Wednesday, May 06, 2020

Experience-led Transformation in Today's Experience Economy: Part 2

B. Joseph Pine II, Leading Authority on the Experience Economy
Strategy / Innovation

This is the second part in our series on the Experience Economy. Read the first part to this series discussing the response and envisioned recovery from the coronacrisis

Being human. That’s what Medtronic is doing by sharing its designs for its ventilator online so that companies around the world can make and service units. What Materialise in Belgium is doing by sharing the files to 3D print a small tool that can be attached to many door handles to enable people to open doors without touching them. And what Novartis, among other pharmaceutical examples, is doing by giving away 20,000 doses of hydroxychloroquine for clinical trials. 

That is not to say that you do not simultaneously work on how your business can come out of this situation – not just by surviving but by thriving. You owe that to your employees, your customers, and yourselves. 

And you do not want to merely revive your business as the economy finally begins to improve and hopefully comes roaring back – especially if you are in the physical experience business. No matter what your business, you need to take this time that has been given to you to refresh your places, redesign your offerings, and renew your capabilities.

Responses For Experience-led Recovery

Refresh Your Places

All physical places need refreshing on a near-constant basis, but it often gets pushed out due to lack of time or resources. Now is the perfect time to keep your employees usefully employed in such tasks, even to the point of substituting for contractors you would have had to pay at some point in the future. You can, for example, deep clean the environment, take inventory, reorganize stock, repair furniture or equipment, or even just repaint. I visited with management from a particular outdoors experience last year and afterward took an individual tour of the place. I couldn’t help but notice that the closer I got to the edges – such as nearing the bathrooms – the more in need of paint and repair were the paths, buildings, and furnishings. 

Working areas need every bit as much attention as customer areas, assuming you want an employee experience that gives them the wherewithal to stage a great customer experience. Moreover, all processes need continuous improvement, technology needs steady upgrades (install that latest security patch?), and people need ongoing learning. Now is the time to take care of all such needs so that when things open up again you can put your best possible face forward with employees who are fully engaged. (And none of this requires capital improvements.) Start with that view of the first impressions you want returning customers to have of your experience and work your way back to ensuring it is great and even amazing!

Redesign Your Offerings

Next, redesign what you offer your customers, again starting from the goal of staging an engaging, memorable experience across all the ways customers interact and buy from you.

Harkening back to being human, so many contact centers’ voice response units (VRUs) exist to delay, drive away, or otherwise deny service to customers. Consider these prime candidates for redesign, extending all the way to the experience customers have when talking to a real human being. (Just last month I was asked by a VRU to input my account number, and when I finally reached the contact center representative, guess what was the first thing she asked of me?) Take a clue from Zappos, whose Customer Loyalty Teams (not customer service representatives, for they recognize that every service interaction is a relationship opportunity) do not measure average handling time – how little time they spend with customers – instead allowing team members to spend as much time as needed to help their customers. They aim to create a “Personal Emotional Connection” with every customer, engendering loyalty and greater sales. 

Then look at your offerings themselves. How can you provide greater economic value in what you sell to customers? Are your experiences engaging and memorable? 

In seeking where to redesign your offerings, again start with the experience you want to create and stage for your customers. In the Preview to our 2020 book The Experience Economy: Competing for Customer Time, Attention, and Money, my coauthor Jim Gilmore and I talk about how companies can get current and potential customers to spend time with them, give them their attention, and then buy their offerings. 

We provide five core characteristics experience designers should focus on to enhance the value they create for their customers and in the world: 

  • Robust: expanding the experience to hit the “sweet spot” of entertaining, educational, escapist, and esthetic realms of experience.
  • Cohesive: fitting all the elements into an organizing principle (the theme, if you will) so that everything hangs together throughout the experience, from front to back.
  • Personal: reaching inside of each customer to create an experience with components customized to the individual.
  • Dramatic: designing the time that customers spend with you to not be flat, but rather rise up to a remarkable climax and come back down again.
  • Transformative: bringing together the set of experiences required to help customers achieve their aspirations.

