In a now-famous 1998 article in the Harvard Business Review, B. Joseph Pine II and James H. Gilmore introduced the business world to the concept of the experience economy. The theory went something like this: businesses had moved through various economic stages—agrarian, industrial, and service—in which the nature of what was sold continued to evolve. For example, the agrarian economy focused on selling ingredients (they used the example of the ingredients in a cake), while the industrial economy saw those ingredients pre-packaged into a complete offering (cake mix). Finally, the service economy saw the emergence of companies that built a host of services around those products (the bakery that makes the cake for you). At each step, the price for the consumer increased steadily.
At the turn of the millennium, the authors accurately foretold the new experience economy, where both the product and the service are an accessory to the main event—the party at Chuck E. Cheese! In an experience economy, the goal becomes a lasting memory (although some may prefer not to remember the whole Chuck E. Cheese experience).
Certainly, there’s little argument that the authors were spot on. The experience economy took hold quickly and continues today. But there’s an offshoot to the experience economy that’s rapidly developing. This new variation, which we call the “digital experience economy,” takes the concept even further by envisioning products and services delivered not just as physical experiences, but as digital experiences as well (and sometimes entirely so). In our analogy above, the birthday party at Chuck E. Cheese becomes an online event between your child and a group of friends around the world.
Facebook’s recent rebrand to Meta, a company focused on creating virtual worlds, makes the prospect of the digital experience economy even more likely—and immediate. But before we head down a “Total Recall”-like rabbit hole, let’s focus on what the practical digital experience economy looks like today and what it’ll look like in the near future.
Supporting the digital experience economy
Taking the experience economy into the digital realm means data—and lots of it. A key element of the experience economy, according to Pine and Gilmore, is personalization. In a digital world, however, the experience likely needs to go further to provide hyper-personalization. As such, artificial intelligence and real-time behavioral data become increasingly more important. In particular, companies need to not only set up multichannel access for customers, but they also need to understand all of a customer’s interactions across those channels in real time.
The shift to a digital experience economy ultimately requires a massive understanding of each customer. With that understanding, companies can deliver the kind of hyper-personalized—and memorable—experiences that drive greater value for their customers (both internal and external), which in turn allows companies to drive greater profit. Doing so requires systems that can support knowledge accumulation at scale.
Systems of experience
So what does it take to support this new digital experience economy? RingCentral trademarked “systems of experience” to define technologies that can support the kind of hyper-personalization and knowledge accumulation we discussed above. Broadly speaking, systems of experience comprise not only the sophisticated big data stores to support the digital experience economy, but also the myriad technologies that support ways that customers (both internal and external) interact with your organization.
In 2018, Gartner discussed the emergence of multi-experience development platforms, recognizing that, while most companies focused on web-based communication (email) to create customer experiences, and more recently mobile, those platforms alone simply won’t cut it today. Today’s experiences require video, chat, and very soon, the aforementioned augmented/virtual reality. Why? Because customers determine which communications modalities they want brands to use today, and when they don’t get what they want, they simply leave. A survey by RingCentral found that customers stopped using a product or service an average of four times over a 12-month period because of poor customer service.
But systems of experience aren’t just about multichannel
By: Deepti Illa
Title: In the experience economy, systems of experience take center stage
Sourced From: www.technologyreview.com/2021/12/09/1040705/in-the-experience-economy-systems-of-experience-take-center-stage/
Published Date: Thu, 09 Dec 2021 15:00:00 +0000