Experience-Driven Manufacturers Realize Real Returns
It used to be that manufacturers focused on making things as efficiently as possible, and those things were usually sold by someone else. But that’s changing. The age of the customer has hit the world of manufacturing full-force, making standard ways of working less effective — if not obsolete.
Manufacturers are increasingly making products that are IoT-enabled, and many are using that connection to provide services directly to the end customer. They’re also using IoT data to understand people who use their products. With skyrocketing customer expectations, customer-driven improvements are all but a necessity for survival. At the same time, expectations are also rising among manufacturers’ traditional clients — distributors, retailers, and other critical partnerships in their ecosystem.
According to those working on the front line, the key to meeting all of these customer expectations is experience. In a new Forrester report commissioned by Adobe, “The Business Impact of Investing in Experience: A Spotlight on Manufacturing,” leaders at manufacturing companies ranked addressing rising customer expectations as their top business priority.
For good reason, too. According to the report, manufacturers that met Forrester’s criteria for an “experience-driven business” outperform those that don’t across numerous key indicators of success, often by a large margin. For example, in customer experience metrics, experience-driven manufacturers outperform all other manufacturers by 1.6x. In customer loyalty, that number is 2x. And they’re increasing orders by 12 percent a year, compared to 7 percent for everyone else.
Start with customer commitment
According to Forrester, achieving experience-driven status in manufacturing requires people, processes, and technology that revolve around the customer. The company’s culture should be based on customer obsession. Processes should focus on continuous improvement through customer feedback. Technology should empower that customer-obsessed culture and enable those customer-centric processes — plus be the driving force behind customer experiences, both digital and physical.
Even how manufacturers define and measure performance should be based on customers. For example, one company Forrester surveyed defined success as creating value for the customer. With that in mind, they created a customer-centric scorecard to measure overall program effectiveness. This approach extended all the way to individual employee contributions.
Be grounded in data, but be careful with it
Forrester found that experience-driven manufacturers understand the importance of data. For example, they’re much more likely to dedicate budget to improving cross-channel experiences through customer analytics. Many are also taking on the challenge of customer data siloed in different functions and departments — and uniting it onto a single platform is a key priority.
Experience-driven manufacturers often see IoT as a key source for data. For example, a leading elevator manufacturer leverages usage data from its elevators to position them on building floors with the highest expected traffic throughout the day. That reduces waiting time for riders, which is a better end customer experience.
However, the rapid growth in IoT has led to new concerns over data and systems security. Many IoT devices and ecosystems are vulnerable to attacks, leaving a door open to a wide variety of negative outcomes. But experience-driven manufacturers seem aware of this, and cite security concerns as a challenge at nearly twice the rate of all other manufacturers.
Make the entire journey great
Among all the manufacturers Forrester included in their research, 54 percent said they’re focusing on the entire customer journey, from acquisition to loyalty. Half of them said they’re dedicated to cross-channel experiences. This shows that, in general, manufacturers are looking to connect directly with customers at every stage of their journey.
But experience-driven manufacturers are ahead of the curve. They’re much more likely to already have budget dedicated to improving customer experiences across many touchpoints. For example, 76 percent of experience-driven manufacturers have a specific budget line item for cross-channel experience design, compared to 50 percent among all other manufacturers. The gap is even greater in experience design for physical locations — executive briefing centers, for example. Experience-driven manufacturers understand that, for customers, the journey isn’t just digital.
Embrace a mix of product and service
For manufacturers accustomed to slim margins on products, there’s obvious appeal in finding new revenue through services. But for those services to have impact on the bottom line, Forrester notes, manufacturers must focus on the value they deliver to customers.
Once again, IoT provides opportunities for this — as simple as a proactive product service or as complex as GPS-enabled farm equipment that increases yields. But it isn’t just about IoT. For example, an aerospace company that participated in the report worked with a UX design firm to create a user-focused support service and product portal.
Wait, there’s more
Few ecosystems are as complex as those for manufacturers. They can involve everything from global supply chains to multifaceted partner marketing, in-depth product engineering to e-commerce design. That means achieving experience-driven manufacturer status takes time, commitment, and investment. It also takes understanding.