Should Marketers Care About Customer Experience?

By: Tony Bodoh, Chief Experience Officer, Tony Bodoh International; Speaker & Award-Winning Coach

Warning: What you are about to read will be considered heretical by many in the customer experience community. But, as marketers, you need to know it…as Nike just proved.

Customer Satisfaction is Dangerously Misleading

Traditional measures of customer experience like customer satisfaction, net promoter score, or ease of doing business, are lag indicators. They can only be measured after the experience. They cannot change the experience itself. At best, they can be used to react to a customer’s dissatisfaction in the moment, which occasionally will cause the customer to edit her memory of the event and influence her to add a “but, then…” to her story about the unpleasant experience.

For this reason, traditional customer experience metrics and tactics are ill-suited for the economy that we are now deeply engaged in. In fact, they often do more harm than good.

These measures were developed during a period when products and services dominated the economy. They are the offspring of the quality movement where lowering the rates and associated costs of defects determined a company’s profitability because nearly everyone was competing on price and quality. Sometimes these measures were useful in providing data that helped lead to innovations in future versions of products and their manufacturing; or, to improve the standards and delivery procedures of services.

But, we are no longer in an economy that is dominated by products and services. We are now firmly entrenched in the “Experience Economy” and we are quickly crossing the threshold into the “Transformation Economy.”

What is the Experience Economy?

The Harvard Business Review published an article about the Experience Economy in 1998.  The authors, Joseph Pine II and James Gilmore, followed the article in 1999 with their book, The Experience Economy. In their writings, Pine and Gilmore demonstrated that the Experience Economy evolved from older economies: the Commodity, Product, and Service Economies.

Pine and Gilmore claimed that companies operating in the Experience Economy did not sell products or services. These companies actually sell the promise that the customer will have an experience that will create a lasting memory because of the feelings that the experience will evoke in the customer. The distinction may seem nuanced, but it is critically important. Consider Disney’s parks as an example of a company selling an experience. Any products or services that are involved in the sale are only there to make the experience more “real” and memorable.

Having Experiences vs Selling Experiences

Customers who buy a commodity, product, or service will have experiences when they acquire, consume, and (if necessary) dispose of that which they purchased. This is a fact of human life. We have experiences at every moment of every day.

But, companies focused on selling a commodity, product, or service aim their marketers on communicating the features and benefits of what they are selling. They focus on the experience only as it relates to their ability retain customers. And, because the experience measures are lag indicators, the marketers in these companies are rarely involved in the design of the experience. In essence, these companies view the experience as accidental to the human condition and not part of the sale.

Companies engaged in selling experiences have a much different focus. Their teams start by analyzing what challenging experiences customers are having in their business or life and what experiences they would rather have. Often, the customer cannot clearly define the experience she is having, much less what experience she would rather have. Therefore, discovering these experiences requires a variety of research methods, sufficient research subjects, substantial time, and financial resources. Once the ideal experience is identified, the company can then explore how that experience can be evoked. It may involve a product, a service, an event, or a combination of these.

Disney has mastered the Experience Economy.

Disney has mastered this. If you take your daughter to a Disney park, you will likely buy the mouse ears, she will be wearing her favorite princess dress, and you’ll have lunch with some of the characters. Maybe you’ll stay at the resort and be immersed in the “reality” that Disney creates for guests. Here they will make it easy for you to stay in the experience by shuttling you to every part of the resort you want to go to. You may have even opted to hitch a ride on their airport shuttle so you did not have to rent a car.

Disney sold you an experience. The products and services are merely tools that enable your experience.

Marketing’s Role in the Experience Economy

This is where you must pay attention to the nuanced difference of the Experience Economy versus the previous economies. The designers and engineers never lose sight of the experience they are attempting to evoke. Successful design is measured by how effectively, efficiently, and accurately the intended experience is evoked in the designated customer segment. If the company was instead competing in the product or service economy, the designers and engineers would measure success by the delivery of features or benefits without much regard to an intended experience.

Companies competing in the Experience Economy also make another deliberate shift. They engage their marketing teams in the research and design phases. This must happen because customers need integrity in their experiences as they move through the various stages of awareness, consideration, and acquisition. The experience is a forethought, not an afterthought. The experience is what is being promised, sold, and delivered.

Marketers as a group have far more expertise designing for experiences. They can bring tremendous value to the research and design phases and foresee how marketing campaigns can ultimately be a part of the experience that is promised, sold, and delivered.

Are We Really Heading into the Transformation Economy?

Nike is selling a self-identity.

Consider Nike’s recent advertisement with Colin Kaepernick. This ad is not actually selling any specific product, service, or experience. It is selling a self-identity. It is asking you if you are the type of person who believes you can become something more than you previously believed was possible.

When you display the Nike Swoosh, you confirm that. If you have doubts about this, look at the reaction of those who opposed the ad. They cut the Swoosh off or burned their clothes. They made it clear that they wanted to be identified as someone who was against what they perceive Kaepernick, and now Nike, stood (or knelt) for.

The the next economic evolution is here. As Pine and Gilmore pointed out, “the customer is the product” in the Transformation Economy. In this economy, the customer wants to become a new person, be part of something bigger, or be a catalyst that influences change in the world. Nike is not just targeting millennials. They know that Gen Z is already leading the way into the Transformation Economy.

The Coming of Age for Gen Z

Nike knows that two-thirds of it shoe sales right now are to those under 35. They also know that the Gen Z is starting to graduate from college and is more driven by social values than any previous generation. Gen Z has already impacted the food industry before they had a dime of their own to spend. Many Zs led the way by giving up the consumption of dairy and meat products or altered their parents’ decision-making so that they buy ethically raised animal products whenever possible. Gen Zs are focused on transforming themselves and as a result, they are transforming the world.

As marketers, you must take note. In the Transformation Economy, your prospects must experience transformation before they will buy. Then, they must experience a transformation while they buy. And, they must experience transformation after they buy. They are the product. They want to buy a new self identity. They want companies to create experiences that guide them through their transformation.

The good news is this: Transformation is what marketers know. They know how to move a person from being unaware to being aware. They know how to move someone who is apathetic to consideration. They know how to move a non-buyer to become a buyer.

In the Experience Economy, these were good skills to have. In the Transformation Economy, the life of your company depends upon you mastering these skills.

Learn more at AMA Cincinnati’s Ignite Conference!

During the lunch session of the AMA Cincinnati Ignite Conference on 9/21, I will explore the importance of customer experience design for marketers. Joining me will be Russ Klein (CEO of the AMA), Pamela Gilchrist (Area Marketing Director for Chick-fil-A), and Kristen Lundbeck (Senior Manager of Advanced Advertising for Spectrum Reach). Each participant comes with a different perspective so we will hear practices, stories and examples in B2B and B2C. We will also learn where experience design will go for marketers in the next three to five years.

Tony Bodoh is constantly seeking to understand the nuances of human experience that separate the high performers from everyone else. His discoveries have led him to publish three #1 bestselling books and to found or co-found five companies ranging from customer experience consulting to television production.

Learn more about Tony.

Follow Tony on Twitter @tonybodoh