Twenty years ago, Harvard Business Review declared that we were entering the experience economy. Today I’d argue that we’re in the heart of it — as a lifelong experiential technologist, I’m in my hay day in many ways. It’s a topic I’ve spoken on an overwhelming amount of times and more importantly it’s a topic that the most successful companies today are embracing BUT only some of us are successfully participating.
I’m going to explain, but first let me unpack the term “experience economy” a bit. It’s thrown around a lot — so what does it actually mean, and how is it shaping societal behavior?
In its’ most simplistic definition, the “experience economy” means we’re placing more economic value on “experiences” than anything else. There are many societal observations and data points that defend this, but just spend some time thinking about what you and your friends spend most of your discretionary money on (i.e not food or home goods), and you’ll likely come to the same conclusion.
Think — travel, concerts, festivals, events, marathons, restaurants, movies, ski trips, cooking classes, camping, yoga, vacations. The list of “experiences” goes on. Many people aren’t even striving to own large/traditionally-valued assets like a home or a car.
Sometimes I also think that the word “experience” is becoming synonymous with “Is it Instagramable?” I’m only half kidding..ha! If you’ve ever taken a sunset selfie to post on social media, you’re living in the experience economy. Welcome.
And that brings me to the second point I’d like to make: As we continue to place higher value on experiences, we’re simultaneously expecting more and more from technology.
Think about how on-demand services like Uber, Lyft, Postmates and Netflix have shifted consumers’ expectations of convenience. We get what we want, when we want it, with just a click of a button. Those services work because the technology is powerful and the user experiences are world class. We’ve come to expect everything to work that way. We’re even starting to demand it.
And guess what? It’s only going to continue.
“As technology innovation cycles decrease, consumer expectations will increase at an equal or greater rate.” — Ryan Costello
When you start paying close attention to these two trends — the increasing value of experiences and the increasing expectations surrounding technology — you start to see that they’re working in concert. They’re dependent on each other.
So if we’re going to successfully participate in and cash in on the experience economy, we have to incorporate technology. And — this is important — it can’t just be any technology. It has to be technology that meets the expectations that the most innovative tech companies, like Uber and Netflix, are setting.
Now back to my original point: Only some companies are meaningfully participating in the experience economy because only some companies are getting the technology piece right. Cashing in on the experience economy isn’t as simple as “putting on an event” or “creating an experience.”
The companies that are meaningfully participating in the experience economy simultaneously harness the demand for experiences and the rising expectations of innovative technology.
The most obvious example I’ve seen is the dramatic shift in retail brands from traditional brick-and-mortar marketing approaches to experiential retail strategies. They’re creating exclusive opportunities for consumers to experience their brands and products. They produce PopUps, in-store events, personalize/customize products, produce large festival-like activations, have maker-spaces, and more. Everything is about immersing us, the consumer, in the company’s brand and giving us a deeper, personalized, authentic experience. And they are massively leveraging technology to power it all. When that happens, we buy more.
For some context, here are are a few great recent brand experiences that come to mind that have done this well: Adidas 747 Warehouse at NBA All Star Weekend, Refinery29’s 29 Rooms, Guess Jeans Farmers Market.
Festivals are another great example of consumers valuing experience and they only continue grow in popularity. Coachella, Bonaroo, Electric Daisy Carnival, etc., have all built massive followings and generate millions in revenue. These organizations invest most of their money in production. In fact, when you think about it, as an attendee you’re only actually buying production… ultimately you’re buying the experience. You very rarely take any physical product home. But while you were there, you’ll likely have experienced new products, took a lot of pictures, consumed content, created content, and connected with new friends on social media. Your only lasting takeaway is something digital, some sort of technology. Hmmmm.
Technology is essential to making the experience economy work, but, as I mentioned earlier, it’s quite a challenge and it’s actually done incorrectly a lot. The most common mistakes I see are:
- Creating something generic (i.e. not personalized) that feels transactional.
- Using technology to extract data from attendees with no value return to the attendee
- Not increasing the convenience of the experience
As far as Event Farm’s tech goes, I won’t bore you with a sales pitch, but I will share some fundamental guiding principles we bring to the engineering process that we feel are key drivers of creating experiences that work and exceed consumers’ expectations. Here are key questions we ask ourselves before building any application:
1) Is it authentic? It should either serve a convenience purpose (i.e., coat check, drink ordering, access into an area) or be something that doesn’t feel transactional.
2) Is it personalized? Will it feel like it was made for each person? Adweek actually covered this exact topic in more detail.
3) Does the attendee get value out of using it? At Event Farm, we call this “the rule of reciprocity.” If it’s only used to collect behavioral data (i.e. heat mapping, social media data scraping, etc.) you’re only receiving and not giving.
4) Would I personally use this at an event? Is it fun? Is it engaging? Is it human and something we would actually enjoy experiencing at an event? Note: It’s very easy to forget this when building experiential technology.
5) Is it engaging enough that attendees will want to use it more than once? If not, it’s probably too close to a transactional experience.
At this point you should probably be thinking “That all sounds great, Ryan, but can you actually prove that this works?” The answer is YES. As an example, Event Farm recently powered an event experience that generated over $1 million in retail sales onsite for a brand at an event in 24 hrs. How? Engagement was overwhelmingly high because the technology built an authentic experience that exceeded consumers’ expectations.
A lot of our customers also sell products and services after events and track pipeline generation and deals closed post-event to measure their return. You probably won’t be surprised to hear that we do the exact same thing at Event Farm. I’ll leave the specific details on how this works for another post, but if you’re curious you can check out more content on Event Farm’s blog about this topic.
Until then, I’ll leave you with a challenge. The early adopters have already hopped on the experiential train and are seeing huge gains. It’s time for the rest to keep up. What’s your organization doing to accommodate and market to consumers in the boom of the experience economy? There’s no doubt we are all demanding more and it’s only going to continue.