ROUNDMAP™ Full Stack

 To understand what elements and aspects the ROUNDMAP™ mapping system actually contains, we’ve created what we call the ROUNDMAP™ Stack:

While the Integrated Customer Lifecycle™, at the bottom of the stack, is all about lateral/horizontal integration, driven by cross-functional collaboration, the other layers of the stack, from the Experience Matrix™ up to the Business Model Matrix™ integrate through vertical alignment.

This theory is based on what we perceive as correlating attributes between aspects of each of the layers, that need to be aligned to optimize the operation.

This has led to a strategy-execution arrangement, known as the ROUNDMAP™ Full Stack:

Case study IBM

Before 1974 IBM had a product-centric business model. Its goal was to grow market share, based on a wide portfolio of IT-related products. Big blue was a household name and marketing was all about the brand experience. From 1976 onwards, while facing increased competition, the firm shifted its business operations by focusing on higher-value, more profitable markets. Its shift began by being perceived as customer intimate, followed by a full shift towards a customer-centric business. In 1994 the firm reported the largest operating loss ever recorded in corporate history: Customer Centricity should never be applied without a companion business model. However, the company recovered miraculously by using its in-depth customer insights to shift once more: to a resource-centric operation, utilizing a vast team of multi-vendor system integrators (acquired from PwC’s consultancy branch). Seeing these people in action was all it takes for customers. Today, IBM is about to make another shift, now that system integrators are no longer in high demand: it is shifting (clockwise) towards a network-centric operation, based on Watson and IBM Cloud.

https://roundmap.com/roundmap-full-stack/

Value Hub Theory

 Prior to constructing the ROUNDMAP™, we created the Value Hub™ theory which in retrospect correlates to Michael Porter’s Value Chains and (later) Value Streams.

11.1 - VALUE HUB THEORY

In 2012, Edwin Korver was invited to sit at a roundtable to help a local radio station to adapt to and benefit from the digital age. During this meeting, he described how they should perceive the role of a (modern) radio station. Which implied ‘the curation of relevant content, collected from multiple sources and then published via multiple channels, to please an audience. All they needed to do was to describe and organize their internal processes to be able to collect, curate, and package content in such a way that it pleased their digital media users.

Edwin soon realized that the same process could also be applied to regular business. All he had to do was replace ‘content’ with ‘product’. In fact, what he described was the Value Hub™ theory, which we’ve described in more detail here (part 1) and here (part 2).

In short: every entity, whether a corporation, hospital, government, church, or an individual has some (hopefully relevant) value to offer, while to create that value it needs to obtain knowledge, know-how, machines, materials, parts, and so, allowing the entity to satisfy a specific need of a customer, client, fan, or patient. This entity is what we refer to as a valued hub.

Communication between Value Hubs occurs using signaling, while, and this is key to understanding the rationale behind the circular shape of ROUNDMAP, customer feedback is used to enhance the process of value creation. After drawing the feedback lines, from the value surplus back to the value deficit, he realized that similar to Earth’s magnetic field, the hub was in fact a three-dimensional sphere. 

As such, another way of explaining why we divided Porter’s Value Chain ─ consisting of primary and secondary (supporting) activities ─ into separate dynamics is by perceiving the entire value orchestration process (see figures below) as a value hub:

11.2 - NOTES

In general, the creation of tangible value comes at a cost (credit) which is driven by the business dynamics. Value delivery, on the other hand, creates revenue (debit) which is driven by Customer Dynamics. The result (margin) ─ what can be captured as value to offset the costs of the value orchestration process ─ is determined by the market dynamics.

As we have seen with the rise of digital platforms, markets can be restructured to allow value to be created and captured in innovative ways. In process improvement, the Value Hub Orchestration Model relates to the SIPOC/COPIS model, originated in the late 1980s and continues to be used in Six Sigma and business process management.

"You've got to start with the customer experience and work backward to the technology."

~ Steven "Steve" Jobs, founder of Apple (1995-2011)

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Customer Lifecycle Map

 ROUNDMAP™ is covering three structural levels: (1) Business Strategy, (2) Strategy Execution, and (3) Performance. In the figure below you can see how these three levels are arranged in the system.

10.1 - LAYOUT OF THE SYSTEM

At first glance the ROUNDMAP might look overly complex, not allowing you to see the forest for the trees which can be discouraging. However, you’ll need to perceive it as a three-in-one mapping system. If we unbundle the system you’ll see it is composed of the business strategy (strategy line), strategy execution (operating line), and performance (customer line).

