For the modern American consumer, the times they are a changin’. Shoppers are much more conservative than they were before the recession, in the big-box-store-heyday of the late ‘90s and early ‘00s. At $58 per day, discretionary spending is at its lowest since 2008, when measurement began. Moreover, Customer Engagement levels have remained essentially flat since 2009. All in all, it seems there is a “new normal” as far as American shopping habits are concerned. How can companies hope to win share of wallet in the new paradigm of conscientious consumerism?
Joseph Pine and James Gilmore may have the answer. They predicted this new normal years ago, dubbing it The Experience Economy. Basically, they argue that the commoditization of goods and services means price and quality are no longer the only differentiators; nowadays, consumers are also looking for a unique purchasing experience.
Starbucks serves as the classic example of a company that has thrived according to the new formula of the Experience Economy. Beyond the business “entry fees” of a compelling business offer, competitive prices, and consistent customer care, Starbucks is one of the world’s most popular brands because they have created a special purchasing experience. Like the coffee houses of the 19th century, Starbucks creates a “Third Zone” between home and work, where consumers can get a special emotional experience along with their grande-skim-milk-no-whip lattes. Theatricality, attention to the consumer experience, and consistent service are crucial in the Experience Economy, among other Customer Engagement-boosting qualities, such as authentic service.
The Mayo Clinic is another example of an organization that is thriving in the new environment. As described in the Harvard Business Review, the Mayo Clinic successfully creates a compelling customer experience through visual and experiential clues. For instance, they renovated to provide new amenities in standard hospital rooms and add couches in doctors’ offices, so as to make patients feel more comfortable. Additionally, the Mayo Clinic instituted a strict business-attire dress code for doctors who are not conducting medical procedures, to communicate the importance of the client. The Mayo Clinic’s high standards for employee appearance even extend to asking back-office lab technicians to change out dirty shoelaces. As one Mayo Clinic employee explains, these details are important because “Everything [we] do, down to [our] shoelaces, represents our commitment to patients and visitors.”
Like Starbucks and The Mayo Clinic, the winners of our 2010 Most Engaged Customers study create an emotionally compelling experience for their customers. And with higher Customer Engagement, these firms also enjoy higher performace across several key business indicators, such as share-of-wallet, profit margins, and ROI.
To emulate these winning brands, aim for a memorable customer experience that still sustains “brass tack” values such as functionality, price, and quality. The first ingredient in any successful Customer Engagement model is measuring current Customer Engagement levels. Next, continuous measurement allows companies to track effectiveness of Customer Engagement programs. PeopleMetrics’ Voice of the Customer solution also includes a proprietary library of best practices and automatically-sent Action Alerts to quickly indicate how to win back wavering customers, or maximize impact from a glowing customer comment. Because American consumers have less discretionary spending these days, companies must put extra effort into creating a consistently compelling customer experience.
[photo: Adam Bartlett]
Topic: Customer Experience
