The role of service in the Experience Economy

Profile picture for user Coen Jeukens By Coen Jeukens July 1, 2020
Summary:
In the Experience Economy, customer service means more than fixing what's broken. Coen Jeukens of ServiceMax explores what this means for service organizations

Business, technology, Internet concept customer experience © Photon photo - shutterstock
(© Photon photo - shutterstock)

In my native Dutch language, we have an expression "operatie geslaagd, patiënt overladen," which translates to "surgery successful, patient deceased." Just because a procedure or process was performed successfully does not necessarily mean it generated a successful outcome. That's because experience matters.

The ‘Experience Economy' is a phrase first coined in 1998 in a Harvard Business Review article and later in an eponymous book by consultants Joseph Pine and James Gilmore. It's based on the premise that businesses must deliberately orchestrate and create memorable encounters for their customers, and that the memory itself becomes the product — or in other words, the ‘experience'. Airlines for example, are not just taking you from A to B on time and at the lowest price, but (hopefully) giving you their distinctive en-route experience.

Valuing the experience in service delivery

The ‘Experience Economy' states that over time the value of the experience will outweigh the value of the product or service. The implications for service delivery — fixing the product alone — is not enough. You need to ‘fix' the customer as well.

It's particularly relevant in service-based industries, because more advanced experience businesses can charge for the value of the ‘transformation' that an experience offers. But a lot has happened since 1998 and the lines have since blurred. Experience is now intertwined with customer management strategies and more recently the move to outcome-based business models and the rising emphasis on customer success.

To help us measure customer satisfaction, Fred Reichheld introduced the Net Promoter Score (NPS) in 2003. Today you see NPS, CSAT, CES and CX everywhere. We care about the customer because the product/service itself is moving towards becoming a commodity. To differentiate and assure ourselves of sustainable revenue streams, we need to move upwards. We need to do what customers really care about. This drives many transformation journeys.

From break-fix to knowing what works

For service organizations, this means moving from fixing what breaks to knowing what works.

For example, a global technology solutions vendor had a persistent problem in finding sufficient qualified technicians. As an experiment they started hiring hospitality graduates. Their logic was that with modern tools, it's easier to teach technical skills to people-oriented employees, than to teach people skills to technology-oriented employees. In other words, you hire for attitude and softer skills, then teach the technical competency. With increasingly vocal customers this experiment not only became a success for the company, it also became the norm.

As industries become increasingly automated we are rethinking the skills our workforce needs. The role of service technicians in delivering positive experiences, human touch, contextual understanding, communication and the slew of softer skills aside from the service or maintenance task, is becoming more important than ever.

As the economy begins to emerge from locked-down restrictions to finding a new level of ‘normal', customer experience will be the bedrock of service delivery, customer retention and proactive customer management strategies.