Over the past few decades, the landscape of the Fortune 500 has changed immensely. Reflecting on this transformation, Alan Murray, the founder of Fortune, offers an intriguing perspective. “If you go back 50 years and you look at the balance sheet of Fortune 500 companies in the 1970s, over 80 percent of the value came from physical entities – from oil in the ground to inventories on the shelves,” he says.
But he points out that this is no longer the case. In today’s digital age, more than 85 percent of the value of the Fortune 500 is tied up in intangibles such as intellectual property, software, and brand value. At its core, brand value epitomizes the emotional bond a brand shares with its customers. The emphasis has shifted from the tangible to the intangible; from concrete assets to human emotion and ingenuity. As Murray explains, “Ingenuity is the human capacity to craft innovative solutions to enhance life.”
This transformation is evident in how businesses operate today. With the digital boom of the 2000s, the essence of what businesses sell has morphed drastically. Companies are now more inclined to sell access to ecosystems rather than standalone products. Take Apple, for instance. While it sells tangible products like iPhones, a significant portion of its revenue springs from its service ecosystem – the App Store, iCloud, and Apple Music.
Google, Meta, and many financial institutions primarily trade in services and digital commodities, underscoring the departure from physical goods. The primary commodity? The relationships companies foster with their customers.
The conclusion is clear. Increasingly, for the Fortune 500, the experience is the product – and the ideas of the people who work there are extremely valuable. The importance of customer experience is now center stage. And recognizing this evolution is crucial for businesses to thrive in this new age.
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Blake Morgan is a customer experience futurist and the bestselling author of The Customer of the Future. For regular updates on customer experience, sign up for her weekly newsletter here.