Competing in the Experience Economy

By Yousuf Khan, CIO and Customer Success and Start-up Advisor

Over the last few years, the level of innovation that has transformed every industry has resulted in companies questioning their strategies – not just for growth but in some cases for survival in industries they took for granted. If there is one question that companies have to ask themselves it has to be, “what are we competing against?” The answer is no longer a matter of pointing to a better feature in a competing product. A company’s brand value represents not just their product, but how it is made.

Similarly, a company’s hiring objective is no longer just about how many people they can hire, but the culture they build. In enterprise software, it’s no longer just about supporting customers, it’s about customer success. It’s not about what happens after you buy a product but the entire process around buying, using, and then deriving the value you expected, whether it’s a car or enterprise software.

All of these points have a common thread. They form part of the entire experience that a customer goes through, whether it’s enterprise software or consumer goods. Companies are now competing in what I refer to as the Experience Economy.

Quickening Pace

The pace of innovation we have seen over the last few years continues unabated. There’s a very good reason for this: It’s never been easier to build a product, to distribute it, and suddenly finding yourself competing against industry leaders.

For example, the financial services industry has gone through what one leading strategist explained to me as “compressive innovation.” The fintech industry continues to grow not because it is any less regulated but because of the compelling new experiences it provides – from mobile-app banking to electronic payments and wealth management – stealing customers from larger financial institutions in the process.

The same can be said for newly built experiences that are transforming industries such as healthcare (higher quality and faster diagnosis), industrial machinery (driven by sensors), and of course enterprise infrastructure and software.

Examples of the Experience Economy are all around us. Look at how people buy shoes, for instance. They’re no longer just walking into stores and trying on shoes. Now you can go online and customize products to your exact tastes, and have it delivered in a few days. After you receive it, you can expect to be connected to a mobile app that gives you a recommended fitness regime to match your new pair of shoes. Now that’s a whole different type of shoe-buying and wearing experience. In the same way, Levi’s has transformed buying jeans into one that offers a universe of customized, personalized denim.

Global Trend

All of this is becoming a global trend because the cost of building software continues to drop with the help of cloud platforms available to all of us. The use of cash and card is becoming obsolete in countries from China to Kenya as people move to mobile payments as the standard.  There are more sensors being put into cars and factories than ever before, triggering actions that optimize production -- and support customers better.

Customer experiences matter more than ever – and they are changing radically across the world because consumer expectations have become ridiculously high. This is not just about being more vocal about our experiences, but about having more choices. Today, our actions in switching to other products are continually amplified.

In order to compete in the Experience Economy, companies need to ensure that the entire customer experience resonates. They need to reimagine customer experiences that are fresh and meaningful, not just a little better.

Retooling for Success

Companies need to think about the tooling and operating platforms they’ll need to build for their companies -- something CIOs have a huge opportunity to deliver on. More than ever, companies have the power to measure customer experience and change it based on data. CIOs are being called upon to make experiences more enriching for both customers and employees alike.

Over the years, I’ve engaged with all kinds of companies in buying everything from marketing and sales productivity tools to cyber security solutions. I’ve learned that the experience is not just about how you buy the product, but about the team behind it. It’s about the company’s vision – and how much value it is driving.  

From my standpoint, companies that focus on building amazing experiences are the ones that will thrive over the long term. They’re the ones that only build great products but also make the experience of buying, implementing and delivering value truly exceptional. Enterprise IT companies need to ask themselves what a successful customer experience really looks like. That will require companies need to get into the minds of their customers and get their hands on realistic and actionable data.

It’s no surprise that companies in the enterprise IT space are waking up to the Experience Economy, with mindsets changing from just “deploying a solution” to “ensuring and measuring success.” In the process, the success bar is getting raised ever higher. It’s no longer just about retaining customers. It’s about inspiring customers to advocate for you, to champion your cause, and even to help build your product roadmap. Any company can provide training to your customers about your product, but wouldn’t you rather focus on enabling them to partner with you?

Of course, all of this is probably old news to many of you. But for the first time, I think we have available to us not only the computing power but the necessary intellect, imagination and data to build truly exceptional customer experiences. It’s an opportunity that we should embrace, knowing that it will be the cornerstone of how companies will compete and win in the future.

Is your company building and delivering great customer experiences? As always, I’d love to hear from you.

Yousuf Khan