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Grubhub, a large American online and mobile prepared food ordering and delivery platform, connects more than 27 million diners with 300,000+ local restaurants. Despite significant growth since it was founded in 2004, the company has been losing market share to rivals. In 2016, the platform held 70 % of the foodtech delivery market; by 2020 its market share had fallen significantly to just 18%. As part of an effort to regain market share the company began experimenting with live events. Around 300 customers were given the chance to attend a live music event, which was recorded and later uploaded for a broader audience.
When COVID hit offering attendance at live music events was no longer possible, so Grubhub went back to the drawing board and developed an experience platform for virtual events. The first “tune-in” experience not only attracted 2.6 million live views and 1.5 million post views, it drove 18,000 orders, with 75% of viewers indicating they were likely to order within a week.
Grubhub didn’t just go virtual. It established a regular set of experiences. With the support of a company called First Tube Media, nine virtual experiences have been staged since last year, attracting over 20 million viewers who watched and engaged for an average of 13 minutes. That’s impressive since studies show that marketers typically have just 10 seconds to grab an audience and call them to action.
It is just one example of how establishing an experience platform can help brands to shift from advertising to staging memorable events that boost customer engagement and the bottom line.
The idea of staging experiences to leave a memorable—and lucrative—impression on customers – was first expressed in a 1998 Harvard Business Review article entitled “The Experience Economy” co-authored by B. Joseph Pine, who went on to write a best-selling book with the same title.
What has changed is the introduction of platform business models. “Companies can create a unique and memorable experience at scale when they marry it with platforms,’ says Peter C. Evans, an expert on platforms and Managing Partner at the Platform Strategy Institute. “They can drive additional network effects and get that flywheel going in powerful and interesting ways.”
Think of it as the experience economy on steroids. Evans has partnered with Experience Economy author Pine on a multiclient study involving corporates in the U.S., Europe and Asia, to school companies on how they can use experience platforms to grow their businesses. After building a database, frameworks and case studies, they led a collective workshop with participating corporates and held one-on-one meetings with each company that were confidential and proprietary to them.
Their collaboration is breaking new ground in bringing together the insights from the Experience Economy with the insights of the Platform Economy. The aim is to help companies think about how experience platforms fit their growth and customer engagement objectives; decide whether they should build, buy or integrate existing experience platforms; and determine what changes to internal processes, capabilities and mindsets are needed to leverage experience platforms.
“While a few innovative people in marketing are looking at experience platforms very few C-suite executives have recognized experience platforms and integrated them as part of a comprehensive strategy,” says Evans. “It is a way for companies to differentiate themselves and avoid the commoditization trap. We know from platform theory that continuous interaction with customers is valuable, and experiences offer a real way to do that.”
Differentiating Outreach
Creating continuous experiences that scale can be difficult and expensive. In some cases, it makes sense to integrate with existing players as there is a whole array of compliments that exist, says Evans.
For example, Cameo, a platform that connects fans directly with their favorite pop culture icons, has partnered with Sendoso, a company specializing in sending personalized gifts, branded swag and e-gifts, to enable revenue-driving teams at corporates to connect with customers by sending custom-recorded celebrity videos personalized to the recipient. Sending personalized videos with a message from their favorite pop culture icons and athletes creates bespoke experiences that give marketing, sales and CX teams a way to differentiate their outreach and brand in a way that companies could never manage to do on their own. (Cameo has built a portfolio of tens of thousands of VIPs, all just a click away).
What’s more, corporates who use the melded Cameo Sendoso experience platform don’t have to worry about the backend. Sendoso is integrated with both Cameo and Salesforce so customers can track their campaigns effectiveness and ROI through Sendoso’s analytics dashboard, making it easy for marketing, sales and CX teams to show tangible success metrics to their C-Suite leaders.
Building Experience Platforms
Some companies are creating their own experience platforms. For example, Michaels Stores, a U.S. chain that sells art supplies, crafts and picture frames, has launched a whole series of virtual online craft courses. The chain store recruits people to lead the courses from local communities. “Now there is an educational component that keeps customers engaged in between purchases,” says Evans. “And Michaels now has more insights on what its customers want and what kind of courses they prefer, which tells them what kind of crafts to stock.”
Coravin, which makes wine preservation systems and accessories, also launched an educational program. It works with a distributor to send wine to people’s homes and then hires a sommelier to virtually explain the wine to people as they are eating a meal and sipping their wine, creating a multisensory experience.
Airbnb has evolved from finding a space on someone’s couch, to finding clients a room or a house to helping them book experiences such as making local foods – while visiting a new location. In-person experiences were replaced by virtual ones during the pandemic. Airbnb is leveraging its platform to aggregate creator communities. The services, which are highly curated, enhance the customer experience and bring in a new source of revenue.
There are lots of other interesting new ways that companies can leverage the infrastructures they have already built and the rise of the platform economy to create new experiences, says Evans.
He points to Amazon Live, a platform that marries the interactive nature of live video and joins it with online shopping. Live promotions by influencers and chat help merchants engage with their audience during their streaming sessions. “Rather than pay millions of dollars for traditional advertisements that people don’t want to watch your customers become your advertisers,” explains Evans. It is also good for Amazon because it incentives merchants to contact customers and get them to watch Amazon Live. “The merchants become advertisers and are self-incentivized to do this,” says Evans. “This is yet another example of the flywheel effect applied to experiences.”
A New Way Of Looking At Loyalty Programs
Traditional loyalty programs either give freebies or steeply discount products to keep clients engaged. “Rather than giving away something that clients are already buying from you, turn your loyalty programs into experience platforms that can add value,” says Evans. “If you can partner with other organizations in concert with what you are doing it can actually increase your sales rather than being a cost center,” he says. “You can charge for these experiences and what virtual and platforms allows you to do is to leverage the scaling impact.”
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