This is the time of year when analysts and consultants make predictions about the upcoming year. The folks at Trendwatching.com have just released their Top 11 Consumer Trends for 2011. Almost seems like a Spinal Tap moment. Anyway, we at OVO are no exception. Each year we publish predictions based on what we believe will happen in the upcoming year. You can register for the email newsletter here. In this blog post I’m going to explore one trend we think will be important, and why you should be acting now.
As you may have guessed from the title of the blog post, we believe customer experience innovation is one of the most compelling opportunities in 2011. This is based on a number of market conditions, trends and innovation needs. First, as anyone paying attention to the economy can tell you, consumer spending is down as people pay off their mortgages, credit cards and other debt. That doesn’t mean that people won’t spend, just that each purchase matters a little more than it did before. Therefore, firms that improve the customer experience, not just in purchasing but in all aspects of the customer’s engagement with your product, service or company will benefit. Increasingly, people are seeking more than a purchase. They are seeking a relationship with a brand or a company and expect to be engaged and rewarded by the relationship.
Beyond what customers want, however, is what firms can create effectively and with lower costs. New product innovation is risky and expensive. The vast majority of new products that reach the market fail to return the investments made to create them. In this current market, few new big bets are going to be made on new products or services. But experiences – how we interact with a customer or a consumer, in all channels and touchpoints – that can be done with far less risk and less cost. Innovation around a customer experience is less risky and has less cost associated with it. Therefore it will be easier to implement in this economic environment. So we have a coming alignment – consumers seeking more engagement and “meaning” in their relationships and acquisitions while firms seek to sustain innovation with lower costs and less risk.
There’s a reason customer experience innovation isn’t more ubiquitous, however, and that’s because while it’s not expensive to accomplish, it’s not easy to accomplish. Customer experience innovation requires understanding what customers value in the “touchpoints” and interactions with your products, services and your firm, and placing the right investments on the most important and valuable touchpoints. Customer experience needs to consider each “channel” a customer may use to interact with your firm: retail locations, telephone, web, email, direct mail, advertising, etc. The total customer experience cuts across a number of vertical silos within many organizations, including sales, marketing, products and customer support and service.
Note that you don’t have to be perfect in all situations and in all channels, and you don’t have to do everything internally. Your customers and clients will work with you to identify weaknesses in customer experience if you are genuine in your intent to improve their experience and let them help you improve those touchpoints.
Innovation matters, but right now and in the near future innovation focused on improving customer experience matters more. The combination of reduced spending on the customer side, compounded by a reduction in conspicuous consumption and an improved sense of meaning and relationship, and a need for innovation on the business side while holding costs low, means that customer experience innovation sits in the sweet spot of those two intersecting sets. Start placing your bets now, because customer experience innovation should be in high demand in 2011.
Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.