Work is theatre and every business a stage,’ wrote James Gilmore and Joseph Pine in their 1999 book, The Experience Economy. Bob James takes their insights further by identifying the skills required to create successful experiences and what this means for the person in charge – for the marketing director as theatre director, with an ever growing cast list and an increasingly complex production schedule
AS EVERY THEATRE director knows, a great production is a result of getting great performances from the cast. Ultimately, success comes down to how you manage your talent.
When Gilmore and Pine talked about experiences, they were anticipating the evolution of many of the pure experience brands out there today – Mark Warner, Starbucks, Disney or CentreParcs, or even the Priory, perhaps. But they failed to recognise the true nature of the real experience economy, which encompasses a far wider range of brands.
Even today’s fmcg product managers need to be able to think like service marketers. But, more importantly, the organisations behind them need to think like service marketers.
This wider experience economy recognises that the total brand experience (the point of awareness, the point of purchase and the point of consumption) is increasingly diffused and managed by more specialised marketers – but these points still need joining together into a single brand proposition.
Today, businesses of all flavours are using experience design to reinforce their existing brand value, deepen customer loyalty, and stretch into new segments and areas of need.
Just look at Gü desserts, whose puddings provide dinner-party-quality desserts of such high quality that a host or hostess can serve them without needing to pretend that they are homemade. The point is that Gü did not actually decide to enter the ‘pure experience’ world of catering – but it is most certainly delivering a catering experience rather than just a taste benefit. In nurturing this competitive advantage, Gü’s marketing director faces the same staff recruitment, development and retention challenges as other experience managers.
This wider experience economy is a cut-throat place. It is not the preserve of radical new business models, but a battleground for pressurised marketing directors seeking new ways to protect existing premiums and maintain critical differentiation.
So what are the management challenges of the wider experience economy?
- Challenge 1: what skills and competencies do you need to build in order to succeed?
- Challenge 2: where do you find the right talent to create great experiences?
- Challenge 3 (the critical one): how do you develop this talent once you’ve found it?
Challenge 1: what talent do you need to succeed?
Success in the wider experience economy means designing and delivering better experiences. It relies upon the ability to unearth insight and then successfully organise around it.
And this, in turn, means cultivating at least three sets of skills. First, the ability to interpret market data and customer data to support a continuous cycle of improvement.
Second, the ability to disseminate experience-led thinking across the whole organisation. And third, the ability to influence the allocation of resources against what really matters to customers.
Data crunching counts
Surprisingly perhaps, this wider experience economy demands the sort of wholeorganisation marketing that may not come easily to the more flamboyant, ideas-led marketers. It demands skills that include the ability to crunch data to justify decision-making effectively and support rational investments in what US guru Claes Fornell calls the ‘Customer Asset’.
But organisation matters more
More important still, though, is the ability to organise in the customer’s interest. We need to build smarter ways of working across the organisation, linking expert communities of practice – like the insight community in Unilever, or the innovation community at Danone – across all components that form the customer’s experience of the brand.
In structural terms, experiencefocused organisations must enhance mechanisms for aligning specialist functions in parallel according to their role in brand delivery. Experienceeconomy marketing thinking is, if anything ‘side to side’, not purely bottom up, and certainly not top down. It involves everyone re-thinking their role in the delivery process, and being accountable for their use of resources in delivering a cost-effective experience.
Promotionally led, brand-push thinking has no place in the experience economy and, more controversially, a knee-jerk service ethos has no place either. The necessary side-to-side marketing approach requires new portfolios of tools to manage it: new models for brand definition that are meaningful to and actionable by increasingly specialist functions.
More importantly, it requires a unifying marketing culture and a common foundation of marketing skills to deploy these tools effectively. Preserving and improving the customer’s experience cannot be left to the whim of a charismatic leader, but must be locked into processes that cut across the organisation: clear processes with clear owners.
Amazon’s ‘Skyline’ approach, for example identifies deep root causes of its unwanted customer interactions and systematically makes process managers accountable for eliminating them.
Amazon works on the premise that ‘no service is great service’. If a customer has to contact it; something somewhere has gone wrong in the experience design or delivery. Simultaneously the cost of contact and the cost of elimination are tracked to remove any ‘friction’ in the service process.
Build your experience capability
This sort of cross-cutting experience management undertaken by Amazon takes training, though.
Authenticity, transparency and consistency are key here, and therefore marketing must engage the whole business in understanding its role in the experience.
