Experience-led Growth: The modern approach to create value and lift across global industries
Experience-led growth is a strategy that involves creating a unique & engaging experience to drive growth and create value for all stakeholders. This approach to business is becoming increasingly critical in a variety of industries, including financial services, healthcare, automotive, and retail.
Experience-led growth is a business strategy that involves creating a unique and engaging customer experience to drive growth and create value for the customer and the company. This approach to business is becoming increasingly critical in a variety of industries, including financial services, healthcare, automotive, and retail.
There is a growing body of evidence that supports the idea that experience-led growth can create value for businesses. Companies that focus on creating exceptional customer or patient experiences are more likely to be profitable than those that do not and are more likely to grow their revenue and market share while differentiating in their markets.
This article builds on our Industry Focus series which focused on leveraging Digital Touchpoints to fuel how firms are Changing Customer Experiences across the; Global Financial Services, Global Health Insurance, Global Automotive, and Global Retail industries. As we explored the evolving customer experiences and their supporting digital touchpoints across those industries, there’s a bevy of thematic similarities, as well as some importantly different nuances of how each industry is leveraging this new Digital Opportunities to lead their growth. We’ll start by exploring this important similarities and differences below, focused on industrialized markets:
Cross Industry Themes
- Personalization and customization: Across all four industries, there is a focus on personalizing experiences for customers. Companies are leveraging customer data to provide tailored recommendations and services.
- Technology as an enabler: Technology is being used to enable more seamless and efficient experiences for customers. Examples include mobile apps, digital platforms, and AI-powered tools.
- Emphasis on customer-centricity: In all industries, there is a recognition that the customer is at the center of the business. Companies are investing in improving customer experiences to build loyalty and differentiate themselves from competitors.
- Digital Transformation: The importance of digital transformation is another common theme across the four industries. As experience-led growth becomes more important, companies are investing heavily in digital technologies that can help them improve the customer experience. This includes everything from mobile apps and chatbots to virtual reality and augmented reality experiences.
- Data Analytics: Data analytics is also a key theme across the industries. By leveraging data and analytics, companies can gain insights into customer behavior and preferences, and use this information to create more personalized and effective experiences.
Nuanced Industry Differentiators
- Regulatory challenges: The healthcare industry faces unique regulatory challenges that impact how companies can use and share customer data. This can limit the extent to which companies can personalize experiences for customers.
- Physical space as an experiential element: The automotive industry places a greater emphasis on physical spaces, such as showrooms and dealerships, as a key part of the customer experience.
- Omnichannel retailing: While all industries are moving towards omnichannel strategies, the retail industry is particularly focused on providing a seamless customer experience across multiple channels, including online, in-store, and mobile.
- Supply Chain Challenges: The automotive and retail industries are facing unique challenges related to supply chain disruptions caused by the COVID-19 pandemic. These disruptions are leading to delays in production and delivery and are affecting the ability of companies in these industries to provide the seamless experiences that customers have come to expect.
- Competitive Landscape: Finally, the competitive landscape is a theme that is unique to each industry. While all four industries are facing increasing competition from new entrants and disruptors, the specific competitors and competitive pressures vary depending on the industry.
From here, we’ll explore each of the mentioned industries and selectively spotlight how market leaders are taking advantage of those Digital Touchpoints to evolve and enhance their customer and member experiences to drive growth.
Jump to your favorite industry:
Global Financial Services Industry
Spotlight on Global Financial Services
The financial services industry is known for being heavily regulated, complex, and often confusing for many consumers. In recent years, however, financial services firms have begun to embrace experience-led growth, recognizing the importance of creating engaging and personalized experiences for their customers.
Improving the customer experience is a key focus for many financial services companies, with companies recognizing the importance of creating engaging and personalized experiences for their customers. A study by Forrester found that companies that lead in customer experience outperform laggards by nearly 80%.
One way that financial services companies are improving the customer experience is by simplifying their products and services. A study by McKinsey found that 30% of customers would switch to a new provider if the product was easier to understand. Furthermore, a study by Accenture found that 60% of customers would pay more for a simple, seamless experience.
Another way that financial services companies are improving the customer experience is by leveraging data to create more personalized experiences for their customers. A study by Epsilon found that personalized emails have an open rate that is 29% higher than non-personalized emails, highlighting the importance of personalization in the financial services industry.
The financial services industry is known for being heavily regulated, complex, and often confusing for consumers. In recent years, however, financial services companies have begun to embrace experience-led growth, recognizing the importance of creating engaging and personalized experiences for their customers.
