In October, 2019 on the forum MTT Forum 7 in Moscow will speak Joseph pine is the author of the bestseller “the experience Economy”, published in 15 languages with a total circulation of over 300,000 copies, the consultant companies from the Fortune 500 and founder of the consultancy Strategic Horizons. On the eve of visit to Russia pine told Forbes how IKEA has helped to transform the business, why the Millennials are not creating the experience economy and how Russian companies to capitalize on the emotions of clients.
Experience for Russia
— This fall you come to Moscow, but it’s not your first visit to Russia. What companies have you worked here?
— I was in Moscow a couple of years ago, worked with IKEA — met with their Russian management and talked about how experiences help to win customers. My task was to help implement the concept of “meeting places” for IKEA shopping Centres Russia. The company wanted to transform its shopping centers “MEGA”, emotionally tied to it customers. I did several presentations on how to create and organize an inspirational space for meetings, socializing and shopping. In particular, after my visit was the reconstructed one from the shopping centers and opened an additional food court in another, and two “Megahit” there was a space for free recreation where you can run around on the lawn, picnics, roller-skating, play badminton, fly kites, etc.. That IKEA changed or improved after 2017, I don’t know — since we’ve never collaborated. It was my only experience of cooperation with Russian companies.
— What to do for Russian companies to earn the experience economy?
— Russia has a vast cultural heritage that it can use for the benefit of the business following the example of other countries. For example, IKEA is the essence of Swedish design, LEGO business card of Denmark on the world market, Lush associated with the UK. Countries use their companies as a way to bring a piece of themselves to another state to share their achievements with the world. When you mention, for example, McDonald’s, Subway and Stаrbucks POPs up in your head the idea of America. Russia’s potential is very great literature, ballet, music. For example, China was able to get the whole world talking about his acrobatics. Today they themselves are in fact separate brand. Why Russia does not go the same way? The winner will be like, so everything is working in it company.
— What Russian companies are already successfully using the principles of experience economy?
— Take, for example, “Face” — the world’s first network of institutions, where guests offered to pay for the time spent there, not for drinks and food. Such places are now called “anticafe” or “half-cafe”. History of the project began in Moscow, but later a good idea spread to other cities and countries, including the UK. This is the only thing that comes to my mind at the moment. But I’m sure if you dig deeper, you will find many of your national examples of emotional engagement tools in the business that can be broadcast to the whole world.
“Millennials did not create anything”
— What is the General experience economy, about which you wrote one of the best-selling non-fiction books in the world?
The experience economy affects not only what we consume but how we feel about ourselves in the process of acquiring and using goods. It is scientifically proven that the experience of positive emotions make us happier than material goods. For example, according to a recent PwC survey, consumers are willing to pay 16% more for those goods and services that allow them to receive higher quality service and a pleasant purchase process. Another study prepared by the companies Eventbrite and Harris showed that 78% of Millennials are willing to spend money on experience than on things.
Only the U.S. has sold 215 000 copies of your book. It was translated into 15 languages, including Turkish, Korean, Japanese, Chinese, Russian etc. were there times when her reading had opened the owners eyes to a new business opportunity?
— Yes, and a lot of them. For example, the founder of the company for the production of toys on order Build-a-Bear Workshop Maxine Clark confessed to me that for a long time unsuccessfully tried to obtain venture capital financing for the development of their ideas, and our 1998 article in the Harvard Business Review [on its basis was later written and the book — approx. Forbes] helped her to keep your confidence and continue to seek investors. Now her company is worth $350 million the Creator of the popular art group Meow Wolf Korvas Brinkerhoff said that it is thanks to our book realized that his project can be something more than just a creative team. Today one of their facilities located in Santa Fe, “House of eternal return” is a modernized version of the journey of Alice in Wonderland — opening the washing machine or climbing the fridge, and visitors find themselves at the end of the tunnel. The New York Times called Meow Wolf “of the disney experience economy”.
— As the economy experiences over the last 20 years has changed the global market?
