scroll
-
LEARN
MORE -
FULL REPORT
-
SLIDESHARE
-
INFOGRAPHIC
Growth: It comes down to experience
An experience renaissance to reignite growth
The structure of almost everything we do—how and what people buy, how and where they work, how they interact with others—has been upended by world events in 2020. The consumer behavior shifts we’re seeing today are not a blip. They are likely to stay with us for a long time, some likely forever. Some have been in motion for years, and many have been accelerated by the COVID-19 pandemic.
Right now, an experience renaissance is afoot – one that is galvanizing companies to push beyond the CX philosophy and organize the whole business around the delivery of exceptional experiences. These experiences must respond to customers’ new, often unmet and frequently changing needs and enable them to achieve their desired outcomes. This is the Business of Experience (BX).
An evolution of CX, BX is a more holistic approach that allows organizations to become customer-obsessed and reignite growth. Whereas CX was limited to the chief marketing officer’s (CMO) or chief operating officer’s (COO) purview, BX is in the board room as a CEO priority because it ties back to every aspect of a company’s operations. In fact, 77% of CEOs said their company will fundamentally change the way it engages and interacts with its customers.
BX is very much a new category of leadership that savvy CEOs and their leadership teams will embrace as we move deeper into the coming decade.
An innovative approach to boost business
In our research, we spoke to 1,550 executives (nearly a quarter of them CEOs) in 21 countries across 22 industries. We found that the organizations that embraced and reoriented around practices that we have defined as important for BX grow their profitability year-on-year by at least six times over their industry peers.
On average, BX leaders outperform CX-oriented companies in year-on-year profitability growth* by:
1yr
0.0x
3yr
0.0x
5yr
0.0x
7yr
0.0x
*Accenture Interactive identified the top 15% BX companies based on their survey responses to questions around BX capabilities. Using publicly available financial data, Accenture Interactive calculated industry-indexed EBIT for each company for 1-, 3-, 5- and 7-year CAGR, and then compared BX companies to their peers.
Three trends that gave rise to the Business of Experience
Many organizations seem to be out of sync, too rigid or moving at a pace that is slower than consumer change. If an organization’s experience fails to meet standards set by companies that do not directly compete with it, then they will be seen as a failure. That’s because consumer expectations have become truly liquid across different product and service categories. They no longer compare their brand experiences between two different companies in the same space. Rather, they make comparisons between their brand experience of, for example, a mobile service provider with a best-in-class airline, or even a design and tech-driven play such as Airbnb.
When executed well, CX investments have yielded good results: more customers, sales and loyalty. Its importance is not going away, but its value proposition is stalling because many of the fundamentals of CX are now commonplace. Designers everywhere have been making incremental improvements to touch points for more than 25 years, and norms have been established. For example, we know how to welcome new bank customers with good onboarding routines. We’ve seen how clothes should be presented in a digital store. We commonly expect ultra-fast online check-out with minimal clicks.
As expectations have risen, simple, fast, clear and intuitive experiences like these have become a given for customers, meaning they’re easy to copy and aren’t differentiated enough to automatically gain you market share. As a result, it’s now harder to differentiate through customer touch points alone than it has been in decades.
Brands are facing intense pressure to stand for something bigger than the products and services they sell. Today, eight in 10 consumers say purpose is at least as important to them as CX. More than half of Gen Y and Z consumers, compared to 37% of other consumers, say they have shifted a portion of their spend away from their current service provider when a company disappointed them due to its words or actions on a social issue.
Recognition that a brand’s vision and purpose can play a critical role in its growth is the foundation of a BX approach. Our research shows the leading 20% of companies are 2.5 times more likely than their peers to say they’re able to establish and manage a brand promise that connects directly to customer experiences. This coincides nicely to what consumers want, with nearly half of Gen Y and Z saying they prefer brands that make them feel part of something bigger and connect people around common causes or beliefs.
Becoming a BX leader starts with becoming customer obsessed.
Beyond the CEO, every C-level executive and leader inside both front- and back-office functions needs to be invested in shifting their thinking about experience.
