If your bank ever offered you the experience of a lifetime—riding in a plane filled with your favorite sports heroes—would you ever go to another bank?
What if your credit card company offered you the chance to take a hot air balloon ride over the vineyards of California’s Napa Valley? Or attend a race-car driving school? Or have a catered dinner, complete with a personal chef, at your home?
A growing number of companies are incorporating such personalized, once-in-a-lifetime experiences directly into their marketing and branding strategies.
Most business and marketing leaders agree that one of the most important attributes of a great brand is its ability to tap into the emotions of consumers. Virgin’s Richard Branson once said, “I’m convinced that it is feelings—and feelings alone—that account for the success of the Virgin brand in all of its myriad forms.” But if emotional connections are the key to successful branding, the real question is how to best create these emotional bonds.
The answer, in a word, is experiences. Every interaction you have with a company, whether it’s watching a TV ad, walking into a retail store, using a product or interacting with a customer service representative, affects your perception of that brand. Disney’s Michael Eisner once said that brands are “the product of a thousand small gestures.” The opportunity for brand-building is to capitalize on every one of these interactions and think of them not as mere customer contact points but, rather, as opportunities to deliver truly meaningful experiences. Leading brands like Starbucks have gone even further by creating entire business models around the delivery of experiences. According to Chairman Howard Shultz, “We’ve known for a long time now that Starbucks is more than just a wonderful cup of coffee. It’s the experience.”
From my many years as marketing and customer service consultant, I can tell you that experiences are the key to connecting with customers on a personal and meaningful level and it is experiences that create emotional and powerful bonds between consumers and brands. This emotional tie, in turn, drives loyalty. While companies like Starbucks, Walt Disney, Krispy Kreme, American Girl and Abercrombie & Kent have engineered their entire brands around delivering experiences, others are now beginning to make the transition from traditional product or service-focused companies by embracing experiential marketing.
Concierge Brings Personalization
Concierge providers allow leading brands to offer their customers an amazingly broad array of experiences such as private dining reservations at trendy restaurants, business or family travel arrangements, tickets to sold-out sporting events, unique and creative gift ideas and even research assistance. Because of the very personal nature of these interactions, virtually every one of them is an opportunity for that company to deliver a brand-enhancing experience.
But do these services truly create business value? The answer is a resounding yes! Companies in the financial services and travel industries have seen increases of more than 30 percent in customer spend levels and reductions of up to 50 percent in attrition levels for concierge users. In fact, one company found that simply offering concierge services as a benefit drove increased spend levels of 10 percent to 20 percent, even for those customers who never took advantage of the service!
Concierge services also offer another very powerful benefit—incredibly powerful insight and information that can be used to drive a company’s one-to-one marketing efforts. Many concierge interactions are so personal that they offer a great opportunity to capture customer information that can’t be captured in any other way.
Individual life stage information, hobbies and personal passions, important dates and personal influences, and business needs are all revealed during these interactions. Fidelity Investments, the nation’s largest mutual fund company, has been offering virtual concierge services to their high net worth client segment since 2000. The concierge program enhances these client relationships and supports Fidelity’s overall wealth management solutions platform.
“With any brand, it is not just about having the right price or the right value, it must also offer the right experience,” says Bernd Schmitt, professor of marketing and director of the Center on Global Brand Management at Columbia Business School and author of Experiential Marketing: How To Get Your Customers To Sense, Feel, Think, Act Related to Your Company and Brands.
While experiential marketing is not a new concept, Schmitt’s book sent it center stage. Says Schmitt, “Most managers have not been trained to think of marketing and branding in terms of experiences. Mangers tend to assume that rational customers are seeking benefits based on functional product features.” In fact, continues Schmitt, “consumers want to be stimulated, entertained, educated and challenged. They are looking for brands that provide them with experiences and thus become part of their lives.”
The American Girl doll, manufactured by the Pleasant Company, is a classic example of a brand that focuses its marketing strategy on creating the experience. When company founder Pleasant Rowland decided to go beyond selling her dolls (and their clothes, furniture and other accessories) directly to consumers, she rejected traditional retail outlets for the American Girl Place in Chicago. There, a family can spend hundreds of dollars on experiences alone—from attending the American Girl Theater to having lunch or tea in the
It’s an example of the mindshift that is taking place in the customer loyalty arena, where marketers are finding that customers have grown bored with traditional loyalty programs. Among 1,000 consumers surveyed by Quadstone in 2001, 19 percent claimed that they “usually forget” about the loyalty program points they have earned and that the points “expire before I use them.” Among those consumers who did not own a loyalty card, 47 percent said that they had no interest in them, with 19 percent indicating that they “didn’t see the benefit” and 10 percent saying that they had held loyalty cards in the past but saw “no perceived benefit from their use.”
What does ignite people’s emotions—and loyalty—however, are rewards that engage them by appealing to their dreams and desires: golf clubs coupled with lessons from a top pro; hot air balloon rides; VIP treatment at exclusive fashion shows; or the opportunity to drive a NASCAR-style stock car. Some companies have taken experiences a step further, allowing their members to redeem points for virtually anything they wish. In one case, a thrilled Merrill Lynch Visa Signature card holder used her Visa Signature Rewards points to host a lavish holiday party, complete with personal chef—paid for entirely with points.
Leading brands such as Merrill Lynch and Saks Fifth Avenue are embracing experiential rewards as an opportunity to broaden their portfolio of award offerings, differentiate themselves from competitors and create more meaningful and memorable interactions with their customers. The key to success in “experientializing” your loyalty program is to capitalize on your brand’s strengths and assets, your partners’ abilities and your knowledge of customer lifestyles and needs.
Your company might not be ready to transform completely into a truly experience-focused company like Starbucks or Walt Disney, but experiential marketing offers you a great starting point.