Traditional measures of customer experience, while helpful in the Experience Economy, are limited and not well suited for the Transformation Economy that is emerging.

Why Traditional Metrics Don’t Measure Up

Most customer experience measures are self-reported through surveys and have minimal basis in psychology. They are often solicited at the level of a consumer transaction or a single experience. As an example, a hotel or restaurant may ask a guest to fill out a survey after one visit to the establishment and never consider asking for their overall evaluation after several visits.

The traditional customer experience measures have their roots in the quality movement. Even today, they are used to solve problems most often customer-by-customer or at specific touch points on the customer journey. Seldom do companies attempt to solve their problems operationally or strategically. These measures also focus on too narrow of a range of positive emotions such as “delight” or anticipated behaviors such as “recommending to family and friends”, rather than considering a greater range of human experiences that lead to transformation and self-actualization.

Tony Robbins observed that: “People buy things because of the way they think they will make them feel.”

Setting the Stage for the Experience Economy

Joseph Pine II and James Gilmore wrote about the Experience Economy first in a Harvard Business Review article twenty years ago. They followed the article by publishing their first book on the topic. Through their writings Pine and Gilmore showed that the Experience Economy was the evolution from older economies (i.e. Commodity, Product & Service). Their analysis also predicted the eventual evolution of the Experience Economy into the Transformation Economy.

The Evolution From Experience to Transformation Economy

According to Pine and Gilmore, companies in the Experience Economy sell the promise of feelings that create memories. In the Transformation Economy companies sell the promise of a new self-identity. These latter companies guide the customer to their new self-identity through a series of experiences that lead to learning, growth and the achievement of aspirations and goals.

Transformational experiences rely on triggering intense internal motivation because transformational growth requires the consumer to face potentially unpleasant emotions. She must step beyond the boundaries of her comfort zone and the self-concept she considers to be normal. Transformation also involves immersive experiences that provide convincing evidence that the customer has stepped into a new and different reality.

In an age of social mania, the voice of our customers is becoming louder and louder.  No-one ever posted that they lost 2 pounds and changed their eating habits for a week.  But when a product or service helps them loose 50 pounds, get off insulin injections and allows them to walk the beach with their children, they will be ready to shout it from the highest mountain, become an advocate for life and cut your advertising budget in half.” Karen Allinder VP, Customer Experience Solutions Miller Heiman Group

Through my analysis of the language used in tens of millions of pieces of customer feedback provided to companies across many industries, I have identified five factors of immersive experiences. Together I call these factors the Admiration Equation. Immersive experiences require multiple, multi-sensory, positive micro-moments, with no unexpected negative micro-moments and the resolution of any negative micro-moments that have occurred. These factors work together to essentially create a kind of virtual reality that causes the customer to shift her perception of reality and to adopt a new self-identity. These micro-moment experiences can alter her perspective of the past and her expectations of the future.

A transformational company is the hero of the story a customer tells about her journey. The customer tells a tale of how the company’s employees, product features and services rendered enabled her to become who she wanted to become. This word-of-mouth marketing can become viral. Emotionally, the customer who encounters immersive experiences will feel a need or desire to reciprocate by being loyal. We’ve measured financial value of customer loyalty in more than a dozen different ways for our clients.

“Helping a customer become the hero of their own story doesn’t require heroic acts on the part of your business or your employees.  It means doing the little things that matter, and doing them consistently.  We’ve all heard the story about a Nordstrom’s employee allowing a customer to return snow tires even though they didn’t sell tires, but a cashier asking me about my sick daughter can have an equally powerful impact on my loyalty.” Karen Allinder VP, Customer Experience Solutions Miller Heiman Group

What creates transformation? 

While Pine and Gilmore were sharing their research about the Experience Economy, Dr. Martin Seligman, then President of the American Psychological Association, started developing a new line of psychological research called Positive Psychology. Where most interventions in psychological therapy were focused on helping those who were struggling reach a level of neutrality, Seligman’s intent was to discover how psychology could develop interventions that allowed people who were already doing good to thrive. He describes much of his work in his book, Flourish.

Seligman’s research uncovered five unique experiences that humans seek for their own sake. They trigger deep and intense motivation. These experiences have become known as the PERMA model and the interventions that evoke these experiences lead to lasting transformations in the subjects.

The elements of the PERMA model include:

  • Positive emotion (the pleasant life)
  • Engagement (the psychological state of flow)
  • Relationships (deep, positive connection with others)
  • Meaning (serving something bigger than self)
  • Accomplishment (mastery and achievement)

Applying Positive Psychology to Customer Transformation

Leading companies are moving beyond staging experiences that create memories to guiding customers through a series of experiences to create transformation. The transformations help customers learn, grow and achieve their aspirations and goals. To do so, these companies must go beyond the attempt to evoke basic positive emotions of “delight” or “ease of use” that are the foci in the Experience Economy. Instead, these companies find ways to leverage various combinations of the five experiences in the PERMA model to help their customers have immersive experiences. These experiences trigger viral word-of-mouth marketing and sell more products than advertising campaigns ever could.

Following are a few examples of companies engaging in the Transformational Economy.

Example #1:

Users of the Audible app can enjoy a wide selection of audio books. They have instant access to tools that allow them to create bookmarks, notes and even to listen to books at an accelerated rate. The app tracks a variety of measures like the number of books listened to, hours listened, and time of day or day of week listened. With this data the app awards users levels and badges. Essentially, they turn listening and learning into a game.

Here are some of my personal Audible stats:

Listening Level: Master

Badge Collection: The Stack, 7-Day Stretch, Nibbler, Mount Everest, Daily Dipper and seven more

Listening Time: 23 Days, 11 Hours, 25 Minutes.

Audible Titles: 85 with 20 added in 2017

Example #2: Change Please Coffee

This UK-based company trains homeless people to be baristas. They provide mobile coffee carts around cities like London for the baristas to work. The daily purchase of coffee transforms from a self-indulgent act into a philanthropic act that is meaningful for the customer. The customer enjoys a latte while knowing she is making a meaningful difference in the life of the barista by helping him earn the money he needs to get off the streets and into a home.

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