— If in 1999 we were saying that the era of the experience economy on the threshold, today we can safely say that it has arrived. More and more companies pay attention to its value. Many organizations have even introduced special positions — Chief Experience Officer (CXO). Today there are experts in PwC, Сarnival Cruises, Marriott International and others. They are designed to improve the quality of service and customer satisfaction. This is mainly achieved by improving products and services from the point of view of their convenience for buyers and visitors. In particular, in a range of CXO responsibilities included bridging the gap between company and consumer. This can be as simple verification of compliance of the user interface of the company to the expectations of its target audience and overall strategy of the company to become in the truest sense of the word closer to his client and spoke to him in the same language. The customer satisfaction CXO is not limited. Such a specialist also needs to monitor the status of employees and their experience because, as a rule, the customer experience is a result of interaction of the company with its own employees.
Why only now about the experience economy talking seriously?
— In fact it is a lost economic opportunity that, until recently, no one paid attention. Affected by changing economic paradigms. For example, in the agrarian economy, people baked cakes to birthday yourself, the cost of ingredients was only a couple of cents, but the emotions brought to the sea. With the development of the industrial economy, people began to buy ready-made cake mixes for a few dollars. Now, in the era of service economy, people just eating a cake at the store for $10 or $15.
This process has a downside. By optimizing many of the processes we have freed up more time, and we want to use it as efficiently and pleasantly. People wonder what they really appreciate? And of course the answer are not things, and, above all, the impressions and emotions they may experience with family, friends and colleagues.
— Do you agree that Millennials are the principal engines of the economy of experiences?
— No, the millenials did not create anything. “Baby boomers” were the first to appreciate the importance of experience and experiences, and Millennials have simply grew up in the new reality. They use the experience economy, but not generate it.
A little bit of home in a foreign land
— How the experience economy affects the business of individual companies?
Only in the United States for 2014-2016 consumer spending on experiences rose 6.3%, while demand for services increased by only 4.7%, and would generally only 1.6%. In addition, today’s consumers don’t just compare your direct competitors. They look to the best service that they receive. Amazon, Uber and other tech corporations have set the bar high for all other players in the market. As a result, consumers expect fast, easy and pleasant interaction with the brand. The consequences of bad or even just mediocre service greatly affect the reputation of the company. Thus, more and more companies and manufacturers one way or another rely on the experience and then monetize that experience.
— Can you give examples of which companies have reached a qualitatively new level due to changes in consumer experience?
In 2007 Apple made a revolution, presenting the first iPhone. The revolution was not only technological: they have changed the approach to relations “seller-buyer”. The client has the opportunity to safely try the product company in a pleasant friendly environment dedicated Apple stores. Consultants are used all boring marketing ploy and wasn’t constantly ask annoying question: “how can I help you?” Samsung, for example, came late to such a strategy.
In the early 2000s in new York, in Times Square, there was a Samsung Experience center, and then its counterpart — the Samsung gallery — worked for several years on Tverskaya street in Moscow. There anyone could look at all phone models and even prototypes of future models.
— And what do both companies now, when experimenting with the design of the phone behind? For them, the resources of the experience economy is exhausted?
— First, we need to continue to innovate within the framework of his economic proposals. You can, for example, to create products with additional “counters” which would force people to spend more time with your product. Secondly, they need to adapt products to the needs of the client. Customization transformerait the product in service, and service, in turn, converted to the experience. Thirdly, we need to create new experiences and impressions to the customers. For example, Heineken has opened stores Guinness in Dublin, the Capital One Bank — coffee shop within its outlets, and Breitling a couple of years ago ran a hotel chain that must transmit the brand values and serve as an embodiment of life style Bvlgari.
— Still have to put a coffee machine in the Bank and build a hotel to broadcast their values — a different cost and scale of things.
— Of course, but somehow the experience economy will affect all sectors. Experience not in all cases, costing the company dearly. There are different ways of gaining clients not only through innovation but also through the preservation of their traditions. For example, Starbucks was able to find its niche, especially for Americans. In all countries they support a common corporate culture (the famous handwriting names on cups) and the same standard of the products. At some point the world would I wouldn’t be, I always stop in cafes of this network, for me Starbucks — a little bit of home in a foreign land. That is, do not trigger new experiences, and appeal to pleasant memories.
$ 10 000 for the experience
— Which region leads in the number of projects in the field of experience economy?
— While dominated by tourism. Selling of emotions from travel and extreme Hobbies and new knowledge is becoming more and more cost-effective, and travel companies are expanding their list of offerings. In second place was the field of IT. Mainly, we are talking about the companies that build platforms and programs for projects aimed directly at consumers. Followed by medical care: studies show that the more agreeable impressions of the patient’s stay in the hospital, the better the treatment results.
