BEST

EXPERIENCE BRANDS

A GLOBAL STUDY BY JACK MORTON WORLDWIDE

EXECUTIVE SUMMARY
reports the topline ndings of quantitative and qualitative research conducted in late 2011 among consumers in the US, UK, Asia and Australia.
BEST EXPERIENCE BRANDS

This research strongly endorses the view that the brands that will lead in the 21st century will be experience brands that is, brands that invest in building and continually improving how people experience and interact with them as a point of differentiation from competitors and a reason for consumers to become customers and advocates. This view is proven out in the following topline ndings: H  aving a unique experience with a brand is important in determining purchase T  wo in five consumers would pay more for a brand that offers a unique experience also highlights the experience drivers that brands can adjust based on their audience and industry sector.
BEST EXPERIENCE BRANDS

We expect unique brand experiences

But how do we do that?

Additional insights from the BEST EXPERIENCE BRANDS study will be released at a future date or may be requested by contacting Jack Morton.

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TABLE OF CONTENTS

Brands are Verbs 4 About the Study 6 Key Research Insights: Experience Matters 7 Experience Brand Drivers 11 Experience Brand Trends 16 Learn More 19 About Jack Morton 20

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BRANDS ARE VERBS

Josh McCall Today, more than ever, how a brand behaves is more important than what it says. Messaging is important, but what really matters is how a brand engages and interacts with the people who impact the business, from its customers to the people who inuence customers. Given an intensely competitive and (in many regions) recessionary climate, theres huge pressure on every interaction with the brand, every touchpoint from the shopping experience to the customer experience and beyond to be effective, efcient and aligned with what the brand says it stands for. Additionally, social media channels have radically amplied the capacity for consumers to broadcast positive and negative experiences with a brand. On a fundamental level, brands are verbs: what they do matters more than what they say. And thus understanding brands as verbs matters to business success. Think about todays most celebrated brands: from Apple to Zappos, one of the things that stands out about leading brands now is how many have established a unique and differentiating experience. Whether its Apples groundbreaking retail concept or Zappos legendary customer service, this unique experience gives the brand clear advantages over competitors.
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Every brand can be an experience brand by understanding the experience drivers that inuence customers and optimizing these drivers to have the greatest impact.

BRANDS ARE VERBS (CONTINUED) These advantages include: differentiation and memorability in a cluttered and competitive marketplace; the ability to maintain price integrity despite commoditization and recessionary caution; and increased brand awareness through resulting earned media and word of mouth (often more cheaply than by buying GRPs). We at Jack Morton have long contended that brands that invest in creating a unique experience which have come to be known as experience brands will be the marketplace leaders of the 21st century. The BEST EXPERIENCE BRANDS study that you are about to read represents our commitment to providing researchbased insights and data not only to prove out this assertion but also to understand why experience matters so much to consumers, and how this varies across product categories, geographies and demographic groups. Our goal with this study is to help clients understand how they can become an experience brand, or be a better one. Because we believe that every brand can be an experience brand by understanding the experience drivers that inuence their customers and optimizing them to have the greatest impact. The following pages highlight top-level ndings, but we invite you to contact us to learn more. Let us know what you think, and look for more of our annual BEST EXPERIENCE BRANDS studies in the future.
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Josh McCall is Chairman & CEO of Jack Morton Worldwide

ABOUT THE STUDY

is based on a survey sponsored by Jack Morton Worldwide and conducted online by KRC Research among 1,605 consumers between August 22 and September 2, 2011.
BEST EXPERIENCE BRANDS
following denition: Survey respondents were provided the

nce, When you see the term brand experie e with it is referring to any of the interactions you hav ser vices. either the specic company or its products or
product or brand, your This can include your own personal use of the or people who represent the conversations or interactions with employees marketing, word-of-mouth, brand, or anything you learn from that brands es or social network. recommendations from your friends, colleagu

Respondents were aged 18 and older and were drawn from the US (1,000), UK (200), Asia (205 [Beijing, Hong Kong, Singapore]) and Australia (200). Data from the sample for the US and for Australia were weighted by demographics so that the results would more closely reect the distribution of adults according to the US Census Bureau and the Australian Bureau of statistics. Total data were weighted to represent each of the four geographies equally. All ndings are statistically signicant at a 90% condence level or higher.

In addition to the results of the online survey reported in the pages that follow, the BEST EXPERIENCE BRANDS study comprised a follow-up qualitative study with a smaller number of respondents relating to their actual experiences with airline brands. Insights from this qualitative study, as well as more detailed quantitative ndings relating to other product categories, will be released at a later date or may be requested by contacting Jack Morton.

