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Experience Economy: What can Organizations do to Thrive?

Times are changing and so should the mindset and thinking patterns. The shift from manufacturing to a service economy has already brought about sea changes in the way businesses interact with customers, suppliers, partners, employees, and the overall eco-system. If anything, the after-effects of covid-19 have further fueled the need for more changes to enhance customer experience. The focus is thus shifting to Experience Economy.

The experience economy is not a new concept. It is characterized by “an experience (that) occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event. Commodities are fungible, goods tangible, services intangible, and experiences memorable” (Pine and Gilmore, 1998).

What it means is that making the customer experience memorable is of paramount importance in the new normal. The value is created by focusing on what experience means to the potential or target customer audience. Please read more on customer experience and customer disappointment experience within the following article:

Customer Disappointment Experience (CDX): Is it the Next Frontier in CX Domain?

One of the key mechanisms for making the customer experience memorable is to connect with customers at an emotional level. Organizations can do a number of things to achieve that which include (but are not limited to) understanding emotional triggers, integrating emotional benevolence in product/service design, and following up to assess whether the organization was able to emotionally connect with customers. Specifically, what do organizations need to do to thrive in the Experience Economy?

1) Develop a plan for delivering emotional benevolence

Organizations need to have a tangible strategy and plan for delivering a memorable experience. An understanding of emotional triggers will help in building such plans to deliver emotional benevolence. For instance, when designing a new product or service; keeping the design simple, modern and functional will increase the likelihood of people connecting with the offering.

Hence, emotional benevolence must be planned at the product/service design and construction stage if the organization intends to build a memorable experience into the product/service. There should be well-defined strategies to build products/services that lead to the creation of an experience eco-system. If that can be achieved, there is a good probability that organizations will be able to connect with their customers at an emotional level. Organizations should not leave the matter open and hope that distribution channel operators will build that connectivity latter-on in the process.

2) Focus on the customer journey

Understanding customer interaction at various instances with an organization’s touchpoints is critical to building emotional connectivity in products/services design and development. Realizing that it is not about just selling a product/service, but is about nurturing relationships is key in the customer journey. What it means is that knowing a number of things including how to make it easy for customers to purchase a product, what information customers will be keen to know to make a purchasing decision, how customers will be supported post-purchase, what type of after-sales services and support infrastructures are available, and how returns will be handled are some of the many instances in the customer journey that should be considered.

For instance, often customers have a preference for buying a product/service from a certain place, location, or a store. It indicates an emotional association. Customers may do that out of many considerations such as quality assurance, good customer service, price competitiveness, accessibility of location, after-sales services, and ambiance of the place. All these factors are important to understand customer journey as they trigger emotional association and impact customers at an emotional level.

3) Leverage cooperative relationships

Building memorable experiences is not a solo flight but requires cooperation and collaboration. Organizations wanting to connect with customers at an emotional level will need to leverage upon their networks of suppliers, partners, channel service providers and regulators.  That means organizations need to build emotional relationships with their collaborators first to be able to translate the momentum to achieve the same with their customers.

The need to collaborate and cooperate with up and downsides of value chain stakeholders is not a new phenomenon. However, with an increased focus on emotional connectivity, it is imperative that organizations should re-evaluate their leverage capacity and assess whether they can bank upon their collaborative strengths to deliver emotional benevolence.

4) Re-invent organization culture

Organizations are human-made systems. Their production is also human-driven. Hence, if an organization is wanting to integrate memorable experiences into its offerings, they need to ensure that people working within the organization are aligned to the vision of delivering value through the integration of emotional connectivity.

Organizations, therefore, need to examine their cultural capacity and identify areas of cultural strengths and weaknesses. Based on such an evaluation, they need to re-invent their culture – easier said than done though. Changing culture is a mega-effort, so using the Kaizen philosophy of small continuous improvements could be a good starting point.

5) Watch out for experience – expectation gap

To be able to deliver value keeping in view the experience proposition, organizations must watch for the experience–expectation gap. That means organizations must understand the experience-related expectations of customers on an ongoing basis and re-align their offering and associated services when there is a gap. Not letting the gap happen should be a priority, but keeping it to a minimum level should always be ensured.

For instance, customers might expect that the food delivery at a restaurant will be within a half-hour of placing an order. The service provider needs to understand the average flow of customers and the orders placed during rush and off-rush hours. Such an understanding will then help in organizing having a sufficient number of staff and associated resources for delivering food within the expected time and not letting the experience-expectation gap occur.

What are your thoughts on Experience Economy and what should organizations do to thrive in the Experience Economy?

References

Joseph B. Pine and James H. Gilmore, 1998, “Welcome to the Experience Economy.” Harvard Business Review, July 1, 1998. https://hbr.org/1998/07/welcome-to-the-experience-economy.

 

Jiwat Ramhttps://pmknowhow.wordpress.com/
Jiwat is currently working as a Professor in Project management at Excelia Business School France. He did his Ph.D. from the University of South Australia and MBA in International Business from AIT Thailand. Jiwat has over 20 years experience of working in industry across banking, construction, service, and education sectors in an international setting. For the last more than 10 years, Jiwat has worked in academia teaching at Executive Education, Master’s, and bachelor’s levels. His teaching includes courses on Artificial Intelligence, project management, management, and research methodology. Jiwat has published his research work in top-tier, high-impact factor journals including the International Journal of Production Economics, the International Journal of Project Management, Computers in Human Behaviour, the Journal of Global Information Management, and Enterprise Information Systems, among others. Combining academic and non-academic work, he has published over 100 articles in journals, conferences and industry outlets. His published work has been well received and four of his published papers have ranked in the Top 25 most downloaded papers from ScienceDirect. His two papers have been ranked in the Top 25 Most Cited articles as well. Jiwat’s research is focused on the impacts of technologies such as Social Media, Big Data, and Artificial Intelligence on businesses and society. Jiwat likes to understand how we can leverage upon the use of innovative technologies for business growth and productivity. Jiwat regularly contributes towards the development of new thought and ideas in business and technology management. As such, he has a growing portfolio of publications on some of the contemporary issues in the management of projects and organizations. Jiwat also publishes his work on social media platform Linkedin to connect and reach out to other industry professionals. His work has received a good following with a significant number of posts cited as reaching top 1% engagement on Linkedin. Jiwat’s content on LinkedIn can be accessed at: #ideannovation_jiwat Please feel free to connect with Jiwat on LinkedIn by clicking on the Icon above.

1 COMMENT

  1. I totally agree with the tips given in the article to help build a memorable customer experience.
    Some time ago I wrote about a group dedicated to hospitality some articles aimed at suggesting, in that sector, some examples of memorable experience to offer to the customer.
    It’s more important than ever to create memorable customer experiences.
    Today, every purchase becomes an “emotional experience”, that generates an “emotional memory” (conscious or unconscious, aware or not) which can be negative or positive, and that is the basis of the escape or loyalty of customers. It is thus necessary to ensure that the customers live an excitement, allow them to live experiences that achieve their “need-dreams”. And fulfill a dream is much more than providing a product or service, as well as an experience is much more than a product or service, which are things, facts, events, transactions, business, money. An experience that fulfills a dream is an emotion, an experience that is worth living, repeating, is a journey that gratifies us and gives us pleasure and, for this reason, it is worthwhile to travel, to retrace, to tell. And even more exciting is the possibility that customers have to share emotions and passions, to experience them and live them with other people.

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