— What is the situation in retail trade — one of the largest global markets?
— Retailers most right now is to attend to the creation of experiences. Retail stores are still between two opposite strategies: save time, like Amazon, and economy of time well spent, as Apple. But neither in the one nor in the other niche retailers have not achieved much success. To keep customers longer in the store and encourage them to leave more money at the checkout, you need something other than just put products on the shelves and to place consultants.
— Tell us, what is interesting in the field of experience economy you come across lately?
A good example of a device ocean Medallion for the cruise company Princess Cruises. It’s a small bracelet or a beautifully designed necklace that can be worn like a watch or hung on the neck. It is a space ship, means of identification, a key to the cabin, by way of payment of additional services on the liner, etc.
A similar project was done, and Disney. It’s called the MagicBand is a bracelet, by which the Corporation monitors all visitors to Disney World in Orlando. Interaction with the infrastructure of the Park begins at the stage of reservation and ticketing on the official website. Then the buyer is invited to choose a few favorite rides — and since then, the system already knows something about the preferences of the new guest. The cost of this project over a million dollars.
— How do you earn in the experience economy?
— My partner and I have a consulting firm Strategic Horizons, which consists of three people. We teach companies to earn on the emotions of clients. The main source of income is consulting, public speaking and staff training, we spend with my partner James Gilmore. In particular, we are preparing seminars for top-managers, marketing experts and representatives of sales departments. We also organize so-called experience-tours to show customers how the experience economy works in practice in other companies.
— What is the experience tours — tell us more?
— We still call them “cultural excursions” during which customers can try out different services stores as consumers. Funds for the purchase and gift cards to the participants of the expeditions we always provide yourself is an important part of the experience economy. Usually, such shopping we go to new York, Las Vegas or Chicago, or Seattle or Denver. Trips specifically designed with many “tourist stops”, but customers are given detailed instructions on what to do in each place. For example, we can ask participants to experience the Apple Store through the lens of our model, “4E”, which assesses the experiences of four dimensions: entertainment, educational, escapist (the departure from everyday reality — approx. Forbes) and aesthetic. Or look at the toy store American Girl Placе the eyes of a teenager-buyer, or purchased at supermarket Whole Foods Market product, which, in the opinion of the customers more for it. Also, no trip is not complete without calling at 3-4 store for body care — Lush, L’occitane en Provence, Aveda, etc. where our guests are not just purchased goods, but also tests products.
Most often experience tours is preceded by a seminar, where James explores the experience economy, and after the tour participants can see how it works or does not work (bad examples, we also consider). At the end of the trip is “debriefing” and discussion of what he saw and experienced. In the end I always ask participants to list all the principles of experience economy, which they noticed during the trip because the main purpose of our company is to help people to understand how it works in practice and learn to apply the experience to their businesses, rather than blindly copying other people’s ideas in isolation from the context and circumstances.
— How much are these services?
— Payment will be charged by the hour. That is, the Corporation paid for the time spent with us. Usually it is at least a few days. The exact amount I am not prepared to cite, but for reference I will say that the check could be $10 000. Directly we are not engaged, and only proposed the methodology for business transformation.
Top 5 brands in Russia
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5 out of 5
Best grocery brand
Was the category “Best product brand” German Bosch competed with Alpen Gold, Bonduelle, Canon, Lay’s, Nescafe, Samsung, Tefal, Tikkurila and “Frutonyanya”. Commercial success of the German brand were not among the leaders, losing Nescafe, Tikkurila, Samsung, Tefal and Bonduelle. But I bypassed the competition by a significant margin on the psychological appeal to Russian consumers. The top three by the sum of the also includes Samsung and Bonduelle. “The German brands traditionally have a good image quality and innovativeness among Russians,” — says Ignatiev. In fact, Bosch consumer attitudes towards the brand associated with the ongoing marketing events and emotional involvement of the audience. “For many years we are actively supporting creative initiatives through social events such as, for example, “picnic Posters”, which aims to engage young people and unlocking their creative potential, — says Andrey Krivosheev, regional sales Director power tools OOO “Robert Bosch”. Another example is the support of the charitable Fund “Galchonok”, aimed at development of creative abilities and integration of children with disabilities”. Methodology. “Best product brand” is determined by two factors. First, it evaluates the commercial success of the brand is defined by its market share, the preference of buyers (first choice) and price premium (the percentage by which the sales price of the product exceeds a reference price). Secondly, taken into account the attractiveness of the brand for consumers. For that 5750 people are polled, they are asked to evaluate the brand awareness and experience with him.
