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From Experience Economy to Experience Ecosystem

Nowadays the experience of the commodity is simply not enough. Venkatraman touches upon this in his book the Digital Matrix (2). Take the iPod for example. The physical commodity was hardware and music which created an ‘on the go’ listening experience to consumers. The commodity changed from something physical to a broader experience (i.e. into iTunes). By embedding iTunes into many devices, the commodity experience transposes into new ecosystems – into cars, into running apps, an online store and more.

The exponential growth of new technologies, new channels & business models, big data, cognitive technologies, together with the boom in millennial thinking of ‘personal’ and ‘now’, has made ‘customer experience’ that much more challenging, yet opportunistic. New opportunities are emerging for creating memorable personal experiences, not only for the commodity itself, but the commodity crossing into other related ecosystems (such as the iPod example above). Moreover, these possibilities are not optional: those failing to address both the advances of technology and the needs of millennials will be faced with disruption from players just around the corner. Experience opportunities does not stop there…

Beyond Commodity Experience

Creating an experience around a commodity is typically associated with consumer experience (CX). Yet in addition to customer experience, companies should also give good attention to employee and partner experience. These three assets – customers, employees and partners – remain key to any company, without which companies could not succeed. So long as these assets remain human (until one day they too become robotized) then there will always be the need to deliver experience to them and take into account their interdependencies. 

Companies that excel in designing a true experience across all three domains including the interdependencies, will have truly formed an experience culture and will be able to be successful in times of digital disruption. In this sense – we should not talk about ‘experience economy’ but instead an ‘experience ecosystem’.

Lets take a deeper look into the three areas of experience, how they are evolving with new technologies, their dependencies, as well as highlighting a couple of companies that excel in the experience ecosystem.

Customer Experience

Nearly twenty years on from Pine and Gilmore’s definition of the experience economy, companies are still hammering away at creating memorable experiences for customers.

In order to help companies manage their customer experience (CX), a number of methodologies, tools, and metrics emerged in the 90’s and early 2000’s. As an indicator of how well companies are doing at customer experience, the Customer Experience Index emerged in 1994 and the Net Promotor Score followed in 2003, introduced by Reichheld (3). More recently, social metrics such as Positive Share of Voice or Ratings are also being used to help companies stay on track. Customer Journey Mapping introduced by IDEO in 1999 (4) has been a tool long used in a companies’ mission towards CX excellence (often in combination with customer personas). Furthermore, Bernd H. Schmitt wrote extensively about the customer experience framework in 2003 in his book ‘Customer Experience Management’ (CXM).

Some of these tools as we know them today, will become a thing of the past. The next twenty years will dramatically evolve thanks to real time behavioural insights, neuroscience, artificial intelligence (AI) and predictive modelling. The current tools and metrics are still often ‘after the fact’. In a world where speed is of essence, these tools are already too slow. A customer’s memorable interaction is ‘at the moment in time’ (whatever the channel) and is influenced by the sum of all interactions prior to that moment. By using new cognitive technologies, it will become possible to get ahead of the game in the customer experience journey – therefore creating more predictive, personal, and authentic experiences that will delight the customer even more.

Already today we are starting to see some great examples in how AI is impacting experience. Take Sentient Technologies for example. They are providing real time improved website customer experience for companies like SHOEme in Canada. Algorithms help provide predictive content and design based on a user’s previous catalogue browsing behaviour, ultimately enriching the user experience seamlessly (5).

New technologies mean we need to continually re-define how we are approaching customer experience. However, we also need to start looking at the whole ecosystem of experience. If we look at ‘experience’ as a primary factor for any ecosystem we should not just start and stop at the customer journey experience.

Employee Experience 

Employee experience is just as important as customer experience, if not even more important. Without employees’ hearts in the right place and acting as ambassadors for the company, it would become very difficult to attract new customers. Patrick Harris suggested that customer experience begins internally at the heart of an organization (6). 

It was in 2003 when Professor Kaveh Abhari conceived Employee Experience Management (EEM) as an aspect of the Experience Economy (7). EEM takes experience further than Human Resource Management or employee engagement. It is how an employee experiences every interaction across his employment lifecycle, from awareness to alumni, encompassing the physical, social and mental journey.

Typically companies have focused more on driving positive customer experience for business success than on employee experience. However, this is beginning to change. The Temkin Group found a correlation between efforts in employee engagement and customer experience success. They concluded that companies that excel in customer experience have employees that are one and a half times more engaged compared to their CX laggards (8). 

