HX: The New Marketing Paradigm Worth Your Time

A headshot of Chad Neufeld

by Chad Neufeld

Illustration of a large letter H and X acting as a structure for people to hangout around.

There’s nothing marketers love more than a good paradigm. Something to lend a little structure to the inherently chaotic exercise of trying to identify and deliver what consumers want and need from moment to moment in a rapidly changing world.

However, we also tend to be the love ‘em and leave ‘em type—moving on to the next shiny new model as eagerly (and almost as often) as Leonardo DiCaprio. Way back, we started out talking about ‘customer service’. In the mid-‘90s, the conversation shifted to ‘customer experience’. In the late ‘90s, we all packed our bags and got on board with the ‘customer journey’. We seem to have been stuck in limbo at this particular luggage carousel for a while now—a kind of paradigm purgatory, if you will. Although today some us may talk about journeys – plural. Yes, yes, it’s quite a leap forward.

Sarcasm aside, what all of these terms seemed to get right – at first blush - was putting the customer front and centre. Certainly, there has always been a lot to be said for putting the customer first, or at least putting yourself in their shoes. The trouble with all of these customer-centric models is that they still create an ‘us vs. them’ dynamic by setting up a separation between customer and vendor. The new reality of today’s value exchange economy reveals that these categories are becoming increasingly blurry, as it turns out that we are all in this cyclical system together.

The moment a customer purchases your product or service represents only one step of their end-to-end experience with it—and with you. Once your product is out there – in the wild – there is a whole ecosystem around each individual consumer that impacts their experience with the product.

So what is a value exchange economy anyways? Let’s start with what it isn’t: what it used to be. Stay with us. Not too long ago, you could create a product or service, run some ads telling people your product or service was great, stick a reasonable price tag on it and watch the sales roll in. If all went well, you repeated the process, or you made some adjustments and tried again. Of course, it was neverquitethat simple – but these are the broad strokes of it. In that era, we built and executed a traditional marketing mix around the 4 P’s: Product, Price, Promotion and Place. This worked best when we were selling basic commodities or services, but it doesn’t really cover the breadth and complexity of what is being exchanged in the modern marketplace. That is, value. 

A visual diagram connecting producers, products, money, and users.

Rarely today are people buying a product strictly for its intrinsic functions and features. We didn’t all run out and buy iPhones because we needed to make a lot of calls. You don’t drop a couple grand on a Burberry trench coat because it’s rainy. People buy things based on the value they perceive it will add to their lives. This value can take many forms based on situational, psychological and social factors. Some people may be primarily concerned with utility, price, function or comfort. Others will be motivated by things like social status, exclusivity and wanting to project a certain image or fit in with a particular group. Often times, people make purchases that fit who they believe they are or who they aspire to be. The creation of value is not so much about the product or service you provide, but how it affects your customers’ inner and outer lives.

A Journal of Marketing article by Stephen L. Vargo and Robert F. Lusch posited that marketing had originally inherited a transactional model of exchange from economics, which had a dominant logic based on the exchange of “goods”, e.g. tangible resources with embedded value. It goes on to suggest that new perspectives focused on “intangible resources, the co-creation of value, and relationships” have emerged. The authors believed that these “new perspectives” were converging to form a new dominant logic for marketing.

A cartoon illustration of a lightbulb with a heart.

Now, the thing about this article is that – having been published in 2004 – it is nearly 16 years old. It’s not difficult to imagine how much things have continued to shift in this direction over the past decade and a half with the proliferation of e-commerce, social media and an overall increase in consumer sophistication. One response has been to add two more P’s: People (in the form of a diverse, motivated and responsive team) and Process (integrating departments and activities under a guiding strategy). Relationship Marketing is another term we’ve come to know – which certainly fares better than the ‘customer service’ model in that it allows reciprocity to rein – but still falls short of acknowledging the rising importance of co-creation and value exchange.  

The moment a customer purchases your product or service represents only one step of their end-to-end experience with it—and with you. Once your product is out there – in the wild – there is a whole ecosystem around each individual consumer that impacts their experience with the product. Context is part of this ecosystem: simply put, what is going on in your customer’s life that caused them to buy this product? A mom at home with a newborn baby has a very different context for buying, say, an Amazon Echo than a 20-something bachelor, or an older retired couple.

Knowledge will also inform the user experience. Does your customer have the knowledge and skill set to get the most out of your product? Could they be having a disappointing or lacklustre experience with it because they simply don’t know how to use it properly?

A cartoon illustration of a graduation cap, a plus sign, and two smiley faces.

