THE EMERGENCE OF THE EXPERIENCE ECONOMY
THE NEXT BIG THING:
THE EMERGENCE OF THE EXPERIENCE ECONOMY
Experiences are today’s social currency and capital. We are what we experience, and what we are we want to share with our friends and communities. We’re living in the times of curated memories and for businesses shining bright means providing memorable experiences for our customers. Goods and services are no longer enough - what consumers are willing to pay for in the future are transformational and memorable events.
Experience provision can be perceived as the fourth economic offering along with commodities, goods and services. Staging experiences is what will keep you ahead of the competitors, both in consumer and B2B business. An experience can seem abstract but it is as actual an offering as any service or product. Experiences can be linked to other offerings as well, but to achieve the full potential of staging experiences, you need to step up your game and start designing the kind of experiences customers are ready - and happy - to pay for. The transition from service to experience economy can be compared to the latest economic shift from the industrial to the service economy - the one we’re greatly influenced by today. However, in order to keep your (business’s) head above the surface, you will need to turn your offerings up a notch and start creating memorable events.
MILLENNIALS FUEL THE EXPERIENCE ECONOMY
Especially young consumers (millennials in the front row) have had enough of material things. They don’t need to own everything - a house, a car, a lawn mower - but instead, they want to explore experiences and live life to the fullest, without burdening themselves with the responsibilities that come with owning stuff. Success is no longer measured by the possessions but by the amount and quality of experiences. After all, we are the sum of our experiences.
What does the new generation want then? They want to engage in meaningful activities, big and small, and gain stories to tell. They want to go out and see the world, focus on purpose-driven work and foster relationships with others. Climbing the corporate ladder is not the only way to seek fulfilment - young generations value the freedom of work. Access is valued over ownership and things to do over things to have and showcase. Renting an apartment in the heart of a big city can be perceived as an experience as well as having easy access to a driver without owning a car. Such freedom is a trend we don’t see going anywhere anytime soon.
What does the growth of The Experience Economy mean for business?
The most successful companies in the future are the ones that can become more experience-focused. There’s an increased demand for experiences instead of stuff to own. The trend of young people being more willing to pay for memorable events and meaningful encounters is in close relation to the growth of the experience economy. The rise of the experience economy has already changed the way we live our lives, even though it might go unnoticed. For example, instead of a regular night out we prefer adventurous bar crawls, we’re in love with the growing number of cat cafe’s around the world and we’re happy to pick our own locally grown organic veggies straight from the farm - and the list goes on. But it’s not only the experiences of activities, it’s also the experiences that are wrapped around traditional products and services.
For businesses selling products and services, the experience economy means looking past the traditional ways to attract and keep customers. It means designing exciting experiences around the traditional offering to engage them. Resources need to be allocated for creating appealing and personalised customer experiences. The Path to Happy Customers study shows that 83 % of consumers pay as much attention to how brands treat them as on the product they’re selling. The research also reveals that 73 % are willing to pay more for products if they love the brand. Quite surprisingly, 43 % of customers are even ready to knowingly buy an inferior product from a brand they have an emotional connection with. This emphasises the fact that customer experience really is a big deal.
Companies need to strive to design experiences that customers feel are worth the price. The design, marketing and delivery of experiences is as vital as they are for products and services. Today, customers perceive experiences as more important than the product your company is selling. That’s almost old news since anyone who’s been attuned with the CX trend is well aware of it. However, many companies have yet to realise the full potential of investing in developing kick-ass customer experiences. Even though it has been shown to be an amazing revenue driver. Read more about delivering extraordinary customer experiences here.
Why isn’t everyone on board with this then? Maybe because many companies don’t thoroughly understand what is it that their customers want. Perhaps they think that their current offerings meet their customers’ needs if they’re meeting their sales objectives. Or maybe they just don’t know how to measure customer experience with the right metrics - or measure it at all.
And what if you think all this is just a passing fad? Well, you would risk losing customers to competitors, decreased customer loyalty and retention as well as risking your reputation, to name a few. So there really isn’t good excuses not to start focusing on delivering customer experiences to remember.
How does the experience economy affect marketing? AND VICE VERSA.
Modern marketing is aiming to exceed customer expectations - all the way through the journey the customer travels with your brand. When building brand affinity, you need to give the people what they want. And what they want is memorable experiences to move them to the core, something to identify and connect with as well as something to share. Experience marketing is not so different from the marketing of products or services. They are all about offering your customers something more, something they didn’t yet know they needed or wanted. If you succeed in providing individual and meaningful experiences to your customers, you can be sure that they’ll be thrilled to share that with their community and become brand evangelists in the process.
Of course, there needs to be a product or a service to build the experience around, no matter the level of experience your company offers. Even if you have a great product, no one will buy it unless you focus on delivering memorable customer experiences. There are many ways to create amazing customer experiences, but first, you need to understand where your customers are coming from: why, how and when are they engaging with your brand. Once you’re on track, start looking to create new value with every interaction the customer and prospect have with your brand.
Want to know more? Read how to exceed your customers’ expectations.
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