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KEY RESEARCH INSIGHTS: EXPERIENCE MATTERS

Liz Bigham I have a lot of conversations about experience brands. These conversations often falter when, inevitably, the question is asked: What are some examples of experience brands? The answer I most often hear, and give, is Apple. Interestingly, answering Apple often leads to an objection one Im condent the BEST EXPERIENCE BRANDS study will help to dispel. The objection goes: I cant be Apple, therefore I cant be an experience brand." The assumption is that Apple is sui generis; only Apple gets to be Apple. Therefore, being an experience brand is a raried condition, achievable only by a special few.
BEST EXPERIENCE BRANDS

WE ASKED CONSUMERS "WHICH BRANDS DO YOU BELIEVE OFFER UNIQUE EXPERIENCES?" HERE'S WHAT THEY SAID:
#1 #2 #3 #4

#5

#6

#7

#8

#9

#10

proves rst and foremost that being an experience brand is neither optional nor limited to certain kinds of brands, Apple or otherwise. Put simply: [ g. 1 ] consumers want and expect brands to provide a unique experience. Yes, consumers do indeed rank Apple as the brand that provides the most unique experience across all categories (see [ g. 1 ] ). But more importantly, they reveal an expectation that they should encounter unique brand experiences everywhere, across many different product categories (see [ g. 2 ] ). Consumers reveal that they will reward brands that offer unique experiences (and by implication, the opposite is true, too: fail to offer a unique brand experience and consumers will choose another brand).
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No more punting on brand experience: consumers expect it, they will buy and pay more because of it, and brands arent delivering.

44%
Strongly agree

Overall experience with a brand is the single biggest factor in whether I decide to purchase a product or service.

Previous unique experience is very important when deciding what specic brands I use in the future.

60%
Strongly agree [ g. 2 ]

62%
Strongly agree
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KEY RESEARCH INSIGHTS: EXPERIENCE MATTERS (CONTINUED) Here are three things the BEST EXPERIENCE BRANDS study makes very clear about the need for all brands to understand and invest in their unique experience: I will have a unique experience with that brand in some way, over two in ve (44%) of consumers strongly agreed that they would pay more, and only 6% disagreed. Among those willing to pay a premium for a unique experience, nearly four out of ve (79%) strongly agreed that experience is the #1 factor in their purchase decision. Not surprisingly, willingness to pay a premium is highest among those least impacted by economic uncertainty. Its 34% higher among upper income respondents. In Asia, 58% of respondents strongly agreed theyd pay more for an experience. Even in the UK, of the regions studied currently the region most impacted by recession among those studied, 28% of respondents still said theyd pay more for a unique experience.

#1 D  IFFERENTIATED BRAND EXPERIENCES DRIVE CONSUMER CHOICE Most consumers surveyed across markets say that experience drives and in large part determines their purchase decisions. For example, in answer to the question My overall experience with a brand is the single biggest factor in whether I decide to purchase a product or service, three out of ve (60%) strongly agreed; only 5% disagreed. Asked How important is a previous unique experience when deciding what specic brands you use in the future?, over three out of ve (62%) also said a unique brand experience was very important; only 1% disagreed. #3 T  OO FEW BRANDS ARE MEETING CONSUMER DEMAND FOR UNIQUE EXPERIENCES If it was ever in doubt, this denitively establishes that The study revealed a big gap between the value brands do not have a choice when it comes to their consumers assign to experience and the number of experience: they need to invest to optimize experience brands that are actually providing them with unique and leverage it as a point of differentiation. experiences. When asked to rate how unique their past brand experiences have been, just one in four #2 C  ONSUMERS WILL PAY MORE FOR BRANDS (26%) said their past brand experiences have been THAT OFFER UNIQUE EXPERIENCES extremely or very unique. The chasm between the Although most of the survey respondents dwell in almost two thirds of consumers (62%) who say unique regions suffering from economic uncertainty, many will experience drives purchase, and the less than one third pay more for brands that offer a unique experience. who say theyve had a unique experience, suggests a In answer to the question, I am willing to pay a tremendous opportunity for companies to dramatically premium price for a product or service if I know that elevate their brand experience.
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KEY RESEARCH INSIGHTS: EXPERIENCE MATTERS (CONTINUED) Collectively, these three key insights should denitively do away with any punting on brand experience: consumers expect it, they will buy and pay more on that basis, and theres a big gap between demand and supply. Of critical importance, the BEST EXPERIENCE BRANDS ndings also suggest that these patterns hold true across different sectors. As part of the study, respondents were asked in-depth questions about their experiences with a service-driven sector (airlines); a product-driven sector (mobile devices); and a web-driven sector (internet retailers). Additional topline ndings relating to these sectors are covered in the following pages.