According to a study by PwC, 73% of financial services executives believe that customer experience is a key differentiator in their industry. Furthermore, 90% of banking customers would be willing to share their personal data in exchange for more personalized services, indicating the value that customers place on a personalized experience.
Virtual Reality (VR) in Financial Services
Virtual reality (VR), although in its infancy is one technology that is increasingly being used by financial institutions to create immersive experiences for customers. For example, Bank of America launched a virtual reality tool that enables customers to explore financial concepts in a 3D environment in the Metaverse. This tool has proven to be popular among select customers, with a 20% increase in customer satisfaction ratings reported after using it.
A study by Accenture found that 63% of consumers are interested in using VR to explore financial products and services. While 80% of consumers polled believe that VR could help them better understand financial products and services.
Artificial Intelligence (AI) in Financial Services
Another way that financial services companies are adopting experience-led growth is by using chatbots and other artificial intelligence tools to provide personalized financial advice and support to customers. A recent survey found that 80% of consumers would be willing to use a chatbot to handle their finances, highlighting the importance of this technology in the financial services industry (Lee & Kwon, 2017).
A study by Juniper Research found that chatbots will save banks $7.3 billion in customer service costs by 2023. Furthermore, a report by Markets and Markets estimates that the global AI in Fintech market will grow from $1.3 billion in 2018 to $7.3 billion by 2022, highlighting the growing importance of this technology in the financial services industry.
Experiences, Journeys, and Product Simplification
One way that financial services companies are improving the customer experience is by simplifying their products and services. A study by McKinsey found that 30% of customers would switch to a new provider if the product was easier to understand. Additionally, a study by Accenture found that 60% of customers would pay more for a simple, seamless experience.
Another way that financial services companies are improving the customer experience is by leveraging data to create more personalized experiences for their customers. A study by Epsilon found that personalized emails have an open rate that is 29% higher than non-personalized emails, highlighting the importance of personalization in the industry.
Spotlight on the Global Healthcare Industry
Experience-led growth has gained tremendous momentum in the healthcare industry as providers and payers strive to deliver patient-centric care. Healthcare providers are realizing the importance of providing a positive patient experience to increase patient satisfaction, engagement, and loyalty. In this article, we will explore how experience-led growth is creating new ways to create value across the healthcare industry.
The Need for Experience-led Growth in Healthcare
The healthcare industry has been rapidly changing over the years, with an increased focus on patient experience. Patients expect high-quality care that is personalized to their needs, and they want to be actively involved in their care journey. Healthcare providers must find ways to meet these expectations while maintaining high-quality care.
Research has shown that a positive patient experience is linked to improved patient outcomes, increased patient engagement, and higher patient satisfaction rates (Boulding, Glickman, Manary, Schulman, & Staelin, 2011). According to a report by The Beryl Institute, a positive patient experience is associated with better adherence to treatment plans, reduced readmissions, and improved clinical outcomes (The Beryl Institute, 2018). A study published in the Journal of Patient Experience found that a positive patient experience is linked to higher patient loyalty and willingness to recommend the provider to others (Zgierska, Rabago, Miller & Coe, 2015).
Thus, experience-led growth has become essential for healthcare providers who want to remain competitive and provide quality care to their patients.
New Ways to Create Value in Healthcare through Experience-led Growth:
Personalized care is one of the key drivers of experience-led growth in healthcare. Patients want to feel that they are being treated as individuals, and not just as a number. Personalized care involves tailoring treatment plans to meet the unique needs of each patient, considering their medical history, preferences, and lifestyle.
One way that healthcare providers can deliver personalized care is using digital health technologies. Digital health tools such as wearables, mobile apps, and telehealth services can help providers collect data on patients' health and lifestyle behaviors. Providers can use this data to tailor treatment plans to meet the unique needs of each patient. For example, a provider may use data from a patient's wearable device to determine how much exercise they are getting and make recommendations to help them meet their fitness goals.
According to a report by Accenture (2018), 74% of consumers are interested in using digital health tools to manage their health. Thus, healthcare providers who invest in digital health technologies can create value by delivering personalized care that meets patients' unique needs.
Patient engagement is another key driver of experience-led growth in healthcare. Engaged patients are more likely to follow treatment plans, take their medication as prescribed, and participate in their care journey.
Healthcare providers can improve patient engagement by providing patients with the tools and resources they need to manage their health. For example, providers may use patient portals to allow patients to access their health records, schedule appointments, and communicate with their provider.
According to a study published in the Journal of Medical Internet Research, patients who use patient portals are more likely to have better outcomes, including improved blood pressure control and lower cholesterol levels (Lau, Campbell, Tang, Thompson, & Elliott, 2014). Additionally, patients who use patient portals are more likely to be engaged in their care and have higher patient satisfaction rates.
