In the experience economy, experience systems take center stage.


In a now-famous 1998 article Harvard Business Review, B. Joseph Pine II and James H. Gilmore introduced the business world to the concept of the experience economy. The theory looked like this: businesses had passed through various economic stages (agriculture, industry, and service) in which the nature of what was sold continued to evolve. For example, agricultural economics focused on selling ingredients (they used a sample of ingredients in a cake), while industrial economics saw these ingredients prepackaged into a complete presentation (cake mix). Finally, the service economy has witnessed the emergence of companies that build a range of services around these products (the bakery that makes the cake for you). With each step, the price for the consumer rose steadily.

At the turn of the millennium, the authors accurately foreshadowed the new experience economy, where both product and service are an accessory to the main event – the party at Chuck E. Cheese! In an experience economy, the goal becomes a permanent memory (although some may prefer not to remember the entire Chuck E. Cheese experience).

Certainly, there is little debate that the authors are in place. The experience economy quickly settled down and continues today. However, there is one offshoot of the rapidly evolving experience economy. This new variation, which we call the “digital experience economy,” takes the concept further by envisioning the products and services offered not just as physical experiences, but also as digital experiences (and sometimes quite so). In our analogy above, the birthday party at Chuck E. Cheese turns into an online event between your child and a group of friends from all over the world.

Facebook’s latest Rebrand as metaA company focused on creating virtual worlds makes the possibility of the digital experience economy even more likely and urgent. But before we get into a “Total Recall”-like rabbit hole, let’s focus on what the practical digital experience economy looks like today and what it will look like in the near future.

Supporting the digital experience economy

Moving the experience economy into the digital realm means data and more. According to Pine and Gilmore, an important element of the experience economy is personalization. However, in a digital world, the experience probably needs to go further to enable hyper-customization. As such, artificial intelligence and real-time behavioral data are becoming more and more important. Specifically, companies need to not only establish omni-channel reach for customers, but also understand all of a customer’s interactions across those channels in real time.

The transition to the digital experience economy ultimately requires a comprehensive understanding of every customer. With this understanding, companies can deliver hyper-personalized and memorable experiences that deliver more value for their customers (both internal and external), which in turn enables companies to generate more profits. Doing so requires systems that can support knowledge at scale.

experience systems

So what does it take to support this new digital experience economy? RingCentral has trademarked “experience systems” to describe technologies that can support the kind of hyper-personalization and know-how we discussed above. Overall, experience systems include not only advanced big data stores to support the digital experience economy, but also numerous technologies that support the ways customers (both internal and external) interact with your organization.

In 2018, Gartner multiple experience development platforms, recognizing that although most companies have focused on web-based communication (email) and more recently mobile devices to create customer experiences, these platforms alone will not be sufficient today. Today’s experiences require video, chat, and soon the augmented/virtual reality mentioned above. Why? Because today, customers determine which communication methods they want brands to use, and when they can’t get what they want, they leave immediately. A survey by RingCentral found that customers stop using a product or service on average four times in a 12-month period. bad customer service.

But experience systems are not just omnichannel or even omnichannel communication. Real experience systems create a different experience for each channel based on the unique qualities each channel has. This is the antithesis of “one size fits all”. And it also goes one step further. While each experience is tailored for each channel, the experiences all need to be consistent in some way. Why? Because customers want to switch channels effortlessly. The truth is, inconsistent experiences across channels hurt your brand.

Distinctive features of experience systems

While technologies like artificial intelligence and big data certainly support experience systems, these technologies mean little to customers. For them, the hallmarks of their experience will revolve around concepts such as:

  • An immersive experience that combines multi-sensory experiences
  • A sense of community where customers feel they are part of a larger group of like-minded individuals
  • Simplicity that lets customers enjoy effortless experiences

As a result, experience systems must achieve three main goals:

  1. Increase current product revenue for your company
  2. Improve the experience for customers
  3. Improve the experience for employees

This final goal of improving the employee experience is the most often overlooked goal in building experience systems. This is because many companies often overlook the impact of employee experience on overall customer experience. In summary, happy employees create happy customers. And it’s not just a catchy phrase. There are numbers to back it up. A Gallup poll shows that organizations are at a high level engaged employees It outperformed its competitors by 147% in earnings per share.

One way companies today grapple with the link between employee engagement and customer engagement is to make connections between these two experience system components. This makes sense, especially since customer service teams, for example, are making a fuss about it. In a RingCentral survey, nearly 80% of agents said they need to put customers on hold every day while looking for information to resolve issues. The problem, compiles, is broken workflows. However, combining customer service and employee engagement systems was a welcome solution: 92% integrated communication and collaboration solutionsPlatforms that tightly integrate messaging, video, phone and customer experience will help.

While the digital experience economy may seem like a natural consequence of the experience economy, the experience systems necessary to support it must be carefully considered. Cloud communication technology will become a hub for collecting, storing, distilling and using interaction data to provide simple, powerful and consistent experiences with your brand. The ability to effortlessly connect these systems to other technologies such as artificial intelligence will also become critical.

This content is produced by RingCentral. It was not written by the editorial staff of MIT Technology Review.


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