Environment also comes into play. What’s going on in the greater world around the consumer that could influence their experience with it? If trends or sentiments have changed - or are changing – the customer may not enjoy your product or derive as much value from it as they expected to. Let’s say your progressive, liberal-minded customer buys a shirt from you that they thought would make them look modern and professional and then Trump shows up at some rally in middle America making a jackass of himself in said shirt. Hey – it could happen. Suddenly, the cool new shirt is the butt of an internet meme and relegated to the back of a now unhappy customer’s closet.

What the Donald will do, say, tweet (or wear) next is literally anybody’s guess, but we should be able to keep up with our customers’ experience – and vice versa. Now that we understand how value is created in the eyes of the beholder rather than the seller, perhaps we can go one step further and explore what happens to value when vendor and consumer take turns as the lead in a kind of endless, choreographed marketplace dance.

A cartoon illustration of a man with a shopping cart full of brown bags.

If we had to make up a term for what we’re describing (twist our rubber arm) it might be something like ‘Holistic Experience’ (or HX) that acknowledges the cyclical nature of the value exchange mechanism. Here’s how it works. When somebody uses your product, they gain valuable firsthand experience with it in a wide range of scenarios. They may stumble upon bugs and limitations or discover some secondary or innovative applications or uses. They may modify it or use it in ways you hadn’t thought of. They might wish it did something it just wasn’t built to do or have a great idea of how to make it better. They might even generate authentic and engaging (user generated) content with it. This is all powerful (read: valuable) information that could immensely benefit the original vendor. Put to good use, that value also impacts the next iteration of the product in question which, in turn, benefits the consumer. And the circle continues.

A detailed labelled diagram.

Currently, there are very few efficient platforms for facilitating this type of holistic value exchange. Online communities are one of them, and perhaps the most powerful as they provide a centralized destination for value creation and co-creation at every stage of the so-called ‘customer journey’. Here, you have the opportunity to build direct, deep and ongoing relationships with your end users to harness and co-create valuable outputs and inputs. You can tap into their wellspring of experience and creativity to supercharge product innovation and improvement. You can enhance the consumer experience by connecting more intimately with them and being accessible and responsive to their needs, in the moment. You can create a sense of connection and camaraderie among users of your product which may increase its perceived value in your customers’ minds. All the while, gathering priceless insight data for product development and targeted marketing initiatives. 

All of the engagement listed above can create a surge in brand loyalty. Given an interactive platform like an online community, superfans will congregate around a brand’s values and resources. This has a doubly positive effect. Superfans assist with a brand’s problem-solving and these superfans leave with a positive impression of the brand because it made an effort to include them. This feeling of sincere inclusion fosters brand loyalty which manifests itself as advocacy. Customers who evangelize about a brand or product provide the best kind of marketing because they meet the desire for trusted, peer-to-peer reviews.

Read More: How Co-creation Impacts the Customer Experience

Rust-Oleum, the worldwide leader in protective paints and coatings, has capitalized on the Holistic Experience (HX) model through its thriving co-creative community called Creator’s Studio.  This brand engagement and innovation platform brings builders, crafters, and painters together for project inspiration and to learn about Rust-Oleum products. The site features everything from “Ask the Rust-Oleum Expert” sessions, to Innovation Challenges, to general chats where inspiration, advice and tips are shared within the close-knit community. Rust-Oleum works closely with its community to co-create, strategize and plan in a number of different ways. They regularly turn to the Creator’s Studio community to vet ideas, crowdsource product names, and to decide the best way to launch a new product to the marketplace. They also mine the community for new product ideas and user feedback and use authentic conversations in the Community Café area to smooth the path to purchase. It works because everybody participating – internally and externally – both gives and gets value out of the arrangement, which is the whole point of HX.

Case Study: Rust-Oleum Gathers DIY-lovers to Test Products, Gather Insights, and Engage Customers

If we continue to think about the business we do as a straightforward trade of products or services for money, we leave immense value on the table. Not only are we shortchanging our customers on the best possible products and experiences, but we are depriving ourselves of the opportunity to gain a competitive edge by leveraging our customers’ wisdom and creativity. In these challenging economic times, it’s imperative to harness and leverage value wherever it is created or co-created before it disappears into the ether. In industrial contexts, companies do this all the time by capturing by-products and reusing them as inputs within the system to reduce waste and increase efficiencies. There’s absolutely no reason we shouldn’t strive to do the same with more nebulous market by-products such as consumer feedback, user-generated content and zero-party data.  Online communities can help holistic-minded brands create meaningful connections and leverage value that will take your business model from transactional to transformational.

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