Companies switching their innovation efforts from products to the customer experience are gaining 3-7% higher annualised revenue than their peers, according to Accenture research.
An Accenture survey of 351 companies across eight industry sectors in nine countries showed that leaders are evolving their approach to innovation by developing a total customer experience that combines product, service, software and hardware. Two thirds of these companies said their most successful innovations in the past two years have been derived from improved customer experiences and related new business models, rather than new products alone.
“Companies need to provide a superior experience to their rivals, from the point a customer shows interest in a product, through the research and purchase, to long after they own the item, with a series of services to keep the customer delighted,” said Richard Holman, managing director of Accenture Strategy. “Companies across all sectors are rewriting the playbook for how they innovate and organise to drive growth, with leaders achieving between 3.5% and 7% higher revenues that are attributable to distinct approaches to innovation, product development and solution development.”
Applying innovation to the customer experience, rather than just products, could increase revenues by US$1 billion in the automotive industry, US$633 million in the consumer technology sector, US$581 million for medical technology providers, and US$567 million for industrial equipment manufacturers.
According to Accenture, leading companies differentiate themselves by going beyond asking customers what they want and instead targeting customers’ and consumers’ unmet needs.
Based on the survey data, Accenture has segmented four distinct categories of innovators: early innovator, value maker, market share protector and efficient executor. All leading companies fall in either the early innovators or value makers category.
“The leading innovators, who Accenture defines as early innovators and value makers are focusing innovation to deliver differentiated outcomes, solutions and experiences, at a strategic level. They are seeing higher revenues as a result,” said Eric Schaeffer, senior managing director and head of Accenture’s Industrial practice. “Only 20 percent of those companies surveyed fell into these two categories, with the vast majority falling into the other two categories, typified by a more tactical approach to differentiated customer experience. Value Makers find new ways to connect with customers through platforms and ecosystems, in which the product or service is just one dimension of a much larger value proposition.”
Share this story