A simple and perfect title choice was picked for Episode 4 of The Experience Strategy Podcast. A trio of true “Experience Pioneers” were interviewed by Dave Norton and Aransas Savas: Bernd Schmitt (Robert D. Calkins Professor of International Business at Columbia Business School; the Center on Global Brand Leadership’s faculty director; author of Customer Experience Management); Lou “Lewis” Carbone (Founder and CEO of Experience Engineering; author of Clued In); Joe Pine (Co-founder of Strategic Horizons LLP; co-author of The Experience Economy)
In his kickoff discussion, Carbone highlighted another Columbia Business School pioneer in this area, Morris Holbrook, William T. Dillard Professor Emeritus of Business, who co-authored a seminal article in the 1980s, “The Experiential Aspects of Consumption,” in which he urged for a deeper push in consumer research to focus on emotion, not just information processing. “Consumption has begun to be seen as involving a steady flow of fantasies, feelings, and fun, encompassed by what we call the ‘experiential view.’”
While at National Car Rental, Carbone was taken aback by the reaction of divisional leadership to customer insight studies as being something only marketing needed to deal with, when he knew that operations, call centers, etc. all impact the customer’s experience. He then highlighted Schmitt’s insights in Experiential Marketing as another piece inspiration in the 1990s which led him to create a program at National Car Rental in which they began offering rentals of classic cars that were owned by movie stars. “I still think there’s a lot of CX practitioners that may not see the vision that Joe, Bernd, myself, saw then. I don’t think it’s even fulfilled today.”
Schmitt remarked that into the 1990s much of the academic marketing literature was still focused around the functional aspects and value of a product or service. “I believed that [the research should] consider how people feel, how they get sensory information, how they think in creative ways about products and what they can do with them, and how they are also living a lifestyle and how they are acting and behaving as they interact with a product.”
Asked for his reflections on the 1990s, Pine stated, “The big bugaboo that I saw, that exists even more so today, was a single word, commoditization…. Where price becomes the differentiation, so there is no real differentiation.” Companies then had to search for new points of differentiation and eventually led them to, “actually recognize that they could be in the experience business.” This didn’t come out of nowhere, Pine noted, as business acknowledgement of the emotional poignancy of entertainment had already been around. The commoditization of the time was both lowering prices and saving consumers time, and thus people were creating a larger demand for experiences within the overall economy. At the time, brands like Disney, Lego, and Las Vegas were demonstrating the financial impact that experiential strategies could have.
While all three pioneers appreciate that companies are now attentive to the impact of experience, they still feel that most haven’t taken on the full, holistic attention to it that they all crafted in their frameworks on the subject. Carbone discusses working with Gerald Zaltman at Harvard around the unconscious factors that influence human decision making, which led him to think about the “clues” and “signals” that we see in the world which lead to our emotions. Those signals and clues come from things that humans do around us, the functional elements of a product or service, and the atmosphere or mechanics of the experience of that product or service. All combined, this leaves us with a feeling about the experience, the company delivering it, and about ourselves. “So often the industrial age is built around efficiency and fixing broken processes, and unfortunately a lot of journey mapping and things like that, get caught up in fixing broken things rather than looking at how do we create distinctive value.”
In his own work, Carbone notes his pride in working with Progressive Insurance as they aimed to move beyond only a service agent sales model to providing a direct-to-customer model in the early days of the internet. They were naturally concerned about losing their relationship with the agents, but Carbone and then-President Bob McMillan believed that building an extraordinary experience would excite all of Progressive’s stakeholders. Through research they realized the moment of impact in a traffic accident was the true emotional beginning of a customer’s insurance experience. This led to the highly successful Immediate Response Vehicle effort in which an agent would arrive on the site of the accident equipped with training in grief counseling, water, a cell phone (prior to their ubiquity), and the offer of a ride home. After this initiative launched, according to Carbone, Progressive became the fastest growing insurance company in the world and ended up gaining sales agents rather than losing them.
To conclude the discussion, Norton and Savas asked about what might most impact the future and Schmitt immediately highlighted the continuing expansion of technology, following on from the immense impact the digital age had on experience right as their own frameworks were developing. From smart devices, to mixed reality, to artificial intelligence and robotics, Schmitt remarks, “The major change I see is that a lot of it will be no longer be just understanding customers, in the sense of humans, but understanding technology, and how technology interacts on it its own and how it then creates good or bad experiences.” In terms of looking at how this is presently playing out, Schmitt points to China where just a few companies have massively integrated platform experiences that allow you to do anything you can think of as a customer.
“Does anyone remember ‘The Information Superhighway’,” Schmitt asked the group, “You know, Al Gore 2000. I mean, in a way, it has happened.”
About the researcher
Professor Schmitt is Robert D. Calkins Professor of International Business at Columbia Business School. He researches, teaches, and advises corporations on branding, innovation, creative...Read more.