Joe Pine: ‘How to personalize customer experiences’
Goods and services are being increasingly commoditized. So how can companies stand out from the competition? The answer is through positive interactions and memorable, personalized experiences. Take a look at these tips from the godfather of the experience economy, Joe Pine…
We live in a world where we can buy almost anything from the palm of our hand. Customers can flit from one company to another without moving from their armchairs. And sadly this means that customers place little value in loyalty anymore. After all, you can get the same product from hundreds of retailers all offering pretty much the same thing at the same price. What consumers now care about now is something intangible. They care about experiences. And good ones.
What makes someone have a good experience?
A good experience is all about time well spent, according to Joe. “The core distinction between services and experiences is all about time,” says Joe. “Services are about being nice and easy and convenient. They're about getting in and out as quickly as possible.
“Experiences are about wanting to spend your time doing something. It means that your customers actually value the time that they spend with you in the place that you have created.”
Why is customizing experiences important?
Customization is core to experiences, explains Joe. When you personalize or customize experiences you can't help but engage people. “It makes them feel special,” explains Joe. “They know that you've done it just for them.
“Starbucks is a great exemplar of the experience economy. Creating coffee-drinking places that people enjoy going to. I go to Starbucks all the time — but I don’t actually drink coffee, I hate it! But I discovered chai at Starbucks. It’s like ambrosia to me. And my standard order is a venti, non-fat, six pump, no water, chai, extra hot for ‘Joe.’ And in every one of those things is the way that they personalize that drink to me.”
“Personalization helps lift goods into services and services into experiences”
“And you can mass personalize your goods. You do this by working directly with every individual customer. You define what they want, then you make it for them, then you deliver it to them individually.
Joe uses the example of Coca-Cola Freestyle machines. “You go to one of these machines with your cup and you can pick from a base of Coca-Cola Classic, Diet Coke or Coca-Cola Zero Sugar. You can then add a flavor to it, e.g. lemon, cherry or vanilla etc. My favorite is lime.
“You can mix decaf with caffeinated or however you want to do it. Coca-Cola isn't in the goods business anymore where they manufacture, put in inventory, ship through all their distribution channels — the final drink is made in the moment of customer desire. All delivered on demand to each individual.”
Here, customization is turning goods (Coca-Cola) into a service (pouring your drink), into an experience (customizing your drink using the freestyle machine). And people pay more — and are more loyal — to customizable experiences. “Ultimately, customization lifts you up in economic value to the consumer,” says Joe.
What’s a great example of a company turning a service into an experience?
Joe cites one of his favorite examples of a company turning a service into an experience as Progressive Automobile Insurance. “It has immediate response planning vehicles roaming the city,” says Joe. “If you have an accident you can just call them as soon as it happens. They’ll drive out and meet you there.
“They design this experience as a sequence of events. They first make sure you’re OK. They’ll give you a seat in their vehicle to calm your nerves, they’ll give you a cup of coffee that they’ll brew in the vehicle, and they’ll go about adjusting the claim.
“They have all your details about your policy and the details of your car, so in more than 90% of cases they’ll hand you a check on the spot. If your car can’t be driven away from the scene, they’ll call a tow truck company to take your car away and give you a rental there and then.” It turns what could have been a horrible experience — albeit not including the accident — into a positive one.
Any other great examples?
Joe gives lots more examples in his webinar, but it’ll come as no surprise that Amazon is leading the way with customizable experiences. Amazon does customization well because it recognizes that every interaction is an opportunity to learn. Amazon is a continuous learning machine. Joe says there should be a continuous loop between learning -> customizing -> customer benefit -> interaction -> back to learning and round the loop again.
How can companies afford to do this?
Contrary to common belief, delivering this level of customer experience costs less for companies than not doing this. Strangely enough, it costs them less to do it this way. Why? Because they get rid of economic waste. E.g. with the car insurance company, customers don’t have to call you up again. They don’t have to come over to your house to take pictures. They just figure it all out right there and then. And they end up with happier customers to boot.
And really, companies can’t afford not to do this. “If you do nothing your company and your offerings will become commoditized,” says Joe. “But if you customize, then you can't help but lift up your product. You can't help but be differentiated. You can’t keep on doing the same things you've always been doing. Instead, you want to shift up this progression of economic value to staging experiences for each one of your customers. And then customize those experiences to individuals. If you do this then you'll be economically rewarded.”
Want to dive deeper into customization?
Discover more about CX through our series of Qualtrics Master Sessions. Each session features unique insights and practical tips from experts who have cracked the CX code – including CX pioneer Joe Pine, the Director of Customer Listening at American Express, Tethr, bestselling author Jay Baer, as well as our own XM Qualtrics masters.
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