In today’s competitive business landscape, customers are no longer content with high-quality goods and services; they seek value from positive, engaging, and memorable experiences. As highlighted by the Experience Economy framework introduced by Pine and Gilmore in 1999, the modern customer desires more than just a transactional exchange – they seek meaningful interactions and emotional connections with brands.
According to the State of the Connected Customer 2018 survey, 80% of customers consider the experience provided by a company to be as important as its products and services, and 84% emphasize the significance of being treated as a person, not just a number.
Not just that, most customers are willing to pay a price premium for a fulfilling experience.
Despite the critical importance of delivering experience, there are significant gaps in the customer expectation versus what companies can deliver.
Understanding the Experience Economy
The Experience Economy is based on the idea that businesses must move beyond merely offering products and services to delivering memorable and transformative experiences. This shift in consumer expectations has reshaped how companies operate, focusing on creating unique and personalized experiences catering to customers’ emotional needs. Customers are willing to pay a premium for fulfilling experiences, making it a crucial aspect of business success.
Challenges in Delivering Expected Experiences
While the importance of delivering exceptional experiences is well-established, many companies need help to meet customer expectations. One of the reasons for this struggle is the ambiguity and misunderstanding of what constitutes an experience. Commerce Experience, as defined by Gartner, refers to the interactions between marketers and customers throughout the buying journey, encompassing awareness, purchase, and post-purchase feedback. Others define experience in terms of omnichannel consistency, personalization of communication and service, and conversations with autonomous agents like chatbots.
Understanding Experiences from the Customer’s Perspective
To deliver the expected experience, businesses must understand experiences from the customer’s perspective. When customers purchase products or services, they have both functional and emotional/psychological needs. Functional needs are defined by what the product or service does. In contrast, emotional needs are determined by how the outcome feels. Expectations of the experience stem from emotional and psychological needs associated with the product or service.
For example, consider the act of hailing a taxi. Whether for a business trip or a fun outing with friends, the functional need for transportation remains the same. However, the emotional needs differ significantly. The expectation for a business trip may revolve around punctuality and reliability for peace of mind. On the other hand, the expectation from a trip with friends could be comfort and convenience. The context of the customer determines these expectations and the extent to which they are met.
The Importance of Contextual Intelligence
Contextual intelligence plays a pivotal role in understanding and meeting customer expectations. Data-driven companies in digital commerce have invested heavily in understanding contextual intelligence as it empowers decision intelligence. By continuously extracting intelligence about the context of customer interactions, these companies can match the right products and services to the contextual needs of the customer.
For instance, companies like Airbnb leverage contextual intelligence to identify the purpose of a customer’s stay, be it business, vacation, or event participation. This information helps them prioritize the importance of various amenities and match properties that align with the specific context of the customer’s stay.
The Role of Decision Intelligence in delivering meaningful experiences in Digital Commerce
In digital commerce, customers take charge of conversations with brands and set the terms for doing business. With abundant choices, digital commerce demands that companies become better listeners and assistants to customers. Delivering a great customer experience starts with gaining insights into the customer’s context and aligning their expectations.
Businesses must embrace decision intelligence – the ability to use data, analytics, and AI to make informed decisions to achieve the agility to orchestrate contextual experiences in real time. By combining contextual intelligence with data-driven insights, companies can create personalized and relevant experiences that resonate with their customers.
In conclusion, the experience economy has ushered in a new era of customer expectations in the digital commerce landscape. Customers are no longer satisfied with mere transactions; they seek personalized and memorable experiences that cater to their emotional needs. Businesses must prioritize delivering exceptional experiences and capture customers’ contextual intelligence to unlock the next level of success in digital commerce.
By understanding experiences from the customer’s perspective, leveraging contextual intelligence, and embracing decision intelligence, businesses can create meaningful connections with their customers, driving loyalty, advocacy, and sustainable growth. The power of experience in digital commerce lies in its ability to transform transactions into meaningful interactions, leaving a lasting impression on customers and setting businesses apart in the competitive marketplace. As the digital commerce landscape continues to evolve, companies prioritizing experience and contextual intelligence will be poised to thrive in the experience-driven economy.
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