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How to take advantage of the New “Experience” Economy

There is no doubt that we are in the middle of an “experience economy”. More and more buying decisions are based on experiences (e.g. how a product or service makes you feel). Features, design, and price are all relevant factors, but no longer the main reason for a purchase.

Why is this the case? Because more and more products are becoming harder to differentiate, so for many brands and businesses “experience” is their unique selling proposition. For example, when buying outdoor clothing, why are so many customers happy to pay a premium for Patagonia over other brands? Is it because performance and quality are so much better? No, in most cases it is because of what the Patagonia brand stands for, how it makes you feel, and the experiences you remember. 

How is Patagonia creating these experiences? For example, most customers know that Patagonia commits 1% of their total sales to environmental groups. Also, their staff seems to be a little more passionate and knowledgeable. Finally, Patagonia is always quick to jump into any land preservation or land mismanagement discussion; these are all things that most outdoor customers care deeply about.

The feeling that Patagonia managed to create around its brand is priceless, and cannot be faked or superimposed on customers; hence why Patagonia can charge more for their products and most customers will happily pay the difference if they feel the experience is worth the premium. The same applies to most other products and services, from buying a home to eating at your local restaurant. Irrespective of the transaction amount (price paid), businesses that focus on experience will always outperform the ones that do not.

How to join the experience economy?

Regardless of how big or small your business is, if “experience” is to become your competitive advantage then every customer interaction has to feel special (not ordinary). You have to revisit every aspect of your business and think of ways to make the experience better for your customers. How do you deal with customer inquiries and complaints? How do you package your product? For example, including a handwritten “Thank You” note in your product package feels a lot more special than just including a printed order confirmation. This is just one of many examples of how you should revisit every “ordinary” customer touch point and make it “special”.

Storytelling is vital

It is important to highlight that storytelling is a vital aspect of the “experience economy”. We all love a good story, so is your business (or cause) worth talking about? And if it is, how are you sharing (promoting) your story?

Finally, if creating memorable experiences were easy then every product you buy or service you use would be enjoyable and memorable. However, this is usually not the case. In a world full of products and services that don’t even meet customer’s minimum expectations, focusing on “experience” can be your competitive advantage

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