Relationship design model

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New observations, and why and how relationship design works.

Is experience an outdated goal? We think so. Our previous posts (here and here) point to companies that succeeded in advancing their efforts from building experiences through innovation to designing relationships. After studying and working on relationship design for a few months, in our work and with students at Pratt, we present a model and principles for designing relationships.

Let’s start with the model. It was no surprise to observe that innovation is focused primarily on the customer. Traditionally, designers use research and behavioral observations to define customer needs and ideate, prototype and develop solutions. But this focus on the customer, through the lens of the offering, provides limited input as it leaves out opportunities created by the connections between the customer and the community (peer customers, friends, family, the society at large).

Instead, the design of relationships must consider three players–the enterprise, the customer and the community, and the separate connections they establish with each other. The cases we cited in our previous post will help you visualize these connections.

But how do the sum of those connections result in relationships? We base our answer on the concept of mutualism, usually used to define relationships of interdependence between two or more players in an ecosystem (think bees and flowers).

In the business context, mutualism can be used to explain and even guide the design of relationships between the three stakeholders in a ‘market ecosystem. Companies like Gustin, Airbnb and Patagonia realized that their role in their respective ecosystem goes beyond selling goods and services, and includes a collaboration on issues they share with their customers and the community, which may be commercial but are often peripheral to their business.

This is why Patagonia guides its customers to buy less and repair more. With customers and everyone else, Patagonia is building a relationship that is built more on ethics than sales. The strategy helps the company focus on what matters (to all) and manage its growth through volatile economic cycles and fashion trends.

Mutualism also guides Gustin’s business model, which involves customers in its manufacturing decisions. Consumer participation allows the company to reduce costs, manage inventories and capital and lower the cost of its product. It also, by the way, opens a door for co-creation and customization.

Airbnb created a community around hosts and travelers seeking to experience a deeper connection with the places and people they visit. By facilitating an exchange between hosts and travelers, the company modified travel behaviors and created their business (and travel category).

These and the rest of the cases cited share mutualism between business, customer and community. And, looking more closely, we also identified a set core principles that may explain how mutualism works for business. Some of them are:

Interdependency–distributing the ownership of the relationship between business, partners, customers and community.

Stickiness–when satisfaction results in frequent interactions and grows over time.

Enrichment–the continued development to extend impact and continue fulfiling needs.

Sustainability–the assurance of long-term viability (from funding to commercial success).

These principles apply to every aspect of business, such as capitalization, purchase, service and loyalty,  product/service design, marketing, communications, etc.

We find these observations fascinating, in part because they offer new ways to think about our role but also because they broaden our playing field and how we can help our clients.

We at Velo will continue to develop our methodology for relationship design and share our progress in future posts. In the meantime, we’d love to hear what you think!

Diego Kolsky