Qualtrics CXweek: The Experience Economy – Customisation is the Answer to Commoditisation

Alex Allwood Customer Experience 0 Comments

Qualtrics CXweek: http://cxweek.com/

It’s Qualtrics third annual #CXweek – the largest online customer experience event on the planet where you’ll find exclusive content, blogs, reviews and keynotes from the world’s best customer experience #cx thought leaders.

I tuned-in for one of my favourite customer experience movers & shakers, author Joseph Pine. His keynote, The Experience Economy, looks at the importance of creating experiences that are engaging, memorable, and personal.

Joseph Pine is an author, speaker, and management advisor. He has authored and co-authored books such as ‘The Experience Economy: Work Is Theatre & Every Business a Stage’ and ‘Mass Customisation – The New Frontier in Business Competition’.

In my book, Customer Experience is the Brand, I explain Pine and Gilmore’s experience economy “the idea that the experience economy was the new economy post the evolution of the agrarian, industrial and service economies. As services become increasingly commoditised (like goods before them), the next competitive advantage for brands is providing experiences.”

In this keynote Pine says, “The most important thing to understand and what a lot of people don’t understand about CX is that experiences are a distinct economic offering as distinct from services as services are from goods. It is basically using goods as props and services as a stage to engage each and every person in a personal way and thereby creating memories, which is the hallmark of the experience.”

Pine uses the example of The Library Hotel in New York. The theme of the Library Hotel is the Dewey decimal system. From the time you walk through the doors the hotel has design the hotel around the book experience.

He says, “If you love books like I love books it is a wonderful place to be and one of the beauties of it is with the architecture theme that they have, they have ten floors, six rooms in every floor, how many times do you have to go to experience it all?”

Looking at sectors that are highly commoditised, Pine points out that the banking industry evolved to what we see today because spending time with customers wasn’t profitable.

UMPQUA Bank is based Oregon and their mission is to be the world’s greatest bank. “So they created a warm and welcoming environment that customers would actually value spend time in. In fact they added a café to the bank so if you’re waiting for an appointment you can have a cup of coffee that is brewed for you right there at the bank café and in fact they have opened it up for community events so people get used to coming in.”

I agree with Pine, it’s hard to talk about the experience economy without discussing Disney. Disney introduced their new customer management system called MyMagic+ in 2015.

MyMagic+ collects personal data using wearable technology called MagicBand. The band links to an individual’s profile and is used to collect vast amounts of customer intelligence and personalise the guest experience. Based on this data, Disney can map the entire customer journey through each touchpoint, measuring the level of engagement with products, rides and characters, including what they ate and drank

The focus of Pine’s keynote is discussing the Customer Experience and true, distinctive experiences. To most organisations CX means “making things nice and easy and convenient. And nice and easy and convenient are all-well and good they are great characteristics but they are characteristics of services. They are not characteristics of true, distinctive experiences.”

Pine points out, “If you want to get into the business like Starbucks did of staging a distinctive experience. You need to think about creating an office of a CXO, a Chief Experience Officer and recognise that nice is nice but if you want to create a true distinctive experience you have to be memorable.”

He continues, “Convenience means let’s get in and out as quickly as possible, let’s spend as little time as possible with the company because that’s convenient but recognising with experience it’s about the time that your customers spend with you that is key. It’s about time and how you manage that time, how you create drama with them in that time, that you rise up into a climax and come back down again, that’s what those signature moments are great for.”

He explains that today customers expect easy and convenient so they can spend their hard earned money and their hard earned time on the experiences they enjoy.

“The experiences that engaged them so what they are looking for there is time well spent. And if you are not providing time well spent then you are not truly in the experience business and you haven’t truly shifted up the progression of economic value and staging a true distinct experience for each and every one of your customers where they think about it as time well spent.”

When brands customise a good it then turns it into a service. He uses the example of how Coke created the freestyle machine. “Customers can choose any variety that you want. You can have a base of Coca-Cola, coke zero or diet coke and you can go in there and add additives you can have cherry, lemon or lime in it and you can mix it in with sprite, Fanta or orange juice or root beer whatever you want. And then as you go through you get to define exactly what your own personal cup of coke is.”

Interesting Pine explains that mass customisation is efficiently serving customers uniquely. What! He says, “Mass customisation isn’t about being every one to everybody because that is a sure fire way to increase your costs. Rather it is about doing only and exactly what each individual customer wants. One of the things that you need to do there is you need to be careful about overwhelming your customers with too many choices.”

He goes on, “Customers don’t want choice they just want exactly what they want so you need some sort of design tool, some way of helping customers figure out what they want because even if they know they might not be able to articulate it. You then get that information back into operations to do something different for this individual customer. Think about how they can use their technology to help retailer’s mass customise their offerings.”

In closing Pine advocates that we think about how you use customisation “to shift the progression of economic value because customisation is basically the answer to commoditisation. As commoditisation drags you down year after year customisation lifts you up.”

He says, “You can stay in that state of past practices and doing the same thing you have always been doing well then mark my words you will be commoditised. Or you can shift up this progression of economic value and stage an experience for each one of your individual customers and then you will be economically rewarded. “

Joseph Pine’s keynote for #cxweek can be viewed in full at http://cxweek.com/

First Published: https://goo.gl/an0tgn

About the Author

Alex Allwood

Alex Allwood is a consultant, author and speaker on customer experience. Empowering Customer-Centric Growth™ is based on the premise of ‘what is great for customers is great for business’. With over 20 years’ experience in customer-led growth, Alex’s expertise stretches across B2B & B2C and includes work in the finance, retail, health, communications and not-for-profit sectors. Alex’s consulting work, writing and professional speaking is designed to foster a culture of customer centricity, build team capability and help transform customer experiences.

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