The Experience Economy

What is the Experience Economy and Why Should You Care?

There’s an amazing book by Joseph Pine and James H. Gilmore called “The Experience Economy.” In the book, they describe a fascinating progression. We have journeyed continuously from tangible, cost and profit driven paradigms to valuing more intrinsic properties like how a product makes us feel. In essence we have moved from the agrarian economy to the industrial economy to the service economy. And now we are at the threshold of a new understanding of how we transact. The authors have named this frontier the “experience economy.”

Even though this book was released in 1999, it’s more accurate now than ever before. There’s so much competition in every niche and industry that it’s difficult to distinguish between the different brands in the market. That’s why the experience offered by companies has become paramount. Goods and services are no longer enough.

Businesses are now gauged and judged on the basis of a 360 degree view of all the interactions they have with their patrons – from the moment they download a freebie to the final signing of the deal. And this journey better be engaging, rewarding and empowering.

The Wonderful World of Disney

How does an experience as a commercial offering appear in practice? Look no further than Walt Disney and Disney World. When you walk into this “magical” theme park, you’re not really there for a product or service — what you’re paying for is an experience. Instead of a patron or a customer, you’re a “guest.” And as you walk around the park, you see Disney characters and go on rides that evoke the feeling of being in a Disney movie. You have the nostalgia of childhood sweeping through you. You feel an experience.

Memories as Products

The authors suggest that the experience — and resulting memory — have become an actual product that you can sell these days, often at a substantial markup.

In fact, the tendency of guests to seek out memorabilia is a great test of how captivating and interesting an experience you have succeeded in providing. If they have enjoyed a wonderful vacation with their spouse in Hawaii, they’re bound to want a postcard to remind them of the trip! The experience warrants it! If you’re in the music business and put on a rockin’ concert, the crowd may well want to stock up on T-shirts from the event — not because they desperately want to own a new T-shirt, but because the product is associated with a great memory.

Improving the Customer Experience

So, how do you improve the experience that customers and clients have with your business? Think about engaging all five senses whenever possible. Put yourself in a customer’s shoes and ask yourself what’s good about the experience, and what’s not so good. Better yet, just ask your customers! They’re sure to have suggestions on how you can make the customer experience better, which will help you attract and retain more clients in the future.

As valuable as it is to think up ways to improve an experience, many businesses succeed by eliminating the negative aspects of experiences that are common in their industry. One great example of this is when you call a business and they put you on hold. These days, you’ll usually hear some pleasant music or an automated voice with something informative or entertaining to say while you wait. That makes the experience of waiting for a live representative a whole lot more bearable than putting up with several minutes of radio silence.

This is just an example, but it shows the power of approaching your business with an experience driven mindset. In today’s economy, more and more young people are opting to have experiences over material possessions. You’ll go far if you can position what you sell as an experience worth having.

Image Attribution: Young Couple In The Clothing Store” by photostock
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