Are you still selling software products? In 2020, you may be more successful if you focus on selling experiences.
Joseph Pine II and James H. Gilmore observed that in many industries where economy was based on commodities, goods, and services, the focus is shifting to selling experiences. Pine and Gilmore’s 1998 article in the Harvard Business Review states, “An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.”
In 2020, the Experience Economy has created vast opportunity for ISVs, VARs and other IT solutions providers. Lloyd Adams, Managing Director for the East Market Unit, SAP North America, says, “This is a $50 billion opportunity for companies that get it right. By 2030, it will be $8 trillion. Expect the experience gap between the superior experiences leaders think they’re providing and what customers think in reality to close as companies get better at integrating experiential data with the operational side.”
Experience management platform provider Qualtrics explains that in the Experience Economy you need to collect and analyze more than operational data, such as daily active users and time in app. You also need to consider experience data that sheds light not only on what is happening but why. Experience data from sources including customer surveys, user testing, Net Promoter Score, and social media comments, will provide insights into how satisfied customers are with the experiences your applications — and working with your business — provides.
Adams adds that solutions providers can develop systems that collect experience data. “The cloud computing market is extremely competitive and the key differentiator for success in 2020 will be a customer-first approach,” he says. “So look for more granular features that help customers continually improve their cloud products. In SAP’s case, Qualtrics will continue being incorporated across our suite to find improvement points.”
Achieving Success in the Experience Economy
Rocky Subramanian, Managing Director for the Midwest Market Unit, SAP North America, comments that, for the past few years, 2020 has been a convenient goalpost for organizations driving towards a vision of digital transformation. “But as the calendar turns over and leaders assess how their business and technology projects have progressed — or shifted — there will be a scramble to get timelines back on track to meet EOY deadlines,” he says.
Qualtrics points out that putting your business on the path to success in the Experience Economy, will take overcoming some challenges, such as:
- Siloed data: Businesses need to find a way to provide teams with a 360-degree view of the experiences they provide, based on data from all parts or the organizations.
- Creating actionable insights: It’s not enough to collect experience data and analyze it along with operational data. You need to use it to pinpoint areas that need to change, set goals and KPIs, and manage progress toward providing better experiences.
- Security and compliance: Experience data can be closely tied to protected consumer data, subject to regulation by the General Data Protection Regulation (GDPR) or other laws or standards.
- Investment in intelligent technologies: You will need a solution that allows you to extract value from both structured and unstructured data and efficiently provide you with actionable insights.
- Company culture: Teams rooted in providing products and services will need to shift their focus to optimizing experiences. Change should occur from the top down, with leaders embracing the importance of experience and making necessary changes with the organization to provide it.
Meeting these challenges and improving customer experiences while efficiently managing current operations is on the agenda for 2020. “What we’re going to see is an accelerated focus on improving user experience to grow revenue with a heavy emphasis on efficiency and process optimization as a means of managing spend – balancing their digital objectives with the day-to-day pressures of remaining competitive,” Subramanian says.