Telehealth services have become increasingly popular in recent years, particularly in the wake of the COVID-19 pandemic. Telehealth services allow patients to receive care remotely, without having to visit a healthcare facility.
Telehealth services create value by improving access to care, particularly for patients who live in rural or underserved areas. Additionally, telehealth services can help healthcare providers reduce costs by eliminating the need for patients to travel to a healthcare facility.
According to a report by Deloitte (2020), the use of telehealth services is expected to increase by 64.3% in 2020 due to the COVID-19 pandemic. This surge in telehealth usage has demonstrated the potential of telehealth services to create value in healthcare.
The rise of healthcare consumerism has also contributed to the need for experience-led growth in healthcare. Patients are increasingly taking an active role in their care journey, and they expect to have a say in the care they receive.
Healthcare providers can create value by providing patients with greater control over their care. For example, providers may allow patients to schedule their own appointments, choose their own providers, and customize their treatment plans.
According to a report by Accenture (2018), 77% of patients are interested in using digital tools to manage their health, and 63% are willing to switch providers to gain access to digital health services. Thus, healthcare providers who invest in digital health tools, high quality digital experiences, and allow patients greater control over their care can create value by meeting patient expectations.
Spotlight on the Global Automotive Industry
The global automotive industry is undergoing a transformation, driven by changes in consumer behavior and technology. As a result, experience-led growth has become essential for automotive companies that want to remain competitive and meet the evolving needs of their customers and a dynamic regulatory environment that is rapidly moving towards de-carbonization and renewable energies. Here we will explore how experience-led growth is creating new ways to create value across the autos industry.
Personalized experiences are becoming increasingly important in the automotive industry. Customers are looking for vehicles that reflect their individual needs and preferences. Automotive companies that can deliver personalized experiences can create value by providing a superior customer experience.
According to a report by Deloitte (2020), 80% of customers are willing to pay more for a personalized experience. Additionally, a study by Accenture found that 75% of customers are more likely to purchase from companies that offer personalized experiences (2018).
Automotive companies can deliver personalized experiences in a variety of ways. For example, they can allow customers to customize their vehicles with various options and features. They can also use data to deliver personalized recommendations for maintenance and repairs.
Connected vehicles are another area where experience-led growth is creating new ways to create value. Connected vehicles use data and technology to provide a range of features and services to drivers and passengers.
Connected vehicles can create value by improving safety, efficiency, and convenience. For example, connected vehicles can provide real-time traffic updates, automatic emergency services, and remote vehicle diagnostics.
According to a report by McKinsey (2016), the market for connected-car services is expected to reach $250 billion by 2020. Additionally, a study by Capgemini (2018) found that 54% of customers are interested in connected-car services.
Automotive companies can create value by investing in connected-vehicle technology and services. By offering a range of connected services, they can differentiate themselves from competitors and meet the evolving needs of their customers.
More specifically, Battery Electric vehicles (BEVs) are another area where experience-led growth is creating new ways to create value in the automotive industry. EVs are becoming increasingly popular as consumers become more concerned about the environment and the cost of fuel. In markets like the U.S. BEVs have crossed above 6% market share and accelerating towards a 50% new BEV vehicle adoption rate of 50%. Meanwhile, in Q1 2023 market share of BEVs is on track for 83.1% penetration and if we combine plug-in hybrids that market share increases to 90.1% of new vehicles sold (Randall, 2023).
EVs can create value by providing a more sustainable and cost-effective mode of transportation. According to a study by McKinsey (2019), the total cost of ownership for an EV is expected to be lower than that of a traditional internal combustion engine vehicle by 2025.
Additionally, a report by Bloomberg NEF (2018) found that EVs are expected to account for 57% of global passenger car sales by 2040. This growth in the EV market presents an opportunity for automotive companies to create value by investing in EV technology and services.
Shared mobility is another area where experience-led growth is creating new ways to create value in the automotive industry. Shared mobility refers to the sharing of vehicles between multiple users, either through car-sharing or ride-sharing services.
Shared mobility can create value by improving access to transportation and reducing the cost of ownership for consumers. According to a report by Frost & Sullivan (2018), the global car-sharing market is expected to grow at a compound annual growth rate of 35.2% from 2017 to 2025.
Lastly, a study by KPMG (2019) found that 63% of consumers are willing to use ride-sharing services instead of owning a vehicle. This trend towards shared mobility presents an opportunity for automotive companies to create value by investing in car-sharing and ride-sharing services.
