Companies with poor customer experience are putting £107 billion at risk
UK companies which fail to maintain customer relevance could forfeit over £100 billion in coming years, as all sectors face mounting competition, thanks to new innovative and agile rivals leveraging new technologies and techniques to eat into the market share of long term incumbents. For this reason, a compelling customer experience has become an integral part of any business, with nine in ten firms innovating their customer experiences compared to just one in six of their peers.
Keeping consumers loyal is becoming increasingly more difficult as technology improves consumers’ ability to shop around for better deals and service provision. Brand loyalty is subsequently no longer enough to maintain custom, having significantly diminished as a concept in terms of maintaining long-term consumers. As firms across all sectors look to avoid ceding market share, new research from Accenture has found that companies that work continuously to remain relevant are those rewarded with the most fervent customer loyalty, as well as an above-average profit growth.
The global consulting firm surveyed over 1,000 C-level executives from companies across the globe in order to examine how leading organisations are achieving sustainable growth. Companies that adopt new capabilities to be more agile, responsive and innovative – or ‘design for relevance’ – were found to not only thrive, but also to be three times more likely to achieve above-average revenue and profit growth. Designing for relevance sees top performers act on insights derived from advanced customer analytics, using this information to develop compelling new experiences and maximising the personalisation and contextual sensitivity of products, services, and experiences to better appeal to customers.
94% of high performers believe that design is highly important to business success, in stark contrast to 68% of all other respondents – a belief which is actually translated almost identically in execution. 93% of the most successful firms polled by Accenture were those which successfully leveraged innovative design to better engage customers, compared to 66% of their peer set.
On a global basis, this has seen an upheaval of global business since the turn of the century. By the paper’s reckoning, a huge 52% of Fortune 500 companies from the year 2000 no longer exist, indicating a sea change in consumer sentiment since the turn of the century.
As this trend looks set to continue into the next decade, Accenture found that British businesses risk losing a combined £107 billion in revenue if they fail to react to this trend and maintain customer relevance. Alarmingly for companies in the UK fighting off ramped up competition, 47% get frustrated when businesses fail to use their personal information to make interactions and offers more relevant, something which could drive the bulk of the 55% of UK consumers willing to switch to rival companies, if their needs are no longer met, into the arms of rival firms. On top of this, once former customers have jumped ship, researchers found that more than one quarter said they are unlikely to return to their former brand choice.
Commenting on this, Nikki Mendonça, President of Accenture Interactive Operations, said, “Boardroom concerns are on the rise as many long-established companies relinquish revenue to more agile competitors that are engaging with customers in more relevant and meaningful ways. All organisations need to embed analytics at the core of their marketing operating models and build a broad platform ecosystem so they can adapt in real-time to individual customer needs and preferences.”
According to the analysts, businesses can avoid becoming a statistic – unlike the majority of Fortune 500 entities since 2000 – by taking steps to becoming a ‘living business’, or an organisation which can maintain relevance in an era of constant change. Five core actions are needed for companies that are undergoing reinvention.
Becoming a ‘living business’
First, firms should target core and disruptive growth initiatives. Companies with a deep understanding of customers’ changing digital needs and preferences are better able to identify areas ripe for disruption and growth. New plays can be funded by optimising costs elsewhere. Then, companies need to work toward the design of products and services as ‘hyper-relevant platforms’, generating real-time customer data which can then be used to develop compelling new experiences that adapt to the ever-changing context and needs of their customers, based on the insights this data allows.
Businesses must build a range of engagement channels through agile technologies and prototyping. This is in order for companies to bring designs to market in a variety of ways, enhancing customers’ experiences and enabling continuous feedback. After this process, a ‘living business’ needs to scale a broad set of ecosystem partners. Scaling was found to be a key factor to 92% of high performing respondents in Accenture’s study. Collaborating with a diverse array of partners enables companies to quickly create a new type of customer experience and value.
Finally, organisations should rewire the culture of their workforce to support new technologies. Companies which can cultivate a mindset that puts customers front and center do so by drawing on the latest technologies to mobilise the right people at the right time foster a culture which can break down barriers with consumers, and continually seeks to better customer relevance.
“The rise of game changers like craft ale, streaming video and ride-sharing platforms demonstrates that hyper growth is possible for consumer propositions that are truly relevant,” said John Zealley, Senior Managing Director, Customers & Channels Function, Consumer Goods & Services Industry. “Organisations need to sense and respond to opportunities by reinventing themselves as ‘living businesses’ to create their own hyper-relevant experiences that enable them to tap into new growth.”
