A Society Hungry for Experiences: How Your Brand can WIN Business by Focusing on Experience
From the great depression in the 30s and WWII in the 40s all the way until today, we have evolved into a consumer-based society. If it saves us time, keeps us active, entertains us, makes us feel good, inspires us, or whatever, we will pay for it. In order to have the best experiences, we have developed systems that we trust. Today we have reviews and referrals. In the near future, we will have advanced sentiment analysis data alongside videos of our friends sharing their insights popping up on our eyeglasses as we walk into or near a particular business.
The Experience Economy
In a 1998 issue of the Harvard Business Review, an article was published “Welcome to the Experience Economy.” The authors outlined the evolution of the Experience Economy and its impact on the progression of economic value. While they wrote this over 20 years ago, it is more relevant today than it was then.
In this insightful article, they used the evolution of the birthday cake as a model to explain the theory. Here is that story through my ﬁlter.
When my father was a child, his mother would take ﬂour, butter, eggs, and sugar and make a cake. The ﬁnished product would likely have cost a couple of dimes .
When I was a child, my mother would buy Betty Crocker’s boxed cake mix. She paid less than $1 for easy instructions, perfectly measured and mixed ingredients, and saved on time and mess.
When my first-born Rebecca was a toddler, I would go to the local grocery store bakery on her birthday and point to one of the cakes. Five minutes later, I could be walking out of the store with a personalized “Happy Birthday Becca” cake, featuring her favorite princess. Seemed like a bargain at $15.
Today, for my younger children, I will break the bank ($300+) for a birthday party experience, and they throw in the cake.
Imagine how today’s reality would fit into any of the other eras. It wouldn’t. In the 40s we were just emerging from the Great Depression and entering World War II. It is very hard to imagine bounce castle businesses and trampoline parks popping up on every corner in those days.
Even in the 70s, my mom made every family meal and baked every birthday cake. Going to dinner at Frisch’s Big Boy in my hometown was a real treat and happened every second Friday. I am literally laughing out loud right now, thinking about my dad spending $300, or even $50, on a party in 1978 for me and my friends to jump on trampolines for an hour. Clearly, the evolution of economic value is a steep curve from then until now. Today, we value experience and are happy to pay for them.
THE AMAZON EFFECT
My 10-year-old son, Charlie, wanted DJ equipment for Christmas. So, he took to Amazon researching every kind of DJ equipment. He knows I am frugal (aka cheap) so he sorted by price. Then, he found several options and dug into the reviews. When he came to me to make the ask, he was armed for victory. “Dad, I want a Pioneer DDJ-SB3 for Christmas. It’s a DJ board. It’s only $248 and I read the reviews,” he said. “It has a 4.6 star rating with 187 reviews on Amazon and most of the unhappy people just couldn’t ﬁgure out how to use it.”
My 10-year-old knew exactly what he wanted, even though he had never used it or even seen it on a shelf. He is a diﬀerent kind of buyer than me or my father. He relies on social proof. He loves that DJ board. He uses it constantly, most nights I wish our bedrooms didn’t share a wall. I’m convinced that there are always dance parties going on in that room!
In many ways, his purchasing behavior is far better and more eﬃcient than my own. Companies selling on Amazon are forced to listen to the voice of their customers and constantly improve their products and service levels. Customer experiences are in control of their success. Charlie doesn’t like going to stores. He’d rather take 10 minutes and ﬁnd the best product at the best price online. This is what I call the Amazon Effect, and it further underlines the reality of the Experience Economy today and shows that customer experience drives business outcomes more today than ever before.
Social Proof, a term coined by Robert Cialdini in his 1984 book Inﬂuence, is also known as informational social inﬂuence. It describes a psychological and social phenomenon wherein people copy the actions of others in an attempt to undertake behavior in a given situation.
LOCAL BUSINESS IMPACT
What about local retail stores, cafes, restaurants, or professional offices?
This year during spring break, I took the family to Newport Beach, CA. My 16 year-old daughter, Bailey, and my girlfriend, Emma, are both big caffeine aficionados who love the coﬀee shop experience. While walking the boardwalk, Emma noticed a coﬀee shop and announced to Bailey that they should check it out. Without slowing her cadence on the walk, Bailey said, “Nah, I looked them up and they are only a 3.5.”
Bailey spends a lot of (my) money on coﬀee. When we go anywhere, she searches for the best options. She hadn’t even walked through the front door of the shop; hadn’t even tasted their coffee, but they had already lost her business. Maybe her experience would have been fantastic. Maybe the shop just wasn’t managing the online conversation. In any case, they likely lost $200, or more, of Bailey and Emma’s business over the course of the trip. Bailey needs social proof. She knows that coﬀee shops with a high volume (quantity) of great reviews (quality) and lots of product photos are likely to give her the best experience—and she values experiences.
If you’re not managing your online reputation, your unhappy customers are happy to do it for you.
The people that went into that coﬀee shop had taken the time to go online and say, “Eh…It’s just ok.” Just a minute down the boardwalk there was a better option. The better option got our business every day that week. The Newport Coﬀee Company was glad to take our eight morning orders: four hot chocolates, two lattes, one frappa-something or other, and my hot tea. In an Experience Economy, a company not only must provide awesome products and services, but they also must manage the online conversation. Imagine how impactful this could be for a local insurance company, lender, real estate company, or other professional? The coffee shop lost a few hundred dollars. How many millions in sales does a local real estate firm stand to lose?
Today, the customer is in charge and they want the best experiences. If they’ve never experienced working with your business, then they are likely do a little research and find out if others enjoyed theirs.
In an Experience Economy, a company must not only provide awesome products and services, but also manage what’s happening online.