3. Convergence on the outcome economy
Product companies have traditionally built their reputations by providing high-quality products at competitive prices, helping retail or commercial customers meet their needs more efficiently or effectively: aircraft that carry more passengers but burn less fuel; tractors that plant hectares of farmland faster; and light bulbs that last longer but consume less energy. In recent years, pressure has been mounting for manufacturers to look downstream to uncover new value creation opportunities by helping customers use their products to meet specific outcomes, such as optimizing transportation of people across long distances, increasing crop yield and providing lighting only when it is needed. This focus on solving the why behind the buy is a key driver in the ongoing evolution from products to services. The increasing availability of smart products will accelerate this process.
This new world is called the “outcome economy,” where businesses compete on their ability to deliver quantifiable results that matter to their customers in a specific place and time. To achieve these goals, companies will increasingly rely on business partners, connected ecosystems, advanced analytics and new data streams from smart products in the field to gain timely insights about customer needs and behaviours.