What it means to do business in the Age of Experience

There is no doubt that technology, and the speed at which is it changes, has significantly impacted the way we do business today. But although technology has vastly improved the transactional efficiencies of business, the true revolution is being driven by how technology has influenced customer expectations.

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Consumers are now more informed and discriminating than ever before. Successfully engaging and retaining them in this new era of expectations requires companies to apply holistic digitalization technologies to their business processes. The product creation process needs to mirror the nimble, adaptive, connected qualities that consumers now expect in their products, and it’s the only way for businesses to succeed in the Age of Experience. This article is the first in a series on this subject.

Defining this new age

The idea of the Experience Economy, defined by B. Joseph Pine II and James Gilmore 20 years ago, is based on the premise that providing goods and services is no longer enough to satisfy the consumer. Instead, businesses must construct and deliver a total package where the memory itself becomes the product – an "experience."  

Studies prove that customers whose expectations are satisfied are far more likely to be loyal to a brand. According to a 2017 Forrester report, companies with a superior customer experience score grew revenue five times faster than competitors with an inferior score. And conversely, poor brand experiences not only harm business, but actually help competitors. An Oracle study found that after a single negative experience with a brand, 68% of customers went to a competitor.

As a keynote speaker at our customer forum in 2017, George Blankenship, former executive at Apple, Tesla and Amazon, noted that creating and managing customer “obsession” is the key to success.  The largest, most technologically-savvy brands have embraced this ethos, as Amazon famously built its brand starting with the customer experience first. As Apple’s Steve Jobs once said, “You have to start with the customer experience and work backwards to the technology.”

Designing for the experience economy

Therefore, focusing on features and functions in product design is no longer sufficient, but rather examining the product and any related services within the context of customer usage is also necessary. The customer is now at the center of innovation and the challenge becomes how to create and deliver experiences that connect with them emotionally to create that “obsession.”

Disney is arguably one of the best examples of making this emotional connection. Disney’s holistic approach – extending far beyond the facades and costumes – ensures that park processes and personnel behaviors support the illusion, delivering emotional experiences that create brand loyalty and ultimately ROI.

Today’s consumer has a level of experiential expectation, which must be well understood in order to make visceral product connections. Prior to the start of any initial design concept, businesses need to ask key questions which lead to insight and understanding of end-user desires. These desires must be translated into a unified product vision which, in turn, requires team collaboration to turn that vision into reality.

True collaboration – from product concept, to design, manufacturing, and through final packaging and marketing – hinges on alignment across the entire organization on the experience they are tasked with delivering, and crucially, understanding how the contributions from each department fit together.  However, most companies today work in silos, where data is unable to flow seamlessly from department to department, let alone outside of the enterprise to external agencies and third-party suppliers. This inevitably leads to departments working with outdated designs, basing their decisions on old requirements, or developing plans based on outlooks that changed earlier that day. 

As an example, imagine a consumer products company that changes the formulation of one its products. That formulation change cascades into changes that are then required in product manufacturing, packaging, shipping, marketing, and retail store shelving. Each of these functions are in a different department within the organization but are interrelated. How does the scientist know that his formulation change will result in higher manufacturing and shipping costs? Everything gets easier and more efficient when information is shared in real-time, directly with the people who need it, and the impacts are communicated in a closed loop.

How we drive consumer connection

To effectively design for today’s Experience Economy, businesses require a holistic and collaborative environment such as the 3DEXPERIENCE platform. A centralized business platform breaks down silos to connect all the dots needed to create differentiating experiences. By digitizing the entire development process, businesses can analyze, design, simulate, engineer and realize the experiences in a virtual world, prior to delivering it to their customer. By capturing intelligent interactions between the environment, the consumer and the product, companies gain a deep business insight and a better understanding of the customer.  Offerings can then be simulated and optimized, encompassing all customer scenarios. And, importantly, the information gleaned from usage data can be applied to the next cycle of innovation.

By delivering experiences instead of products, opportunities for customer involvement and touchpoints have expanded, now beginning at design and production phases and lasting well beyond delivery of the product. This means more opportunity for customer engagement across the product lifecycle. Tesla, for example, has disrupted the typical car dealership model by establishing its own stores. These stores are designed and built by Tesla and staffed by Tesla employees, extending its ability to deliver a customer experience far beyond the physical vehicle. Additionally, Tesla is using market insight and applying it to its next cycle of innovation with its Tesla Semi.

In this Age of Experience, it is no longer enough for businesses to rely on a product for engaging buyers; organizations must continually show value by providing sustainable engagement through ongoing positive experiences.  It requires a new way of thinking about the customer experience as a business priority, and thus requires new ways of conducting business with that priority in mind.  It’s time to re-think if your business processes can support the experience you need to deliver.

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