Once upon a time we were happy with our consumer economy, comfortable in the knowledge that what we consumed, stated who we were and defined our position in society. Simple, easy and clear. You knew what you could afford and aspired to move a little further up the social ladder, defined by what you consumed.
Then came “Branding”, the awareness that we could better define who we were by the products we used and the stories they told. We could belong to smaller groups that weren’t socially or ethnically differentiated. That was the consumer economy and the service economy.
Our hopes, desires and aspirations could be targeted and exploited by our desire to belong, to be part of something. The stories brands carried with them bound us together in loyal groups, until consumption became the empty promise of a better life.
Emotion has always been present in consumption, but the realisation that experience is the result emotion and is how we “feel” things, has allowed experience to become the driving force behind contemporary design and economic theory, and so we have the so-called “experience economy”.
The concept was first outlined by Alvin Toffler in his book, Future Shock and was brought into economic and consumer theory by Pine and Gilmore in their 1998 Harvard article. They felt that all consumption can be understood in experiential terms. Building brand value becomes building the stories and collective experiences that we want to share. People will be willing to invest very high percentages of their salaries to live amazing experiences.
Loyalty to a brand is only as strong as the emotions it evokes and the experiences that can be shared. Technology has made this even more evident, as we share the picture of the experience rather than enjoying the experience itself and for its own sake. I don’t think hotels can count on loyalty anymore unless they can deliver collective experiences. Transformational experiences.
So perhaps what we have now is the “transformational economy”. We consume experiences in the same way we consume a theme park experience, always on to the next, more thrilling experience. People are fickle and will switch loyalty for the next experience. It’s a buyer’s market, in hospitality, in fashion, in holidays, in telephones, and almost any other market.
So, is there any place for traditional values such as Authenticity, Service, Glamour, Beauty, Good Design?
Perhaps only if these qualities can deliver a transformational, sharable, emotional experience. Brand values are only as good as the experience they are able to deliver. So, I believe that all the above qualities are only marketable if they can deliver the experience.
On one level Brand loyalty is the reduction of risk, on both sides. You tell me something I value and buy into and I’ll give you my affiliation, affection and trust, we share values and stories and we can believe that we have mutual interests. You are consistent and I feel we are compatible. So, we play a little game, you think you understand my needs and I think you deliver what I want. But if I am fickle and change my desires, will I remain loyal. No. My loyalty depends on my needs not yours. In a very distracting world, with short spans of attention, I will only be loyal if you can change in harmony with me and deliver the values I now hold.
I think it is rare for Brands to be loyal to their customers, because to be loyal they must reverse their role, as object and become subject. Brands can show loyalty to their customers by listening and changing. Consumer research is often focussed on the lowest common denominator. It does give the customer what they want, and it reduces risk for the brand, but it rarely innovates. Technology engagement isn’t the answer, the answer is the question; what problem, need or desire does this solve? If and only if, it enhances the experience, then it has value. And the game is to add value to the experience.
In an experience economy, it seems to me, a brand would need to be perceived to be constantly evolving and innovating as a core quality of its brand. In fact, I think that is the new experiential brand. Not product based but innovation based, change based. It’s a risky business. That’s why people will change hotels according to their changing needs and means, rather than remaining loyal to one brand.
I think hotels are right to diversify and segment their brands into ever smaller niche markets at the moment. That’s how we consume now. If a group can deliver 20 evolving brands and keep its sanity whilst others around it are losing theirs, they will succeed. I don’t think the future is in better technology (unless it enhances the experience), the future is in ever smaller niche brands, that deliver unique and diverse experiences. Perhaps within an overarching “trusted” group. But in order to deliver, they will need to keep innovating. The fickle guest constantly reviews the landscape and changes his or her mind as to where to spend their money.
Loyalty isn’t a thing of the past, but it is changing and it’s changing in favour of fleeting, momentary experiences that can be shared. The future’s bright, but it’s not orange, more like 50 shades of grey.
Charles Leon, President, BIID