Earlier we stated that digital leaders appear to be more focused on providing greater value to customers – helping them get more out of the products they’ve already sold them – than on trying to sell them on products they don’t currently have. Data on how our survey participants allocate their digital investments by business function (marketing, sales, R&D, production and so on) further makes this case.
Leaders will spend far less of their digital budgets on marketing and sales than followers will from 2014 to 2017. Some 36.6% of leaders’ investments will go to these two areas. In contrast, followers plan to spend 42.0% of their digital budgets on marketing and sales.
So on which functions will leaders spend more than followers? Leaders plan to invest a bigger percentage of their digital budgets on R&D (14.9% vs. 14.0%), manufacturing/production (13.7% vs. 12.2%) and ‘other’ functions (9.2% vs. 5.7%). (See Exhibit IV-11)
Exhibit IV-11: Leaders Spend a Smaller Proportion of Digital Investments on Marketing and Sales
So why is this case? Related survey data suggests that leaders are more interested than followers in digital investments that help them improve their offerings and provide more customer value:
- 36% of leaders are now able to make software-related improvements to products while customers are using those products. Only 24% are followers can do this currently. Nearly twice as many leaders (45%) as followers (25%) can help customers get more value from their products – e.g., to help them understand more about the features of those offerings.
- More leaders (39%) than followers (26%) report they’ve improved customer support of their products when those products stop working.
- Nearly twice as many leaders (30%) than followers (17%) report having gained the ability to understand deeply why customers chose their products over competitors’ products in the first place.
Perhaps superior responsiveness to customer issues is a key factor that helps digital leaders generate more revenue from their digital products and more overall revenue from their digital initiatives than followers can. This pattern plays out in small ways as well. About 39% of leaders said their digital initiatives enable customers to automatically reorder their products, while only 24% of followers are able to do so.