What Is the Experience Economy?

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Customers no longer choose between brands purely based on the products and services they offer. Today, the overall experience a company provides is just as important. Here’s what the experience economy is — and how you can level up your experience game.

Over the past few centuries our society has transformed from agrarian (where the economy was based on commodities) to industrial (where the economy was based on goods). Then, in post-industrial economies, service providers overtook manufacturers as the dominant economic force.

And now, we’re seeing these services customized in order to give consumers an unforgettable experience. This is the experience economy. But what does it really mean, and how does it affect your business?

What characterizes an experience?

An experience is an event or incident that leaves an impression on the person it happens to. So what does this mean in a business sense? According to the Harvard Business Review article where the term “the experience economy” was first coined:

“An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.”

- B. Joseph Pine II and James H. Gilmore

Experiences are inherently personal. No two are the same. They engage customers on so many levels — from emotional to physical to intellectual (and sometimes even spiritual). And it’s this holistic engagement that makes experiences so much more memorable than any product or service alone ever could.

Experience economy examples

So what does the experience economy look like in practice? The Starbucks Experience is a perfect example — because you’re paying for so much more than a coffee.

You’re paying for the cozy ambiance. You’re paying for the skilled and friendly staff (in 2022, Starbucks announced they would spend $1 billion on higher wages and better employee training). You’re paying for comfortable furnishings and free WiFi. You’re paying to be surrounded by other people enjoying their Starbucks experience.

Here’s another example. You might have seen this viral video, where a South by Southwest Airlines flight attendant turns a dry safety spiel into a comedy sketch.

 

 

With customers in stitches, Southwest created a fun flying experience that those passengers (and millions of people who viewed the clip) won’t forget anytime soon. And there are plenty of other brands that offer incredible experiences that keep customers coming back again and again.

Why does customer experience matter?

In the experience economy, creating memorable interactions with customers is more than a nice-to-have. For brands who want to see results, joyful CX is a must. But don’t take our word for it. Here are the numbers to prove it:

80% of customers report that CX is a key factor in their buying decisions, alongside the quality of goods and services offered. And today, 86% of consumers are willing to pay more if they know they’ll receive an outstanding customer experience. 

What’s more, 61% of customers will switch to a competitor after a single bad experience. So when it comes to CX, consistency is key.

Where customer support fits within the experience economy

Creating customer support experiences that go above and beyond is a great way for brands to stand out from the crowd. Not only does this provide an outstanding experience for an individual customer, but it gives brands a captivating story to share.

Look at footwear giant Zappos. When a customer was late returning a pair of shoes because of a death in their family, the Zappos support team took care of the return shipping themselves and arranged for a courier to pick up the shoes at no extra cost. The company even sent a bouquet, along with a note offering their condolences.

Customer support is one of the most important touch points that consumers have with your brand. And a positive interaction with your support team helps build customer loyalty: A survey revealed that 80% of Americans are more likely to be loyal to a brand after a good support experience.

Learn how to empower your agents with the right customer service skills for success.

How to deliver joyful customer support experiences with automation

With incredible advances in conversational AI technology, forward-thinking support teams are using automation to up their experience game. Here’s how automating your customer service can help you deliver faster, better CX.

1. Round-the-clock support

While you can’t expect agents to work around the clock, a virtual agent allows you to provide customers with 24/7 support. This means customers can get the answers they need, whenever they want them. As well as providing instant support, this helps reduce buyer friction. Plus, you can serve different time zones without scaling your support team.

2. Faster responses

For questions that need to be escalated to a human agent, process automation means your bot can collect details up front and route tickets to the right department. This intelligent triage gives agents the context they need to resolve issues quickly, cutting average handle time. And faster responses means happier customers.

3. Personalized interactions

The best automation providers use a headless approach, allowing them to seamlessly integrate into your existing tech stack. This means your virtual agent can pull customer data (such as name, location, IP address, and more) from your CRM.  Brands can use this information to suggest new products based on past preferences, or reach out in a customer’s preferred language — to really personalize each conversation.

4. Multilingual support

75% of customers are more likely to be loyal to companies that offer support in their native language. But many brands don’t have the resources to hire agents in every market they serve. With the help of a virtual agent, they won’t have to: at Ultimate, our powerful virtual agent platform supports 109 languages at native-level fluency. We’ve developed the most accurate multilingual AI on the market — so unlike some automation providers, our platform doesn’t rely on clunky translation layers.

 

With increasing numbers of brands investing in CX, the experience economy is growing rapidly. And advances in AI technology mean companies can take their customer support to the next level. This allows leading brands to deliver experiences that keep them a step ahead of the competition.

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