Over the years, consumer spending has grown from purchasing goods at conveniently located stores to searching for “sales” from competing retailers and making purchases based on price. In the 1900s, not only did the purchasing of “goods” increase economic growth but so did the birth of the service industry.
More currently, and despite the rise in huge online behemoths like Amazon, economists have witnessed a new economic offering develop over the past decade. They are calling it the “experience” economy. Understanding what the experience economy is, and how it can be applied to your own business, could be the key to sustainable growth.
The experience economy doesn’t simply revolve around recreation and entertainment purchases. Economists have broadened their definition of this economic offering. Stock market analysts have taken notice of companies that use consumer experience management (CXM) programs. These companies have become more profitable over the past decade than companies not focusing on the consumer experience.
An experience purchase is when you take a commodity and stage it with service to create a unique and individualized experience that leaves consumers with positive memories.
A winner in the experience economy is the luxury piano giant, Steinway. The company saw declining sales of their $25,000-plus grand pianos during the early 2000s, when the rise of less expensive electronic keyboards forced this legendary brand to rethink its marketing and sales techniques.
After enlisting CXM experts, Steinway has seen its sales rebound. It now provides purchasers of new pianos with a one-of-a-kind experience: Every new Steinway comes with a private concert performed by a piano virtuoso. The concert is held among friends at the home of the buyer. Steinway reported that for every concert held, another piano is purchased. At the same, it has created a unique memory for the purchaser, embracing a fundamental element of the experience economy.
For agents who might think because we sell experiences we are destined to make strides in this economy, it’s important to understand that travel is the result of the purchase. The commodity is the airline ticket or other vacation components, which can also be bought online and are competitively priced.
Because OTAs don’t provide memorable purchasing experiences, travel consultants should embrace this experience economy. CXM experts note that an experience goes beyond customer service. CXM is the process of providing unforgettable experiences to your customers at every touchpoint.
This includes managing your online web presence (providing ease of use), developing phone techniques (including short hold times, answering quickly) and creating a personalized interaction with your client. It also includes using social media to build enthusiasm versus being promotional and soliciting sales.
Creating memories for clients can go beyond helping them plan amazing vacations—if you construct personalized experiences that deliver more than they expect.