According to the latest forecast from research firm Forrester, fewer and fewer revenue streams are safe. Over the next twelve months, companies across B2B and B2C industries will face up to 50 percent higher revenue risk as customers appear willing to switch brands on a dime.
This increased risk is a byproduct of ongoing trends: new technologies that continue to disrupt traditional purchase habits, and an abundance of choice and information that have empowered customers and diminished brand loyalty. But there are also specific challenges straining the relationship between brands and customers that are poised to play out in the coming year, buoying the fortunes of some brands and causing potentially irreparable damage to others.
CUSTOMER EXPERIENCE IS THE LAST FRONTIER FOR DIFFERENTIATION
Previous reports from Forrester have attested to the difficulty that companies currently face around innovation. As products and services in many industries increasingly become commoditized, the vast majority of companies — upwards of 90% — are pivoting towards business models that address the broader customer experience. “CX” may be the last sustainable differentiator, or competitive “moat,” that a company can build around its business, and brands like ELLE, UPS Store, and Hertz are investing in customer intelligence to help them better understand the nuances of rapidly evolving customer preferences.
DISRUPTORS ARE CREATING VALUE ACROSS THE CUSTOMER JOURNEY
If CX represents the last frontier of growth for brands, then the truly disruptive companies are the ones that are looking for ways to create value outside of their core product or service. Two prominent examples of this shift include Dollar Shave Club and Casper, e-commerce startups that have rapidly taken market share away from incumbents by innovating in the realm of distribution and CX, rather than adding a fourth razor or making a mattress 10 percent softer. These are exciting developments for customers, but they also represent unchartered waters for most established companies. What used to be considered a possibly heretical idea — shifting focus away from your existing product offering — has become the blueprint for virtually any promising attempt at innovation.
THE THREAT OF REVENUE RISK IS ALSO A GROWTH OPPORTUNITY
Although revenue risk poses a significant threat for companies in the coming year, it also presents an opportunity for those organizations who have fostered a customer-centric culture. According to the 2017 Forrester report, nearly half of consumers have a high willingness and ability to shift spend, with an additional quarter building that mindset; one bad experience is all it takes to lose a customer, but also all it takes to win someone new over from a competitor.
Given the combined forces of abundant choice, information, and rapid technological change, the only way to maintain a pulse on the evolving tastes of the market is to listen directly to your customer base, uncover those unaddressed pain points and opportunities to add value, and execute on those insights before competitors have the chance to strike first.
For a more detailed breakdown of how customer intelligence can transform revenue risk into a growth opportunity, check out our whitepaper on “The Value of Community Insights Across the Organization.”