The Experience Economy
Are you ready for it?
The term Experience Economy was first described in a book published in 1999 by B. Joseph Pine II and James H. Gilmore, titled “The Experience Economy”. In it they described the experience economy as the next economy following the agrarian economy, the industrial economy, and the most recent service economy. This concept had been previously researched by many other authors.
Pine and Gilmore argue that businesses must orchestrate memorable events for their customers, and that memory itself becomes the product — the “experience”. More advanced experience businesses can begin charging for the value of the “transformation” that an experience offers, e.g., as education offerings might do if they were able to participate in the value that is created by the educated individual. This, they argue, is a natural progression in the value added by the business over and above its inputs.
Work is Theatre & Every Business a Stage
“You are what you charge for. And if you’re competing solely on the basis of price, then you’ve been commoditized, offering little or no true differentiation. What would your customers really value? Better yet, for what would they pay a premium? Experiences. The curtain is about to rise, say Pine & Gilmore, on the Experience Economy, a new economic era in which every business is a stage, and companies must design memorable events for which they charge admission.
With The Experience Economy, Pine & Gilmore explore how successful companies-using goods as props and services as the stage-create experiences that engage customers in an inherently personal way. Why does a cup of coffee cost more at a trendy cafe than it does at the corner diner or when brewed at home? It’s the value that the experience holds for the individual that determines the worth of the offering and the work of the business. From online communities to airport parking, the authors draw from a rich and varied mix of examples that showcase businesses in the midst of creating engaging experiences for both consumers and corporate customers.
The Experience Economy marks the debut of an insightful, highly original, and yet eminently practical approach for companies to script and stage compelling experiences. In doing so, all workers become actors, intentionally creating specific effects for their customers. And it’s the experiences they stage that create memorable-and lasting-impressions that ultimately create transformations within individuals. Make no mistake, say Pine & Gilmore: goods and services are no longer enough. Experiences are the foundation for future economic growth, and The Experience Economy is the playbook from which managers can begin to direct new performances.”
Due to the growing global entertainment, tourism and leisure markets, the diversity of experience-based products, both goods and services, is needed in order to create difference in the market. ‘Magic’ is a key-word commonly used in the experience economy pointing to the creation of distinctive, innovative, spectacular and sensual products.
In order to market and distinguish products, added cultural values have become more important then before. Marketing aesthetics are the practices, strategies and technologies which are applied in order to make products more attractive. By adding storytelling, entertainment, values, culture and arts the products are designed to facilitate the consumer’s social relationships, feelings and identities. Experience economy thus supports the field of customer experience management.
The experience/cultural/creative industries are the pragmatic and professional aspect of the experience economy. How can experience economy as a developmental strategy be managed, enhanced and implemented? What kind of tools and competences already exist, and how are they put to best use as experience products? How can the organisation work together in order to develop a stronger awareness of its unique experimental resources? The concept of experience economy arose in the field of business. It has crossed the frontiers of tourism, architecture, urban and regional planning, art- and museum industry, public health service and other fields. This means that experience economy as a tool to develop and improve experience products has been widely tested amongst many and different consumer groups and lifestyle segments.
Read ‘Welcome to the Experience Economy‘ by B. Joseph Pine IIJames H. Gilmore at Harvard Business Review.
Total experience marketing is a 360-degree platform.
Track Marketing president Alex Frias talks about Marketing In The new ‘Total Experience’ Economy that we live in.
“Marketing is everywhere. It’s digital, mobile, experiential, social and word of mouth. A brand conversation that begins on a TV campaign must continue digitally. It should become a two-way conversation and ultimately a customer springboard that the brand is curating and amplifying on social platforms.”