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