Liz Bigham is SVP, Director of Brand Marketing, Jack Morton Worldwide

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EXPERIENCE BRAND DRIVERS

So consumers expect unique experiences and will reward brands that provide them. What can brands do about that? Where to start? They cant just decide to be more experiential (a term that has, by the way, become extremely ambiguous through overuse, arguably since the publication of The Experience Economy, a 1998 Harvard Business Review article by James Gillmore and Joseph Pine that brought experience to the forefront of business leaders thinking). In order to build a strong experience brand, its important to understand what the drivers of experience are, and how they variously impact consumer perception and purchase.

Brands must understand how different experience drivers inuence consumers

Community experience

Digital experience Customer experience Shopping experience

WHAT INFLUENCES ME?

Discovery experience

Employee experience Product experience

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EXPERIENCE BRAND DRIVERS (CONTINUED) As part of the BEST EXPERIENCE BRANDS study, consumers were asked to rank the importance of a variety of factors to their experience of brands. They were asked to rank importance both to brand experience overall and to experience with brands in specic sectors (airlines, mobile devices, internet retailers). Some interesting insights about these experience drivers emerge: #1 D  RIVERS ARE FUNCTIONAL AND BRANDFOCUSED, BOTH RATIONAL AND EMOTIONAL Across all sectors, geographies and demographics, consumers are highly consistent in selecting both transparently functional, needs-driven factors and those with softer, more brand-driven associations as very important to them when experiencing a brand [ g. 3 ]. For example, the #1 driver across nearly all category sets is as functional as it gets (Products and services that meet your needs), followed closely by the softer Understand my needs. Interestingly, the third-ranked experience driver is a demand to be engaged and educated on an ongoing basis: consumers say its important that experience brands Continue to serve and engage you after youve become a customer. When top ranked drivers are correlated specically to those consumers who were most likely to say that unique brand experience strongly inuences their brand choice, the experience drivers became more brand-driven and less needs-driven [ g. 3 ].
1

T O P EXPERI E N CE D R IV E R S OV E R A L L
1
Products and services that meet your needs

2 Understands your needs Continues to serve and engage you after youve 3 
become a customer

4 Exceeds your expectations Makes it easy to nd information and buy their products, 5 
wherever and whenever I want to shop

EXPERI ENC E D R IV E R S IM P OR T A N T 2 T O U N IQU E B R A N D E XPE R IE N CE

1 Initial impression the brand makes on you Continues to serve and engage you after youve 2 
become a customer

3 4 5

Understands your needs Differentiates from similar products Employs people who anticipate your needs

1. Data reects top box rankings for very/somewhat important. 2.  Data reects derived ranking based on correlation of driver ranking and respondents who were most likely to state that unique brand experience is very/somewhat important in deciding brand choice.

[ g. 3 ]
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EXPERIENCE BRAND DRIVERS (CONTINUED) #2 T  HE MOST IMPORTANT CATEGORIES OF EXPERIENCE DRIVERS ARE PRODUCT EXPERIENCE AND CUSTOMER EXPERIENCE Looking holistically at the various drivers ranked in the study and grouping them into different types of experience [ g. 4 ], its clear that on a general level, product experience and customer experience are most inuential for consumers, followed fairly closely by shopping experience. Other drivers, although still important, gure less explicitly in consumers judgments of brand experiences. This suggests that brands may need to reprioritize programs and partners to reinforce innovation in product experience as well as exemplary delivery across the customer and shopping experience. This is denitely not to say that any areas of experience are unimportant, but rather to emphasize that in the minds of consumers, the areas of product, customer and shopping experience are the forefront of conscious decision-making. #3 A  CROSS EXPERIENCE DRIVERS, BRANDS NEED TO CLOSE AN EXPECTATION AND DELIVERY GAP Theres a sizable gap between the importance consumers place on varying experience drivers and how those drivers actually deliver in reality. For example, consumers were asked about actual experience with brands in three sectors: airlines, mobile devices and internet retailers. Across all three, consumers indicated a signicant gap between drivers that were ranked very /somewhat important and those they deemed excellent /very good based on actual experience [ g. 5 ]. In some instances, the gap exceeds a 20-point gulf between expectation and delivery. Clearly, theres work to be done to fulll both brand promise and consumer expectations Its interesting to note how well these ndings about experience drivers map onto whats already evident about top experience brands. From Apple to Zappos, Amazon to Zipcar, top experience brands emphasize and invest in innovating their product experience even as they orchestrate and perfect their customer and shopping experiences. Theyre dedicated to continuing to serve and engage consumers even after theyve become customers. And theyre truly passionate about exceeding expectations. demonstrates that its not just these leaders who are setting a path for experience brands: its consumers themselves who are demanding these very qualities from all brands.
BEST EXPERIENCE BRANDS
LB

