The Experience Strategy Podcast: Unpacking The Experience Pioneers Episode

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Your hosts, Aransas and Dave, recently had the opportunity to speak with the true pioneers of Experience Strategy, Lou Carbone, Joe Pine, and Bernd Schmitt, for a previous episode of The Experience Strategy Podcast. These pioneers shared so much valuable information that Aransas and Dave decided to sit down together and thoroughly unpack the ‘aha moments’ from that episode. Tune in to hear a breakdown of the key lessons these Pioneers shared.

Aransas: Welcome to the Experience Strategy podcast. I'm our host Aransas Savas and Dave Norton. I recently had the opportunity to sit down with some of the true pioneers of experience strategy to talk about the early days.

There was so much incredible information in there. I know I personally had so many big ahas from the conversation so we wanted to spend some time in this episode unpacking the meat of the lessons we learned there, and maybe even challenging some of the ideas based on what we're learning in our practice.

So we're going to take this moment by moment today [00:01:00] and break down some of the clips that they shared with us. Let's first look at a clip featuring Lou Carbone, talking about how experiences transformed companies and the people who worked for those companies.

Lou Clip: I was just amazed that as we got consumer insight everyone would be sitting in a room and around a board table, all of the leadership and everyone would walk out of the room, operations, et cetera, and going well, that's really great information marketing. And you'd think, well, wait a minute, operations and other people in the call center would all be, oh, that's nice to know. It's a tracking study and I began to watch Disney. That was a much simpler organization in terms of the way that they created value and [00:02:00] was fascinated by Disney as a cartoonist and his use of signals and clues to create experience and a feeling that was the impetus for really understanding an experiential value proposition.

How do you go about literally designing it and then Bernd, your work brought a great deal of influence into my thinking around experiential notions and it actually was one of the things that we did at national car was renting classic cars that were owned by movie stars and Bernd you were the inspiration for thinking about creating an experience in that regard.

Aransas: So Dave, you listened back to this, what really strikes you about what he's saying?

Dave: All right. So [00:03:00] Lou's describing things that are occurring in the 1980s. And because he was really on the scene in the late 1980s and what he's basically saying is that he went through this kind of transformation, where he realized that if he just focused on kind of what the company was doing from a marketing standpoint, there was no way that anything was ever going to really change and that he uses the example of Disney, that Disney had a very different approach. They actually took these things that they imagined could be really, really amazing things.

Instead of just talking about them, they actually went out and executed these really new amazing experiences and I think that in the beginning, from the [00:04:00] very beginning, what Joe and Lou and Bernd were trying to do was to do something that was transformational for companies instead of operations, continuing to kind of do what they were doing with marketing coming up with these beautiful brand stories that they were developing. There needed to be some kind of transference that occurred where the promise that was being made by the brand somehow came out into the experience itself.

Today, we think about that as kind of as common sense, but at the time it really wasn't. I say it was kind of common sense, but in fact, we still run into many companies for whom the promise that's being made by the brand is way loftier than the operations [00:05:00] experiences on the ground.

And so Lou kind of saw this as a way of helping to transform a company into something that was truly amazing overall. I think that that's really, really powerful. The other thing about transformation that occurs to me in this particular clip is that from the very beginning, people have seen experienced strategy as a way of moving their company from kind of a perfunctory functional kind of delivery mechanism to something special.

And in this case, Lou talks about his work with Progressive Insurance quite a bit. In this case, back then, it was about a concierge service. So kind of a white glove [00:06:00] type of a thing. Even today we hear many CX people talking about treating customers with kind of that white glove service as kind of the gold star of experience strategy and design.

Those are some of the things that are kind of running through my head as I'm hearing this. What are you thinking?

Aransas: It's really interesting to hear how little has changed. I think that punting from one department to the other to tackle the experience problems still happens in a lot of large organizations because we still, in so many organizations are treated as a tactical problem or a need to fix what's broken or a question of marketing power. I think what he's saying is to flatten the organization, look at one thing, which is what is your customer is [00:07:00] experiencing and how can you make that experience that is for them, period. Let's transition now to the next clip and look at what the guys were saying about taking a comprehensive view of the customer.

