Marketing 0

Revisiting Customer Experience in the Digital
World
CX is not a new idea. The concept of the Experience Economy was
first postulated in 1998 by Pine and Gilmore, who argued that goods
and services used to be the primary vehicle for innovation. But they
have become so undifferentiated that premium pricing is no longer
possible without a strategy upgrade.
A small distinction in product features may prevent customers from
switching to a competitor, but it can hardly increase willingness-to-
pay. Companies must move on to the next step in the progression of
economic value: the experience. Using a theater as a metaphor, an
experiential company engages with the customers memorably using
goods as props and services as a stage.
The concept has gained more mainstream popularity with the rise of
digitalization. First of all, Internet transparency has made it easy for
customers to compare products and services, making
commoditization happen faster. Thus, companies have to innovate in
experiences beyond basic offerings. But most importantly, customers
have been longing for genuine connection with brands, which
paradoxically has become scarce in the connected era. As a result,
companies today feel compelled to interact and engage with
customers via the Internet and other digital technologies.
As products have become commoditized, businesses now turn their
innovation focus to every touchpoint surrounding the products. The
new ways to interact with a product are now more compelling than
the product itself. The key to winning the competition no longer rests
on the product but on how the customers evaluate, purchase, use,
and recommend it. CX has essentially become a new effective way for
companies to create and deliver more customer value.
In fact, CX is one of the primary drivers of business results. One-
third of connected customers are willing to pay more for a great CX,

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according to a Salesforce survey. A PwC study also found that almost
three out of four customers say that a great CX will make them stay
loyal. And customers would pay a price premium of up to 16% for a
better CX.