Michelle Bottomley – The Future of Advertising in 2020: Are You Experienced?

Michelle Bottomley, President, Zinio, LLC

Since the publication of “The Experience Economy,” a 1998 Harvard Business Review article by Gillmore and Pine that brought experience to the forefront of business leaders’ thinking,1 marketers have grown fond of the term “experience” to describe certain activities or functions. Now, its definitions are infinite: “experience” can mean call center experience, brand-sponsored events, retail stores, customer service, website tools and games, sampling, marketing campaigns, and CRM’s successor, customer experience management (CEM). While “experience” means different things to different people – we believe in 2020 all of the best brands will actively manage the end-to-end experience in ways that inspire their customers; we call these Experience Brands.

Experience Brands exist today – Apple, Nike, Starbucks, Virgin Atlantic, Target, Disney, Nordstrom’s, American Express – brands that challenged the category convention and differentiated themselves by delivering a brand idea that emotionally connects with their target audience and is consistently expressed across every point of contact. These Experience Brands exhibit five behaviors:

(1) they listen carefully to target customers (those that drive a disproportionately high share of the category value) to understand their deepest needs; (2) they design products and customer experiences to deliver on these needs; (3) they consistently engage in dialogue with customers to keep the brand fresh and relevant; (4) they surpass customers’ expectations; and (5) they make it easy to find information and buy the products or services. It is no surprise that customers feel fully satisfied and even enriched when they engage with these brands because these brands understand consumers often better than consumers know themselves. Consumers voluntarily tell their friends and family how wonderful the brand is and may go out of their way to fly with this airline, use this credit card, purchase these shoes, or drink this coffee.

The benefits of becoming an Experience Brand are numerous. First, companies with Experience Brands benefit from a more loyal customer base, which leads to sustained value over a longer period of time. A recent Forrester study shows that the loyalty-based revenue benefits for a firm going from a below-industry-average Customer Experience Index score to an above-average score ranged from $31 million for retailers to $1.4 billion for hotels.2  Experience Brands also enjoy a competitive advantage over their peers, as two in five consumers state that they would pay more for a brand that offers a unique experience.3 Finally, some speculate that Experience Brands also generate increased value for shareholders through increased conversion and sales.

Beyond the reputational and financial reasons for Experience Branding, we believe 2020 will see more Experience Brands due to the proliferation of data and digital powering today’s always-on consumer, and enabling more companies to design engaging experiences that reflect their brand idea. By 2020 smart phones will have mobile payment capabilities and the next generation of Internet- enabled TVs, cars and kitchen appliances will make the following possible:

  1. Ads (and content) on digital devices will be personalized to the individual as well as the room/location in which they are viewing the ad. For example, Ads for hair products will be served on bedroom TVs while ads for automobiles on living room TVs or within cars – comparing the better features and benefits of the advertised car with the one in the ad. A finance calculator and test drive scheduler will be a click away. Content and functionality typically existent within a website will be accessible on the digital device within the ad, including testimonials, reviews, maps, etc., enabling the targeted consumer to drill down and purchase. Digital folders will store favorite ads, configurations, etc. for sharing or future reference.
  2. Mobile payment will transform the way consumers shop and buy. By 2013 the majority of mobile devices sold in the US will have payment capability enabling consumers to “tap and go”, paying with their mobile phones instead of cash or a card. Mobile payment enabled smart phones will feature loyalty program numbers and currency, as well as store sale items, manufacturer or partner special offers, shopping lists and gift wish lists. Consumers will check into stores, moving through stores as cloud-based maps with offers guide them to destination(s) based on what they are looking to buy. Data will be used to communicate product adjacencies as manufacturers pulse digital coupons, product information and sales support to the mobile device, influencing consumers closer to point of sale.
  3. Social Shopping will provide input into potential purchases from friends, family or paid personal brand advisors supporting in-store decision-making. Hang tags featuring QR codes will be scanned to show how the item works within the consumer’s digital closet, while recommending alternate as well as complementary items. Virtual chat will be available via the mobile device. Social shopping may even become a form of entertainment with people watching and voting from afar.

As more businesses aspire to become Experience Brands, CEOs will champion enterprise-wide brand experience visions. Experience Branding exemplars will be the most powerful brands in the world – less because of the advertising spend – than because their customers have taken them to new heights. Customers love Experience Brands because they enable them to live better lives. These brands will measure their success based on quality of life metrics and the degree to which they have become trusted advisors. Customer co-creation, sharing “their brands” and providing real time feedback about their experience will enable employee focus and compensation/rewards. Chief Experience Officers will be appointed to steward their organizations in bringing their brands to life in important ways. Several CEOs have already established these roles reporting directly to them. And, this is just the beginning.

Advertising in 2020 will recognize Experience Brands and mint experts capable of creating them in a way that energizes organizations and the markets they serve. Today, we must learn from the Experience Exemplars and leap forward if our brands are to secure leadership positions tomorrow.

Appendix

Exhibit 1: Experience Branding Table – Traditional Brands vs. Experiential Brands4

Experience brands span all industries, include established players and new entrants, and can fall in and out of favor, depending how consistently they react to customer feedback.

Traditional  Brand Experience  Brand
Industry Name Description Name

Description

Electronics Sony Generic,  functional Apple Intriguing, part of a community, lifestyle, innovative, playful
Athletic Apparel Reebok Old-fashioned,  nerdy, generic Nike Active, inspiring, sporty, powerful
Coffee Retailer Dunkin Donuts Average, fast, uninviting Starbucks Enticing, comforting, inviting
Airline British Airways Basic, cramped, economy Virgin Atlantic Fun, entertaining, state-of-the-art, spacious,  service-oriented
Automobile Kia Generic,  mass-produced, cheap BMW Youthful, stylish, status symbol, fun to drive
Mass Retail Wal-Mart Disorganized, low priced, utilitarian Target Clean, eye-catching, trendy
Leisure Six Flags Uncaring staff, teen- focused Disney Stimulating,  magical, adventurous,  youthful, imaginative, carefree, innocent
Department Store Macy’s Mass, promotions- oriented, messy, overwhelming Nordstrom Customer  service-focused, elegant, clean
Internet Yahoo! Clunky, cluttered, second- tier Google Simple, playful, smart, dialogic
e-Commerce Bluefly Low-energy, flat Zappos Easy to understand, reliable, friendly
Rental Cars Hertz Over-complicated, frustrating Zipcar Convenient,  logical
Financial Services CapitalOne Promotional, unsophisticated American Express Respected, consistent, quality, relationship-oriented
Grocery Gristedes Chaotic, unpleasant, harsh Whole Foods Warm, friendly
Quick Service Restaurant Burger King Slow, tacky, promotional Chipotle Authentic, fresh, reliable
Jewelry Retail Kay Jewelers Mass, outdated Tiffany & Co. Celebratory,  design-oriented, professional
Entertainment Blockbuster Pay for individual rentals, bricks and mortar focused NetFlix Membership model, multiple content distribution formats, ideas and inspiration

Exhibit 2: Increase in Customer Experience Index Scores Generates Significant Revenue Gains

Bottomley-Michelle-Ad2020

1 Jack Morton Worldwide, “Best Experience Brands,” global study, 2011.

2 Buns, Megan, “The Business Impact of Customer Experience, 2012,” Forrester, 26 Mar 2012, p. 4.

3 Jack Morton Worldwide, “Best Experience Brands,” global study, 2011.

4 Brakus, Schmitt, and Zarantonello, “Experiential Brands”, p. 56.