CX within the experience economy

If brands are to be successful, they need to be:

Authentic: feeding the social consciousness in society.
Differentiated: tough to do in a market where replication is easy. Some form of ‘value add’ needs to be evident.
Responsive: perhaps in a crisis, but with the advent of ‘big data’ the notion of a ‘segment of one’ – brands need to be proactive and anticipate a need before the customer realises that they have it.
Consistent: failures in delivery will typically lead to a customer switching to an alternate supplier if expectations are not met.

Forrester stated that: “Consumers expect any desired information or service to be available, in context, at their precise moment of need.”

So how do we ensure delivery against this level of customer demand? The agility that is required to do so has led to a number of older businesses failing and the growth of many start-ups that are now leaders in their sectors.

Critically many of these do not even own the commodity that they are marketing:

• Airbnb
• Uber
• JustEat
• Deliveroo
• Not on the High Street

All of these businesses are effectively selling a service that utilises something that belongs to another. This demonstrates the evolution of economies from commodities to goods, then services and latterly to experiences.

Based on this premise, customer needs have changed:

• When we were buying commodities the key concern of the customer was availability, this would in turn drive the price or value.
• Where commodities were manufactured into goods, the price of those goods becomes a key customer consideration.
• Where there are multiple goods available in the same sector, to differentiate the development of services to wrap around those goods, supported the growth of the service economy. As this sector matured customers became more focused on the quality of service being delivered.
• As the level of service has increased across all sectors, underpinned by the advancement of society, we are now focused on experiences and a clear market view, however, a key element of this must be authenticity.

This movement from commodity to experience offers the opportunity to maximise revenues and margins. Take for example Starbucks, the value of coffee beans in raw form versus what is charged as an end product in a coffee shop.

As we face a cost-of-living crisis it will be interesting to see if consumers become less interested in the experience and go back to focusing on costs. For many businesses it may seem like a necessity but there are smarter ways to do this.

If you need help finding new ways to improve efficiencies, whilst maintaining or improving CX, get in touch.