Experience Selling

Enhancing value through operational excellence and memorable moments

Experience Selling Business Model Pattern

Experience Selling Business Model Pattern Featured Image

The experience selling business model pattern focuses on creating unique, memorable, and engaging customer experiences around products or services to increase their perceived value.

History of Experience Selling

The concept of experience selling has been around for decades, but it has gained significant momentum in recent years as businesses recognize the value of creating memorable and engaging experiences for their customers. Here’s a brief history of experience selling and why it remains relevant today:

  • 1970s: Alvin Toffler introduces the concept of the “experience industry” in his book “Future Shock,” predicting the rise of experience-based businesses.
  • 1998: B. Joseph Pine II and James H. Gilmore publish “The Experience Economy,” arguing that businesses must create memorable experiences to differentiate themselves and command premium prices.
  • 1999: Apple opens its first retail store, focusing on creating an engaging and interactive customer experience, setting a new standard for retail.
  • 2000s: The rise of social media and user-generated content heightens the importance of creating shareable and memorable experiences.
  • 2010s: The experience economy continues to grow, with businesses across industries investing in experiential marketing, immersive technologies, and personalized services.
  • 2020s: The COVID-19 pandemic accelerates the shift towards digital and virtual experiences, with businesses adapting to new ways of engaging customers.

Relevance Today

Experience selling remains highly relevant in today’s marketplace for several reasons:

  1. Differentiation: In an increasingly commoditized world, experiences provide a powerful way for businesses to differentiate themselves and stand out from competitors.
  2. Customer expectations: Today’s consumers, particularly millennials and Gen Z, prioritize experiences over material possessions and are willing to pay more for unique and memorable experiences.
  3. Emotional connection: Experiences create emotional bonds between customers and brands, leading to increased loyalty, advocacy, and customer lifetime value.
  4. Competitive advantage: Businesses that excel at delivering exceptional experiences can gain a significant competitive advantage, as experiences are often more difficult to replicate than products or services.
  5. Economic impact: The experience economy is a significant driver of global economic growth, with sectors such as tourism, entertainment, and retail heavily reliant on experience selling.

Stats and Facts:

  • According to a study by Eventbrite, 78% of millennials would choose to spend money on a desirable experience over buying a product.
  • A report by McKinsey found that experiential brands have outperformed their peers by nearly 200% in the stock market over the past decade.
  • A survey by Harris Group revealed that 72% of millennials prefer to spend money on experiences rather than material things.
  • Airbnb, a company built on the experience selling model, has grown to over 7 million listings in more than 220 countries since its founding in 2008.
  • The global experiential marketing industry is expected to grow from $50.88 billion in 2020 to $82.82 billion by 2025, at a CAGR of 10.3% (MarketsandMarkets).
  • According to PWC customers are willing to pay up to a 16% price premium for products/services that involve a great customer experience.

What is the Experience Selling Business Model Pattern?

Experience Selling Business Model Pattern

The experience selling business model pattern is a strategy where a company focuses on creating unique, memorable, and engaging customer experiences around its products or services to increase their perceived value and differentiate itself from competitors. This model recognizes that customers are willing to pay more for products and services that come with an exceptional experience, as the emotional and sensory elements of the experience add significant value to the overall offering.

Why is the Experience Selling Business Model Pattern Important?

The experience selling business model pattern is important because it offers several key benefits for businesses and their customers:

  • Increased Perceived Value: By creating memorable and engaging experiences around products and services, companies can increase the perceived value of their offerings in the eyes of customers, enabling them to command higher prices.
  • Differentiation and Competitive Advantage: Unique and compelling customer experiences can help companies differentiate themselves from competitors and establish a strong competitive advantage in the market.
  • Enhanced Customer Loyalty: Customers who have positive and memorable experiences with a company are more likely to develop an emotional connection with the brand, leading to increased loyalty, repeat business, and positive word-of-mouth.
  • Higher Profit Margins: The increased perceived value and willingness to pay associated with exceptional customer experiences allow companies to charge higher prices and enjoy higher profit margins compared to competitors who focus solely on the product or service itself.
  • Opportunities for Upselling and Cross-Selling: Engaging customer experiences can create opportunities for companies to upsell and cross-sell related products and services, as customers are more receptive to additional offerings in the context of a positive experience.