It is clear that a key driver to CX is having engaged employees and to influence this, companies need to take this to the next level and embrace employee experience across the worker’s journey. This is especially critical in a world where millennials expect more and technologies are continually advancing.

By 2025, millennials will account for nearly 75% of the global workforce (9). Gone are the days when people would be employed and loyal to one company for 15 plus years. The new generation are looking for more challenge, community, ownership, immediacy, wellbeing and purpose. Without these elements, a company will find it hard to compete against digital giants and scale ups that have this at the core of their strategy. Talented people will become harder to recruit and keep. It is therefore not surprising to see the likes of Google, Apple and AirBnB positioning these elements at the core of their proposition (10). Free bus rides to work, free lunches and wellness passes are often a part of this experience, but this too won’t be enough anymore.

Upcoming technologies and cognitive AI solutions are already playing a big role in transforming how HR handle employee experience. Intelligent apps, bots and automation in areas such as talent aquisition, collaboration, performance, career development, learning, employment services and wellbeing have significantly increased in the last years and will be set to grow. Gamified and cognitive video recruiting at Unilever (11), chatbots to answer HR questions as by Loka (12), immersive augmented learning at Shell (13) and real time monitoring tools addressing wellbeing and potential burnouts (such as Virgin Pulse) are just some of the many examples.

Deloitte’s Global Human Capital Trends Report 2018 (13), suggested that there is a “readiness gap” for addressing these types of opportunities. Of the 11,000 respondents interviewed, 72% confirmed that upcoming technologies (AI, robots and automation) are important, yet only 31% feel ready to address it. However, these new technological tools on their own are not enough. It is the integrated cognitive data insights that will help fuel a seamless experience. The same report from Deloitte suggested that although integrated systems to analyse worker-related data is important, only 17% already have real-time dashboards to crunch masses of data in ‘new and useful ways’. In addition, organisations need to take into account the security and transparency measures around their people data efforts in order to gain respect from their employees. It is those companies that can orchestrate data intuitively and transparently who will benefit by being able to generate whole new experiences.

Partner Experience

Partner relations are a critical part of customer experience, especially when you think of how to transform the ecosystem of your product from commodity into an experience. It is impossible to do this alone and will always require partners – from R&D, value chain partners, channel partners, to maintenance and beyond. Think of Spotify and Nike improving the experience of runners, or Uber partnering with Intel and BMW to improve the upcoming ‘on demand’ driverless experience of passengers (2).

Partners that leverage new technologies are not only critical for maximizing the experience for the customer but also that of the employee. Consider training partners, using technologies such as immersive reality or cognitive applications to ensure capabilities are in place. Health and lifestyle partners such as gym or yoga memberships that link to productivity data. Application partners that provide tools to improve workplace efficiencies in being able to carry out processes seamlessly and with extreme ease. 

Unlike CXM and EEM (that have transitioned from more than just CRM and HRM respectively), the partner experience phenomenon is yet to set the stage. The fundamentals of Partner Relationship Management and Strategic Partner Management are relevant but is only part of the full partner experience story. Partner Experience Management deserves to stand out on its own rather than being part of CXM and EEM. Since a growing ecosystem of partnerships bring with it dependencies, data ownership issues and efficiency challenges, it deserves exclusive attention to make it a success. For example, how can we optimise partner journeys even today? Quite a few corporate companies work with preferred suppliers and purchase orders, but this lacks agility and it can take weeks before a supplier is in place. Consequently, this can delay delivering the experience to the end user. How will processes change as we start looking at the partner experience journey as a whole?

Large companies have built their strength on the back of partnerships like Intel and Microsoft, and start-ups are doing just the same only quicker. Their need for investors, channels, and corporates will be an important element of their growth strategy. When it comes to innovation and experimentation, partnerships will come and go. There will be more experimentation ‘at the edge’ before partnerships are nailed down. There also needs to be an element of flexibility concerning how solutions are built. The DevOps model of Netflix for example, allows for disposable apps and a test and learn development environment. This flexibility means partnerships may become as disposable as the technology itself. We should also not forget that partners sometimes become potential competitors. Today Uber and BMW are partners who will also soon be competitors to each other in the future – grappling for a share of the driverless car market. (Explained in Digital Matrix (2)).

