The Experience Economy Comes of Age
by John Watton
Posted on 04-17-2018
1998 was a vintage year. The Spice Girls topped the charts, France hosted and won an incredible World Cup, and Bill Clinton issued one of the most famous denials in history. In July of that year, marketing history was made too, when Joseph Pine II and James H. Gilmore published an article in the Harvard Business Review where they coined the phrase ‘the experience economy’. In their article, the authors outlined what they saw as the next economic era following on from the agrarian, industrial and service economies of the past. In a new experience economy, the authors argued, businesses would sell memories—their products would be experiences. Well, twenty years on from that article, it looks like Pine and Gilmore’s predictions were bang on the money.
Experience business defined
What is an experience business? Put simply, it’s a company that understands that the way in which customers appreciate a brand has changed dramatically. In the old “Mad Men” days it was simple: a marketer hooked up with an agency, created a cool ad and then pinged it out on TV. Job done. Today, however, this approach no longer guarantees success. Digital technologies have shattered the media landscape into a thousand different fragments, while content saturation has eaten away at the attention spans of media consumers. The old ways of marketing simply aren’t enough on their own to get cut-through.
This is where experiences come in. Leading companies now realise that a brand isn’t about how we present a product/company—it is the product/company. There’s no difference between the marketing promise and the brand experience because the promise is directly fulfilled in the experience. This is a huge shift and one that puts the marketing team right at the heart of the business: after all, if the brand is the experience, then marketing needs to help map out the customer journey and inform their company’s business models. In effect, marketing needs to become Experience Makers.
The benefits of experience business
Now, this isn’t all fluffy theory. Companies that become experience businesses have been shown to do measurably better than traditional businesses. In our recent Digital Trends Survey, for example, we found that organisations that commit to the customer experience are nearly twice as likely to have exceeded their top business goal by a significant margin (20 percent vs. 11 percent). Across the board, experience businesses consistently show stronger revenue, increased customer loyalty, stronger brand advocacy and higher levels of repeat business.
This shouldn’t come as a surprise. If you think about it, experience is what digital disruption is all about. Netflix didn’t destroy Blockbuster because of technology, it destroyed Blockbuster because it gave film lovers an exponentially better way to watch films. The same with Uber and the taxi industry, AirBNB and the holiday rental industry—every single darling of the digital revolution has won its place at the top because they’ve created an amazing experience.
What’s more, experiences are where the money’s at. In the UK for example, Barclays’ Q1 2017 Consumer Spending Report showed that consumer spending was up because people are ‘splashing out on the experience economy’. People want good feelings and fun times more than widgets – if you fail to give these to them, then you risk losing out.
What you need to do
So, how can your business become an experience business? This is one of the key questions we’ll seek to answer at our EMEA Summit this May, where in over 140 sessions we’ll tackle the issues behind becoming an Experience Maker. It’s a question that’s very close to our hearts here at Adobe, as we’re currently working closely with many of the world’s leading brands to help them transition to the experience economy.
Perhaps the most important lesson we share is that to reinvent customer experiences successfully, you need to be able to engage people with superbly designed content that’s personalised, consistent and integrated across every channel. A truly compelling experience is one that’s seamless and centred on customers as individuals.
Take the Sydney Opera House as an example. They’re using Adobe Experience Manager to completely renew the visitor experience. They’ve supercharged their analytics efforts to better understand their customers and are using this data to create omni-channel content that’s curated to the tastes and needs of individuals. What they’ve done is create a personal one-to-one relationship between them and their customers, and it’s this sort of personal experience that we consumers will keep coming back for.
This level of customer focus and integrated content delivery can only be achieved by coordinating elements such as experience design, customer intelligence and cross-channel delivery. Every part of your business holds a piece of the customer experience puzzle – the secret to success is putting all these pieces together to achieve finish the puzzle and achieve a complete view of the customer. From there, you can bring together exceptional content with robust data and analytics to deliver amazing, impactful customer experiences.
New business for a new economy
If Pine and Gilmore were right in their prediction of a new experience economy – and I think they were – then it’s important not to understate the importance of this change. Experience business isn’t just a new marketing model; if we’re entering a new economy it represents nothing less than a macroeconomic structural shift. Market disruption is the growing pains of this shift; and as you know it’s already claimed the scalps of many once-great businesses that failed to adjust. Our advice to you is therefore simple but urgent: if you aren’t placing customer experiences at the very centre of everything you do, then you need to start. Doing nothing risks being left behind.
Topics: Digital Transformation, brands, Digital Trends, UK, UK Exclusive, Digital EMEA