Businesses need to focus on experience innovation
For today’s most innovative companies and brands, the product isn’t the star. In fact, many 21st century businesses don’t have ‘products’ at all — Spotify, Airbnb and Uber provide an experience, not a product. Now, more traditional businesses in a wide range of sectors from banking, to automotive, to consumer goods, are realizing that thinking less about the product and more about the experience is the key to playing a more meaningful role in people’s lives.
The shift from product to experience has partly been driven by the increasing challenge of differentiating based on product functions and benefits. Thanks to greater transparency and outsourced supply chains, technological advancements are matched or bettered much more rapidly than before. Therefore, businesses need to look elsewhere to create meaningful differentiation. Creating experiences that people love, and that give them powerful reasons to invite you into their lives, is the key to driving growth. Furthermore, the experience innovation opportunity is fueled by the cloud of digital information that now surrounds us (and our connected products) – new service innovations such as payment applications in banking, content services like Amazon Prime in retail, B2B services like proactive product diagnostics and self servicing, etc. Experience innovation opportunities are everywhere.
How should businesses think about experience innovation now and in the future?
Look at the whole ecosystem, not just where you play today
Finding innovation opportunities means taking a more holistic standpoint, looking beyond your specific product category at the whole potential ecosystem and the experience created by linking it end-to-end. To their detriment, many businesses and brands compartmentalise the different aspects of this ecosystem and ownership of customer touchpoints is often split into siloes, which is limiting. Only by seeing your current (and potential) offering as one integrated whole will you address the fundamentals at the core of successful experience innovation.
Connect the experience under one brand, not individual breakthrough ideas
Great innovation isn’t just about single ideas owned by individual departments, but in delivering a connected brand journey. Innovation coming from one department at a time won’t suffice because true innovation only comes when the entire business is interconnected and different perspectives brought together.
British Gas, for example, understood that its operational communications to customers — and particularly its energy bills — have as much impact on how customers view the company as its marketing communications. The company looked across every internal function to completely innovate these critical touchpoints, exemplified by a ‘world-class bill’ that’s clear, intuitive and personalised. This couldn’t have been accomplished without the whole organisation collaborating in a coherent approach to tens of thousands of different communications, to create something new, better and focused on improving an unloved experience.
Be customer-driven, not customer-led
Customers’ needs should lie at the heart of innovation, but brands can’t rely on customers dictating what they need. Often companies must take a leap of faith to drive new behaviour and be comfortable with a degree of risk. Inevitably, there will be successes, and there will be failures. But truly successful experience innovation comes when there is openness to testing new ideas for customers and accepting that not every idea will work. Being in a state of constant beta, carefully managing how ideas are tested and refined while allowing for a degree of imperfection, means companies learn faster, manage risk better and stand out to consumers.
Create delight and surprise, not just new products
In-the-moment interactions with products and services are key for any brand and business, but experiences before and after the interaction are often more exciting and compelling for consumers. Businesses need to remember that consumer satisfaction is as much about how we look forward to and look back on an event as it is about the event itself. To make customers happy, brands must tap into both the joy of anticipating an experience and the warmth of remembering it.
While brand loyalty and long-term growth are increasingly challenging to achieve, experience innovation, and the possibilities it reveals, provide a rich avenue for almost any business and a new way to achieve meaningful differentiation and growth.
Article originally published on London Loves Business on July 24, 2015.