The main drivers of the experience economy, and brands that are leading the way
Customer experience has always been a priority for businesses. But in today’s hyper-connected world, consumers are looking for more than a good product or service.
When it comes to consumer preference, customer experience is surpassing both product and price. A survey of almost 2,000 businesses revealed that 86% of buyers would pay more for a great customer experience. In fact, 81% of businesses consider customer experience as a main competitive differentiator.
However, a friendly and helpful customer service team isn’t enough to get you that competitive edge. Today’s consumers want a personalised journey where they feel valued, included and appreciated at every point.
For brands to stay ahead, they need to understand and cater to the ‘experience economy’.
What is the experience economy?
The concept of experience as a source of value dates back to 1998, when the term ‘experience economy’ was coined by B. Joseph Pine II and James H. Gilmore. It can be defined as “an economy in which many goods or services are sold by emphasising the effect they can have on people’s lives”.
Ordinarily, when you think of an experience, you imagine theme parks such as Disney World or ‘eatertainment’ themed restaurants like the Hard Rock Café or Planet Hollywood. People are attracted to these venues, not just to take a rollercoaster ride or eat a hamburger, but because they’re seeking a unique ‘experience’.
But experiences, according to Pine and Gilmore, aren’t just about entertainment. Every time a business engages customers in a ‘personal, memorable way’, they’re selling an experience.
The best way to understand this concept is to look at brands that are successfully implementing ‘experience’ strategies in their business models.
How does catering to the experience economy work?
There are three main drivers that enable the experience economy to thrive:
Social media
Social media enables you to experience someone else’s life. It gives you a tantalising glimpse into their world.
Take the makeup industry. It’s one thing seeing a line of Victoria Beckham or Lady Gaga beauty products. But watching them apply their foundation or eyeliner, actually teaching you how they do it, talking directly to you – that’s an experience. You aspire to not just look like them, but to actually be like them. It’s a clever experience-marketing tactic that could only be enabled by social media platforms such as Instagram and Facebook Reels.
You could also say that the experience economy itself has enabled the growth of a whole new industry – that of the ‘social media influencer’. Dubai-based makeup artist Huda Kattan is a great example of how one person’s experience can affect your buying decisions. Kattan initially gained popularity by uploading beauty tutorials on YouTube. She took something she was passionate about and shared it.
领英推荐
Now, with over 20 million Instagram followers, she is one of the most popular social media celebrities in the world. A combination of sharing her knowledge and launching her own cosmetic brand ‘Hada Beauty’ in 2013 has led Kattan to amass a total net worth of $USD 560 million.
Technology
Of course, the real gamechanger for experiences is technology. The rise of the internet and mobile adoption have totally changed how we see the world today. From apps and e-commerce to virtual reality and multi-player gaming, technology enables us to access experiences like never before, from wherever we are.
It’s thanks to technology that esports have become the ultimate experience for gamers. The most popular video game in the world, Fortnite, took the gaming experience to a whole new level with the Fortnite World Cup esports spectacle back in 2019. The three-day event in New York attracted thousands of visitors in person, as well as tens of thousands via live streams on YouTube and Twitch.
Middle East ride-hailing pioneer Careem uses AI technology to ‘simplify and improve people’s lives’. Careem’s business model is clearly centred on customer empowerment. Its super app offers users a seamless experience whether hailing a cab, ordering food or buying groceries.
Emirates Airlines has also adopted AI technology to enhance its customer experience. The world’s first ‘integrated biometric path’ at Dubai International Airport uses facial recognition technology to provide travellers with seamless airport experience.
The human element
Technology and social media may enable experiences, but they don’t guarantee an excellent customer experience. In order for the experience economy to thrive, we need to add another vital ingredient: the human element. Empathy, engagement and personalisation are all key factors in making people feel valued instead of just another number.
Huda Kattan’s appeal is that she’s refreshingly honest and natural. She makes mistakes while applying her makeup, she doesn’t take herself too seriously, she talks about her flaws. In short, she adds a human element.
One reason for Fortnite’s success is that it offers a truly immersive and connective experience. Its unique formula offers a combination of gaming and social connectivity all in one. Many fans feel they can be themselves, make friends and bond with others while playing Fortnite.
One of Careem’s core values is that ‘every experience matters’. For this reason, personalisation is key factor in the super-app’s business offering. With the help of AI technology, the super app can enhance customer experience based on their preferences and historical behaviour, such as favourite foods or frequent destinations.
The Emirates contactless journey has transformed its base function – transport, into a smooth and hassle-free travelling experience. This experience is personalised further by the Emirates exclusive app which offers digital menus and playlists for you to choose before you even board the plane.
The experience economy is changing the way we sell our products and services. Savvy brands are shifting their focus from traditional marketing to creating personal and memorable customer experiences.
To build a lasting relationship with your customers, you need to offer more than just your base products or services. And it doesn’t have to blow your budget either. Instagram stories, photo opps, interactive games and competitions, are all low-cost ways to help your brand engage and connect with your customers.
The more memories you can create, the more competitive edge you’ll have to get ahead in the experience economy.