Paula Vennells, Network Director of the Post Office, argues that marketing should be the shaper but the drive must come from across the business. She believes the whole organisation has to own the customer outcome for it to be successful. The question remains, though, as the would-be theatre director: once you’ve written the script and invited the audience, where do you find these data-crunching, business-model building, values-led, storytelling process gurus to put on the production? Which brings us to the second challenge …
Challenge 2: where can you find the right talent to create great experiences?
The first rule of recruitment is ‘don’t recruit’. As you start to think about delivering insight-based experiences, just ask yourself, first and foremost, is the talent we are looking for already available within our business?
And if it’s really not, do you have a sustainable business in the first place? What is your plan to build and grow your experience capability?
If you do decide you have a real talent gap, focus on determining precisely what’s needed. Don’t hire some brand equity dreamer when what you need are hard-nosed and broad-shouldered project managers who can ‘tough it out’ internally, on behalf of the customer, from a solid financial footing.
Most European fmcg companies are still grappling with this transition in some form. As upstream brand planning and downstream brand activation have split apart in many organisations, a chasm has opened up that needs to be filled with stronger processes, and with marketers who are both flexible and talented enough to keep crossing the chasm throughout their careers. But where do you find these people?
The rise of jigsaw marketing
It used to be an article of faith that fmcg was the best place to look for marketing talent. But the wider experience economy is changing this – demanding an increasing array of specialist skills and a new breed of experience assembler to deploy all these specialisms on behalf of the customer.
But now everyone has one piece of the marketing jigsaw, who’s in charge of putting the picture together again?
Retailers are the new experience experts
fmcg companies may have started with an integrated, resource-minded view of marketing, but under the weight of cost-pressure, have gradually been dismantling and segregating their skills base. Meanwhile, experience businesses like retail actually started with their marketing segregated (usually just a promotions department) and have inexorably been putting the pieces together, breaking through the silos.
In the first wave of marketing sophistication, they put classically trained marketers into a marketing silo, disconnected from the purchasing and servicing powerbases of these experience-dependent organisations. These mass-experience efforts failed, with Midland Orchard and Firkin pubs being classic momentary success stories and subsequent crashes.
The second generation of marketers into these experience organisations found a better way to adopt the lessons of marketing – not by building up the promotion department, but by cultivating marketing expertise where it counts – in buying teams, at store level and in CRM departments. Tesco’s acquisition of data-mining company, dunnhumby, is symbolic of this recognition.
Another iconic example of retail experience management is Games Workshop, the fantasy war gaming retailer, which now organises Saturday morning in-store gaming sessions for its customers. Not only do these sessions serve as an enhanced experience and sales opportunity, but they also serve as a valuable new product development input. Most profoundly, these gaming communities also serve as a recruiting pool for new employees.
Games Workshop creates a virtuous circle, or ‘brand vortex’, by bringing customers, employees and suppliers into a single community.
Tesco, Carphone Warehouse, Halifax and Whitbread recognise that they are experience marketing organisations at heart – delivering tight-loose marketing: putting together prescriptive brand experiences, while still enabling the individual employee to innovate ‘in the moment’ of customer service. They are making a real connection to the customer. Beyond these retail pioneers, financial services is also catching on.
In the next development cycle, smart financial services organisations may well be the next breeding ground for talent. The next Tim Mason will most likely be in financial services, where there’s still a perceived gulf between customers and organizations.
Having exported fmcg talent to build the expertise of retailers and financial services, it is time for fmcg to start poaching talent back the other way. This will bring with it a renewed focus on ROI. The marketing industry will ultimately benefit from this twoway flow of talent between fmcg that ‘gets’ customer intimacy and service organisations that thrive on operational excellence.
Challenge 3: how do you manage your talent?
The marketing profession today is a patchwork of fragmented skills, splintered into upstream planning and downstream activation, and often spread across complex ‘masterbranded’ or globalised brand architectures. At the same time, individual marketers have more and more career choices.
In this environment, marketing directors must increasingly see themselves as marketing resource directors, working closely with colleagues in HR and strategy to develop a long-term resource strategy. Most critically, they must find ‘win:wins’ for their people, which create both fulfilling careers for employees and maintain the competitiveness of the organisation.
Expose your talent to the full: the experience-mix
These challenges vary across businesses. It may be harder to keep marketing talent during the early years in pure service businesses. Lower-level roles in marketing within some service businesses can be a long way from the spotlight (minor roles within a support function). As such, marketers’ impacts may not be very high profile until they reach more senior levels. Keeping smart people in this environment means rotating them around different functional positions – critically store management, buying, brand management and promotions. You need to celebrate the importance of understanding the total experience mix.
