The Rise of the Experience Economy

The Rise of the Experience Economy

Amidst the fourth industrial revolution, based on a Harvard Business Review study by B. Joseph Pine II and James H. Gilmore, the experience economy has emerged as the differentiator along the progression of economic value. Both renowned academics coined in the 1990’s how the Experience Economy is a concept which has transformed the way in which organisations around the world do business, create products and engage audiences.

Experience Graph

In today’s economy, businesses are maxing out their offerings with experiences to engage individual customers in a way that creates a memorable event, as opposed to products. Gartner says 90% of business will compete over experience and 86% of customers would pay for a better one.

Apple’s Ingenious Genius Bar

It’s no wonder Apple has become a premium brand, simply by delivering exceptional customer experiences. A leader of its kind, Apple Genius Bar is the heart and soul of the brand’s customer-first culture, through which they have defined the best-in-class customer services.

Fast forward to the current digital landscape, customer expectations have evolved. Here’s a new reality, modern consumers value experiences, not products. Or at least products are not the sole differentiator. It’s how the customers feel about brands that matters most. Experiences are directly connected to feelings, and companies must decide what they want their customers to feel when they interact with their brand.

The generational shift has further affected this consumer trend. As the biggest spending cohort, millennials (the generation born between 1981 and 1996) are igniting the experience economy. In a study by Harris Group, 78 percent of millennials would rather spend on experiences rather than material items. And this behaviour is driven by the very core nature of “FOMO” (fear of missing out), whereby young people are eager to share experiences that will give them online or offline reputation.

The result is more and more brands are cashing in on experiences that are “FOMO-worthy.” Only highlighting benefits and services of a brand are in the past, authentic and relevant experiences that come with a purchase are in the now. In other words, customer experience is not only confined in the way brands deliver services but more about the personal value that brands ascribe to customers who experience them.

Lego the Past, On to the Future

While commoditized toy companies have faded in the digital age, Lego is standing tall and continues to thrive in the experience industry. The company has launched in-store experiences and conventions accessible to all socioeconomic groups creating offline experiences that create connection and brand affinity designed to encourage collaborations and help build cognitive skills amongst children.

Fun Fact: Lego was founded by carpenter Ole Kirk Christiansen in 1934, and took its name from the Danish phrase, leg godt, meaning play well.

The Lego House sits on the corner of “Technology Road and Experience Street” in a small Danish town called Billund. It is a prime example of a unique experience. Visitors have 13 separate galleries of interactive technology to play with along with traditional brick-based building exercises. Guests can stop at a booth and create their own stop-motion animation or build amazing race cars at the garage. Everything made at the Lego House can then be uploaded to the cloud and enjoyed on their app. The store even has a Mosaic Maker, which uses augmented reality (AR) to capture your image so you can build your own Lego self-portrait, list of required bricks and instructions included.

Simply Put

A brilliant product or service is no longer enough, companies must put the experiences of the customer at the heart of their strategy, which in turn will encourage trust and loyalty. Creativity and authenticity along with being memorable and sharable (most important) are key factors to consider when building experiences. Here at Everise, we built Systematic Insights®, a data-driven methodology for improving CX to help Fortune 500 companies and the world’s most beloved unicorns nurture innovation and deliver immersive customer experiences with our deep talent pool of technology-driven professionals.

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