New research from Accenture found that US companies risk losing $1 trillion of revenue if they fail to maintain customer relevance, forcing consumers to seek alternative brands. Once gone, more than one quarter of the consumers are unlikely to return.
As part of its “Living Business” study, Accenture surveyed 400 C-level executives from US companies to understand how leading organisations are achieving sustainable growth.
The study found that companies that adopt new capabilities to be more agile, responsive and innovative will not only thrive, but are also three times more likely to achieve above-average revenue and profit growth.
By identifying these common characteristics, Accenture uncovered a new formula for companies that want to evolve into a living business – one that continuously adapts to changing customer preferences and market conditions with speed and at scale to thrive.
According to the report, 61 per cent of consumers switch companies that no longer meet their needs, and 44 per cent get frustrated when companies fail to use their personal information to make interactions and offers more relevant.
While the vast majority (85 per cent) of business leaders at top-performing companies believe that customer expectations are influenced by relevant, real-time and dynamic experiences, many admit they are struggling to move fast enough.
Eighty-five per cent say that their company needs a more agile approach to doing business, and 81 per cent agree that they need to reinvent their business to be successful in today’s challenging environment.
“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,” said Nikki Mendonça, president of Accenture Interactive Operations.
“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.”
“In addition to rewiring from within, businesses today need to build and scale physical and digital experiences that are not only relevant to customers but also useful and meaningful – experiences that constantly adapt to their ever-changing needs and help improve their lives,” said Glen Hartman, head of Accenture Interactive, North America.
“Our research found that those companies that flex best combine the latest technologies and skills with a sense of empathy for the customer, driving customer engagement in new ways and new measures of success defined by customers and employees alike.”
For companies to capitalise in this era of hyper-relevance, they need to transform into living businesses. According to Accenture, five core actions are needed for companies that are undergoing reinvention (all of which coincidentally align to what Accenture is selling) :
- Target core and disruptive growth initiatives. Companies that have 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 optimizing costs elsewhere.
- Design products and services as hyper-relevant platforms. Organizations that create products and services that generate real-time customer data are well positioned to use that insight to develop compelling new experiences that adapt to the ever-changing context and needs of their customers.
- Build a range of engagement channels through agile technologies and prototyping. So that companies can bring designs to market in a variety of ways, enhancing customers’ experiences and enabling continuous feedback.
- Scale a broad set of ecosystem partners. Collaborating with a diverse array of partners enables companies to quickly create a new type of customer experience and value. Each player brings something new and unique to the table – such as customers, industry experience or technology – enabling all parties to benefit from the experience.
- Rewire the workforce through new technology and culture of hyper-relevance. Companies that cultivate a mindset that puts customers front and center do so by drawing on the latest technologies to mobilize the right people at the right time. They foster a culture that breaks down silos 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.”