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EXPERIENCES VALUED BY CONSUMERS

Average importance on a scale of 1- 7 for unique brand experience drivers, by category (mean score)

5.8 5.8 5.7 5.4

PRODUCT EXPERIENCE
6.1 P  roducts and services that meet your needs 5.6 I nvents new ways to enhance their products or services, after youve become a customer

4.9 4.8

CUSTOMER EXPERIENCE
5.9 Understands your needs 5.8  Continues to serve and engage you after youve become a customer 5.8 Exceeds your expectations 5.6  Educates you about how to use their products and services and be a smarter customer, after youve become a customer 5.3  Employs people who anticipate your needs

COMMUNITY EXPERIENCE
5.0  Supports causes that are important to you 4.8  Makes you feel part of a special group of people

DIGITAL EXPERIENCE DISCOVERY EXPERIENCE

5.6  Initial impression the brand makes on you 5.5  How the brand differentiates itself from similar products and services 5.0  What a brand says about itself in marketing and ads 5.0 A  rray of available digital functions (apps, mobile, etc.) to engage with the brand 4.8 O  nline presence (web site, social networks, advertising) 4.5 A  ctive online following or community

SHOPPING EXPERIENCE

5.8  Makes it easy to nd information and buy their products, wherever and whenever I want to shop (in store, online, mobile) 5.8  Provides an efcient purchasing experience

[ g. 4 ]

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EXPERIENCE BRAND DRIVERS BY SECTOR

SERVICE-BASED SECTOR / AIRLINES Products and services that meet my needs Understand my needs Provide an efficient purchasing experience Make it easy to buy their services, whenever and wherever I shop Exceed my expectations Employ people who anticipate my needs 34 35 40 41 42 63 62 60
PERFORMANCE IMPORTANCE GAP

44

70 69 66

26 29 25 21 28 25

PRODUCT-BASED SECTOR / MOBILE DEVICES Products and services that meet my needs Understand my needs Make it easy to buy their services, whenever and wherever I shop Provide an efficient purchase experience Exceed my expectations Educate me about how to use their products and be a smarter consumer, after Ive become a customer WEB-BASED SECTOR / INTERNET RETAILERS Provide an efficient purchasing experience Products and services that meet my needs Make it easy to buy their services, whenever and wherever I shop Understand my needs Exceed my expectations Initial impression the brand makes on me 46 45 50 59 65 63 60 60 64 76 74 71 16 10 12 15 17 15 43 40 41 43 51 63 62 59 58 53 72 69 19 26 12 19 19 17

[ g. 5 ]
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EXPERIENCE BRAND TRENDS

provides detailed insights into varying considerations and inuences for experience brands across sectors, geographies and demographic groups. Although we will be sharing more detailed insights in future articles and presentations, the following top-line trends stand out:
BEST EXPERIENCE BRANDS

