Organisations going from “good to great” are halving the amount of products and services offered, according to Gartner research. And analysts say the cull is having a near negligible impact on revenue.

With CX initiatives well established, the very top CX leaders are turning away from customers and focusing on themselves, according to Gartner. Where many of them are focused now – and where Gartner advises other leaders to concentrate – is to slash the number of products and services offered.

“When you’re trying to be number one [in customer experience], we’re seeing organisations being really brave,” said Gartner VP distinguished analyst, Ed Thompson during the opening keynote of Gartner’s Customer Experience and Technology Summit in Sydney today.

“They are turning away from their customers and saying ‘we need to fix ourselves, we’re the problem, not the customers, we worked out the customers are right, we’re doing the right thing. But now we have a problem’.”

The top priorities of the CX leaders – the top 5 per cent, according to Thompson – is to cut products and services by around 50 per cent, accelerate processes ten fold, and up-skill and empower employees.

Ed Thompson, Gartner VP and Distinguished Analyst

The trend is not necessarily new, Thompson told the audience, citing Steve Jobs reducing Apple’s product line to just four products when he returned to the company in 1997. Apple’s products range has grown since then with its move into phones and mobile computing, but Thompson said one of the world’s most innovative companies can still fit its entire product line on one boardroom table.

Thompson also referred to Ford reducing its car lineup to just two models, Unilever and Tesco reducing their product range by 30 per cent, ad the top 25 per cent of banks cutting 57 per cent of products in two years.

“This is happening in many, many different industries. And they’re doing it not because just for fun, they’re doing it specifically to improve the customer experience,” Thompson said.

“And the reason for that is it’s difficult when there’s too much choice. It’s difficult for customers when there’s too much choice.”

There are obvious risks and challenges with slashing half of the product range. Thompson said product owners will “fight to the death” to avoid sacrificing their area of a company, a battle which will likely see some employees leave. More importantly, Thompson says, killing products and services will kill revenue streams. But he said, for leaders at least, the impact is minimal because of a long tail of under used products and services.

“I’ve been interviewing the [companies] who’ve done at least 40 per cent cuts of their products and services, all of them have told me the revenue hit over the first three years is about four or five per cent. Because [they] have a long tail of products that nobody uses.”

Banks in particular have an excess of underused and under purchased products, according to Thompson, and killing them creates an almost imperceptible hit to revenue. The challenge then becomes migrating the few “annoyed” customers of those products to the core ones.

“You will lose customers by killing products but you make all the other customers happy. So there are risks and benefits.”

Gartner’s advice to slash products and services is reserved for those already near the peak of CX. For those still establishing customer initiative a much more measured approach is needed, Thompson said.

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