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The Experience Economy

The Experience Economy. Lecture 3. What is The Experience Economy All About?. It is a book on marketing It lays out a strategy for dealing with the “commoditization” phenomenon (All products are being pushed toward commoditization) It talks about establishing a new market position

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The Experience Economy

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  1. The Experience Economy Lecture 3

  2. What is The Experience Economy All About? • It is a book on marketing • It lays out a strategy for dealing with the “commoditization” phenomenon (All products are being pushed toward commoditization) • It talks about establishing a new market position • It talks about controlling customer perception • It is a “how-to” book on modern marketing

  3. Is it IT’s Role to Help with Marketing? • Why do professional IT people need to spend time with this book? (Shouldn’t we be passing this off to our co-workers in the marketing department?) • What is IT Alignment all about? • What is IT Governance all about?

  4. IT Alignment • IT Alignment is the responsibility and process for creating maximumbusiness value using IT resources. • Can’t be done without knowing a lot about the business processes in the company • Can’t be done without knowing a lot about the market position and marketing strategies of the company • Can’t be done without understanding how to decrease customer sacrifice • Usually, when IT adds significant value to the company, it is done by finding meaningful ways that IT services can reduce customer sacrifice.

  5. IT Governance • IT Governance is the process by which the other CXOs in the company take ownership of IT initiatives • Can’t be done without a focus on using IT to add value to the company • Can’t be done without understanding the market position and marketing strategy of the company • Can’t be done without understanding where the customers are sacrificing and how to work with others in the company to reduce that sacrifice

  6. So, … Why Study The Experience Economy? • IT professionals must understand marketing to be able to deliver the best IT value to the company • The book helps us discover how to use IT systems to reduce customer sacrifice • The book helps us discover how to use IT to add value to the company (how to increase company profit margins)

  7. Experiencing Less Sacrifice • Discover how to reduce the amount of customer sacrifice • This is a great way to approach the discovery of how to develop meaningful experiences for your customer in a B2C business • It may be the ONLY WAY to approach the discovery and development of meaningful experiences for your customer in a B2B business

  8. Ways to Discover Customer Sacrifice • Searching for Uniqueness • Examining your research studies anew and search for uniqueness (customization opportunities) (p. 82) • Cyberspace provides a great new place for understanding sacrifice (p. 83)

  9. More Ways to Discover Customer Sacrifice • Cultivating learning relationships • As the number of customer interactions increases (and are analyzed), customer sacrifice is decreased (p. 84-85) • Collaborative Customization • Collaborative customizers to determine what they need and then produce it for them (p. 88) • Adaptive customizers offer one product designed to let users alter it themselves (p. 89)

  10. More Ways to Discover Customer Sacrifice • Cosmetic Customization: customizing packaging or presentation • Cosmetic customizers present a standard good or service differently to different customers (p. 90-91) • Example: T-Shirt logo/picture customization • Transparent Customization • Transparent customers provide a tailored offering without customers knowing that is is customized for them (p. 93) • Examples: Ritz-Carlton and Amazon.com

  11. The Learning Process • To truly differentiate themselves, businesses must focus • First on increasing customer satisfaction • Then on eliminating customer sacrifice • And finally on creating customer surprise. • (And then stage customer suspense) (p. 99)

  12. So how to we provide for customer suspense? • That’s where theater staging comes in • Improv • Platform • Matching • Street (Chapt 7) • But first there is “Acting” …

  13. Acting?!? • Business performances must rival those featured on Broadway and in ballparks (p. 103) • Theater is not a metaphor, but a model (p. 104) • Whenever employees work in front of customers, an act of theater occurs (recent visit to Best Buy)

  14. The Theater Experience • Where does work begin, climax, and have its denouement? (p. 105) • With theater as the model, even mundane tasks engage customers in memorable ways (p. 106) • Any work a customer observes directly is an act of theater (p. 107) • The act of acting differentiates memorable experiences from ordinary activity (p. 109)

  15. Developing the Character • You are a performer. Your work is theater. Now act accordingly. (p. 111) • Acting is taking deliberate steps to connect with the audience. (p. 112) • Proper characterization turns service activities into memorable performances. (p. 113) • Act with intention. (p. 117)

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