Bernd Clip: I came as a marketing professor to Columbia and when I taught courses or when my colleagues taught courses, we always talked about the functional features and benefits, the product and its quality, and the various features that a toothpaste tasks, you know, it cleans her teeth and stuff like that. I always felt that there's something missing there, whether it's in toothpaste or whether it's in real estate. Real estate was all about the location and the size of the apartments, that's what you're selling. I felt what marketers also need to sell is really the experience.

You know, how people feel with any product, not just with movies and with music, but with any kind of offer that they're putting in front of customers and to consider how people feel so how they get sort of sensory [00:08:00] information, how these things and creative ways about products and what they can do with them.

And how they are also sort of living in lifestyle, how they are acting and behaving when they are interacting with products and that sort of got me into this notion of experiential marketing and indeed in that book I talked about concerts that I called sense, feel, think, act relate, which I think provided a much more comprehensive view of the customer, not just as a rational, analytical being that makes these rational decisions about product features and about quality.

Aransas: Such incredible stuff packed into that clip there. What jumped out to you today?

Dave: Well, Bernd is going on this journey and he's reacting to a lot of things that are happening in the nineties, where in the eighties people were basically selling [00:09:00] this particular feature or this incremental benefit, and he's an academic and the academic world kind of builds on who wrote something last and you just kind of keep going from there and you can sense his frustration that there's so much more to be thinking about when you're trying to understand customers.

He's going to go on and talk about how you unpack the entire sensory experience that's associated with it. How do you tell that type of story? I find that really fascinating.

Aransas: I do too, especially because when he's talking about a sensory experience, he's literally talking about the five senses and really getting in touch. I just think that word experience gets so watered [00:10:00] down and loses its sense of definition through overuse, but he's really specific right there. He's saying it is about what they see, they feel, they touch, what their emotional state is, and what their needs are. To me, that’s the heart of design thinking is really understanding what your customer is experiencing at the moment to understand what their real needs are instead of getting sucked into marketing tricks.

Dave: Yeah, exactly. We still feel a lot of pressure as experience strategists to try to focus on sales behavior, nudging, getting into the mind of the customer, supporting tricks, and positioning the product.

These are things that we still get a lot of pushback as strategists over and what he's trying to do is say, you've got to look at the environment, the [00:11:00] census, the way that people feel things. Bernd was instrumental in really pushing the whole world of going to a venue and having a full experience, the time square experience where different brands would set up stores and you could experience the brand, that was part of what Bernd was doing.

What's interesting to me also is that it comes back in the nineties, branding was supportive. In almost every way, shape, or form. These pioneers didn't really believe that brand strategists really understood customers. That's pretty fascinating and now experience strategy is so much more a part of what we do and there's kind of more of an equilibrium between brand strategy and experience strategy. [00:12:00] We expect both to kind of inform so I think that that's fascinating as well for what Bernd says.

Aransas: Totally agree Dave, but what about what he was saying about taking a more comprehensive view of the member journey instead of just looking at the moment of interaction, really looking at what happens end to end when a customer interacts with us?

Dave: Comprehensive now because what he's describing means looking at what happens after. Today we hardly blink at that particular idea, but in the nineties, brand strategists were convinced that all you had to do was to manage the brand and you'd be fine. As experience began to make its way into the vernacular a lot of brand strategists began putting their logos on basically everything. So you would walk into a Hilton hotel in the 1990s and you'd have the logo on the soap wrappers. Do you remember everywhere you [00:13:00] went? The logo or some kind of brand moment that was trying to be created and that's kind of how brand strategists thought about experiences. Then they called it a “touch point”. I think that language is still a part of how a lot of companies think about experiences today, that all you have to do is kind of manage the touch points and if you can do that, you can reinforce the aspirations of the brand. And if you can do that you're going to be successful.

Aransas: So interesting because it's sort of sending a message that the only thing that matters is continuity and that the only way to create memorability is through this unconscious cue that this is this brand serving you this product. Let's transition for a second to the conversation we had with the pioneers about customization and [00:14:00] how important it is to experience strategy.

Lou Clip: Often as marketers or as CX people, will we become so concerned about how our constituents feel about the organization, we lose sight of how the organization causes them to feel about themselves?

Dave: Let me add here that Lou's work with Progressive was absolutely fantastic and it's long been one of my favorite exams of how you take a plain old vanilla service and customize it and turn it into just a remarkable experience.

It's so neat because you know, people will always ask about financial performance and they became the fastest growing most profitable insurance company in the world.

