Today's world has changed considerably from how it was 30 years ago. We are constantly connected to the internet; we interact on social media, engage with online advertisements and purchase items online. COVID-19 has also accelerated the pace of which organisations adopt digitalisation efforts to adapt to changing consumer behavior. Gone are the days when businesses would run solely from brick-and-mortar stores and use traditional marketing techniques. This applies to both large enterprises as well as MSMEs. Hence, digital transformation is crucial for businesses if they want to stay on top of their game and their competitors.
This digital transformation has also defined new avenues of how consumers interact with brands. While customer satisfaction was derived from the actual product a few years ago, it is not the case now. Today, when a customer buys a product, they are not simply buying a product. They are buying the experience that comes along with the product. This is where experience economy comes in.
So what exactly is experience economy, and how can MSMEs integrate this into their strategies to satisfy consumers? Read on to find out more.
Understanding The Experience Economy
Experience economy is the concept where customers are treated to an experience whenever they purchase a product or service. In today's competitive world, where customers have many options to choose from during shopping and many products have become commodities, they prefer to pay even more for an experience that makes them feel good.
They expect to be heard and offered services beyond what they had paid. According to collaborative study on American adults by Eventbrite, Ipsos and CrowdDNA, 75% of millenials say that they value experiences over material things. They would prefer to share their travel adventures in exotic destinations on Instagram rather than show off luxury couture or jewelry. This thinking calls for a digital transformation of businesses that do not wish to fall behind and become obsolete.
The experience economy is a digital transformation strategy that helps you create loyal customers and enjoy a competitive advantage. Primarily, there are two aspects of experiences involved:
Customer Participation — involves the customers participating actively or passively in the experience.
Connection — this aspect signifies the consumer's relationship with the product or brand during the experience.
Some experience economy examples where companies adopted this digital transformation strategy and turned them into opportunities are discussed below:
Airbnb
Airbnb was the pioneer of online couch surfing. They now also provide people with the option of hosting experiences. You can host virtual experiences like cooking classes or physical experiences such as guided tours, sporting activities, and wine tastings.
Fortnite
Fortnite is an online game that offers a virtual experience to its players. However, the owners decided to offer an even more immersive involvement by bringing the game to life during the Paris Games Week 2018. They created a complete Fortnite scene where people could interact with the characters and play games.
McDonald’s started giving out Monopoly stickers with their meals. When people get enough property stickers, they get the opportunity to win exciting prizes. This customer involvement created a lot of buzz on social media, with more and more people wanting to be part of it.
Why is the Experience Economy Important in Marketing?
The experience economy has changed the way companies market. Today, customers do not want to be bombarded by ads; instead, they want you to show them that your brand cares for them and that it creates authentic experiences for them. The digital transformation roadmap now contains immersive experiences as a notable feature of marketing techniques. If we analyse the strategies of businesses in the past, we see that those that adopted experience economy strategies in their marketing approach, creating immersive experiences for their customers – stood out amongst their competitors.
Walt Disney World is a prime example of such a marketing strategy. Firstly, they provide an immersive experience in their theme parks by bringing beloved Disney cartoon characters to life. Next, having more engaging and immersive rides, bigger theme parks and shorter wait times. As a result, customers are willing to pay for the higher ticket prices because they value the experience at Walt Disney World.
