The experience economy is upon us.
All the research points to the fact that people increasingly value the experience of a thing more than the thing itself. The adventure of hiking the Inca trail is worth more than buying a new car. The Uber experience is so much better than standing in the rain trying to hail a taxi. And the list goes on.
What does this means for businesses? No matter what product or service you’re promoting, the experience of your brand is what matters the most and is the key to success.
The experience economy is here and you have a choice — be a participant or be a spectator. Choose the latter and you will most likely suffer the fate of disruption like Blockbuster, Borders and, who knows, maybe Sears.
Enter the Third Wave
At the Adobe Summit in Las Vegas last month, the key theme was the emergence of the new experience business wave. Essentially, speakers argued that business technology has seen two previous waves: the back office wave typified by ERP systems and a second wave, automating some of the sales process using tools like CRM.
We are entering the third wave — one that takes advantage of a new generation of marketing cloud platforms and systems to automate the customer experience.
I fully agree with this assessment, but I think it falls short in its framing only in terms of software and processes. The experience economy transcends business. It represents fundamental changes in the way economics, commerce and culture interact and — most importantly — the way people interact with each other, communities and brands.
What Makes Us Happy?
Researchers around the world have been hard pressed to answer that topic as of late. The general consensus appears to be that the accumulation of possessions does not make us happy. It is how we use things that make us happy.
This shift from consumerism to experiencism (let’s see if this new word takes off) will have profound impacts on every facet of society. It has already brought about the rise of the sharing economy.
Tool sharing clubs are sprouting up across the country. People not only rent their homes occasionally (VRBO turned 20 last year), but now share their homes with Airbnb. The economic impact of reducing sales of personal power tools in half has the potential to redefine the industry. Airbnb lists over 20,000 rentals in New York City alone. In Seattle, Uber and Lyft drivers outnumber taxis.
At a more fundamental level, sharing is less about sharing products or services and more about sharing experiences. Every time I dine out I see people taking pictures of their food and sharing it before they’ve taken a bite. The explosion of selfies testifies to the importance of sharing.
Some pundits even claim that if an experience isn’t shared, it isn’t real. If an experience happens in the middle of a forest and there’s no one there to see it, did it make a noise?
How Business Needs to React
Start by acknowledging the pervasiveness of experience.
No matter what product or services your company sells, what you are really selling is the experience of engaging with your brand. That experience starts with becoming aware of the brand, hearing about it from advertising, but more likely from friends, family and our increasingly broad social communities.
The experience continues through the entire purchase process, but it doesn’t stop there. The use of a product or service is an experience, getting support for it, talking about it with others and making the decision to recommend it (or not), are all part of the overall experience. And to be successful, brands need to deliver great experiences at every step of the journey.
How does a brand do that? Well it starts with making a commitment to become customer-centric. It requires an evaluation of a company’s business model, organizational structure and approach to customer engagement. If the customer is not put at the center, the brand will never be able to deliver differentiated customer experiences.
Next it requires a new way of looking at customers. One size fits all went away with Mad Men. Customers expect a brand to know who they are, what they want and how they want it. They expect a personalized experience and increasingly customers expect brands to not only know who they are and what they like, but to understand the context of the experience in the moment and respond accordingly.
We call it real-time marketing. Consumers just call it, “getting me.”
And finally, it requires the integration of people, process and technology. Luckily, there have been such great advances in marketing and business technology in the last five years that it is now possible for brands to make good on their customers’ expectations. It is the process of combining people, process and technology to deliver personalized and contextually relevant experiences that we refer to as digital transformation.
So where to start? Begin by understanding the importance of experience. Then organize your business around delivering experiences and leverage the great technology that’s out there to help you do it. In the end it will be up to you if your brand delivers a Nordstrom experience or a Comcast one.