10.2 - INTERTWINED

Obviously, the aspects of each of these layers, Strategy, Execution, and Performance, are to a large extend interrelated and interdepedent: it makes no sense to drive Customer Performance without being acutely aware of related matters such as the firm’s Vision, Mission, Goals and Objectives, Business Strategy, Competitive Advantages, or Customer Expectations. Everything is connected in a series of loops.

10.3 - REVISIT THE ROUNDMAP

We believe you are now ready to have look at the ROUNDMAP™ canvas. One final remark: we’ve designed the layout as a hub-and-spoke, with the value hub in the middle while the spokes represent the 8 stages that customers typically go through ─ in any order they see fit.

"If we allow that we live in times of unusual upheaval, then there are almost no certainties but this: that most people don’t like changing their minds. After committing to a narrative about something or someone, most of us will do anything to avoid having to revisit it."

~ Emma Brockes, The Guardian

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ROUNDMAP™ Universe

 ROUNDMAP™ Customer 360 consists on two dimensions, on the one hand a vertical perspective, consisting of the Business Model Matrix™, the Value Position Matrix™, and the Experience Matrix™, and on the other hand a lateral perspective, taken from the Integrated Customer Lifecycle™.

To perceive the two dimensions as part of one framework might be difficult to grasp, so we’ve created an additional illustration to explain the interrelationships.

In the figure above the Integrated Customer Lifecycle™ is represented by a color-coded horizontal ellipse, indicating the customer’s journey, i.e., crossing four silos, or four phases of a customer’s lifecycle: marketing, sales, delivery, and success. Strategy is executed cross-structure, usually top-down, while customer intelligence is captured cross-market, usually bottom-up.

Business Side

Before a customer can be served, we’ll need a business model explaining how we are going to create, deliver and capture value.

Next, we’ll need to look at how external parties will perceive us. This will determine our (relative) value position.

 

Now that we know how we are going to create value, and how we are (hopefully) being perceived in terms of value position, we’ll need to focus on the experiences we want our visitors/customers to have, Experience design and the Customer Lifecycle are strongly interwoven.

 

Market Side

 

As we execute our strategy of obtaining a piece of the market at a profit, some customers can be converted immediately, others have to be pursuaded over a period of time. We’ll need to track their behavior and learn about their intent, to transform them to satisfied customers. Any feedback from them, registrered in various databases, has to be unified and used to create more personalized experiences and more relevant value.

EDWIN KORVER

Architect of ROUNDMAP™ - Advancing Grandmastership of Business™ ✪ Business Model Matrix™ ✪ Polymath ✪ Generalist ✪ Systems Thinker ✪ Board Member, CEO CROSS-SILO BV

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Ultimate Level of Truth™

 Now let’s have a look at where to position the entire framework: from strategy, chaining, business model, value position, marketing strategy, and all the way down to the employee-customer interaction.

9.1 - EMPLOYEE-CUSTOMER ENGAGEMENT

If frontline employees fail to acquire, create, retain, and extend enough paying customers at a profit, then, regardless of the resources, infrastructure, capabilities, skills, talents, processes, services, systems, culture, business model, or products, the entire operation will fail. To emphasize the gravity of employee-customer engagement to drive sustainable growth, we regard the entire frontline operation, represented by the Customer Carousel™, as the Ultimate Level of Truth™.

9.2 - THE OVERALL PICTURE

We’ve created an image to explain where we position the Customer Carousel (and The Ultimate Level of Truth™) relative to the strategy execution (cross-structure), the performance (cross-silo), and customer intelligence (cross-market):

As we discussed earlier, the Customer Carousel™ is a double helix ─ as the brand touches onto suspects, prospects, and leads, the objective is to transform them into customers. But beware, after the customer was on-boarded, their expectations and frame of reference will evolve over time.

Or as the Greek philosopher, Heraclitus used to say: “Everything changes and nothing remains still. You cannot step twice into the same stream of water.”, a philosophy more commonly known as Panta Rhei.

"The paradox of the modern age, I realized, is that we live in a world that is closely integrated in some ways, but fragmented in others. Shocks are increasingly contagious. But we continue to behave and think in tiny silos."

~ Gillian Tett, FT journalist, author of The Silo Effect

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Customer Carousel™

 Once you have the right processes and systems in place, developed a collaborative mindset based on a shared vision, and established cross-functional teams that understand the customer dynamics, you’ll appreciate the high level of detail we’ve put into describing the entire customer lifecycle process.

8.1 - SHIFTS IN CUSTOMER DEVELOPMENT

We found that the customer development process has changed significantly in recent years and in many ways. Not just because of globalization and digitalization, but also due to rising concerns over matters like income inequality, our environment, and climate.