The reverse challenge applies in fmcg, where responsibility still comes early, but a period of indecision and stagnation can then set in as bright young things consider ‘What next?’
When P&G formed its ‘Expert Track’ to accommodate and nurture the talents of those managers who did not wish to pursue the relentless broadening required for fewer and fewer general manager jobs, it explicitly recognised this issue.
Of course, big-brand fmcg companies accept and even require churn, but they also need to feed the specialist skills both upstream and down, while also generating a cadre of marketing generalists who can assume P&L control of global budgets and brands.
Offer zig-zag career paths
For fmcg, this means thinking in terms of zig-zag careers for staff, giving them opportunities to continually deepen their executional expertise, while still spending time on planning to understand what their colleagues are grappling with.
Resource management is not only confined to internal teams, of course. It is very rare now for a big marketing organisation to be able to function alone, and brand experiences rely upon agencies and channel partners to deliver them. Most organisations are heavily dependent on outside players to deliver what would once have been done in-house.
There are benefits to this outsourced world – it means that resource is much more flexible and can be increased or decreased rapidly. Nevertheless, gains in flexibility and cost reduction risk becoming losses in brand consistency, business understanding, commercial acumen, and strategic and analytical competence.
This has been a long-term and accelerating evolution: first, outsource advertising, then outsource responsibility for research design, placement and analysis, then brand design.
Then reduce promotion to trade margin investment and hand the balance to external promotions agencies, then offload the pack development part – now even the core business strategy is increasingly outsourced, as brand and marketing management focus on niche disciplines like NPD or project delivery of brand activation strategies.
Upskill your data and process specialists
The outsourced nature of modern experience management means that marketing managers increasingly act as project or network managers, calling diverse teams of agencies together to work on topics, extracting the best from them and moving on. As long as they can hold fast to a process or a key customer outcome, that’s fine.
In many cases it may be better to take strong CRM analysts and project managers and give them some marketing skills, rather than rely on generalist marketers trying to learn CRM or project management.
Or, when you are recruiting, look for specialists with empathy and social skills as well as great technical capability. And when you have them, don’t keep them in a technical ‘box’ in a separate department, keep them close to marketing and communications teams, and give them plenty of opportunity to meet real customers. Because data can never substitute entirely for hands-on experience, marketing teams in big companies surrounded by agencies must balance the process of collaborative team management with direct consumer contact, and real hands-on proximity to key business drivers. Otherwise, too absorbed in the inward-facing challenges of project management, the quality of outward-facing consumer experiences and market-led decisions will deteriorate.
Become a better briefer
The final lesson for marketing leaders is to cultivate outstanding skills at recruiting, briefing, motivating, managing and rewarding transitory networks of people against tight timetables. The irony is that these skills may actually be better grounded in agencies and consultancies. In a spirit of collaboration, it makes sense to embrace a structured borrowing of skills through secondment or project-based collaborations. These efforts should focus on transferring and embedding skills in-house, but should also develop the soft competencies of collaboration and teamworking.
The critical skill ahead of briefing is defining the problem and opportunity correctly – something the leaders need to apply all their experience and skills to, but is an area that is often overlooked.
If this wider experience economy demands nothing else, it demands collaboration and greater awareness of real competencies. Fewer promises, more delivery. Less self-promotion; more self-awareness.
Ultimately, experience management is an exercise in managing the flow of value to and from the customer. Everyone must take responsibility for this: not just the marketing function. Of course, marketing directors should look at their departments, at their agencies and their whole organisation; but first and foremost they must examine their own leadership priorities, to see how far they are leading the organisation’s marketing capability, not just the function, for future success.
This wider experience economy recognises that the total brand experience (the point of awareness, the point of purchase and the point of consumption) is increasingly diffused and managed by more specialised marketers – but these points still need joining together into a single brand proposition
Tesco, Carphone Warehouse, Halifax and Whitbread recognise that they are experience marketing organisations at heart: putting together prescriptive brand experiences, while still enabling the individual employee to innovate ‘in the moment’ of customer service.
If you do decide you have a real talent gap, focus on determining precisely what’s needed. on’t hire some brand equity dreamer when what you need are hard-nosed and broadshouldered project managers who can ‘tough it out’ internally, on behalf of the customer, from a solid financial footing If this wider experience economy demands nothing else, it demands collaboration and greater awareness of real competencies. Fewer promises, more delivery. Less self-promotion; more self-awareness. Ultimately, experience management is an exercise in managing the flow of value to and from the customer. Everyone must take responsibility for this: not just the marketing function.