For the world’s largest companies, achieving sustainable profitable growth relies on strategies that generate value by improving the experience of existing customers.
Airlines, insurers, telcos, utilities, and other major incumbents can at times neglect their most powerful competitive advantage – their large existing customer bases. However, a shift in focus can help achieve significant growth by unlocking new revenues from these existing customers.
By providing a distinctive customer experience (CX) to entice existing customers, these companies can drive profitable growth that their most nimble and disruptive competitors cannot emulate.
At McKinsey, we call this “experience-led growth.” Companies that adopt this strategy have the boldness to rethink their corporate culture and operating models, and to reinvent their approach to service.
The companies that get growth right deliver 30 percent higher total returns to shareholders (TRS) and, on average, nearly double the shareholder value than their industry peers. As one CEO put it:
“It’s amazing the things you can do when you shut up and listen to your customers.”
McKinsey analysis has shown that companies that are leaders of CX achieved more than double the revenue growth of “CX laggards.” Further studies have also concluded that successful experience-led growth strategies can substantially increase cross-sell rates, boost companies’ share of wallet, and improve customer satisfaction and engagement.
These strategies rest on setting clear growth aspiration and purpose. It means transforming the business through redesigning customer journeys, products, and services, as well as enabling change by shifting organizational cultures and building new capabilities, among both executives and frontline staff.