Let’s review just some of these changes, although there are many more:

Brands need to be purposeful: "It is (about) the story you tell, not the product you sell".

Technically, your mission is your purpose. However, customers demand more than a mission statement explaining what it is you do, how you plan to do it, and to who it may concern. They want to know why you do what you do. What drives you, what passionates you, or what keeps you awake at night. They need to know whether you’re equitable to your stakeholders and care about our planet. With the rise of social media public scrutiny is intimidating, so whatever you do, don’t pretend to be what you’re not. They’re bound to find out and destroy your reputation.

The moment of purchase should no longer be perceived as the end, rather as a means to an end.

Common practice dictates that customer development is mostly about driving a customer to a moment of purchase. This is unsound: purchase is not an end, it is the start of a relationship that is based on an Understanding of Trust™ and confirmed by a contract to which both parties are commited.

Only if you follow through, as promised and expected, the relationship may develop into an Alliance of Trust™ which could lead to a long-lasting relationship. However, most marketing and sales funnels describe ‘purchase’ as a final stage while a few models have added ‘satisfaction’ and ‘advocacy’, without describing how to reach these post-purchase stages or who is responsible for it.

Marketing communications is no longer about sending, rather a real-time reciprocal process.

Before the age of digital, marketing communications was mostly a unilateral process, often referred by as ‘sending’. Due to the rise of
the Internet, mobile devices, and social networks customers can now actively engage in the buying process, driving bilateral communications.

Yet, most purchase funnels still perceive the customer journey as a one-sided process. It is not: from a customer’s point of view, it is a decision tree while from a brand’s point of view it is an influencing tree. As we will explain further down, the buying process is best seen as two separate ribbons, that may become entangled for as long as it is beneficial to both parties.

Buying motivation throughout the buying cycle shifted from rational to emotional triggers.

Due to the amount of information that is now freely available to each and everyone, customers already know most of what is to know about your product and your reputation. Customer activation, therefore, needs to shift, from an emphasis on rational triggers to emotional triggers, i.e., all signals and sensory stimuli customers can experience about your product or brand.

As a result, Emotional Intelligence (EQ) and emotional engagement have become prevalent in customer experience management.

Customer development should not be seen as a series of steps, rather as an integrative process.

The frontline operation has become extremely divided with numerous specialists, each focusing on a fraction of the 360-degree puzzle. It should come at no surprise that individual employees have become entirely disconnected from the overall customer development process and often have no clue what customers experience during each of their interactions with the organization at large.

Customer on-boarding has become a critical component of the customer development strategy.

As more and more companies make the shift from as-a-product to as-a-service business models, the revenue model is also changing from one-off purchases to subscription-based services. While customer churn hasn’t been of much concern to product-centric brands, in case of subscription-based services it is absolutely vital that customers extend their subscriptions.

To reduce customer churn ─ and increase employee engagement to raise customer loyalty ─ brands now resort to Customer Success, a kind of proactive customer support practice. Customer Success efforts commence just prior to or shortly after the moment of purchase.

Significance is the traverse in customer lifecycle management, leading to customer extension.

Customer Lifecycle Management involves many steps, however, one step has been overlooked by most: Significance. Significance supersedes Satisfaction and even Happiness. While Satisfaction and Happiness look backward, Significance looks toward the future. Why should a customer maintain a close relationship with you? What future value do you have to offer them? Why would they want to associate themselves with your brand?

If you want to build strong customer bonds, you’ll need to provide customers (implicitly) with favorable answers to these questions.

Innovation can either extent (sustain) or prematurely end (disrupt) a revenue stream.

It should come to no surprise that we live in an age of technological disruption. Technology that was developed in the previous century is now phasing out, while new (digital) technology is rapidly gaining traction. If your core operation still relies on old systems, or your
business model is out-of-date, chances are that your revenue streams will soon be prematurely discontinued.

Since your business relies on revenue, this disruption could become fatal. While product innovation could provide a temporary edge over the competition, outdated business models may require your organization to make a complete turnaround.

Employee-customer engagement drives customer loyalty and customer advocacy.

As mentioned before, the customer journey isn’t a one-sided process: it involves two parties, your brand, represented by its employees, and the customer. If you want to drive loyalty and advocacy, you’ll need to get both your customers as well as your employees engaged in the process.

Customer expectations may vary greatly depending on their point (or frame) of reference.

Customer expectations greatly determine Customer Satisfaction, Happiness, Significance, and Loyalty. However, each customer has a
different point (or frame) of reference, meaning, their expectations may vary greatly. While one customer may be thrilled because your customer service desk was quick to solve an issue, others may not be so impressed and demand that you proactively help them to obtain as many benefits as soon as possible from what it is they purchased from you.