Dave: All right so there are some really interesting things that are going on in that particular clip and part of the reason we wanted to share it is because it kind of happens in passing. [00:15:00] Lou is talking about the fact that an experience should make you feel something for yourself, not feel something for the brand.

You know, it makes complete sense. We spent so much time trying to get them to change their perception of us. In fact, we should be helping them to think about things that are important to themselves and things that really really matter to them. That is actually really tied to this idea of customization because Joe came to the whole idea of experiences through customization.

His first book was on mass customization and he believed that when you customize a service it becomes inherently unique to you and therefore becomes an experience. So you can kind of see the connection between what [00:16:00] Lou is saying and what Joe is saying, that idea that you need to be supporting them in what it is that they're trying to do.

Customization has almost become synonymous with customer experience. This is one of the concepts that have stuck for both companies and consumers and it was really made possible by technology. I mean, if you think about it, what we can do today in terms of customization goes way beyond what they were imagining back in the 1990s.

I think we all understand it in the early days when Joe was talking about the customization of services, that process was so expensive that only the really big brands like Levi's at the time could do it or companies that focused on a high-touch like Four Seasons could really do customization.

It's very different from [00:17:00] the way we think about it today.

Aransas: It's so interesting. You talk about Levi's and the first thing I think about is whether there is a customization of denim for people or how many sneaker companies have gotten into that. And it has become sort of par for the course, a customer expectation that customization is available.

How should we be thinking about that today?

Dave: Well, the odd thing about customization is that it didn't really lead to premium experiences. Customization happens when we think about personalization with technology.

Aransas: What do you mean when you say that?

Dave: Let's just talk for a second about your Netflix list of shows that you want to watch.

Okay. That's customized to you, right? Great. Are you paying a premium for that? You're not. The same, thing's [00:18:00] true with your song list the way that you purchase from Amazon. These are all of the technologies that we use today that employ some form of customization and personalization, and there is no premium associated with it.

Aransas: The examples you gave are all digital examples. So they're using AI, they're using data to customize or personalize in these instances. Is there a difference between products to some degree?

Dave: Yeah. The physical products, but when physical products become smart, they become automatically customizable and you do get somewhat of a premium if you're delivering a smart experience, but not much. I'm thinking about my garage door opener. That's a commodity, right? You buy it once. It has a little bit of smarts, but now you start adding more [00:19:00] intelligence to it. It becomes more customized.

Can you command a premium for that? Maybe, maybe not. If you think about travel, for instance, What does a customized travel experience look like, well, you hire somebody who's going to tailor it to exactly your needs. That's fantastic. But what if you wanted to do that yourself? You could, right?

You could customize it. You just hop on the internet, and you pick all of the different things that you want. And pretty soon you've got exactly a customized travel experience. So we have far more ability to customize today than ever before and companies need to really be thinking about what is the role of customization in their experience strategy, but it didn't turn out quite the way that they thought it would back in the nineties.

Aransas: In my mind, there's still a distinction [00:20:00] between those products that are customized by technology, whether they be physical products or products that are only experienced in a digital space, and those products that are purely physical customization. So again, if I go back to Levi's, the customized tailored jeans, I do see people paying a premium for those so to me, perhaps some divide is between the delivery method and the value of customization.

Dave: That's a good point. Fair enough. So can't go all the way down that path.

Aransas: I think though, you're so right, that as companies think about this, it is about distinguishing between the strengths of their different delivery models and what's a baseline expectation from consumers and what's delightful.

Dave: I'll just push back a little bit on that Aransas. [00:21:00] I would argue that customization has become almost a baseline expectation for so many. I was talking to a woman the other day and she has her shampoo customized for her. She's a regular person who signs up for a service and she says, I want these ingredients and they send it.

Aransas: It’s called Pure or True.

Dave: Yeah. Right, right, right and that's fantastic. Surely she does pay a little bit more, but man, talk about where we've come that you can customize your shampoos is amazing.

Aransas: I remembered it's called Prose. People are paying a premium for that though, right? It is both baselines and it is a premium product. Or even if you look at Stitch Fix or some of [00:22:00] these other things, where they're customizing your subscription box. People are paying more for some of that but for the purely tech-delivered stuff. It can't exist without both customization and personalization.

