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RESEARCH
ANALYSIS
According to Gartner, more than two-thirds of all enterprise processes and
TRENDS
companies nowadays compete primarily on the basis of business, operational and
customer experience. Another study even predicts experience management data
that customer experience will overtake price and to provide an exceptional,
product as the key brand differentiator by the end of hyper-individualized customer
this year. The fact is, just as Cameron Beveridge, interaction that is not soon
regional director for Southern Africa at SAP confirms to forgotten, SAP is convinced
us as well, the experience economy is alive and well, of.
despite the extraordinary events of 2020. However, he
points out, it has undergone dramatic changes that By embracing the value and
business leaders must take note of if they hope to capability offered, the entire business, from the back-
recover fully from the challenges brought by the office to the frontline, can bring a differentiated
widespread disruption. Too often companies leave customer experience to life. The consumer-driven
gaps in their experience economy strategies that growth revolution will require all businesses to not only
undermine their success, he warns. In fact, getting it change their thinking but also adopt a new approach –
wrong can be costly, considering that nearly a third of one that puts the customer and their experience, not
customers in one study said they would leave a sales, at the center of the relationship to satisfy the
brand after a single bad experience and consumer expectations of digitally native consumers.
expectations are constantly rising.
It’s time to enter uncharted waters to radically re-
“Simply having the product or service is not enough; it imagine the very concept of customer experience to
is no longer even a differentiator. Consumers want a survive and thrive in the experience economy. For
positive and personalized experience to sweeten the instance, those who meet the consumer's natural
deal. They want to feel like brands are listening to instinct to play with their product, or who develop
them, that they understand them. This has necessitated products according to such rules, generate measurably
a shift in value delivery. As a business, you cannot rely more success and demand. Addressing all five senses
purely on only your product or service any longer”, is also required, in addition to seeing and hearing,
Cameron Beveridge highlights. touch, smell and taste - hence, gamification is not just a
question of technology. Rather, every gamification
Ever since the term Experience Economy was first concept is based on "positive psychology" and
coined by Pine and Gilmore roughly 20 years ago, motivation to change behavior. The secret is
researchers have explored how consumer buying voluntariness instead of compulsion, praise, and
decisions are increasingly determined by experiences. recognition for overcoming hurdles and customer
Pine and Gilmore make the case that in today’s loyalty. So, the earlier companies start virtualizing
economy, consumer buying decisions are greatly offers and data streams, the more they will be able to
influenced by the quality of the experience they receive face the competition.
from the brand, and not just by the brand’s product or
service. The Experience Economy was birthed out of What social media was for the entry into the virtual
the increased desire of digitally native Millennials, who community, "gamification" is now for the "sharing
now form the largest purchasing group, to spend their economy". It's not a new invention, but a real
money on experiences they can share on social media competitive factor in business. The ‘Olympic Games’
platforms rather than products and services. were already invented in ancient times to encourage
people to perform at their best, to compete in public
With artificial intelligence (AI), with others, and to receive a laurel wreath as a reward
businesses can extend today at the end. ◊
their capabilities in ways that
were once unimaginable; and it By Daniela La Marca
is through technologies like AI
that businesses can truly deliver
a holistic customer experience
that intelligently connects all
October 2020: Experience Economy: customer-centricity & cross-channel customer interaction 6