2023: Guests buy Experiences, not Products
Traditional business models focus on products and services. Companies build up their products, advertise them, then make sales.
That strategy no longer works.
Sales are becoming less and less dependent on products and services. Instead, consumers are turning their attention to the buying experience and how they feel about your company after they become customers.
The effect of customer experience is so powerful, it’s drawing the attention of major organizations like Harvard Business Review. They say that “organizations able to skillfully manage the entire experience reap enormous rewards: enhanced customer satisfaction, reduced churn, increased revenue, and greater employee satisfaction.”
Those are big benefits that show us just how important experience is to buyers. But what makes customer experience such a powerful driver for purchases and loyalty? There are three key reasons.
“… organizations able to skillfully manage the entire experience reap enormous rewards: enhanced customer satisfaction, reduced churn, increased revenue, and greater employee satisfaction.”
1. PEOPLE MAKE PURCHASES BASED ON FEELINGS
Ninety percent (or more) of purchasing decisions are made subconsciously, according to research. That means we’re not making our decisions logically. We’re relying on our emotions.
A recent article in Entrepreneur explores this idea in more detail. The author, who arrived at a restaurant right before they closed, explains how his customer experience made him feel. Even though he needed to eat, he says, he was really craving empathy. The restaurant didn’t rush him out, but treated him well. That feeling stuck, and was a powerful enough experience for him to write an article about it.
Those types of positive experiences appeal more to emotion than a static product or service. Eating a burger is over in a few minutes but feeling like a valued customer can leave a lifelong impression. By creating a great customer experience that makes people feel good, you’re more likely to motivate them to make a purchase and be loyal to your company in the future.
2. EXPERIENCES ARE RELATABLE – AND SHARABLE
Selling your product often includes ratting off its features. For example, a flat screen TV’s features include screen size, resolution, and WiFi connection. All that information is important to know but it’s not inherently compelling.
Your experience with the TV, on the other hand, is more relatable and sharable. You can describe how your TV makes you feel like you’re flying through the jungle when you watch Tarzan. It becomes a story. “I was watching Tarzan on my new TV and it was like I was swinging from the vines myself. It was so real, I jumped when the leopard appeared.”
Stories are always more compelling than feature lists. Why? Because they activate more of our brains.
Research shows when you hear a list of bullet points, such as TV features, only the language processing part of your brain is working. When you hear a story, other relevant areas kick in. Our story about swinging through vines in the jungle will also activate the motion center of your brain. A story about delicious food will light up the sensory cortex.
Stories activate our whole brains, making us feel more and increasing the intrinsic value of the product we purchased.
3. PEOPLE COVET EXPERIENCES MORE THAN PRODUCTS
Society is shifting. In the past, possessions and status symbols like the corner office were a big deal, but now people crave experiences.
The value of experiences is driven in part by younger generations – a study by Harris Group found 72 percent of millennials prefer to spend money on experiences than material things – but it often transcends age. Most people, from an 18-year-old to a 68-year-old, now value your experiences more than your products and services.
The value of experiences is so powerful in the consumer world that it’s created new business models. The sharing economy and the boom in subscription services are two examples. In both situations, you can get everything you need without owning anything. For example, most of us now stream our music without purchasing a single song. And social media focuses on pictures, stories, and videos about what people are doing right at that moment, instead of what they own long term.
Your customer experience fits in this new worldview better than your products and services.
SELLING YOUR EXPERIENCE WILL SELL YOUR PRODUCTS
The moral is this: your product is no longer the most important thing you’re selling. Changes in society are making people value the experiences they have and the way they feel over products and services.
For your brand to keep up, you need to focus on experience. Products are still important, but we need to pivot how we promote them. Products can no longer stand alone, they must be built around an experience that makes people feel excited and motivates them to share how they feel in an Instagram story. That’s what will convince them to buy.
Help your product adapt to this change by pairing it with an amazing experience, then promote that experience. Product sales and satisfied customers will follow naturally.
