Headphones as a service

Abstract

In 2014 two Industrial Design alumni from the TU Delft decided that they wanted to start a company that will demonstrate that a circular business model can be viable. They have developed a modular headphone, which they provide to customers as a subscription. Customers pay a monthly or yearly fee for the use of the headphone, which entitles them to free repairs and upgrades over time. The company has been growing steadily but too slow to become a sustainable business. One of the challenges they face is that need a better understanding of their customers in order to effectively build a brand and grow their business. The following assignment was therefore formulated for this thesis:

Refine and validate Gerrard Street’s target segment and redesign its touchpoints with Gerrard Street.

The analysis focused on creating a clear definition of Gerrard Street’s most important customer segment and on repositioning the brand. The synthesis and final design demonstrate how this should be implemented within Gerrard Street’s service through the design of a touchpoint.

Refining the target segment
Through a analysis of Gerrards Street’s internal environment was found that their business model is still in the early phases of adoption. It was therefore decided that Gerrard Street should focus their energy on targeting early adopters to build a strong brand before going after the early majority. The literature helped with describing the early adopters of services as young, well educated, having a high social status and do not mind taking risks. Customer research was used to develop a deeper understanding of the early adopters of Gerrard Street’s headphone service. Qualitative exploration through interviews provided direction for the target segment. A survey is used to sharpen that direction and to test some of the insights gathered during the qualitative research. Based on the customer research the target segment is described as:

Young educated men that live in an urban area, who listen to music at every opportunity and use music as a social connector, he values progress and change and works toward self-fulfillment. The need for self-fulfillment is divided into three sub audiences that Gerrard Street can use for specific targeting:

The passionate musician looking for musical fulfillment
The young achiever looking for Professional fulfillment
The Sporty lifestyle looking for Athletic fulfillment

Repositioning the brand
Gerrard Street’s mission is: “We will take the next step towards a circular economy by developing circular consumer electronics” Gerrard Street noticed that the market for people that are into the circular economy and headphone is too small. Therefore it is decided that they should demonstrate that the circular economy benefits the consumer more that traditional solutions, instead of focusing on the environmental image of their service.

The headphone market, the competitive landscape and the environment of the consumers has been explored. Headphones have transformed from rather technical devices to lifestyle products. This led to many new entrants and a highly fragmented market, making it difficult to Stand out. Gerrard Street is competing in this market based on product form for a premium price with fewer features than its competitors. They also lack a specific lifestyle or a strong legacy. It is therefore concluded that they should put the emphasis on developing their service, which is the main differentiator from the competition. Based on new the target segment and the findings of the analysis Gerrard Street has been repositioned as:

Gerrard Street, the audio service for doers, not talkers, for users, not owners, that connect through music and desire a great sound, carefree.

Five design principles were created that provide guidance on how to express the Gerrard Street brand:
Be Bold Confidence - Outspoken - Direct - Unapologetic - Doers
Why so serious? Surprising - Fun - Professionally avoiding Seriousness - Don’t speak your parents language
Quality is usability Making sure that you can always enjoy great sound experience - Here to serve - All grown up - keeping you online
Circular products are better For everyone, but especially for our customers - Smarter choice - no brainer - Modularity - Repair instead of waste
Engaging - A relationship - join the gang - Steer towards conversation instead of statements - Customer community - Honest about taste

Synthesis
To implement the new positioning for the newly formed target segment a touchpoint strategy was created: Adding value through the service by delivering a personal and social experience.
An analysis of Gerrard Street’s current customer journey map pinpointed how they should adapt their service in order to deliver the desired experience. Ideation sessions on these on these different phases were used to develop a desired customer journey that serves as a vision for the development of Gerrard Street’s service. Moments of truth were allocated to parts of the Desired Journey that were especially relevant for achieving this vision. The moment someone’s headphone breaks down has been selected as the moment of truth. The repair experience is truly unique for the Gerrard Street’s brand, since it is the moment where they deliver on their brand promise of providing a great sound carefree.

The final design
The moment someone's headphone breaks down is usually considered as a very negative experience. The repair experience has been designed to radically change the perception by providing a moment where negative energy becomes something great and sharable. The customer should feel empowered by fixing their headphone, since they do not have to throw it away. The aim of the design was to let the customer consciously experience this moment, providing positive feedback and adding extra satisfiers. The final design serves as an example for Gerrard Street on how they can implement the findings of this thesis.