Nothing is more frustrating or boring than a product, service or trip that doesn't meet the customer's expectations, don’t you think? Innovative companies and service providers are therefore increasingly relying on providing outstanding customer experience to remain on top and to avoid the downward price spiral. Whoever wants to remain competitive must recognize, understand, and quickly respond to constantly changing customer requirements - including a high experience factor - and be at the same time inexpensive, since the competitor is just a click away.
According to Gartner, more than two-thirds of all companies nowadays compete primarily on the basis of customer experience. Another study even predicts that customer experience will overtake price and product as the key brand differentiator by the end of this year. The fact is, just as Cameron Beveridge, regional director for Southern Africa at SAP confirms to us as well, the experience economy is alive and well, despite the extraordinary events of 2020. However, he points out, it has undergone dramatic changes that business leaders must take note of if they hope to recover fully from the challenges brought by the widespread disruption. Too often companies leave gaps in their experience economy strategies that undermine their success, he warns. In fact, getting it wrong can be costly, considering that nearly a third of customers in one study said they would leave a brand after a single bad experience and consumer expectations are constantly rising.
“Simply having the product or service is not enough; it is no longer even a differentiator. Consumers want a positive and personalized experience to sweeten the deal. They want to feel like brands are listening to them, that they understand them. This has necessitated a shift in value delivery. As a business, you cannot rely purely on only your product or service any longer”, Cameron Beveridge highlights.
Ever since the term Experience Economy was first coined by Pine and Gilmore roughly 20 years ago, researchers have explored how consumer buying decisions are increasingly determined by experiences. Pine and Gilmore make the case that in today’s economy, consumer buying decisions are greatly influenced by the quality of the experience they receive from the brand, and not just by the brand’s product or service. The Experience Economy was birthed out of the increased desire of digitally native Millennials, who now form the largest purchasing group, to spend their money on experiences they can share on social media platforms rather than products and services.
With artificial intelligence (AI), businesses can extend today their capabilities in ways that were once unimaginable; and it is through technologies like AI that businesses can truly deliver a holistic customer experience that intelligently connects all enterprise processes and business, operational and experience management data to provide an exceptional, hyper-individualized customer interaction that is not soon forgotten, SAP is convinced of.
By embracing the value and capability offered, the entire business, from the back-office to the frontline, can bring a differentiated customer experience to life. The consumer-driven growth revolution will require all businesses to not only change their thinking but also adopt a new approach – one that puts the customer and their experience, not sales, at the center of the relationship to satisfy the expectations of digitally native consumers.
It’s time to enter uncharted waters to radically re-imagine the very concept of customer experience to survive and thrive in the experience economy. For instance, those who meet the consumer's natural instinct to play with their product, or who develop products according to such rules, generate measurably more success and demand. Addressing all five senses is also required, in addition to seeing and hearing, touch, smell and taste - hence, gamification is not just a question of technology. Rather, every gamification concept is based on "positive psychology" and motivation to change behavior. The secret is voluntariness instead of compulsion, praise, and recognition for overcoming hurdles and customer loyalty. So, the earlier companies start virtualizing offers and data streams, the more they will be able to face the competition.
What social media was for the entry into the virtual community, "gamification" is now for the "sharing economy". It's not a new invention, but a real competitive factor in business. The ‘Olympic Games’ were already invented in ancient times to encourage people to perform at their best, to compete in public with others, and to receive a laurel wreath as a reward at the end.
By Daniela La Marca