As we try to future-proof our businesses, we have a very real enemy banging our doors—commoditization. Commoditization drives down pricing and makes our brands undifferentiated in the marketplace. The only way we can create brand value is to make ourselves stand out.
Enter staged experiences—the creation of distinctive, innovative, spectacular, and sensual products with added value and marketing aesthetics. Staged experiences are part of the Experience Economy, in which, as the Harvard Business Review so eloquently put it, “a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.”
How are brands staging some of these experiences that create economic distinction and transform their value proposition? Let’s start with a look at the intimate apparels category.
“In 1995, lingerie wasn’t fashion. Women had five bras—three white, one nude, and one black that they only wore once a year,” said Ed Razek, CMO and creative director of Limited Brands Inc.
Today, however, lingerie is fashion. A large part of this transformation has been product innovation. And a distinctive part has been the creation of the Victoria’s Secret Annual Fashion Show, a catalog-come-to-life event featuring supermodels, celebrities, and top fashionistas. The only way to obtain tickets to the highly anticipated show is by special invitation or through charitable contributions to preapproved nonprofit organizations. (Tickets have been auctioned off anywhere around $US20,000.) Online sales increase substantially both the night the show is taped and the day after its broadcast.
Talk about the creation of value through an experience.
Geek Squad provides another example of a brand doing exactly that. The Minneapolis computer-installation and repair company’s success demonstrates that people are willing to pay extra for computer repairs if the technician, a “special agent,” arrives at their homes dressed in a dorky outfit, usually a white shirt with thin black tie, driving a Volkswagen Beetle to match. Kudos to Geek Squad for turning a monotonous, often frustrating service into a memorable event.
Another way to create value around a product or service—and one of the most effective, in my opinion—is by collaborating with consumers. With the MyStarbucksIdea platform, for example, Starbucks firmly entrenched consumers in the coffee-drinking experience, received brilliant ideas that it actually implemented, including lid stoppers that help prevent coffee spills, found a newer, better brand of coffee for its signature drinks, and offered free Wi-Fi
Bigger picture, Starbucks showed that customer experience innovation is a continuous process—one that feeds into the product itself.
Building new experiences and integrating them as part of the core marketing strategy allow brands to stand out, make competitors look irrelevant, and most importantly, improve the lives and happiness of their customers, even if it’s for only a short period of time.
As the Experience Economy matures, category shakeups are bound to happen. Brands will start reinventing the businesses they are in. Automotive companies, for instance, are going into the mobility experience. Travel and hospitality companies are becoming memory creators. To be sure, not every business will survive this disruption. But without reinvention and business innovation, brands are under the very real threat of becoming commoditized, undifferentiated, and irrelevant to the categories they are in today.
The Experience Economy is here, and it is not to be taken lightly.
This article is the first of a three-part series. Part 2 will discuss how to deliver against the experience promise.