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Does Your Firm Over the past couple of decades, the American economy reportedly underwent another historic transformation. Did you notice? Welcome to the Experience Economy. Previous transformations took us from an agrarian economy to an industrial economy to a services economy. Each in turn yielded to a more profitable business model as first goods, then services, became commoditized. So what is the Experience Economy? Proponents say that the highest fees now go to firms that deliver a "unique and compelling experience." There are abundant examples to support their theory. Perhaps the most commonly quoted is Starbucks Coffee. Consider the fact that coffee can be bought in the grocery store for 5 to 25 cents a cup, yet is sold in Starbucks stores for $3-5. Why? Credit is most often given to the distinctive customer environment that has been coined "the Starbucks experience." The success of companies like Disney, Amazon, and Southwest Airlines is also mentioned as evidence of the Experience Economy. The prices for entertainment events like sports and concerts keep rising and people keep coming. Adventure travel is among the fastest growing businesses. The hottest selling technologies (e.g., iPods, widescreen TVs, digital cameras) are not those that offer distinctly new functions as much as they provide enhanced experiences. So Is It Relevant to Our Business? If you accept the premise of the Experience Economy, you may still question whether it applies to our business. Do our clients value the experience? The research indicates they do. Various studies reveal what you already know, that clients are much more likely to change professional service providers because of perceived deficiencies in service than dissatisfaction with technical work products or price. PSMJ found that 67% of clients who defected did so because of the apparent indifference of their A/E service suppliers. That clearly relates to the client experience. Kennedy and Greenberg, in their landmark book Clientship, asked over 500 clients to weigh the relative value of the service experience compared to the technical capabilities delivered. They responded that the two were roughly equivalent—the experience was just as valuable to clients as the expertise they received. BTI reached essentially the same conclusions in their client research. (Interestingly, customer research in other industries has produced similar conclusions.) We can debate whether our clients would pay more for a better experience. But there is clearly a bottom-line benefit in delivering service excellence. Our most loyal clients are typically our most profitable ones, and their loyalty is almost always a byproduct of our service. On the other hand, clients who defect or shop for the best price because they haven't received great service exact a significant cost to our firms. Plus delivering service (experience) excellence represents one the best opportunities to differentiate your firm. Delivering the Branded Experience The prized product of the Experience Economy is what is commonly called the branded experience. The Forum Corporation outlines the evolution that most firms undergo in becoming providers of the branded experience, as depicted below:
In the first stage, the quality of the client experience delivered is widely variable from one project to another. The difference is usually a reflection of the disparate service skills of individual client or project managers. In the next stage, the firm has developed a consistent delivery process that results in a fairly predictable client experience across the organization. But the difference is either not evident to or valued by the client. The branded experience, however, is consistently delivered, distinct from what the client receives from other firms, and the difference is valued. So at what stage is your firm? In my experience, the vast majority of technical consulting and design firms fall short of the predictable experience. That's because they make little if any effort to manage the client service delivery process. Service excellence in our business depends almost entirely on the natural competence of the individual service provider, not the firm's delivery practices. Even worse, most firms passively tolerate those individuals who consistently provide a mediocre level of service. What does it take to become a provider of the branded experience? Accenture did an extensive study of the companies that do it best. They concluded that two corporate practices are paramount: u Provide a consistently exceptional experience. In other words, manage the delivery process to achieve consistency across different organizational channels and multiple encounters with the client. A good starting place is to review the various "touch points" (direct and indirect encounters with the client) that define the client's perception of the experience. This will include everything from meetings to phone conversations to voice mail to deliverables. Identify opportunities for enhancing each of these touch points. You also need to develop some kind of consistent delivery process, to the extent that this can be done in our business given the personal and customized nature of our services. The article "Managing Client Service" outlines a proven process that you may want to consider. Consistent delivery will get you to the predictable experience stage. u Regularly solicit client feedback. Only our clients can ultimately define the branded experience. We can provide more consistent delivery, but the distinctiveness and value of that experience falls to the discretion of the client. I am amazed that, despite persistent claims by firms that they provide great service, only less than a quarter of them regularly solicit feedback from their clients. How then can they know? Most assume that the proportion of repeat clients testifies to their loyalty. But the evidence suggests that it has more to do with clients' reluctance to go to the trouble of changing providers when they likely won't find appreciably better service elsewhere. In fact, a recent survey found that 88% of A/E firm clients were open to switching from their current providers if a better alternative were found. What's the best way to get feedback from your clients? I refer you to a couple of previous articles that outline my advice. "Uncovering Client Expectations" describes the importance of "benchmarking" service expectations at the start of the project to enable you to define what the client views as a great experience. "Soliciting Client Feedback" suggests the best way to confirm that the client is satisfied with the experience delivered once the project is underway. As firms search for strategies to differentiate themselves in an increasingly competitive marketplace, the branded client experience is a golden opportunity that remains largely ignored in our business. Firms give lip service to service excellence but fail to apply the same rigor to the delivery process that they do with technical deliverables. Granted it's not easy to provide the branded experience. But that's the essence of differentiation—creating a distinction that your competitors can't readily duplicate. Is your firm ready to enter the Experience Economy?
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