A couple of weeks ago I gave two presentations on Customer Experiences with Soul at FCE Pharma and FCE Cosmetique, the largest expo in Latin America covering pharmaceuticals and cosmetics. I spoke about purpose, values, authenticity and also showed how authentic and sustainable businesses could be modelled using the flourishing business canvas.
I began my talks by discussing Joseph Pine and James Gilmore’s classic article Welcome to the Experience Economy published in Harvard Business Review in 1998. I also discussed new research from Barclaycard in the UK which shows that people are continuing to spend less money on buying things, and more on doing things, and that businesses are now rushing to adapt. The major difference between the experience economy of twenty years ago and today is the emergence of social media and the way in which people are sharing their experiences online.
It was therefore interesting today to read a new report from GfK which indicates that millennials believe that experiences are more important than possessions in greater numbers than older and younger generations. Millennials are roughly those ages 20-39.
GfK interviewed in summer 2016 more than 22,000 consumers (aged 15 and older) in 17 countries online. Respondents were asked to indicate how strongly they personally agreed or disagreed with each of the following statements, using this scale where “1” means “disagree strongly” and “7” means “agree strongly.” Select one answer for each item.
- I would rather have more time than more money
- Experiences are more important than possessions
They found the following results:
- Three out of ten people (31 percent) firmly prefer to have more time than more money – compared to only nine percent firmly disagree with that
- This preference for more time than more money is especially important for people in China (41 percent), Brazil (37 percent) and Argentina (32 percent)
- Over four out of ten (44 percent) firmly believe that experiences are more important than possession – compared to just three percent who firmly disagree with that
- Agreement with experiences being more important than possessions is highest in Mexico (57 percent), Argentina and the USA (both 53 percent)
Here are a couple of their charts:
These changing patterns from consumption to experience have major implications, not just for retailers but for our current economic model. Those businesses who will flourish in the future will be the ones who really understand experience at a deep level – and for this reason Maria and I developed our framework we call Customer Experiences with Soul.
A really excellent example of customer experiences with soul in practice comes from São Paulo. Cris Dios is a Brazilian cosmetologist and entrepreneur who for thirty years has been championing natural hair care and the concept of slow beauty in Brazil, first in 1987 with the opening of the first Laces and Hair beauty salon, and then more recently with the launch of Cris Dios Organics, her line of natural hair care products. This week saw the opening of Laces and Hair’s new hair spa, Bioma Laces, which has been constructed inside the Villa Lobos shopping centre, situated next to Villa Lobos park, one of the major recreational parks in São Paulo.
Bioma is Portuguese for ‘biome’, a term defined by biologist Neil Allison Campbell as “the world’s major communities, classified according to the predominant vegetation and characterized by adaptations of organisms to that particular environment”. The name was chosen to reflect the way in which Cris sees their new spa as an extension of Villa Lobos park inside the shopping centre, describing it as a “visual extension of the DNA of the park”. It has been really interesting to speak with Cris in recent weeks, following the development of Bioma Laces, for whom it is not simply the next Laces and Hair unit. Far from it, the name was chosen to help explain to clients the fact that Bioma Laces represented the most complete vision and expression of the soul and essence of Laces and Hair.
One of the outstanding features and achievements of Laces and Hair has been their ability to create extraordinary experiences for their clients, providing them with the sensation of being in an oasis, inside the hustle and bustle of a city. So for example the spa features 1200 plants, which architect and landscaper Caroline Elkis brought in to represent the treetops of the park. And engineer Carlos Raiza was tasked with the challenge of bringing natural light into a shopping centre, a technological feat rarely achieved.
The specialist architectural elements would not have been possible without the contributions of architects Marcelo Bicudo, whose signature designs are in two other Laces and Hair projects, and Juliemy Machado. The design approach to Bioma Laces perfectly encapsulates the notion of the relationship between the whole and the parts which we write about in Customer Experiences with Soul. Cris expressed this sense of wholeness by explaining that “The plurality of those involved in the project assured me that the Laces experience would be perfectly delivered”.
The hair care philosophy of the spa and idea of “slow beauty” follows in the footsteps of the slow food movement. The focus is not on creating a momentary hair style for when the client steps out of a beauty salon, but in teaching clients how to care for their hair at home. So from a customer experience perspective, every single part of Laces and Hair, the people, the products and the environment all have to belong together to enable the expression of the essence and soul through the experience overall.
If we really wish to create new businesses which are authentic as well as sustainable, we need new ways to model them in a systemic manner. For this reason I discussed the Flourishing Business Canvas. I am a member of the Strongly Sustainable Business Model Group which is based on the Strategic Innovation Lab of OCAD University in Toronto, Canada. This group has been developing this canvas for three years, which is an evolution of the business model canvas. Our company Holonomics Education is now introducing the Flourishing Canvas to businesses both in Brazil and in other countries too.
A traditional business model describes how an organization creates and delivers financial value. The Business Model Canvas created by Alex Osterwalder brings together the value proposition, customer segments, customer relationships, channels of contact with the market, resources, activities and partnerships. These result in costs and revenues.
The benefits of Business Model Canvas reside in being a visual tool that with nine questions defines a Profitable Business Model, emphasizing the financial dimension. In the case of Flourishing Business Canvas the objective is to define a Sustainable Business Model considering two other dimensions, the environmental and the social as well as the financial. Thus, there are sixteen questions which systemically describe a sustainable and authentic Business Model.
The Flourishing Business Canvas provides a common language for describing and designing enterprises with a diverse range of stakeholders and goals. It builds an understanding of interconnections of the organisation, its products and services with its communities and the world: Economically, Socially, Environmentally. It enables broader, deeper and richer conversations about all aspect of value co-creation (and destruction). And it provides the context to enable stakeholders to collaborate around shared goals informed by their values – enabling teams to align on key strategic decisions.
Rather than focus on financial results, an interesting aspect of the Flourishiong Business Canvas is the fact that the higher purpose of the company can be fully stated in the Goals section. So for example, for Laces and Hair the purposes are develop inner beauty and self-confidence in women, and support social and environmental causes, one example of which is their manifesto for women which I have previously written about in my article Stereotypes, Blame, Guilt and Fear.
In the example of Patagonia above, generally regarded as one of the most sustainable and authentic companies in the world, we see that they have five main goals:
- Build the best products which cause no harm
- Save wild and beautiful places
- Reverse the decline in the overall health of the planet
- Build a company which can last at least for100 years
- Provide good working conditions for every worker who sews.
We can place these in the Goals section of the canvas. These goals articulate the main purpose and ambition of the company and are the organisation’s definition of success. It is those companies who are fully able to articulate these goals and also live them authentically which manage to connect with the younger generation especially who are now looking for more than just meaningless and relentless consumption.
The overall objective of my talks were to show the audience how their businesses and organisations could develop engaging, sustainable and more soulful customer experiences. I left them with these five key insights:
- Nowadays people do not just want to buy something, they want to believe in something.
- Ensure that your executive team fully understands the implications for the shift from the service economy into the experience economy.
- Start to use business modelling tools which have their basis in systems thinking and which provide an expanded understanding of an enterprise within the wider context of society and the environment.
- Understand that the whole organisation is responsible for delivering a customer experience with soul.
- Look for authenticity in everything you do.
As we say in our new book, the most disruptive word we can use in innovation is ‘soul’. The experience economy has now arrived, and so now more than ever before companies need to understand experience, not just in terms of what their customers are experiencing, the customer journey, but our essential experience of being, what it means to be human. Businesses and organisations which really get this are those who will flourish in the years to come.