Banking on the Experience Economy

Elevating the Value

Let’s face reality; banking is a service business. Banks provide customers with financial services and charge for doing what their customers cannot do for themselves. In today’s market, banking is faced with a wide and expanding range of competition that is forcing price to become the primary defining factor at best. Unfortunately, fighting on price creates no greater value for the business, only volume with decreased margins. If there is no real difference in the eyes of the customer, there is no loyalty. Moreover, the idea of great customer service is not a differentiator, it is what is expected.

In the Experience Economy, it is much more than efficiency or performance ratings of service delivery, it is about a personal customized offering to the individual and staging memorable engagements. It is a shift from doing for a customer to doing with a customer. This is a deliberate strategic change from ‘time well saved’ in the service economy to ‘time well spent’ in the experience economy. Moreover, that time well spent being engaged, should come at a premium price.

The question before us is this; can a service economy industry like banking be elevated to that of an experience stager? We believe the answer is a definitive yes given the desire for change exists.

Staging Experiences with Bank Customers

In the book “The Experience Economy” by B. Joseph Pine II and James H. Gilmore, the phrase “Work is theatre and every business a stage” is used to frame up the key idea that staff have roles to perform and that the environment becomes a stage for the performance. To achieve this idea, banks need to refocus away from merely delivering efficient service to staging engaging experiences with their customers. The environment must be aligned with the brand promise and support the bank’s culture. Banks need to avoid rehashing older delivery models or duplicating another bank’s design to create activity. The physical and digital place must be a manifestation of the bank’s brand and purpose.

Transforming the Culture

The hurdle for banking in the Experience Economy is that it requires an honest assessment of the culture across the whole of the organization. The evolution to an experience begins always with the strength of the people. No brand statement or great environment design can create a memorable engagement without the efforts and intention of the staff. This must happen at all levels and all channels of customer interaction. The more staff is engaged with the customer, the more memorable the experience.

3S Model: Satisfaction, Sacrifice and Surprise

One method to begin the journey to becoming an experience is applying the practice of the 3S model: Satisfaction, Sacrifice and Surprise.

Satisfaction: First, begin by finding ways to improve satisfaction for the customer. Find out what they like about the current interaction with the bank and expand those ideas. Improve on what is already being done and eliminate the customer’s dislike.

Sacrifice: Next, identify customer sacrifices and barriers between what the customer wants and what they must accept because of limitations, efficiencies or selection. Begin removing these sacrifices to enhance the interactions with the customer. Remember, it’s about what the customer really wants and not about being limited to selecting from a menu of what is only offered. One major method to removing sacrifice is by leveraging digital channels. As more and more functions and processes of banking become digital, the more customizable they become. The more customizable an experience/event can be, the more personalized it becomes and eventually, the more customer sacrifice is removed. Being digital means being customizable.

Surprise: Finally, add in a surprise during the interaction. Surprises can be random or planned. Take the idea of opening an account. Imagine allowing the customer to create their own unique banking package that fits their needs. Then, because options can be digital, this particular blend of service and features gets named after them and becomes a pre-designed package offering that others can choose. It also creates conversation for the customer with their connections and an experience they are willing to share.

For banking to evolve from the service economy to the experience economy, it will take deliberate action. It is a shift in thinking that is interactive and intentional. The experience economy is a very purposeful level of interaction and takes practice, performance and focus. Just imagine if Starbucks stopped being an experience and commoditized the experience by just serving preset coffee drinks. No more getting your order the way you want with the extra shot or soy versus milk. No more customization of ingredients so that it’s your personal latte and no one else’s. How fast would the value of Starbucks fall?

The key to being an experience stager is knowing that experience is unique to each customer, and the customer becomes the product in which the engagement is designed around. To become an experience, an organization must create a unique difference through the engagement, the purpose and deliberate staging of the engagement in order to create a memorable and valuable event in the mind of the customer. Creating memories through experiences creates increased value and revenue.

We are in the era of the experience economy, companies who do not adapt or evolve from goods or services will be replaced by companies who can stage experiences in order to add greater value to their offering.

November 11, 2016

Seeing the Future of SEL

I had a wonderful opportunity to capture the ideas and conversations of a growing movement in the educational world. SEL (Social Emotional Learning) is an empathetic approach to learning and is seeing a growing following. Here’s a look at the thinking of SEL.