With partnerships, the power of data sharing comes to the forefront of the relationship, not only to optimise experiences but also to redefine business models. This process will be underpinned by trust. For this reason you see more and more companies employing a partner experience manager whose main focus is to connect an ecosystem of solutions together and enhance collaboration, inspiration and innovation. In addition when talking about trust, it is good to understand how blockchain can be utilised to facilitate the dynamics of data. Companies like Transavia and Schiphol are currently experimenting with blockchain to see how distributed data sets can be used anonimously to enhance customer experience (14). If companies get the dynamics right in the partnership and technology, then the rewarding experience can be rightly transferred to the customer and workforce.

Bringing the Ecosystem Together

If your company is embracing Customer Experience as its strategy – make sure the Experience culture is embedded across all domains. At the end of the day, benefits across all areas will help amplify your results but most important of all, your relationships.

Take Airbnb for example, they are a company that are executing true experience management across all its domains. Their HR director, Mark Levy, became its Chief Employee Experience Officer, trying to find synergies between employee focus and customer focus (15). They are also clearly incorporating partner management into this domain by recruiting CX Partner Managers with a refreshing job description. Another example is Tiqets, a start-up that recently raised $17 million in funding and which puts experience at its core. Already their pioneering online experience to buy tickets has filled a gap many establishments failed to fill. Besides the CX focus, they too are recruiting to get the best in-house capabilities and are also employing Partner Experience Managers. It’s not surprising that these two companies are young, disruptive and agile which helps when bringing ‘experience’ to the core.

Four tips to get started in ‘experience’ excellence:

1. Look around you and see where ‘experience’ can be applied in whatever ecosystem you are in. Don’t just think about customer experience – embrace ‘ experience’ as a core cultural value at the heart of your organization.
2. Know and own every single relationship – your customers, employees and partners and know what drives them whilst respecting privacy. Insights and algorithms will be key to drive experiences.
3. Create experience hubs and associated multi – disciplined teams that work together and that are powered by data, but also real emperical evidence direct from the target audience.
4. Apply experience to different segments in an agile test and learn situation, working towards autonomous end-to-end seamless experiences. Keep on maintaining continuous improvement through data insights and new technologies.

Final word: As we see with a lot of tech startups (such as Tiqets, Patient JourneyApp and the likes of Uber of course), ‘experience’ is at the heart of their mission and they are able to rapidly fulfil gaps left behind by market/industry blind spots. So if executed correctly, experience management across ecosystems will not only help companies create new engagement dimensions, it will help raise the bar in their digital transformation journey.

Sources:

1. Experience Economy, Pine & Gilmore (Wiki): https://en.wikipedia.org/wiki/The_Experience_Economy 
2. Digital Matrix, Venkat Venkatraman: https://www.amazon.com/Digital-Matrix-Business-Transformation-Technology/dp/1928055206
3. Frederick Reichheld (December 2003). “One Number You Need to Grow” Harvard Business Review: https://hbr.org/product/one-number-you-need-to-grow/R0312C-PDF-ENG
4. Customer Experience, section – customer journey mapping (Wiki): https://en.wikipedia.org/wiki/Customer_experience
5. Visual Product Discovery: http://www.phillong.info/publications/LLBetal16_vpd.pdf
6. Patrick Harris “We the people – The importance of employees in the process of building customer experience”: https://faculty.mu.edu.sa/public/uploads/1357463964.3404artical%2060.pdf
7. Employment Experience (Wiki): https://en.wikipedia.org/wiki/Employee_experience_management
8. Temkin Group Report 2016: https://experiencematters.blog/2016/02/16/report-employee-engagement-benchmark-study-2016/
9. Catalyst.org: http://www.catalyst.org/knowledge/generations-demographic-trends-population-and-workforce
10. Deloitte Human Capital Trends 2017: https://dupress.deloitte.com/dup-us-en/focus/human-capital-trends/2017/improving-the-employee-experience-culture-engagement.html
11. Deloitte Human Capital Trends 2017: https://dupress.deloitte.com/dup-us-en/focus/human-capital-trends/2017/predictive-hiring-talent-acquisition.html
12. Forbes – The Future of Work: https://www.forbes.com/sites/jeannemeister/2017/03/01/the-future-of-work-the-intersection-of-artificial-intelligence-and-human-resources/2/#7054951967ee
13. Deloitte Human Capital Trends 2018: https://www2.deloitte.com/insights/us/en/focus/human-capital-trends.html
14. Emerce Meetup 2018 (in dutch): https://www.emerce.nl/achtergrond/travel-tomorrow-meetup-schiphol-moyee-coffee-blockchain-doen-2
15. Forbes 2015: https://www.forbes.com/sites/jeannemeister/2015/07/21/the-future-of-work-airbnb-chro-becomes-chief-employee-experinece-officer/#40b2ba642327