The next one that I think is really interesting to explore is the guys talked about journey mapping, and I think they kind of challenged the current thinking around journey mapping and how it was intended versus how it's being used. So let's listen to that for a second.

Lou Clip: I think that so often the industrial age is built around efficiency and fixing broken processes and unfortunately I think a lot of journey mapping and things like that get caught up and fixing broken things rather than looking at how do we create distinctive value.

Dave: Again, Lou kind of started this off, but the rest of the group [00:23:00] surely felt the same way, and he's not impressed with what's going on with journey mapping, but in fact, journey mapping is considered a strategic activity within all companies these days. It's one of the most impressive feats of the experience economy, really that you have to go back to the nineties again. In the nineties, strategic leaders didn't really focus on the time that customers spent with their products and how channels function to support a journey.

Most business strategists were focused on Harvard professor, Michael Porter's five forces. So they would be thinking about how does their company thrive through a focus on industry rivalry, threats of substitutes, threats of new [00:24:00] entrance, and the bargaining power of suppliers and buyers in effect operationally.

They were trying to figure out how to maintain the status quo. A few companies were beginning to use journey maps to help them. These new multi-channel design issues, but few saw journey maps as really kind of strategic documents, and the change happened because companies began to realize that they had to compete in multiple channels.

So they had to have an e-commerce platform as well as a retail platform, as well as social platforms and all of these things needed to be integrated in some way, shape or form, and all of a sudden they began to abandon Michael Porter. Then there were some other things that were going on as well and not the least of which was [00:25:00] Clayton Christensen’s work on disruptive innovation. The journey map became moved from being kind of a tactical document to being a strategic document because it helped them to think about the time that the customer spent within these different channels and how they might support it.

And of course, their entire business models were changing because of journey mapping. So that's kind of the transition that was happening when people started talking about journey maps. Originally, these were the big transformational type of initiatives that were going on. Whereas today I think many companies start a journey map exercise because they basically are trying to describe what they think the customer wants and it oftentimes just leads to incremental process [00:26:00] improvement, not transformational, strategic type work. So that's part of the reason why these pioneers were so frustrated with the document itself.

Aransas: Yeah, I think so often it turns into clean up on aisle four and companies are like, oh, that's happening over there and this is happening over here and how do we bridge the gap between those two, since they seem to be doing exactly the same thing in different places, but slightly differently. It becomes so discombobulating for the customer because we used to walk into my friendly neighborhood pizzeria you'd order your pizza and would serve you a pizza. We would say farewell, and I'd see you the next time he visited. Pretty simple, but now you look at my Yelp reviews. You check out my social media posts. You go through an app to order the pizza. You then maybe come in, but probably get [00:27:00] delivery and interact with someone who's not me at your door. We then exchange money mostly through credit card companies that have their own relationship. It just goes through so many different touch points and channels and that's for a pretty simple business and so many of these end up intersecting and influencing the customer's belief and experience with the business and with the brand.

A lot of them are outside of the experience owner’s control and so that's where I think that sort of transactional journey mapping it's important because if those things aren't reconciled, it all ends up feeling like a big mess, and there loses a sense of clarity. I think to your point, it has to also be the source of transformative ideas where are we missing the [00:28:00] customer's needs? Where are we misunderstanding? What do they need and how can we really add value to their lives through enriching those moments?

Dave: I think it's fair for people to try to describe what is going on using a journey map, kind of the current state, and then try to describe something new and imagined in the future, and to your point around SIS its hard not to be reactive when you're getting hit with all of these different things. And oh, by the way, every time somebody comes up with a new channel, it doesn't support your business model. Right?

Aransas: I mean, whatever the new channel is a little strategy thing.

Dave: It's not going to support your business model or your legacy technologies or anything that you've been doing to date.

It's really, really tough to stay strategic, stay at the forefront, and to [00:29:00] really use journey mapping the right way.

Aransas: So true. Let's talk about customer experience management for a minute and what that means right now.

Bernd Clip: What I've created in this book, Customer Experience Management is sort of a project management framework that any company can really use to manage an experience, and what that means is let's say you have not really focused on experience management yet. So how can you do it, or do you want to reposition your brand in a more experiential way, or do you want to launch a new product as experiential?

Aransas: So Dave, take a minute and explain or define customer experience management for us.