8.2 - INTEGRATED PROCESS

To incorporate these changes into a modern buying cycle, we’ve created the Customer Carousel™.

The Customer Carousel is the ’roundtrip’ part of the ROUNDMAP framework and contains:

• 4x Customer Development Goals ─ Acquisition, Creation, Retention, and Extension.
• 4x Frontline Departments ─ Marketing, Sales, Delivery, and Success.
• 8x Moments of Engagement ─ Brand-initiated touchpoints.
• 8x Moments of Reflection™ ─ Measurable responses by customers to these touchpoints.

Instead of focusing on creating the perfect customer journey, we believe companies should focus on providing more insights into the gains of their product (Prospect Theory) and adhere to a very simple 4-step response to each touchpoint (f.i., “More info”, “Order now”, “Keep me informed”, and “Not interested”). This way ─ provided brands use the right channels and responsive touchpoints ─ firms will be able to drive their prospective customers forward. Remember the KISS-formula: Keep it simple, stupid.

8.3 - TIMELINE

Since the customer lifecycle is a cyclical process, as suggested by the term, a circular layout may be difficult to grasp at first sight. The cycle includes the classic AIDA, as well as elements of Alan H. Monroe’s Motivational Sequence (mid-1930s). 

To introduce you to these steps, we’ve created a more familiar linear timeline. First, let’s have a quick look at it:

On the bottom half of the figure, you’ll find the brand-initiated touchpoints or Moments of Engagement (Attraction, Awareness, etc.). Beneath each Moment of Engagement you’ll find a Prompt (1-8) that determines its position and meaning in the lifecycle process. While on the upper-half you’ll find the Moments of Reflection™ ─ the measeable responses of customers to the touchpoints. In between is a color-coded wave, representing the Ultimate Level of Truth™.

The figure illustrates how customers respond to the brand-initiated touchpoints as they pass through the Customer Carousel™. By extending the frontline operation with a fourth department, Customer Success (marked in red), the likelihood of retaining more customers ─ getting them to return more often and spend more over the course of their customer life time ─ increases significantly.

According to Zappos, 75% of their daily purchases come from returning customers (successfully extended).

8.4 - RELATIONSHIPS AS A DOUBLE HELIX

Although we’ve chosen to explain the arrangement of the Customer Carousel™ to you by using a linear timeline, please remember fact that the actual motion is circular (360-degrees). Over time this creates a helix (see image to the right), indicating a customer circling around the brand.

However, since it is a two-sided process, engaging the brand as well as the customer in the process, it is actually a double helix ─ much like a DNA-string. In a more abstract way, the Customer Carousel™ is about estabilishing a product-customer fit, as part of the product-market fit, that creates a double helix.

A product-market fit is the degree to which a product satisfies a strong market demand.
Product-market fit is a first step to building a successful venture in which the company meets early adopters, gathers feedback and gauges interest in its product(s).

8.5 - FROM CYCLES TO WAVES

In fact, a product-market fit is exactly that: two interwoven strands, one of demand and one of supply, held together by for the most part emotional bonds. While we could consider customer relationships as a mere consequence of our actions, convictions, or even as strokes of luck, we should place them in perspective. Afterall, cycles are a series of occurrences that occur over time, destined to repeat itself ─ given the right circumstances and conditions. Let’s consider the Customer Carousel™, the customer lifecycle, over time:

By plotting the steps of the Customer Carousel™ on a timeline, you can see that we need to invest in the relationship (downward movement) before we can capture value from it (upward movement), following tipping point #1, i.e., the moment of transaction.

In a similar way Product Carousel™, Growth Carousel™, and Business Carousel™ can be plotted over time while we need to consider that the Customer Carousel™ is the shortest wave (spanning across the lifetime of a customer relationship) and the Business Carousel™ the longest (spanning across the lifetime of the business venture). More can be found in our online programs.

In general terms:

• Business Carousel™ is about developing the business venture over time.
• Product Carousel™ is about developing the product-market fit over time.
• Customer Carousel™ is about developing the customer-product fit over time.
• Growth Carousel™ is about developing the strategy to grow over time.

PETER DRUCKER: PURPOSE OF BUSINESS

Despite Peter Drucker‘s suggestion that “The purpose of business is to create and keep a customer”, few companies actually have a customer retention strategy ─ even though an increase of a mere 5% of the customer retention rate could raise profitability by as much as 25-95% (Harvard).

And: “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”

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