Cait Wilson, Ph.D.
Millennials want memorable experiences from companies, but is that all they’re after? It’s true that we are currently in the experience economy; millennials value experiences over material goods. Companies recognize they must follow this trend and offer experiences for millennials if they are to succeed in this economy. There’s more to the story, though. The transformation economy is emerging and companies need to take the experiences they offer millennial consumers to the next level.
The Transformation Economy
Experiences are great on their own but millennials want transformation; self-actualization is one of the key motivators of their consumption. They value personal growth, self-improvement, and want to become different and better versions of themselves. Experiences are merely a means to elicit growth and development. Consumers may want to transform their physical health, emotional state, knowledge, or social connections (to name a few developmental areas). Companies will lose out on millennial spending if they only stage experiences and don’t consider the effects experiences have on participants.
A Lesson From the Fitness Industry
Millennials are big into health and wellness; they want to look and feel good. Gyms like LA Fitness have lost 5% of their gym visit share in the last year. These gyms don’t tend to have an invested emphasis on customers’ transformations; they provide a space with workout gear which often leads to monotonous experiences. Millennials are leaving these mid-market gyms and going to boutique fitness studios that are class-centric. Boutique fitness studios provide class experiences but most importantly consumers often leave feeling transformed; healthy, empowered, refreshed, and a part of a community.
How do we quantify consumers’ transformations? For more immediate feedback on if customer experiences cause transformations, companies can do pre- and post-test research (comparing baseline measures to measures taken shortly after the experience ends). Some initial qualitative inquiry may need to be done to better understand what type of transformational outcomes should be measured. The difficulty is that transformation involves sustained change that holds over time for the consumer. Another possible approach is retrospective research; companies can ask consumers long after their customer experience has ended to see the long-term impact of experiences. Insights derived from this research can be used to market experiences to millennials. For example, testimonials of consumers transformational experiences may be particularly impactful.
The key takeaway; the focus should shift from offering millennials experiences to transformations. Measure the impact of the experiences you stage and use that data to market to millennials.
Note: Some concepts from “The Experience Economy” by Pine and Gilmore (2011) helped inform this blog post.