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There is a change happening right now in the economy, that if taken advantage of, could dramatically impact how your customers perceive, value and talk about your business. This change is a shift from a “Service Economy” to an “Experience Economy.”
A Brief History
Over time, the nature of our economy changes. Typically, this change is driven by innovation and availability. Our original economy was driven by raw goods: crops, minerals, and other basics. These products were difficult to acquire because of the labor and transportation required. Innovations changed this and these goods became commoditized and lost the potential for significant profits. Therefore, the economy became product-driven, but again, innovation (namely, the industrial revolution and Henry Ford) made products so easy to create that many became commodities. This caused the economy to move towards service offerings to add-value and differentiate our companies from our competitors. We have been in a service economy cycle for quite some time.
We are now in the midst an economic shift. Because many services are easy to replicate there is increased competition and reduced prices. This is resulting in the shift to an experience economy. Companies that can provide a pleasurable experience along the customer journey will be able to drive sales back to their services and products. Companies need a differentiator to separate themselves from the pack. Providing the right experience, whether it be digitally, environmentally or related to customer interaction is crucial and something many companies have been using for years to gain competitive advantage. In the social/mobile/ local world we currently live, there is almost nothing more valuable than a customer sharing a positive experience with your company with their personal network.
According to a CEI Survey, 86% of buyers will pay more for a better customer experience, but only 1% of customers feel that vendors consistently meet their expectations. (Forbes)
Examples of Experiential Value
- Walt Disney has been leveraging experience as a differentiator for decades. His company pioneered animated feature films and then expanded their offering in creating Disney Land and Disney World. These amusement parks were the only of their kind not only in the services they provide but more importantly in the experience that they provide. People come home from Disney parks talking about the “magical feeling” they felt when visiting a Disney theme park – not the value they received in exchanged for a tangible product.
- Trunk Club a Chicago-based personal shopping service has really nailed customer experience. Any number of clothing retailers online can offer you garments at competitive prices. What Trunk Club offers is a personal stylist who hand-selects clothing for you based on preferences you select when setting up your profile. This unique characteristic of the service not only sets Trunk Club apart, but also helps to attract a higher-end client base willing to spend more money for the personalized experience.
- Chick-fil-a offers chicken sandwiches like any other fast food company. Where they differ is in exceptional customer service, pleasant associates and innovative, speedy service to the point of being in complete contrast to their competition.
In 2013, 62% of global consumers switched service providers due to poor customer service experiences, up 4% from the previous year. (Accenture Global Consumer Pulse Survey)
You and your company must strive to work on providing the best experience possible to your customers. Not an experience that is as good as your competitors but an experience that is noticeably better.
The change has already begun but most companies will be late to adopt an experience focus. Thinking about your business and service offerings in terms of experience will give your company a leg up on your competitors that lasts much longer than any priced-based promotion.
Areas in Your Business Where You Can Focus on Experience:
- Customer Service
- Personal Touch
- Cool Factor
- Cutting-Edge (Website, Collateral, Office)
- On-Boarding Process (Customers and Employees)
Can you think of another example of companies providing above-and-beyond experience to their customers? Let us know in the comments below.