Experience – The new economic offering.

July 14, 2009

“If you build a great experience customers tell each other about that. Word of mouth is very powerful.”  – Jeff Bezos.

In the experience economy availability, pricing and quality no longer satisfy the consumer. Customers base their buying on symbolic values like status, appreciation, attention, imagination and self development. People have become relatively immune to messages targeted at them. The new way to reach customers is to create an experience with them. To market their goods and services, brands no longer invest in traditional mass media marketing but to search for emotional attachment.

“Half the money I spend on advertising is wasted, the problem is I don’t know which half “– Lord Leverhulme, British founder of Unilever. It is now abundantly clear that the wasted half is that which does not offer this new economic offering that is experience.

Starbucks case study: the anomaly of the $4 coffee.

Although the CEO of Starbucks is trying to kill the myth that all coffees at Starbucks cost $4, their offering is still largely more expensive than other cafés. The reason is that they have managed to offer clients more than just a cup of crushed beans and hot water. The extra value comes from the fact that when you enter a Starbucks café you are prepared to engage all five senses and it is not just a matter of drinking but of entering into a new environment that has been created to cater to you needs. It is this reason why people will leave their coffee at home which they bought for less and come and sit and spend. starbucks

According to the European Centre for experience marketing, now more than ever, the customer plays a key role in the marketing process. To be successful brands can no longer focus on the features and beauty of their offer but on the personal goals, drives and interests of the customer. Indeed interactions can be of great value, especially in the moments where personal contact with the customer is possible. The dynamic nature of interactive applications creates the possibilities for personal involvement based on interests.

The customer becomes part of the experience, controls process and this creates a relationship with the brand. To be successful brands have to ensure that all interaction between the brand and the customer is perfect. This is because CLARITY IS KING. The careful use of the interaction will result in proper function and functionality for a product or process to keep it CLEAR, COMPREHENSIVE AND COMPREHENSIBLE. To prevent a negative experience is just as important as or even more important than stimulating a positive experience.

“If you do not create a positive experience, the client will discuss the commodity and not the brand” – Munyaradzi Hoto


2 Responses to “Experience – The new economic offering.”

  1. buckohare Says:

    Above all else im loving the quote – “i dont know which half lol” This a very well thought out analysis and could better direct the focus of marketing for many businesses. It reminds me of the old Coca Cola – Pepsi debate. Though people actually preferred the taste of pepsi they thought they preferred coke – Coca Cola sold the idea that Coca cola = happiness. Pepsi sold the taste – the experience (ie happiness) won the battle despite the fact that people would surely enjoy the taste of pepsi more. But maybe there is a placebo effect, that the thought situation becomes reality due to the power of the mind believing as it wants to believe.

  2. Scott Gould Says:

    Munya has hit the nail on the head in introducing the experience economy.

    The Starbucks example (their coffee costs a lot more than $4!) is very pertinent. As someone said, Starbucks is not about selling the best coffee. It’s everything else – every little positive cue that creates an impression – like a stage director setting the scene before a single word has been spoken.

    Good conversation!

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