The Rise Of The Intelligence Economy – Where To Next?

The Rise Of The Intelligence Economy – Where To Next?

For Customer Experience Director at Whybin TBWA, Billy Loizou, 2015 was the year of the Customer Journey, while 2016 was the year of Design Thinking. In this opinion piece, he ponders what 2017 has to offer marketers and businesses.

Billy Loizou
Posted by Billy Loizou

To find an answer I decided to do some research on how the economy has changed over the last 50 years.

It was evident that consumers are willing to pay a premium for a product or service based on it’s perceived value; does it save me time? Does it create a memorable experience? Does it have long lasting qualities?

Thanks to Joseph Pine II and James H Gilmore they made it quite simple to understand with an article on HBR called ‘Welcome To The Experience Economy.’ They simplify the entire history of economic progress across the four stages of evolution using a birthday cake as the example:

  1. The Commodities Economy: As the agrarian economy advanced, mothers made birthday cakes from scratch, mixing farm commodities such as flour, sugar, butter and eggs. That together would cost a dollar – however it took time to buy the ingredients and make the cake.
  2. The Goods Economy: As the goods-based industrial economy boomed, mothers paid a few dollars to Betty Crocker for premixed ingredients, where all you had to do was follow the recipe and bake the cake – you saved time and ingredients by buying it all in one box.
  3. The Services Economy: When the service economy took hold, busy parents ordered quality made cakes from the bakery or grocery store. It would cost $10-$15, far more than packaged ingredients however it was convenient, desirable and saved you time in the kitchen.
  4. The Experiences Economy: In the time-starved late 90’s, parents neither made the birthday cake nor threw a party. Instead, they spend $100 or more to outsource the entire birthday event to McDonald’s so they can stage a memorable event for the kids – and the cake is thrown in for free.

An experience occurs when a company intentionally uses services as the stage, and goods as props to engage individual customers in a way that creates memorable events. Experiences have always been at the heart of the entertainment business – think Walt Disney.

However if you could charge admission for consumers to interact and engage with your brand, what would you do differently? That’s a good place to start brainstorming.

Today the concept of selling experiences is spreading beyond theatres and theme parks. Customer experience today has become one of the key pillars for organisations around the world – irrelevant of industry.

Consumers desire experiences, whether it be buying a laptop at the Apple store, staying at the Hilton for a few nights on a business trip or going into an ANZ bank branch to take out a mortgage on a new home.

The Digital Evolution = The Intelligence Economy

Over the last 10 years we have seen amazing advancements in digital technology – from cloud computing, mobile smartphones, virtual & augmented reality and now the explosion of machine learning.

This has made a significant change to customer behaviour as now not only do we expect a personalised service from all brands but it has created a need for us to have access to that information and knowledge on demand.

Good businesses today meet customer expectations through seamless, invisible service that predicts their needs and wants. Welcome to the intelligence economy where experiences are driven by customer data, underpinned by artificial intelligence and personalised to the individual through the channel of their choice.

Let’s simplify it by bringing it back to the birthday cake.

The Intelligence Economy

In the digital evolution during the internet boom, parents want to be able to order the cake or book the event while on the go from their mobile phone.

They would also like personalised recommendations based on their searches, inspiration from social sources and access to the information (recipes) and tools (applications) so they can recreate the experience themselves if needed. Delivery to the front door will be included in the cost of the cake.

The businesses that utilise their data and serve it in meaningful and powerful ways will charge ahead in 2017. Creating intelligent and smart tools that allow consumers from their homes to have meaningful interactions with your brand are the next battleground.

How about a bank that provides you with the tools to scenario plan and budget for your future using your real-life data, such as transactional history i.e where am I spending my money? What investments can I make?

How about a gym that tracks your activities on the treadmill, then through a Fitbit provides tailored food plans to help you reach your desired weight? How about a real-estate agency that guides you through a lifestyle application online and then can recommend a suburb for you to live in based on it’s demographic profile?

The list of possibilities goes on when you combine data, technology and creativity.

2017 is the year of Artificial Intelligence

The goal is to turn data into information, information into insight and insight into actions. We are going to see some amazing advancements in this space – IBM Watson and Salesforce Einstein are just the beginning.