Insight
April 6, 2023
The Value Of The UK Experience Economy
by
Cloudline
What Is The Experience Economy?
You may have heard the term ‘experience economy’ being used in reference to businesses that move beyond core commoditised products to create real value in the service and staging of their businesses, widely recognised from Pine and Gilmore’s 1999 publication, the experience economy reflects the way that the economy has evolved and the value that we now place on intangible assets such as experiences, events, theatre, guided tours, rides and trips. The experience economy reflects our modern experience of, to put it shortly “too much stuff” and "too little“ and focuses on the value of our time and how we choose to spend it – cue the growing UK Leisure and Entertainment industry.
In brief, the experience economy is all about creating unique visitor experiences that genuinely make your business stand out and add value to your existing services. With the cost of living crisis restricting your customer’s ability to indulge in both experiences and commodities, it is imperative that you demonstrate the value of your products and services by providing an unrivalled customer experience. What’s more, studies from the University of Texas show that consumers prefer purchasing experiences over goods as they are associated with lasting memories, happiness and opportunities to enhance their mental well-being, which is corroborated by studies which show that the average UK family now spends 22% of their overall budget on leisure activities. As such, there is inherent value in the UK experience economy, not just in terms of generating profit for your business, but in creating meaningful experiences for your visitors that could truly last a lifetime.Download How To Lose Customers And Alienate Guests
Creating Meaningful Consumerism
As the academic and commercial studies show, experiences are often deemed more meaningful forms of consumerism when compared to purchasing material possessions. By creating meaningful guest experiences, customers, guests and visitors establish deep connection with your business that encourage repeat visits, great reviews and both loyalty and advocacy. This can help to mitigate the often mundane feel of consumerism that leaves customers with just a product: instead, they leave with a product (the visit), memories and an experience.
Now many leisure and hospitality business leaders will already know the value of the experience economy and indeed may be passionate about providing exceptional experiences for guests. Business leaders will be tackling head on the way that your experience and notably how technology enables or disables it, impacts your customer’s view of your entire brand and business, encouraging your guests to become advocates of your brand, spend more time and money with your business, and boost your resilience to competitive threats in the market.
The Experience Economy Boosts Customer Retention
The experience economy isn’t all about appealing to new customers in isolation, but also retaining the ones you already have. If your resort or venue can offer more than a bed for the night or a “day out for the kids” but actually focuses on providing a great pre-visit experience, friendly customer service, accessible food and drink services, and personalised promotions that matter to your guests, your venue becomes far more than ‘just a day out’. As such, your guests become far more likely to visit your resort, venue or attraction again rather head to one of your competitors who create a far less engaging and meaningful experience.
Sharing experiences and positive reviews also help with customer acquisition, with research from Barclaycard demonstrating that customers are more likely to recommend an experience to a friend when compared to a physical item. 52 per cent of the consumers they surveyed conveyed more interest in telling their peers about their most recent experience purchases when compared to material possessions. This demonstrates the lasting impact that experiences can have on your customers, with the potential for positive reviews and recommendations being far greater for businesses selling experiences rather than tangible commodities.
It's worth noting that this works both ways – and unsatisfied guests and those that don’t have a great experience are likely to talk about it too.
Personalising Experiences
Many of the prospective trends in the UK experience economy revolve around personalisation: from online experiences that use tailored advertising, to helpful customer service and concierges, to QR codes that allow visitors to browse at their own pace and focus on the aspects of your destination that they care the most about. The UK experience economy thrives when you place the experience in the hands of the customer and allow them to explore your business in their own time, a difficult task for many business owners and operations managers who are trying to keep the everyday functions running smoothly, and a role that could be greatly enhanced with technology. Additionally, tailored guest experiences help each individual visitor to your business feel special: with self-serve tech and personalised events, promotions and notifications making sure they each receive a one-of-a-kind visitor experience that cannot be replicated, therefore making them feel valued and increasing the likelihood of further visits to your destination in the future.
Financial Value Of The UK Experience Economy
We’ve discussed the value of the UK experience economy to your business, but what is the literal monetary value of providing exceptional experiences to your visitors? With 78 per cent of millennials choosing to purchase experiences over products, it is anticipated that the experience economy is worth $12 billion on a global scale. This is set to grow over time, especially since the pandemic has demonstrated to us the value of meaningful experiences over physical products and personalised experiences are becoming more normalised. For example, Gen Z consumers are for more interested in being provided with a personalised customer experience when compared to their millennial or boomer counterparts, as younger visitors are already so acclimatised to personalised advertising on social media platforms that use algorithms to understand what each user will be most interested in.
However, millennials are still active participants in the experience economy, with this demographic being increasingly likely to challenge preconceptions of value equalling ownership. In a society where economic uncertainty pervades every aspect of life, and the ownership of tangible commodities such as property have become increasingly far fetched, millennials are far more likely to value experiences over material items. This demonstrates a change in attitudes on a broader scale which sees visitors associate value with emotional response, memories and connection as opposed to a physical trophy.
Provide Experiences That Last A Lifetime
Cloudline is here to help you transform your leisure and hospitality business by providing you with the tools to take your visitor experience to the next level. From interactive map features, to streamlined booking systems, and order and pay features – the Cloudline platform provides your visitors with everything they need to experience the best your destination has to offer. For more details on how we can add value to your business by providing a premium experience for your visitors, simply fill out the form below:
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