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Experience economy: Understanding customer-centric transformation & what your customer wants - Mark Cameron (Digital Disruption Speaker) - 07 February 2017

Experience economy: Understanding customer-centric transformation & what your customer wants - Mark Cameron (Digital Disruption Speaker)

Mark Cameron is a strategic digital mastermind specialising in the digital business model revolution and customer engagement platform creation. A columnist for over 6 years, his expertise and opinions are featured in Australia's leading business magazine BRW, as well as the industry focussed Marketing Magazine, CMO, Social Media Today and Smart Data Collective in the USA. Mark has been inducted into an exclusive group of specialists from around the world regarded as Certified Experience Economy Experts. Mark is the 225th person to receive this qualification worldwide – and the only Australian on the list. Mark is a perfect fit for progressive thinking conferences and events.

In this series, the Digital Disruption Speaker discusses some key Experience Economy themes and frames them up for the current digital world. In part two, Mark looks at how businesses evolve and why building personalised products and experiences drive margin gains. In part three, he discusses the five stages of leading customer focused change. So stayed tuned.

The lucky country

Over the last decade, Australia has enhanced its reputation as “the lucky country.” Many other economies struggled with the consequences of the GFC but Australia’s economy remained strong. Surprisingly, this success came at a cost. While many global businesses needed to rapidly transform around the needs of the customer and the impacts of digital technologies, Australian businesses didn’t experience this sense of urgency to evolve.

Many market commentators now say that Australian businesses trail behind the major western economies when it comes to digital proficiency. As a result, Australian businesses are more susceptible to “disruptive” business models and non-traditional competitors. As a response to these perceived threats, many Australian businesses have been searching for a “silver bullet”. This has seen businesses investing heavily in technology and data believing this is their “silver bullet”. But this has come at the expense of focusing on the overall competitive strategy.

Leaders who invest in understanding the needs of their customers are in a good position to develop a new lens on their competitive landscape and discover where new opportunities may lie. Surprisingly, many businesses think of the customer experience as a mere piece of the overall services that they offer, but in this day and age, excellent customer experiences are their own distinct type of economic offering. Customer experiences are one of the most valuable ways for a business to cut ahead of the competition. This concept is detailed in “The Experience Economy”, a book written by TED talker and ‘ex-IBMer’ Joe Pine and his co-author James Gilmore. It broke new ground when it was first published by outlining that any type of business could improve the experiences it provides its customers and demonstrated how that could drive new revenue opportunities.

As a certified ‘Experience Economy Expert’ (the only one in Australia), I use many of the concepts, frameworks and models presented in The Experience Economy book to design digital transformation programs for my clients. In this series of articles I discuss the key themes of the book and frame them up for the current digital world. I will not be discussing the common tools for understanding your customer. We won’t be looking at design thinking, journey mapping or service blueprinting, although all of those tools are very valuable. This is about reviewing your whole business from the customer’s viewpoint and using that perspective to design memorable experiences that are engaging and new.

The progression of economic value

Almost all businesses exist in a competitive environment. To avoid becoming commoditized businesses need to evolve the value of their offering as the landscape in which they operate matures.

‘The Progression of Economic value’ model, created by Pine and Gilmore, helps business leaders understand how their customer offerings move up and down the value ladder.

 

The progression of offerings starts with the lowest-value offerings - commodities, and progresses up toward transformations - the highest value offerings. Low-value offerings are material, while the highest value offerings are intangible. The dynamic forces of an ever-evolving economy means continual innovation around offerings.

Examples of business offerings at each level of the ladder include:

  • A commodity business charges for undifferentiated products e.g. iron ore
  • A goods business charges for distinctive, tangible things e.g. a can of food
  • A service business charges for the activities you perform e.g. a delivery service
  • An experience business charges for the feeling customers get by engaging it e.g. Disneyland
  • A transformation business charges for the benefit customers receive by spending time there e.g. a university degree.

Progressing to the next stage more or less requires giving away products at the more commodified level. For instance, for a business to charge for a service such as new car warranties, that business must be prepared to supply new cars to replace any “lemons”. And to charge for transformations, a business must be prepared to risk not being paid for the time they spend working with customers who don’t “transform”.

It’s critical to discover where your business’s offerings sit on the value ladder and the upward and downward pressures on them. This is the first step in understanding the needs of your customers and the opportunities in the market.

Next up is what you do with this information and how you design experiences that change your business. This is what we will discuss in the next article in this series.

Learn more about Mark here.

 

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