3 overlooked facts about the post-pandemic Experience Economy
Many companies keep on focusing on their product, improving its features, its price or any other characteristic, but the truth is, there has been a huge shift in consumer trends, and not only in the experience economy but in any market or sector you may come up with. It is not that much about the product anymore; it is about the experience around it. People talk about the time value of money, but there is in fact a money value of time.
Now that we are going through this pandemic; an unexpected and disruptive event that is changing our lifestyles and habits, we all miss our freedom, our trips, or our experiences. Pretty sure that now that most of us are stuck at home, you have also been reminiscing on the days that you used to spend together with your family in your favourite theme park or those mornings when you would meet your friend at the cafe and spend hours talking. All of those little things that used to put such a big smile on our faces. Because, at the end of the day, that is what matters the most; all the memories and experiences that bring happiness to us. And, that is exactly what the Experience Economy revolves around.
The Experience Economy is defined as an economy in which both goods or services are sold by emphasizing the effect they can have on people’s lives. The experience economy is a phenomenon that we have seen since the 1990s when consumers started to recognize that there is more to life than just having stuff. Research has indeed noted a trend: material goods are simply not as valued, but on the contrary, events are memorable and they impact us in a way that possessions simply.
According to an Eventbrite study, more than 3 in 4 millennials would choose to spend money on a desirable experience or event over buying something desirable, and 55% of millennials say they are spending more on events and live experiences than ever before.
But, even if a lot of companies are catching on to the fact that the more memorable the experience they create and they provide, the more loyal their customers will be, there is still a huge number of businesses that are overlooking the experience economy and how positively it could shape the value of their products and services. Well, here you have 3 facts not to do so.
1. Customers prioritize experiences over the ownership of goods
If you want to build brand affinity, you need to give your customers what they want: something memorable, and something that makes them feel like less of a number and more of an active participant. It is all about value, in fact, customer experience surpasses price and product as the key competitive differentiator. For this reason, brands are now trying harder to give their customers a memorable experience.
As we have mentioned before, the experience economy started to trend in the early 1990s, when people did not just want things anymore. They started spending more money on services than they were on material stuff. But, now that due to the COVID19 our lifestyles are so limited, this trend has adopted an even more radical shift; we all value experiences more than ever, and that is why creating unique guest experiences and customer journeys is crucial for your business in this post-pandemic world.
2. The more immersive and memorable, the better
Events are more memorable and play a bigger part in how we view ourselves and the world than our possessions generally do. As the authors of the book “The Experience Economy” Joe Pine and Jim Gilmore point out, “more and more, people want to be the more active heroes of their own stories.” But, how do you fit into that? Operating from a customer-centric approach within your business.
According to Capgemini, 75% of businesses believe they are customer-centric, yet only 30% of customers agree, and this discrepancy creates an experience gap. To close this gap and succeed in the experience economy, businesses need to redefine how they understand their customers, not just as “personas” but as people, to form deeper relationships and build closer bonds of trust. Putting your customers at the very core of your strategy is the way to grow bigger, but most importantly, to provide the best experiences in the market. Because although the “V” of volume is crucial for your attraction, the “V” of value will always be what your customers care about the most.
For instance, have you ever reflected on the fact that one of the reasons that people go on a day out as a family is that they want to improve their relationship? If you design your customer journey around facilitating family interaction, then you will be providing a more successful experience, which will nurture your business with the most loyal clients.
3. Consumers seek additional utility
We no longer simply make a purchase and walk away. In fact, consumers seek and often expect, whether we realize it or not, additional utility from the brands. They want to feel like brands are actually listening. Each action they take has the same end game: Satisfy me, give me the answer to my search question. Give me a platform to reach out to those around me. Give me a way to share and explore. Oh, and do all those things immediately, if you do not mind.
The marketing-driven definition of utility speaks to the specific value realized by consumers when they spend on products or services, and when done well, it can create stronger bonds between customers and companies, and drive increased brand loyalty over time. Even if there are five types of marketing utilities (time, place, possession, form and information), it is not necessary that all the five utility types improve conversion and customer satisfaction, but you need to make sure you choose to focus on the ones that provide most value to your audience. Do they value more having very detailed information about your products on your eCommerce or spending as little time as possible waiting for products to arrive at their homes?
So, what our consumers want, it turns out, is an experience; something memorable, something they can connect with, something that makes them feel like less of a checkbook and more of a participant. But, due to the consequences of the pandemic, we all have gone online now, so keep in mind that that the experience already starts at home. In this new normal, companies will need to be more proactive in order to anticipate customer expectations and needs; and this can only be done with good data and analytics.
Organizations who are able to understand customers better (and faster) are likely to be the next customer-experience leaders. Accomplish this, and you will have the loyalty of a mobile, social generation of consumers who can't wait to share their experience in your attraction.
Our eCommerce platform for the experience economy will allow you to use first-hand customer data and therefore create the best possible experiences for your clients. If you'd like to know more, our team would be happy to have a talk!