The Experience Economy And The Chemistry Of Customer Experience

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Joseph Pine and James Gilmore introduced the idea of the Experience Economy in 1998. Fast forward to this year, in the wake of the COVID-19 pandemic, and Accenture research shows that, to drive growth, companies must reimagine their entire businesses through the lens of experience. So, what’s a brand to do in an intensified experience economy? Harness the chemistry of customer and employee experiences.

What does brain science and the experience economy have to do with each other? More than you might think. Take, for instance, the work of experts like Diana Lucaci, a neuromarketing strategist and CEO of True Impact. Neuromarketing research such as hers shows that our behavior in general — and customer behavior, specifically — is based on how we feel. Science shows the that type of emotional experience customers and prospects have affects the length and quality of your relationship with them.

Let’s look at how experiences — both positive and negative — result in different types of brain chemistry reactions. And then we’ll explore how these experiences correlate to customer behavior, customer lifetime value and business success.

As customers, we feel experiences through our neurotransmitters — tiny chemical messenger cells that transmit signals between neurons and cells in the body. However, when we experience something that we perceive as frustrating, stressful, annoying or infuriating, we release the brain chemical cortisol. With an increase in cortisol, negative thoughts don’t allow the brain to perform at a high or even normal capacity. Negative emotions narrow our field of vision and place us on guard — and that makes us more reactive and sensitive. We often perceive even greater judgment and negativity than what’s actually present. And these effects can last for 26 hours or more, imprinting the interaction on our memories and magnifying its impact on our future behavior.

Cortisol functions like a sustained-release tablet — the more we ruminate about our fear and frustration, the longer the effects. Not only does this type of experience elicit certain chemicals and subsequent feelings, but the length of those feelings is also different. Negative feelings stay with us longer than positive ones.

Typical tipping points of poor customer experiences that elicit negative feelings include:

  • Having to speak with multiple people — repeating the same information
  • Being on hold for a long time
  • Having to deal with rude or inexperienced service representatives
  • Not being able to resolve an issue after oneinteraction
  • Not being understood

On the Positive Side

In the book “Positivity: Top-Notch Research Reveals the 3-to-1 Ratio That Will Change Your Life,” author and psychologist Barbara Fredrickson explains that, when you have an experience you perceive as positive, your brain receives the signal to release different chemicals into your nervous system: serotonin, dopamine and oxytocin. This results in a sense of calm and well-being that expands your mindset, attention and receptiveness.

Dopamine, in particular, controls the brain’s reward system — the more dopamine released, the more we want to repeat the experience to spark the release of more dopamine. This is, in part, why a positive experience is the start of a positive association that builds upon itself overtime. And, if repeated throughout the customer journey and interactions, it builds trust and loyalty.

Research by psychologist Jennifer Lerner of the Harvard Kennedy School suggests there are two types of emotions that come into play during the decision-making process. Integral emotions are feelings that arise from the actual interaction and decisions at hand. And even more crucial to long-term customer relationships are incidental emotions — feelings that carry over from one decision to the next. These emotions also influence decisions in the future.

From the customer experience perspective, these incidental emotions affect decisions long after the event that caused them. Because these emotions continue to influence the future, it’s clear that organizations must always consider how customers feel — throughout the entire customer journey.

When a company takes the long view in building a positive emotional connection, that relationship is much more likely to flourish, and their customer lifetime value has the potential to grow. When employees are given the freedom to be themselves and respond to people in a human way, they can develop a personal emotional connection (PEC) with the customer. This is the strategy Tony Hsieh, former CEO of Zappos used. In his book, “Delivering Happiness,” Hsieh relates that companies often write off contact centers “as an expense to minimize.” But in doing so, they lose crucial opportunities to increase the customer lifetime value (CLV). He explains:

“Companies assume the lifetime value of a customer is fixed when doing their ROI calculations. We view the CLV to be a moving target which can increase if we create continuous positive emotional associations with your brand through every interaction a customer has with us.”

Increasing PEC is what led to the stickiness of the Zappos brand and even drove the network effect — when a customer has a good experience with a brand and shares it with friends and family, either in person or online. This showed that every person who encounters your brand can be an advocate and a source of referrals.

According to consumer research firm Motista, customers follow a four-step emotional connection pathway, transitioning from being unconnected in the first step to being fully connected in the fourth step. And, with each advancement, their value increases dramatically. Fully emotionally connected customers are 52% more valuable, on average, than those who are just highly satisfied. And their relative value is striking across a variety of metrics, such as purchases and frequency of use. Customers who feel strong positive emotions will be more satisfied with the service they’ve received; they’ll demonstrate increased loyalty; and they’ll provide exceptional word-of-mouth references. Additionally, they’ll likely spend more and encourage others to do the same.

The first way to increase the personal connection with your customers and your employees is to put yourself in their shoes and then redesign your experiences from their points of view. The most sophisticated firms make emotional connection part of a broad strategy that involves every function in the value chain — from product development and marketing to sales and service.

Given the enormous opportunity to create new value, companies should pursue emotional connections as a science. And then create strategies and processes and incorporate the technology necessary to orchestrate customer experience investments with those elements that have been shown to drive a positive emotional connection with the customer at scale.

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