We spend a lot of time thinking about marketing, sales, and service processes. What if we took it a level deeper and looked at these through the clients’ eyes? What if we considered the experience they were having?
These are the types of questions I started asking as I read The Experience Economy: Competing For Customer Time, Attention, and Money by B. Joseph Pine II and James H. Gilmore. The book challenges the reader to look at value and competitive advantage from the viewpoint of the client.
I discovered this book one evening as I was having dinner with fellow authors of the W.O.W. Factor book. One of the attendees had experience with The Disney Institute. I asked what books he recommended and he told me about The Experience Economy.
Since then, I’ve been devouring this book. These ideas have profoundly changed my thinking. Here are some of my key takeaways.
There Is a Hierarchy of Value
We used to live in an agrarian economy that produced commodities. The industrial revolution created a product-driven economy. As products became commodities, we shifted to a services economy. Today, as services become more of an expectation than a competitive advantage, where do we go to create value? Pine and Gilmore say, “Welcome to the experience economy!”
“Where commodities are fungible, goods tangible, and services intangible, experiences are memorable.” Isn’t that what we all want for our businesses? Don’t we want to stand out—to be differentiated? “Companies that create such happiness-generating experiences not only earn a place in the hearts of their customers but also capture their hard-earned dollars—and harder earned time.”
If this is starting to sound too touchy-feely, consider the real results in terms of GDP growth from 1959-2009. Products dropped by 0.1%, services grew by 7.2%, and experiences grew by 7.5%. That data is now 10-years old. In our world where we enjoy Bass Pro shopping experiences and look forward to new applications for augmented reality, I can only expect that growth will be larger in the decades to come.
Improving Your Client Experience Builds Competitive Advantage and Loyalty
Before you write off the idea of experience as valuable as something for a Disney theme park or a vacation tour guide, Pine and Gilmore assert, “Even the most mundane business transaction can be turned into a memorable experience.”
When you enhance the experience, you build mindshare and heart-share. You build goodwill. You become seen as a partner, trusted advisor, and maybe even a friend. Just as a great sales professional builds a personal relationship, your company creates an emotional bond with your customers.
All of this pours through to the top and bottom lines. Competitive advantage leads to more net-new at a higher margin. Loyalty leads to more cross-sell and longer relationships.
We Can Cultivate Learning Relationships With Our Clients
How can you enhance the experience you provide your clients? Pine and Gilmore offer four categories of experience: Education, Entertainment, Esthetic, and Escapist. In the B2B context, all four can play a role, but the two that stand out the most to me are education and esthetic.
What can you do to provide educational experiences throughout your buying and client processes? Jay Abraham presents the paradox of knowledge: the more you learn, the more questions you have. Where are you going to go to get the answers? To the person or organization that educated you. Integrating education throughout the buyer and customer journey helps create an experience beyond just buying your product or service. Think of the Apple store staffed with geniuses teaching (educating) customers how to use their devices and offering classes throughout the day. How could you create an experience like that?
You can also look at the esthetic. Some of this can be simple. In Revenue Growth Engine I tell the story of one company I worked for that delivered warm Otis Spunkmeyer cookies with each client meeting or delivery. The $5 box of cookies created an incredible esthetic experience. Think about the Apple store or the experience of unboxing your new MacBook or iPhone. Look around and you can find all kinds of cool ideas to enhance the esthetic. All of this creates an experience that differentiates and builds loyalty, driving revenue and profit.
In the book, they talk about creating a theme for your business that flows through your brand, your facilities, your dress code, and your sales collateral. (Hear my conversation with Arjun Sen, former VP of Marketing for Papa Johns about How Your Brand Affects Your Growth.)
Business Processes Can Be Looked at as Performances
In Revenue Growth Engine the last half of the book is about sales and marketing processes. Pine and Gilmore recommend we look at processes as performances. Your interactions with your clients are the stage. The strategy is like the script and your team are the actors. “In the Experience Economy businesses must figure out how to make work, whether performed on stage or off, more engaging.”
Most marketing and sales processes are sterile, unemotional documents. I think we need to take it a step further and bring in the emotions. After all, aren’t all buying decisions emotional?
Reducing Customer Sacrifice
What sacrifices do your clients have to make to work with you? What risks do they have to take? How can you create an experience that reduces these? The concept of customer sacrifice is a powerful idea that every company should consider. I explore this in-depth in my recent blog post, A New Way To Create Competitive Advantage: Reduce Customer Sacrifice.
The Next Level of Value is Transformation
When it’s all said and done, improving your client experience builds a competitive advantage. It creates client loyalty. It makes your company worth talking about, helping generate referrals. But what are we really aiming at?
The final chapters of The Experience Economy take an unexpected turn, offering an even higher level of value than experience: transformation. “Today, the only thing better than being in the business of staging experiences is being in the business of guiding transformations.”
At this level of value, the client becomes the product and the result is how much they transform. Where experience leverages knowledge, transformation requires wisdom.
There is true value here. “Much greater profits will accrue to those businesses with the wisdom to shift beyond goods and services to the use of experiences… to transform their customers.”
I love it! This describes my passion and the work me and my team get to do every day, helping businesses transform their sales and marketing approach so they can grow revenue to create meaningful jobs and give back to their communities.
You’re going to enjoy The Experience Economy. It’s a long read, but you’ll find valuable ideas in every chapter.
Originally Published on Revenue Growth Engine.