July 29, 2016

Learning From Alice

In the Experience Economy, understanding the flow is critical in the success of any staged experience. A good example of how this works is through the story of Alice in Wonderland.

In order to develop a complete experience for your customer you must address every phase of the experience from the enticement to enter through the extending of the memory.

February 12, 2016February 12, 2016

Alcoholism Rises to 500%

This may soon be the headline we read in the not too far future.

When mapping out cause and effect of any new development or change, it maybe helpful to visually map out how that new development or change will affect other conditions.

In the example of the title headline, imagine as more and more autonomous self-driving cars or accessible to the public some responses may not be as positive as expected. With self-driving cars, occupants are no longer responsible for their condition behind the wheel. Not being responsible for driving allows people the opportunity to indulge in excess.

Yes bartender, I’ll have another, I’m not driving.

In this example, more autonomous cars could bring about a dramatic increase in public drinking and alcoholism. After all, we’re human.

Autonomous cars and drinking maybe a dramatic example that may never unfold, but then again, it does have the possibility. Look at how companies approach developmental change within an organization. What maybe a small change from the top will ripple down may have unseen consequences if not mapped out. What about dramatic change such as rebranding, environmental design, digital adaptation or even evolving staff culture?

For companies attempting to evolve and stay profitable, not seeing how change will unfold could be as dangerous as not changing at all. This is why visual thinking and graphic facilitation are such a powerful tools in Organizational Change or new product development.

See the possible outcomes and pitfalls before you implement change.

January 18, 2016February 11, 2016

Why Change is Hard

There is an old quote I heard many years ago that goes something like this;

“You can’t read the label from inside the jar.”

Each time I’m asked about strategic ideation or innovation labs and why I believe them to be such a powerful tools for clients, businesses and organizations I always remember the quote. Trying to find a solution or discover new opportunities when you are so close to the situation or the problem is usually highly improbable. You see, it’s very hard to challenge yourself with questions or perceptions that drive new discoveries. The reason is simply, we naturally avoid asking ourselves questions we don’t know the answers to.

In many cases, to discover fresh ideas, solve problems or uncover new opportunities, it requires someone outside your jar to challenge with questions, ideas or observations that may be beyond your normal sight lines or focus. Strategic ideation or innovation labs conducted by outside resources can assist with this type of challenging thinking, a type of thinking process that becomes a provocateur to historic patterns and beliefs.

So, if you trying to “think outside the box”, change the paradigm or have a desire to change course direction, then my suggestion to you is to seek out an outside specialist to help you to see what is written the other side of the label. When you can do that, then you can begin to discover the opportunities and solutions unseen before.

As Winnie the Pooh always says “Think Think Think” and see how.

KMD

November 18, 2015January 26, 2016

What is the Experience

“We have a great customer experience.”

Okay, I know we all have heard this response from a lot of companies expressing what makes them different than the competition. Maybe we even caught ourselves say it. The phrase ‘A Great Customer Experience’ has become the hot buzzword response statement of the year. Yet, each time I hear this I find myself wondering and wanting to ask this question…

“What is the experience you’re staging for your customer that is so great?”

Let me be clear about one thing, a true experience is not an enhancement of services to support an offering, rather, the experience is the offering which is supported by goods and services. If the experience is the offering, than what type of customer experience are you staging?

Pine and Gilmore identified two dimensions of an experience. The first dimension is that of customer or guest participation. At one of the spectrum lies passive participation and at the other, active participation.

The second dimension of an experience is the type of connection or environmental relationship that connects the customer to the event or performance. At one end of this spectrum lies absorption, viewing from a distance. At the other lies immersion, becoming physically part of the experience itself.

Combining these two aspects helps to define the four primary types of experiences customers can partake of. In the upper left lies the passive absorption of Entertainment such as listening to music, watching a performance or even reading for pleasure. In the upper right lies the active absorption of Educational Experiences. To the lower right lies the active immersion of Escapist Experiences where customers are actively involved. In the final quadrant to the lower left lies the experience of the Esthetic such as viewing artwork in a gallery or museum.

Combinations of any two of these experience realms can create six additional blended experiences. The real differentiator for a great customer experience is the ability of hitting the sweet spot between all four realms into one blended experience like Walt Disney has achieved with the theme parks.

So, the next time you hear someone say they have a great customer experience, ask them what kind of experience(s) are they staging for their customers, because Disney never said he had a ‘Great Customer Experience’ only great experiences.