In the market of offerings for consumers, there is something that goes beyond just a commodity, good, or service: an experience. An experience is considered a “fourth” economic value offering for consumers. While experiences have always been around, they have traditionally been grouped together with services. When a person buys a service, they purchase tangible activities. On the other hand, when a person buys an experience, they pay to spend time enjoying a series of memorable events or more intangible activities. This is the foundation of the Experience Economy.
According to Joseph Pine of Harvard Business Review, “experiences are about time,” where customers value the time you spend with them. Companies can engage with us digitally and physically, and it’s up to them to stage individualized customer experiences. Experiences can even be transformative, helping customers achieve their highest aspirations.
Companies have found a new source of value in creating experiences for their customers. Where a service is already more customizable than a good, experience is more personalized than a service because it takes into account a number of different factors for a response from customers, such as environment and experience quality. This creates an entirely different business model, which focuses less on promotion to draw customers in and relies more on customers eager to buy experiences at a premium price and higher margin.
By doing this, companies can create or even improve their customer intimacy. To do this, it requires three major criteria:
- Customer-Driven Offerings — The capability to understand the segmented and nuanced needs and wants of your customers in a way that anticipates not just the physical goods or nature of services, but also the unique ways in which those goods and services are delivered.
- Predictive Engagement — The ability to understand past behavior and combine those insights with real-time contextual awareness to engage with an experienced-focused “best action” that builds upon and enhances customers’ expectations and satisfaction.
- Connected Experiences — The capacity to seamlessly deliver experiences across many digital and physical platforms of engagement in order to increase customer interactions, attention and money while giving the impression of less friction and lower time spent overall.
To learn more about how the Experience Economy drives the need for better customer intimacy, read our Sponsor’s Perspective, watch the webinar, and visit our customer experience solutions page.