Dave: Well, there's kind of customer experience as Schmidt was kind of describing. It is very holistic. It takes into consideration things like building an experiential platform, really focusing on innovation, delivering seamlessly, [00:30:00] treating your customer as an asset. There's been additional work that's been done by other people as well, that really builds on this idea of looking holistically and innovatively at how do you support the customer experience. That was the original idea and it should have been built from there. It should have continued down that particular path and some company, you hear what's going wrong.

Dave: Let's be honest customer experience management today is a massive industry and it's mostly focused on measurement and analytics and to some degree journey design, the current state of journey design, trying to kind of manage different expectations and different things that are going on.

Let's see how our NPS score is doing and is down in this particular area. If [00:31:00] it's down in this particular area, let's go and train our employees. Talk to them about the importance of being genuine and see if we can get that NPS score back up. That is only one part of the experience, customer experience management.

And yet it seems to dominate what a lot of people are doing today.

Aransas: What do you think is the big thing missing?

Dave: In that view of innovation, some of that attention to goals, strategy, innovative thinking holistically, constantly improving, regardless of what the journey map says, regardless of what the score is saying. Allowing yourself to really breathe innovation into the experiences.

Aransas: I think too with NPS, it gets so murky, cause you're only talking to the people who want to talk to you and [00:32:00] that can get pretty misleading. One of the other things the guys were talking about in this episode and that you brought back a minute ago when we were talking about customization is the smart home.

When we talk about innovation I think that big space for expected continuous innovation. What jumped out to you as you listened to these guys’ riff on that?

Dave: Well, one of the most amazing ironies of all of this experience strategy work is that in the beginning, it was all about going to these places to have these experiences like Mall of America or Las Vegas or some exotic island or something along that line and all of the pioneers in the episode that we had, talked about what was happening in the home as the future of experiences. [00:33:00] That's a huge shift, the shift from focusing on themed restaurants, to smart homes, bringing the experience home. That to me is a fascinating shift.

It's something that actually we've been researching for quite some time. The home is the smartest environment in most customers' lives. You can do far more there. You work from home now, of course, because of 2020, but there's so much more that is going on as the home becomes more important experientially because of all of the digital solutions that are in people's lives. It changes the way we expect to interact with all kinds of different types of goods, services, and experiences and so we're going to interact with those companies very differently and a lot is going to happen with smart homes. 

[00:34:00] Aransas: especially, I mean, the entire idea of why we spend time in our homes has shifted. The expectation of home has shifted and certainly, that has resulted in a totally topsy-turvy home buying market as a result. I think you're absolutely right. Once we have the home, we've chosen it now for different reasons and we expect it to respond to us very differently than ever before. So many interesting things here.

Anything else jumps out at you that you feel is worth an unpacking Dave?

Dave: You know, all three of them agreed that the future is about new battles. I think that one of the most exciting things about experience is some of the principles that were developed in the nineties and in the end in the early two thousand may not be the principles [00:35:00] that will help to support us going forward. The way that we think about customization meant something very specific back in the nineties. You could call in and get your jeans, or you could log onto a website and get your genes perfectly fitted to you today.

There are new things that are going on that are completely different. We might call them things like individualization, where you have company control over so much of your life, and the jeans just kind of fit into your life. So there are a lot of new battles, new things, new principles that are going to be discovered and we gotta be careful not to think that yes, two years’ way of doing things is going to be the way that experiences are going to [00:36:00] happen in the future. I think they all agreed with that. I thought that was really exciting. This is a growing in and evolving part of business strategy.

Aransas: Yeah. I think the value of experience has been well proven at this point. But I also hear in what you're saying that this is a moment where innovation and experience strategy and experience principles is going to be crucial to moving it beyond being a baseline customer expectation into something that is truly differentiating and meaningful and adds value for those businesses who employ it.

I look forward to getting into that much more in future episodes but for now, Dave I can't thank you enough for sharing your point of view while we are certainly really fortunate to have those pioneers of experience [00:37:00] join us on the show, you too are an experienced pioneer and so to have your perspective on that thinking is really valuable and inspiring.

Thank you for shedding so much bright light on these topics. Looking forward to getting into this idea of innovating experience strategy more in some of our next episodes. Those of you listening. thank you for joining us on this journey. We are so excited to learn alongside you. Reach out to us. Tell us what works for you.

Tell us what you want to hear more of on future episodes of the experience strategy podcast.

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