Impact on the Business Model

Experience Selling Business Model Pattern Canvas

The experience selling business model pattern significantly impacts various aspects of a company’s overall business model:

  • Value Proposition: The value proposition extends beyond the core product or service to include the unique and memorable customer experience that accompanies it, creating additional value for the customer.
  • Key Activities: Key activities include designing, delivering, and continuously improving customer experiences that align with the brand’s identity and resonate with the target audience.
  • Key Resources: The main resources are the people, skills, and technologies needed to create and deliver exceptional customer experiences, such as trained staff, immersive environments, and customer data analytics.
  • Customer Relationships: Building strong, emotionally connected customer relationships through personalized and engaging experiences is a central focus of this business model.
  • Revenue Streams: Revenue is generated through the sale of products and services at premium prices, justified by the added value of the customer experience.

How to Implement the Experience Selling Business Model Pattern

To successfully implement the experience selling business model pattern, companies should follow these steps:

  • Understand Customer Preferences: Conduct thorough research to understand the preferences, expectations, and emotions of the target customer segment, and use these insights to inform the design of customer experiences.
  • Develop a Unique Experience Concept: Create a distinct and memorable experience concept that aligns with the brand identity and resonates with the target audience, focusing on elements such as sensory stimulation, storytelling, and personalization.
  • Train and Empower Employees: Invest in training and empowering employees to deliver exceptional customer experiences consistently, ensuring that they have the skills, knowledge, and autonomy to create memorable moments for customers.
  • Create Immersive Environments: Design physical and digital environments that immerse customers in the brand experience, using elements such as lighting, sound, scent, and interactive displays to engage the senses and create a strong emotional connection.
  • Leverage Technology: Utilize technology to enhance and personalize customer experiences, such as using customer data analytics to tailor recommendations and offers, or implementing virtual and augmented reality to create immersive and engaging experiences.
  • Continuously Measure and Improve: Regularly assess the effectiveness of customer experiences through metrics such as customer satisfaction, loyalty, and lifetime value, and use these insights to continuously refine and improve the experience over time.

Trigger Questions

  • What unique and memorable experiences can we create around our products or services to differentiate from competitors?
  • How can we design and choreograph the customer journey to maximize engagement, delight, and emotional connection?
  • What sensory elements (e.g., sight, sound, touch, taste, smell) can we incorporate into our customer experiences to create a lasting impression?
  • How can we personalize the experience for each customer based on their preferences, behaviors, or context?
  • What technology or innovation can we leverage to enhance or streamline the customer experience?
  • How can we gather and act on customer feedback to continually improve and evolve our experience selling approach?

Examples of the Experience Selling Business Model Pattern

  • Starbucks: The global coffee chain has built a strong brand and loyal customer base by focusing on creating a welcoming, comfortable, and personalized coffee shop experience, rather than just selling coffee.
  • Disney: The entertainment giant is known for its immersive and magical theme park experiences, which command premium prices and create lasting memories for visitors.
  • Apple: The technology company has created a distinct brand experience across its products, retail stores, and customer service interactions, focusing on simplicity, design, and personalized attention.
  • Lululemon: The athletic apparel retailer has differentiated itself by creating a community-driven experience around its products, offering in-store yoga classes, events, and personalized customer service to create a strong emotional connection with customers.

Summary

The experience selling business model pattern recognizes that in today’s competitive and experience-driven economy, customers are increasingly seeking more than just products and services – they want memorable, engaging, and personalized experiences that create value beyond the functional benefits of the offering. By focusing on creating unique and compelling customer experiences, companies can differentiate themselves, command premium prices, and foster loyal and emotionally connected customer relationships. As the importance of customer experience continues to grow, the experience selling model is likely to become an increasingly critical strategy for businesses across a wide range of industries.

Related Business Model Patterns

Explore More Business Model Patterns

References: