Brand Growth in the Experience Economy
Last month, we outlined a business case for Brand as a Platform. We illustrated that the new activities created as brands transform into platforms generate tangible business results of growth, sales, advocacy and service. All of which should be the core metrics that we measure our business and brand by. And we see these activities as the evolution of the Experience Economy. One that is digitally enabled and connected as consumer expectations evolve at an astonishing rate simply by having super computers in their pockets.
These activities powering the next evolution of the Experience Economy are quickly becoming the drivers of brand growth. So much so, that Walker has predicted that by 2020, a brand’s “experience” will be the number one driver of a purchase decision, surpassing product and price. And as expectations continue to rise, this will only become more true as we get beyond 2020.
86% of buyers will pay more for a better brand experience, but only 1% feel that brands consistently meet expectations (Oracle)
Customers who had the best past experiences spend 140% more compared to those who had the poorest past experience.
Acquiring a new customer costs around 6X more than keeping an existing one (ThinkJar)
This transformation was originally felt in industries where digital and physical met; auto, tech, retail. But now digital and physical are ubiquitous and the transformation is happening across all industries, healthcare, direct-to-consumer, lifestyle, CPG. The experiences of awareness, shopping, buying, delivery, repurchase and advocacy are all becoming reasons to engage and reasons to purchase. The companies that are doing it right are finding long held consumer expectations and redirecting them to reduce friction and spur excitement.
They do this by becoming:
Human Centered: They understand the human participating in the experience and remove pain points or offer incremental value based on needs and wants. Warby Parker makes every business decision with the human at the center. Whether it’s a new technology, social impact or even store location, the consumer is a key ingredient to their decision making.
Always On: They focus on demand capture and retention over demand creation or acquisition. They know the long term value of a consumer is more efficient to create than a new customer. Spotify’s Mayur Gupta has been talking about this recently and is well worth the read.
Enabled by Technology: The expansion of consumer expectations in the Experience Economy is being driven exponentially by technology. A combination of processing power and connectivity has opened tremendous opportunity for companies to find new ways to meet or exceed expectations. Amazon has been using new technologies to radically shake up almost every industry. From more efficient logistics with Prime, to lane-less checkouts with Go, Amazon has grown to the most dominant force in retail through effective use of technology.
As the Experience Economy evolves and the consumer experience gets in the driver’s seat to brand growth, we need to understand the opportunities to evolve our brands and business. Knowing the holistic, end-to-end consumer journey and how we can meet, exceed or redirect expectations at key stages of the relationship. This journey will only continue to evolve and transform over the next 2-5 years. But each journey starts with a single step.
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