Design intimacy at scale
Designing intimacy at scale is building a hyper-personalised service in a highly scalable way.
Why consider it?
Product companies need to develop a balanced vision of how to create value (value creation), how to deliver this value to customers (value delivery) and how to be paid correctly for the delivered value (value capturing).
“A business model is a story about how an organization creates, delivers, and captures value.” — Saul Kaplan, The Business Model Innovation Factory
Traditionally, various departments have been responsible for creating the various components of the Value Model.
- Value Creation is mostly done through product development in the form of product functionality: make sure you offer valuable product functionality.
- Value Delivery is often a marketing activity (attracting customers) and can also include after-sales activities: make sure your customers have access to and can use the product.
- Value Capturing is mostly done by the sales department: make sure you get paid for a fair part of the delivered value.
Designing intimacy at scale mainly targets builders of digital products and is primarily aimed at the value delivery and capture components of these companies' business models. The goal is to develop new tactics for value delivery and value creation by using digital technology; in other words, addressing the Software Paradox. Two main tactics can be applied:
- Micro Care is the tactic that maximises revenue and margins for an individual user over time based on a continuous and customer-intimate service relationship between user and provider. The customer service and retention processes are key to this tactic by optimising over time the value perceived by the user, his or her recurring subscription revenue and the related cost of customer intimacy.
- HyperScale is the tactic that focuses on maximising the market share for a niche segment based on a scalable, online and real-time acquisition and servicing channel between provider and (potential) customer. By using digital technology and ecosystems, it strives for a very high degree of scaling in customer acquisition and customer service, which is achieved without a linear dependence on human capital and without endangering the quality of the basic service.
What does it involve?
Designing intimacy at scale requires specific capabilities and skills:
- Full-Stack Engineering. Full-stack engineers have in-depth knowledge of all aspects of software development:
- Hosting environment
- Trade-off between proprietary development and third-party technology sourcing.
- Use of APIs and web services
- User interface and user experience
- Security and privacy concerns
- Application of best practices in agile programming and lean customer development
- Growth hacking and the introduction of viral features into the product. These are features that encourage users to invite other users to use the product (e.g. integration with social media platforms). Growth hacks are a way of rapidly experimenting across marketing channels and product development to identify the most efficient ways to grow a business. Growth hackers combine skills from marketers, engineers and product managers to focus on building and engaging a business's user base. This might require investment in a dominant online presence.
- Exploiting customer understanding to relentlessly optimise the key business processes: customer acquisition, onboarding servicing and retention.
- Mastering the financial aspects of a subscription business and the management of working capital. E.g. pricing models for digital services.