We live in the experience economy, meaning brands no longer only compete on the quality of their products but also their impact on consumers. In the experience economy, experiences are first, products and services second.
First coined by economists B. Joseph Pine II and James H. Gilmore in 1998, the experience economy describes an economy where “goods and services are sold by emphasizing the effect they have on people’s lives.”
In the experience economy, customer experience (CX) and user experience (UX) has become a critical differentiator for brands that get it right. However, Pines makes an important point when he says most brands equate CX to good service, which is good, “but rarely does it rise to the level of memorability.”
A brand may do a great job of making things easy and convenient for consumers, which is ideal, but it needs to create a distinctive memory to be considered a memorable experience.
There have been shifts in consumer behavior, and they will purchase experience over material things. This is especially true for Millennials and Gen Zers. Psychologists have a good explanation for this shift. They believe experiences make people happier over the long term than material things. This is because experiences stay in our memories longer, give us better stories than material things, and help us form meaningful social connections and relationships that are key to happiness and health. For this reason, brands that nurture human experiences will grow faster than their competitors, who do not build unique, memorable events.
The importance of building a customer-centric business.
According to studies, customer-centric brands are 60 percent more profitable than those not focused on the consumer’s needs and wants.
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Research also shows that 74 percent of consumers are likely to buy based on experiences alone. The good news is that most companies and business leaders (89 percent) consider customer experience to be directly linked with loyalty and retention. However, only about 20 percent believe these brands to be customer-centric. Studies show a gap between brand promise and customer experience because organizations focus more on brand awareness. The reality of the market today is that brand experience management helps improve brand awareness.
So, what exactly is brand experience management?
Brand experience management refers to the discipline of managing, strategizing, measuring, controlling, and influencing every aspect of customer engagement and interaction with a brand.
Brands that get experience management right see higher revenues, stronger brand resonance, and happier, more loyal customers. In today’s marketplace, organizations have less time, more communication channels, and tighter competition, so brand experience management is essential to cut through the noise. It also aligns with your brand’s promise to match the customer experience. It can close the gap between the brand’s promises and the customer’s actual experiences.
Disney is, without a doubt, one of the earliest examples of brand experience management.
Disney has an impressive lineup of products and services that deliver exceptional brand experiences, including theme parks, movies, merchandise, and media content.
The brand has garnered a loyal following by creating immersive and engaging experiences and content across multiple touchpoints.
For instance, as guests enter Disney theme parks, they are instantly transported to a magical world with the type of memorable experiences Pines refers to in his definition of experience management. Disney’s unwavering attention to detail in every project and engaging storytelling contribute to its brand value and experience. Disney also transcends generations in its appeal and has a loyal consumer base across all ages. Disney’s consistent emphasis on creating a customer-centric brand and delivering an exceptional experience has made it the ultimate example of brand experience management.
Organizations need to move from brand management to brand experience management to win over consumers looking for a sweet spot between value, quality, convenience, and emotional experience.
Where is the experience data to manage brand experience?
To manage experience data, brands need reliable, real-time experience data to show how customers feel about your brand (in the moment) and identify any experience gaps. Markets move quickly, and when brands collect old and outdated data, it doesn’t help them make the right decisions.
Examples of brands getting it right.
Brands are working hard to ensure they delight their customers and never disappoint them because they understand how a great customer experience can build or break their brand, directly impacting brand value, customer loyalty, and revenue.
The Heineken Experience in Amsterdam is an excellent example of how a brand can create memorable experiences. Through its self-guided tour, visitors get an inside look at the beer brand and learn about its heritage, history, brewing process, and innovations and get a taste of the beer.
The building has more than 1,000 visitors a day.
Companies in the service industry are at the forefront of the experience economy. Restaurants are playing with themes and recipes to add that layer of experience wherever they can.
Le Petit Chef, a culinary experience, is an example of a brand taking it to the next level. Using visual mapping technology, the world’s smallest chef “cooks” your food on your table.
Although like any restaurant, the actual dish is prepared in the kitchen by real staff, guests are treated to an immersive show with custom animations. The animation on the table varies based on the story, but the tabletop transforms into a landscape and features Le Petit Chef working hard to grow your food, prepare it, and put it on your plate.
How can brands develop and measure their CX through research?
Define what the ultimate experience should be.
Brands that create excellent customer experiences first define what that experience looks like and work backwards. Once a brand understands what it wants to be known for, it can then initiate the values and strategies to achieve that vision.
CX is an organization-wide function.
CX continues beyond the leadership level. Business leaders must communicate the vision to everyone in the organization. Everyone should be excited about the CX’s why, what, and how, as defined by the brand, from IT to sales, marketing, and Human Resources.
Metrics used to measure CX
There are five broad types of research used to measure CX.
- Customer satisfaction (CSAT). This is the best place to start, as CSAT captures survey questions explicitly asking about satisfaction or measures implicit metrics, such as reviews, ratings, delivery statistics, or mystery shopping scores.
- Advocacy/reputation/brand. These metrics are important because they show how willing customers would be to recommend a product, service, or brand to others. Social media sentiment scores, online reputation, trust scores, and event participation are good ways to gauge these metrics.
- Consumer loyalty. Customer retention and churn are more retrospective and measure the average consumer engagement period. They can also show the likelihood of a customer staying with a brand. These can be measured through loyalty program participation levels, buying frequency, loyalty program participation, average order size, and repeat orders.
- Employee engagement. Customer experience has to be an organization-wide effort. Many organizations ignore this important metric. Employee engagement is a significant concern in providing CX advancements.
- Brand promise and customer experience gaps. When a product or service does not align with the brand promise, the customer experience is poor, no matter what.
Putting experience insights into action.
Brands need suitable systems in place to pull the experience data so it can lead to insightful action. With the appropriate procedures in place, brands can immediately apply the insights they get from their data to action. For this to happen, customer feedback should be directed to the right people. This feedback is looked at with sales data and marketing spending so business leaders can connect the dots and measure the impact of their initiatives.
When everyone in the organization is responsible for brand experience management, and systems are in place along with real-time data, the organization develops a brand experience mindset, which leads to long-term growth.
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