Through talking to clients who are leaders in or at least aspiring to do BX, we’ve identified four winning ways to help you realize its promise. Our research shows that leading companies (i.e., companies that are independently performing well in terms of financial growth and business cycle endurance) are far more likely to take the following approaches, enabling them to consistently outperform peers who don’t:
01
Obsess about customer needs—and use that as your compass.
02
Make experience innovation an everyday habit.
03
Expand the experience remit across your organization.
04
Sync the tech, data and human agendas.
Trailblazers in action
These leaders redefined business by unearthing and serving
big, unmet needs.
Seamless
Why we say they’re a BX leader
Seamless didn’t just create an app for food delivery; it created an experience that satisfies all our cravings in the comfort of our own homes.
Think of it as…
The business of dining at home.
Zocdoc
Why we say they’re a BX leader
Zocdoc didn’t just create a booking website; it offered a better experience for patients to connect with doctors without the roadblocks that prevent them from taking ownership of their health.
Think of it as…
The business of health empowerment.
Venmo
Why we say they’re a BX leader
Venmo didn’t just create a payment app; it offered a universal way to borrow and lend money to friends and family regardless of bank affiliation and without the hassle of cash.
Think of it as…
The business of frictionless payments.
Netflix
Why we say they’re a BX leader
Netflix didn’t just create a movie streaming service; it transformed its entire company to own the experience around programming and how we watch it at home.
Think of it as…
The business of home entertainment.
Velux
Why we say they’re a BX leader
Velux didn’t just create a digital service for buying roof windows and skylights; it transformed people’s lives and homes without disturbing a single roof tile.
Think of it as…
The business of seeing your home in a different light.
01.
Obsess about customer needs—and use that as your compass.
Get the best by being customer obsessed
Uncovering unmet needs means thinking about how you make your customers happier and more loyal, identifying what they need—whether at work, at play or at home—and delivering a stellar experience for them.
A deeply embedded purpose gives direction here and keeps everyone aligned. It allows brands to anticipate which customer needs they should solve for and unmet needs they can fulfill.
60%
In fact, around 60% of outperforming companies (double the percentage compared to other respondents) acknowledged that they need to stand for something bigger than the products and services they sell and that they expect to always seek the best outcomes for their customers.
Uncovering unmet needs is critical for growth. Yet, organizations have traditionally limited their customer insights function to marketing, using historical data and market segmentation to paint a picture of customers at moments in time. This broader view can be a helpful snapshot of the market, but it has limitations. Most notably, it separates people from the rich context that informs their lives, choices and needs.
55%
VS.
26%
Our research shows that leading companies are twice as likely (55% versus 26%) to say they have the ability to translate customer data into actions. But many of these same leaders say that there are limits to their data and what they can do as a result. To be truly customer obsessed, companies need better ways to dig deep and uncover these needs.
You should turn yourself into a listening organization. That means picking up on signals through data and research to understand what people are saying and how they’re behaving (knowing the two aren’t always the same).
New methods and approaches are needed to gain this contextual, data-integrated understanding of people’s unmet needs. Integrating traditional market segmentation with contextual mindset research yields a rich, unified way to understand and predict what customers are likely to do and why, based on their needs in different situations. Gone are the days of year-long segmentation studies. Getting it fast and in the right hands is key. Good BX means efficiently and continually learning from your customers. The rapid and continual integration of qualitative and quantitative insights about a group of people can inform actionable outcomes and invite your customers to collaborate in shaping the future.
02.
Make Experience Innovation an everyday habit
Get the feel for experience
A true experience innovation culture asks you to close the gap between your brand promise and the experiences you deliver by changing not just what you say, but how you behave across your organization.
Experience innovation is not a tactic that shows up at a specific moment. And it’s not achieved by optimizing CX touch points.
Experience innovation is about solving problems in fundamentally new ways. And that requires rethinking your starting point for innovation as anchored to human needs. For example, if innovation is only focused on a single app, it might result in more reliable service or a more personalized solution, but neither of those on their own will change the game. They are improvements but not substantive innovations in how the product, service and brand are experienced. And they will be relatively easy to copy. Harder to implement, but also harder to copy (and more transformative for the customer) is when innovations converge in coherent and mutually reinforcing ways that create value in the experience.