Consumers more likely to value experience are prized by marketers

GEOGRAPHIC TRENDS: Impact of brand experience Consumers in Asia are far more likely to say that experience is the single biggest factor in brand choice (71%, compared to 60% overall). This should inform the strategies for brands moving into Asian economies like China. Willingness to pay more for experience Asian consumers are more likely to be willing to pay a premium for brands that offer a unique experience (58% vs. 28% in the UK). Australian consumers are as likely as US consumers to indicate theyd pay more (45%). Customer experience In general, US consumers have the highest expectations around customer experience: theyre most likely to identify Exceeding expectations as a driver (75%). By contrast, consumers in the UK are far less likely to cite Exceeding expectations as a driver (57%); Asian and Australian consumers are in the middle (67%). High expectations for customer service in the US are an important consideration as brands seek to compete in the American market.
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EXPERIENCE BRAND TRENDS (CONTINUED) DEMOGRAPHIC TRENDS: Premium audiences outshine other groups when it comes to valuing experience Women more responsive and receptive Not surprisingly, those with higher incomes are far more to experience likely to say theyd pay more for a unique experience. Women are somewhat more likely to say that unique brand Also not surprisingly, those consumers willing to pay more experience is very /somewhat important in determining are also far more likely to cite experience as the #1 factor brand choice (64% vs. 59% among men). Women are informing their purchase choices (84% vs. 60% among the also more likely to agree that they will pay a premium general population). Interestingly, the drivers inuencing for experience (47% vs. 41% among men). Interestingly, these experience-seeking consumers are far more likely women are also slightly less likely to say that theyve been to be customer experience drivers such as Understands engaged in a unique experience in the past (24% vs. 28% your needs, Continues to serve and engage you after among men). Since women still make or inuence most youve become a customer and Educates you about household purchase decisions, this is an important insight how to use their products and services and be a smarter for marketers. Also of note, women rank some experience consumer, after youve become a customer. drivers much higher than men: Understands your needs (73% vs 65%), Continues to serve and engage you after SECTOR TRENDS: youve become a customer (71% vs 62%) and Exceeds Airlines expectations (72% vs 60%). Consumers appear to suffer from low expectations based Younger and middle-aged consumers are on less than stellar experiences when it comes to the airline more willing than seniors to pay a premium sector. Over two in ve consumers (43%) say that unique for experience brand experience is important to their purchase choices There is a ten-point gap between people under 55 and in this sector. Yet fewer than two fths (39%) of consumers people over 55 when it comes to willingness to pay more rate their previous airline experiences as excellent or good. for brands that offer a unique experience (47% vs 37%). Again, refer to the signicant gap between consumers Whether this reects seniors budgetary caution or a more expectations for key drivers and how airline brands have conservative brand-view, its worth noting for marketers. actually performed [ g. 5 ].

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EXPERIENCE BRAND TRENDS (CONTINUED) Mobile devices There is a much smaller gap between consumers judgment of past experiences with mobile device brands and the importance they place on experience. Almost half (48%) say that unique experiences drive purchase in this sector; a slightly smaller group (46%) rank their actual past experiences as excellent or very good. Interestingly, although Apple tops the list of experience brands in this sector with a 69% ranking for highly unique brand experience, the next best-ranked brand pales in comparison, at 41%. Internet retailers Most consumers ranked this sector very positively in terms of actual past experience: over two out of three (70%) said their past experiences had been excellent or very good. Simultaneously, unique experience was most important in this sector compared to the others (49% vs. 48% for mobile devices and 43% for airlines). This is worth noting as more transactional or exclusively web-based brands may assume that brand experience is less relevant in the online marketplace. Clearly, online brand experience maps closely to user experience just look at the drivers cited as important by consumers [ g. 5 ].
LB

What makes an experience memorable? I like to experience new things

What's a 'wow' factor?

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LEARN MORE
Look for more insights from the BEST EXPERIENCE BRANDS study to be released in the future. To request insights from the qualitative phase of the study, as well as more detailed quantitative ndings relating to product categories, contact liz_bigham@jackmorton.com

READ OUR ARTICLES ON EXPERIENCE BRANDS: What is an Experience Brand? read Experience Brands and the Owned Media Opportunity read Experience Brands and the New Engagement Model (research) read Experience Brand Leaders 2010 read

TO JOIN THE CONVERSATION ABOUT BEST EXPERIENCE BRANDS, PLEASE CONNECT WITH US ONLINE: Follow us on twitter: @jackmorton Visit us online: jackmorton.com Read our blog: blog.jackmorton.com

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JACK MORTON WORLDWIDE IS A GLOBAL BRAND EXPERIENCE AGENCY WITH OFFICES ON FOUR CONTINENTS. OUR AGENCY CULTURE PROMOTES BREAKTHROUGH IDEAS ABOUT HOW EXPERIENCES CONNECT BRANDS AND PEOPLE IN PERSON, ONLINE, AT RETAIL AND THROUGH THE POWER OF DIGITAL AND WORD OF MOUTH INFLUENCE. WE WORK WITH BOTH BTOC AND BTOB CLIENTS TO CREATE POWERFUL AND EFFECTIVE EXPERIENCES THAT ENGAGE CUSTOMERS AND CONSUMERS, LAUNCH PRODUCTS, ALIGN EMPLOYEES AND BUILD STRONG EXPERIENCE BRANDS. RANKED AT THE TOP OF OUR FIELD, WEVE EARNED OVER 40 AWARDS FOR CREATIVITY, EXECUTION AND EFFECTIVENESS SO FAR THIS YEAR, INCLUDING BEST NEW PRODUCT INTRO, BEST MEDIA EVENT AND EMPLOYEE CAMPAIGN OF THE YEAR. JACK MORTON IS PART OF THE INTERPUBLIC GROUP OF COMPANIES, INC. (NYSE: IPG).

Jack Morton Worldwide 2011

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