The best growing grocery brand
Homegenie competitors, the Chinese giant in the nomination “the Best growing grocery brand” in Russia was Alpen Gold, Bosch, Huawei, Lay’s, Makita, Mr.Ricco, Nutrilon, Panasonic, and Sony. Xiaomi was the first by a large margin due to the significant growth of the company’s share on the Russian market. Behind him in this category located Panasonic and Alpen Gold. On emotional perception among Russian buyers of Chinese brand was an obvious outsider, losing the other nine nominees, but outperformed its rivals, the growth rate of its market share in Russia. Methodology. In the category “Best growth brand” the dynamics of growth is a priority.
Best Russian grocery brand
“Frutonyanya”Brand of baby food ahead in the nomination “the Best Russian food brand” rivals such as Greenfield, “Babaevskiy”, “Hot”, “Good”, “Makfa”, “Mahe”, “Prostokvashino”, “Russia” and “Sloboda”. Financial indicators “Frutonyanya” lost to the main competitors — “Buttermilk” and “Sloboda”, but passed them by “share a soul” (emotional and rational perception on the part of consumers). In addition, played a role indicators such as the ability of a brand to translate its strength in other categories (in the consumer survey asked about willingness to buy the brand in other segments of goods). In favor of the “Frutonyanya” was played by the assessment of the quality of its products, the ability of a brand to evoke joy, its adaptation to the needs of consumers and good value for the price and quality. For the combination of these criteria “Frutonyanya” won. Marketing Director at JSC “Progress” (produces products under the brand “Frutonyanya”) Anna Ivanova explains the success of the company’s ability to predict the mood and needs of the consumer. In particular, the brand began to build its positioning is not only to help mothers, but also fathers (“men in baby food Department is no surprise”). Illustrative example to strengthen the position of the brand “Frutonyanya” in the market of baby juices, Ivanov cited the refusal in 2017 from the “dodgy stories” in advertising.
Best Russian corporate brand
“Yandex”In the competition for the title of “Best Russian corporate brand” company founded by Arkady Volozh and Ilya Segalovich, walked Mail.Ru Group “Aeroflot” VTB, “Gazprom”, LUKOIL, MTS, Rosneft, Russian Railways and Sberbank. At Yandex, Sberbank and Aeroflot were similar rational exponents. A slightly higher emotional consumer preferences has enabled Yandex to become the first. Followed by Sberbank and Aeroflot. Brands of “Rosneft”, VTB, MTS and Mail.Ru Group was in the bottom of the list of 10 nominees. On emotional perception by the respondents brands of VTB and “Rosneft” took the last stitch. For the sound perception at the end of the list were VTB and MTS. Methodology. In determining the nominees in the category “Best Russian corporate brand” in the calculation were taken open data about the commercial viability of Russian companies. Brand strength was calculated according to the results of the online survey of 1,500 respondents and reflects the emotional and rational perception of these companies.
Best foreign corporate brand
GoogleПо emotional and rational perception of the image of Google was higher than those of competitors, among which were Apple, Danone, LG Electronics, Mercedes-Benz, Nestle, Pepsico, Procter and Gamble, Samsung Electronics and Toyota Motor. But the victory of the American brand got thanks to the greatest contribution of rational perception, said GfK. A bit of Google behind Samsung, Mercedes-Benz and Toyota. Apple was in the top three in the rational perception of the brand in Russia (it is about reputation, international recognition and development), but was only sixth on the emotions that the brand evokes among customers (sympathy, identification, uniqueness).Google ahead of competitors in emotional characteristics, especially on likeability, attractiveness, and identification. “People, the study shows that some feel a great closeness to Google, which is logical, since the company’s products are used in daily life and it does not need to have a high level of income,” — said Ignatieff. The press service of Google’s most remarkable marketing campaigns of the brand in 2018 called the launch assistant on the Russian language, streaming service You Tube Music, program “Business class” Google reader “From small to large.”
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