While people’s expectations of brands have been shifting for years, they have been accelerated by COVID-19. BX leaders have taken notice and are pivoting accordingly.
53%
VS.
31%
Just over half of leading companies (about 53%) say that customers expect them to continuously innovate with more relevant products, services and experiences that adapt to their needs and set new standards, versus just 31% of their peers.
Think of experience innovation as an onion with three main layers: feature, service and business.
Each one provides a platform for the next.
Feature innovation
is about incrementally improving human experiences with an existing product. Experience features are everyday activities, like Netflix auto play or contactless payments. Features leverage existing technological capabilities and business models to refresh current products and services.
Service innovation
arises when a set of features creates new services and products, like a mobile banking app.
Business innovation
develops if a service creates radical, disruptive change to the human experience. At this level, embedding experience innovation as an entire business can change or create a whole new ecosystem.
03.
Expand the experience remit across your organization
Experience is everyone’s business.
Experience is not the responsibility of just one member of the C-suite anymore—it’s everybody’s business.
BX is ultimately about fusing your front office of sales, marketing, service and product functions (no more siloes) and connecting it to the back office (e.g., HR, supply chain, etc.). It is an operating model change across the board that flips the focus from engaging customers at touch points to the full customer journey instead.
BX leaders are very adept at cultivating this kind of organization-wide agility. Leaders are more likely to say that functions beyond traditional CX are set up to pivot in response to changing customer needs.
69%
cited their innovation organization as being set up this way
63%
said the same thing about operations
Most businesses still organize different functions independently, with separate leadership, channel touch points, budgets, data pools and more. Lackluster customer experience can result when some aspect of it was designed to meet the needs of the company or one of its functional siloes instead of the customer.
04.
Sync the tech, data and human agendas
Get on track by investing differently.
Becoming a business of experience is not about investing more; it’s about investing differently.
BX leaders rewire data, tech and people to enable agility that continuously unlocks efficiencies that can be reinvested in new opportunities for performance and growth. This allows them to improve experiences and give customers exactly what they desire without trading profitability and sustainability.
61%
VS.
27%
Among leading companies today, 61% say their company has a clear view of which technology platforms they need to leverage in order to remain competitive and relevant to customers—compared to only 27% of their peers.
As the experiences you need to deliver have dramatically evolved and continue to evolve, the need to build flexibility in your systems and processes has never been greater. You can only enable customer-centricity at greater scale if you integrate technologies, tools, data and processes. Doing so will help you build and maintain BX, adapt to the unknown and drive the best, most relevant customer experiences.
Start by building a more agile technology infrastructure with cloud. Think of your system as a stack. Increasingly, cloud should be at the bottom. This not only allows you to save costs, but to link data and people in newer, faster and more creative ways.
Next, with the savings that the cloud architecture unlocks, you can reinvest in data, powered by AI, to drive performance. Data enables pattern recognition in the cloud, helping you to see and understand things. As data continues to drive performance through more relevant, impactful experiences, you can use those learnings to refine your cloud infrastructure and unlock additional efficiencies.
Why have cloud and data layers? On their own, they are just investments in technology and operations. Where they create value is through the experiences they enable. So don’t disconnect your investments here from customer outcomes. Reverse that thinking and plan your tech strategy around your experience goals.
Every company today is looking at how to manage its way through the economic and health crises unfolding around us and come out on the other end not only stronger, but also poised to compete in what many are predicting will be a robust decade.
Each company must examine and pivot its business to find new ways to offer meaningful experiences to customers who are also grappling with many of the same challenges.
There’s no better time than now to discover what a BX versus CX approach can do for your business. We believe it will ignite growth and deliver the outcomes desired by your customers and for your business, even as uncertainty continues to swirl. Is it easy? No. But it’s essential.
BX may be a significant mindset shift, but we believe that over the years, it’s going to be an incredible engine for meaningful disruption, market differentiation and customer satisfaction.
We can show you how.