So when redesigning your offerings, look at each one of these characteristics to determine how you could create greater experience value for your customers – taking into considerable account the way people will want to interact coming out of the current crisis – and therefore greater economic value for your company.

Renew Your Capabilities

It may be counterintuitive, but recessions can be great times to invest in new capabilities that will generate new offerings that prepare you for the future. This should be particularly true in a V-shaped recession as we may have today, where it looks very dire at the beginning, but once it turns around rises very sharply. While competitors are hunkered down and thinking only of today, now is the time to move beyond industry norms – the way things have always been done – to discover new opportunities, create new capabilities, and be the one to shape the future.

During the  2001–2003 recession, for example, Apple increased its R&D investment markedly – introducing the iPod and quickly extending its family, developing iTunes, and beginning the project that led to the iPhone – and opened up the very first Apple Store, which it also rapidly expanded. This was the time where the rejuvenated Steve Jobs took Apple beyond being a mere manufacturer to also becoming a premier experience stager. And note that when you combine excelling at both – amazing products combined with a remarkable experience – well, that is when magic happens.

This is particularly important if you have noticed a slide – even ever so slight – of customers viewing your goods and services as commodities, to be bought on price, price, price. For if that is the case, the slope of that slide just increased with the economic crisis we now face, and once your customers get used to the taste of commoditization, they will just demand price concessions all the more. If you do not lower your prices, then they’ll buy from your competitors who do go down that slippery slope.

The greatest force of commoditization ever invented? The internet. That frictionless marketplace means that customers can instantly compare prices from one vendor to another, and that tends to push them down to the lowest possible price. And again, the coronacrisis has shifted more people onto purchasing on the internet and increased the dollar amount of purchases made by everybody. 

So one particular set of capabilities to renew is your digital strategy. To forestall the forces of commoditization, you cannot just focus on providing time well saved. Yes, you want to be nice, easy, and convenient for all service aspects of what you provide online – completing transactions, changing account parameters, checking on orders and deliveries – but you must incorporate that within a strategy of offering time well spent. That’s the value people seek with experiences. So therefore, you must develop the capabilities to design the time that people spend with you digitally and ensure that they value that time, not just the goods and services they order and receive. 

Of course, don’t divorce your digital strategy from your physical interactions. The experience you want to stage for your customers – the experience they want to hire you to have – must always be the connective tissue that unifies your enterprise.

Reaping the Rewards

If you are an enterprise hard hit by COVID-19, you face a stark choice. You can hunker down, eliminate as much spending as possible, lay off people, and wait it out, hoping that your business will revive once the economy starts to recover. Or you can take this opportunity to refresh your places, redesign your offerings, and renew your capabilities, preparing you to not only survive in the coming months but thrive in the years ahead.

It’s time for experience-led transformation as Rightpoint rightly calls it. Let the experience you want to stage for your customers be your north star during this time of turbulence, and let this time we have been given provide the means to drive the end of meaningful business outcomes for your enterprise. To learn more about why experiences will continue to be the most important criteria for enterprise-level success download our POV.

About B. Joseph Pine II

B. Joseph Pine II is an internationally acclaimed author, speaker, and management advisor to Fortune 500 companies and entrepreneurial start-ups alike. He is cofounder of Strategic Horizons LLP, a thinking studio dedicated to helping businesses conceive and design new ways of adding value to their economic offerings. Earlier this year, Mr. Pine and his partner James H. Gilmore re-released in hardcover The Experience Economy: Competing for Customer Time, Attention, and Money featuring an all-new Preview to their best-selling 1999 book introducing this concept. The book demonstrates how goods and services are no longer enough; what companies must offer today are experiences – memorable events that engage each customer in an inherently personal way. It further shows that in today’s Experience Economy companies now compete against the world for the time, attention, and money of individual customers.

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