer moving-
increase in the very first year, leading to image screens and reflective floor tiles that bring content and
context together to encourage exploration and engagement.
OpenRoad being named the top-selling Toyota
dealership in all of Canada in 2006, and to approaches to business problem-solving that
its validation as the only Toyota dealership rarely come into play. Unlike management
in western Canada to receive the President’s consultants, who are often hired to help
Recognition Award from Toyota. companies formulate new service strategies by
analyzing and optimizing what already exists,
design can help organizations visualize future
possibilities from the customer’s point of view.
In the process, they can invent entirely new
market spaces and opportunities.
>> visualize futurehelp organizations
“…design can
possibilities from
As noted earlier, the concept and practice of
service design is not new. however, it is pos-
sibly a more universal way of bringing together
the customer’s point of view.” the many facets of design and business under a
common framework of thinking. Designers, by
their nature, are generally less willing to accept
Innovation and Service that technological and operational constraints
Design are acceptable reasons for not changing or
adapting service delivery to meet customer
Clearly, service design offers many opportuni-
needs. Design thinking can and does create
ties for innovation. When you look at an entire
a healthy tension in the search for better and
service system with a mind open to making
more innovative ways to create new systems,
adjustments in multiple dimensions, it helps you
design new services, and deliver an enhanced
make better decisions when integrating new
customer experience, capable of truly helping
technologies and new approaches. The role
service brands succeed in the market.
of design is therefore unique, because it brings
forward creative opportunities and divergent
BRAnD ExPERIEnCE SERIES Summer 2008 6

9. Authors
Chris Bedford Anson Lee
president and CEo of Karo Group Director, Customer Experience Strategy
Chris has helped a roster of blue-chip Anson has over 13 years experience
clients focus and streamline their brand in branding and strategic management.
stories over an illustrious 25–year With an education in computer science,
career. Prior to Karo Chris held senior communications and fine arts, Anson
roles in some of north America’s applies a unique combination of
most formidable agencies, including technology, business strategy and visual
MBL/DDBO and McKim Advertising, design to the strategic development
where he was the youngest ever and execution of creative concepts.
Vice President in the firm’s 100–year Anson has become a leading authority
history. Chris is a member of the DMI on customer experience strategy and
International Advisory Council and is service design, having worked on
regularly invited to speak at design numerous high profile projects in
and marketing events in north America Canada and north America.
and internationally.
referenCes
1. B. Joseph Pine, James h. Gilmore 1999,
“The Experience Economy: Work is Theatre and Every
Business is a Stage”, harvard Business School Press,
Boston, Massachusetts.
2. Danish Design Centre, Copenhagen.
BRAnD ExPERIEnCE SERIES Summer 2008 7