Spotlight on the Global Retail Industry
Experience-led growth is transforming the global retail industry by creating new ways to create value for customers. Retailers are realizing that they need to provide a personalized and immersive experience to stand out in an increasingly crowded market. In this section, we’ll explore the ways in which Experience-led growth is driving innovation in the global retail industry and the key factors that are contributing to its success.
Personalization is a key driver of Experience-led growth in the retail industry. Customers expect a personalized experience that caters to their individual needs and preferences. According to a study by Accenture (2018), 91% of consumers are more likely to shop with brands that recognize, remember, and provide relevant offers and recommendations. It’s significant to note the increase in the percent of consumers who what personalization in this section when compared to the previous sectors discussed in this article. Retailers are exploiting this opportunity by using data and analytics to personalize the shopping experience for customers. For example, Amazon uses customers' browsing and purchase history to provide personalized product recommendations, while Sephora's Virtual Artist app uses augmented reality to help customers find the perfect shade of lipstick.
Another trend driving Experience-led growth in the retail industry is the convergence of online and offline channels. Customers are using multiple channels to research and purchase products. According to a survey by Deloitte (2020), 60% of customers use digital devices to research products before making a purchase, while 78% of customers prefer to shop in stores for immediate product availability and the ability to touch and feel products. Retailers are integrating their online and offline channels to create a seamless shopping experience for customers. For example, Nordstrom like many retailers now offers in-store pickup for online orders and allows customers to reserve items online and try them on in store.
Digital Capabilities & Technology
To say that the use of technology is also driving Experience-led growth in the retail industry, would be an understatement. Retailers are using technologies such as augmented reality (AR), virtual reality (VR), and chatbots to create immersive and interactive shopping experiences. According to a study by KPMG (2019), 48% of retailers are using augmented reality to enhance the shopping experience, while 42% are using virtual reality. For example, IKEA's Place app uses augmented reality to allow customers to visualize how furniture would look in their home before making a purchase.
In addition to personalization, moving beyond omni-channel to channel convergence, and technology, sustainability is another key driver of Experience-led growth in retail. Customers are increasingly concerned about the environmental impact of their purchases and are looking for retailers that prioritize sustainability and closed loop product development. According to a study by Accenture (2021), 60% of consumers are willing to pay more for sustainable products. Retailers are responding to this trend by implementing sustainable practices in their operations and product offerings. By way of example, H&M's Conscious Collection uses sustainable materials such as organic cotton and recycled polyester.
COVID-19 Led Accelerated Transformation
As with many industries the COVID-19 pandemic has accelerated the adoption of Experience-led growth in retail. With many customers avoiding physical stores, retailers have had to find new ways to provide a personalized and immersive shopping experience online. According to a survey by McKinsey & Company (2020), 75% of customers have tried a new shopping behavior during the pandemic, such as curbside pickup or online grocery shopping. Retailers are adapting to these changes by investing in e-commerce platforms, digital marketing, and contactless payment options to name just a few.
Experience-led growth is also creating new ways to create value in the retail by providing a personalized, seamless, and immersive shopping experiences. Personalization, channel convergence, technology, sustainability, and the COVID-19 pandemic are all driving this trend. To succeed in the Experience-led retail landscape, retailers must prioritize the end-to-end customer experience and invest in the technologies and practices that will help them deliver it.
Experience-led growth is driving innovation and creating new ways to create value across industries and geographies, including financial services, automotive, healthcare, and retail. In the financial services industry, customer experience is becoming increasingly important, with banks and other financial institutions investing in digital technologies to enhance the customer experience and meet changing consumer expectations. The healthcare industry is also undergoing a transformation, with a focus on patient-centric care and the use of digital technologies to improve access and convenience for patients.
In the automotive industry, experience-led growth is driving a shift from traditional car ownership models to more flexible, sustainable, and personalized mobility solutions. The integration of technology and data is enabling automakers to offer new services and experiences, such as connected cars, software marketplaces, and shared mobility options. Finally, in the retail industry, customer experience is key to success, with retailers investing in seamless channel integrations, personalization, and other technologies to enhance the shopping experience and drive sales.
Overall, experience-led growth is revolutionizing industries and creating new opportunities for businesses to create value for their customers. By adopting a customer-centric approach and investing in technology, businesses can stay ahead of the curve and deliver experiences that meet and exceed customer expectations.
Here at Mesh Digital, LLC we're fortunate to have helped global clients, across sectors define and realize the value driving outcomes for our clients leveraging Experience Led approaches. From performing research, to developing Personas, Journeys, or Service Blueprints, to bootstrapping CX teams, we bring the power of real-world experience to bear on behalf of our clients. To unlock the potential of a modern business for your firm fueled by Digital Strategies and Tech, please feel free to reach out.
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