In a now famous 1998 article Harvard Business Review, B. Joseph Pine II and James H. Gilmore’s experience introduced the business world to the concept of economics. The theory goes something like this: Businesses have gone through different economic stages – agriculture, industry and services – where the nature of what was sold began 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 that those ingredients were pre-packaged in a complete offer (cake mix). Finally, the service economy has seen the rise of companies that have built many services around those products (the bakery that makes cakes for you). At each step, prices for consumers continue to rise.
At the turn of the millennium, the authors accurately predicted a new experiential economy, where both products and services were an adjunct to the main event — Chuck E. Cheese party! In an experience economy, the goal becomes a lasting memory (although some may not like to remember the whole Chuck E. cheese experience).
Of course, there is little argument that the authors had the spot. Experience took over the economy quickly and continues to this day. But there is a branch of empirical economy that is developing rapidly. This new variant, which we call the “digital experience economy”, takes the concept further by imagining products and services not only as physical experiences, but also as digital experiences (and sometimes so completely). According to our analogy above, Chuck e. Cheese’s birthday party turns into an online event between your child and a group of friends from around the world.
A recent rebrand of Facebook to meet, a company focused on creating virtual worlds, digital experience makes the potential of the economy even more promising and instantaneous. But before we move on to the rabbit hole like a “total recall”, let’s focus on what the real digital experience economy looks like today and what it will be like in the near future.
Digital experience economy support
Experience taking economics to the digital world means data — and plenty. According to Pine and Gilmore, personalization is a key element of experience economics. In a digital world, however, experience has to go further to provide hyper-personalization. As such, artificial intelligence and real-time behavioral data are becoming increasingly important. In particular, companies need to not only set up multichannel access for customers, but also understand all customer interactions across those channels in real time.
To transform a digital experience into an economy requires a comprehensive understanding of each customer in the end. With this understanding, companies can provide the kind of hyper-personalized and memorable experiences that add value to their customers (both internal and external), allowing companies to run more profits. To do this requires a system that can support the accumulation of knowledge on a scale.
The system of experience
So what does it take to support this new digital experience economy? RingCentral defines trademark “systems of experience” technologies that may support the hyper-personalization and knowledge accumulation we discuss above. Broadly speaking, Experience Systems not only supports the sophisticated Big Data Store to support the digital experience economy, but also countless technologies that support the way customers (both internal and external) interact with your organization.
In 2018, Gartner discussed the emergence of multi-experience development platforms, acknowledging that while most companies focus on web-based communication (email) to create customer experiences, and more recently mobile, those platforms alone will not cut it today. . Today’s experience requires video, chat, and soon, the augmented / virtual reality mentioned above. Why? Because consumers decide what brand of communication they want to use today and when they don’t get what they want, they just leave. A study by RingCentral found that customers stopped using a product or service an average of four times over a 12-month period due to poor customer service.
Experience systems, however, are not just about multichannel or even universal communication. A true system of experience creates a unique experience for each channel based on the unique features of each channel. This is the opposite of “one size fits all”. And it goes one step further. Although each experience is tailored to a specific channel, experiences have to be considered consistent in some way. Why? Because customers want to switch between channels effortlessly. The truth is that inconsistent experiences across channels hurt your brand.
Features of the system of experience
While technologies such as artificial intelligence and big data certainly underpin experience systems, for consumers, those technologies mean very little. For them, the characteristics of their experience revolve around ideas, such as:
- An immersive experience that combines multiple sensory experiences
- Feelings of community, where customers feel part of a larger group of like-minded people
- Simplicity that allows customers to enjoy the experience effortlessly
Finally, three main objectives of the experience system should be achieved:
- Increase existing product revenue for your company
- Improve the experience for customers
- Improve experience for employees
That ultimate goal, improving employee experience, is often overlooked in creating systems of experience. This is because many companies often overlook the impact of employee experience on the overall customer experience. In short, happy employees make happy customers. And that’s not just an interesting phrase. It has numbers to back up. A Gallup poll found that companies with highly employed employees outperformed their competitors by 147% in terms of earnings per share.
One way the company today is tackling the link between employee engagement and customer engagement is creating a link between those two elements of the experience system. This is understandable, especially since customer service groups, for example, are demanding it. In a RingCentral survey, about 80% of agents say they have to retain customers every day because they search for information to solve problems. The problem, they say, is the broken workflow. Integrating customer service and employee engagement systems, however, was a welcome solution: 92% said integrated communication and collaboration solutions – platforms that strongly integrate messaging, video, phone and customer experience – would help.
While the digital experience economy may seem like the normal growth of an experience economy, the systems of experience needed to support it need to be carefully considered. Cloud communication technology will become a hub for data collection, storage, distilling and use for an easy, powerful and consistent experience with your brand. The ability to easily integrate those systems with other technologies, such as artificial intelligence, will also become important.
This content was produced by RingCentral. It was not written by the editorial staff of MIT Technology Review.