What is the Experience Economy?

Why Marketers Need to Focus on Creating Experiences

to Thrive in the New Economy

The newer generations of people and technological advances they are bringing about are changing the way people see the economy. In this new, digital system, consumers no longer only look for products that give them value. Instead, they go beyond the intrinsic value of the product. The consumers of today are using the products as a method of “experiencing” value-driven processes.

To explain it differently, people are no longer buying products just to use them. The benefits they get from the consumption are no longer the main objective. Instead, the consumers of the 21st century are focusing on the process of consumption, rather than the benefit.

Take Uber as an example. The users of this incredible service aren’t only looking for a quick ride. They are rating the drivers according to their own experience of the ride. In fact, the riders rate every step of the process of getting an Uber ride. They are willing to scrutinise the mobile phone app, the experience of the ride, and even the billing process. Every bit of the experience is as important as the transportation aspect itself.

A lot of marketing experts will mention the fact that marketing was always manufacturing experiences. However, there is an important difference in the new ways marketers are going about it. The intangible aspects that you cannot quantify are taking over. The relative value is becoming more important, and the overall consumer perceptions are shifting noticeably towards the subjective aspect of the market.

 

Back to Basics

The subjective approach of the consumers is not a new concept. Namely, before the digital economy took over, the personal touch was incredibly important. The consumers were always turning to familiar marketers and sellers.

Take for example the concept of neighbourhood stores. Most of us can remember going to local stores where we knew everything about everyone coming to the store. They were our friends and neighbours. Going to buy some groceries was about more than just getting food on the table. It was, in a way, a social outing.

That is why our parents used to love going to the store and having a nice chat with the store owner. The feeling of comfort those stores offer is something that modern stores can’t replicate.

So in the era before the newest digital revolution, the marketing was about creating experiences. However, that process got diluted through the desire of the providers for mass marketing and mass production. So, at this moment, the advertising methods are very impersonal.

While these methods are capable of bringing up decent results, they are far from ideal. And some of the forward-looking advertisers are aware of that fact. For that reason, they are returning to the feelings of belonging. Marketing is, once again, turning to experience creation in order to complement consumption benefits.

 

The Place of Technology in the Experience Creation

In the modern ages, Big Data and Artificial Intelligence are the main driving forces behind marketing efforts. Unfortunately, that approach has led to the age of anonymous selling and mass marketing. So marketers have been finding ways to make up for those flaws through the use of chatbots and other tools.

In fact, it is very common for e-Commerce websites to employ chatbots or other widgets that can give the customers a feeling of the personal touch.

As we have said, in the current age, marketing has to balance the needs for both the absolute value of products and the relative value. Namely, customers can sometimes perceive things as valuable through relative value. The feeling they get from a product can steer their future purchases. In fact, it can do so more effectively than the gratitude for the excellent objective value of the product.

Additionally, handling perceptions properly in the era of the digital economy can bring even more benefits. When consumers believe that their experience is better thanks to small details, they are more likely to come back for more. So the companies that offer the best possible experience get the most out of their customer interactions.

Of course, marketing can’t move away from the quality and the price of the products. Those two are still incredibly important indicators when it comes to the future success of said products. However, incorporating consumer experiences into the advertising plan seems to be a crucial step in the new economy.

 

Product Marketing and Services Marketing

Marketing of services has always been all about the experience creation. After all, service providers don’t give their customers products as such. Instead, they rely on their ability to connect with their customers.

Take for example the airline industry. While the flight itself can be important for people, they are paying for the entire value chain of experiences. From the first time they enter the airport to the moment they reach their destination, customers want to receive good treatment.

The same approach can work for product marketing. However, that means that the value chain of consumption has to go through some changes. The very least companies should do is to make sure that their customers feel at home when they visit their websites. Every interaction should feel welcoming and personal.

 

In the End

For some, this development can seem like a step back. After all, technology has given us the means to leverage mass marketing strategies. But most marketers have lost the personal touch in their pursue of high-level analytics.

Overall, the age that we live in is becoming more and more impersonal. So you can make your company stand above the competition by reminding the customers of the personal touch.

Consumers want to have excellent experiences with every purchase, and they are becoming very demanding. Thankfully, the older methods seem to have the exact solution that we need for that problem. Namely, simply reviving older methods of marketing can bring in great results. Lastly, that revival can, and should be the cause of exciting news for both consumers and marketers alike.