In This Moment, Experience Wins.
The going is getting tough.
For a long time, there’s been a feeling that assets of all types are overvalued and that we’ve been due for a correction. From 2018 until Q4 of 2021 in the US, there was a .92 correlation between the Fed’s introduction of money into the economy and the upward moves of the S&P – every dollar the Fed created effectively saw the market go up a dollar. But so far, over the course of 2022, we have seen the erosion of $35 trillion in global market value – meaning that nearly 14% of all global wealth has been erased in just 5 months. (For reference, at the time of the global financial crisis in 2008, 19% of the world’s global wealth was erased.)
At the same time, the persistent pandemic and the war in Ukraine are impacting global demand. And wage increases are not keeping up with inflation – in the year ending this past March, nominal US wages grew only 5.6%, compared with 8.5% inflation growth, leading to an effective wage decline of 2.7% over the past year. If that weren’t enough, many of the products we need and want – from Similac baby formula to Rivian pickup trucks – are stuck in stubborn supply-chain cul-de-sacs.
It’s a time of stress, and even if we want to hold off on using the “R” word, recessionary conditions have already arrived. For those who’ve weathered a downturn or two, you’ll know what I mean when I say that you can feel it before you can see it.
In a downturn, things get tough. Work becomes harder and more uncertain as companies bring operating expenses in line with revenues. Home becomes more stressful because dollars have to stretch further. And, just as many of us were getting used to a newfound sense of agency around work/life flexibility, it feels like over the past few weeks we’ve suddenly had to grab a hold of something and just … hang on.
When times are tough, people – as consumers and as employees – want to hang on to the experiences that meet the moment for them in both functional and emotional ways.
Think about Costco, whose membership model provides not only tremendous financial value, but also a sense of protection and belonging when families need to tighten things up. Or Southwest, which doesn’t just operate a low-cost airline – it helps people easily discover the cheapest days of the month on which to fly. Or Starbucks, the latest company to plan to cover travel costs for employees who elect to receive an abortion if Roe v. Wade is overturned. Or HSBC, which rewards current account holders with up to $2,000 for referring a friend. Or Fitbit, whose Luxe line of fashion-forward fitness/wellness trackers motivates people to give their body and mind the healthy boost they deserve.
These kinds of moves might seem simple on the surface, but they are notoriously challenging to pull off. Companies have to listen at scale to customers and employees to understand the gaps in their experiences. They have to internalize these insights and develop action plans to close the gaps. And then they have to execute with excellence, over and over, at scale. And to top it off, they have to become learning organizations, getting better and faster and more agile and more accurate with every cycle, creating not just an innovation flywheel, but a culture in which employee and customer experiences take center stage.
This is the discipline of Experience Management, which effectively means running your business from the outside in. Persistently getting signal from people on what’s working and what’s not, getting insight to teams on the front lines, and taking action in near-real time fix broken experiences and formulate new ones. All in the name of improving the human experience, one small step at a time.
Life right now is wrought with more uncertainty than we’ve experienced since the early stages of the pandemic. Improving the human experience in this moment is not for the faint of heart. But those that consistently design and deliver powerful experiences – rooted in deep empathy and executed at scale – are the ones that will be rewarded with customer and employee loyalty. They’ll be the ones that win.
Back in 1985, Billy Ocean implored us to believe that when the going gets tough, the tough get going. And that very well may be true. But when the going gets tough, it’s those who dial up empathy at scale that are gonna get growing.