The Experience Economy

The Experience Economy – Competing for Customer Time, Attention and Money

B.Joseph Pine II and James H. Gilmore
Harvard Business Review Press

The Experience Economy, in its latest and revised edition (2020), draws a very interesting parallel between Business and Theater. It describes how the actors on the process of delivering good service can add enough drama to turn this delivery into memorable experiences, by staging those experiences.

It compares the Drama to the Strategy, the Script to the Processes, the Theater to the Work, the Performance to the Offering and the Audience to the Customers. It explains how each person in the organization has a role to play and that those people shall never leave character. They are constantly “acting”. But acting here does not mean that what is being showed is fake. Actually, it means that people have to put emotions into what they do to create an engaging environment to the Customers, where they can experience emotions that will become memorable.

The name of the book comes from the fact that the backbone of this entire discussion is the fact that the way the Customers see value has evolved over time, which is consistent with the phases of the economy as we know them. From the Agrarian economy when the extraction of Commodities was the driver of value, evolving to the Industrial economy, when the production of Goods was the driver of value, which further evolved to the Services economy, where the delivery of Services was the driver of value. Today we live in the Experiences economy, where the staging of Experiences is the driver of value. The explanation how the level of customization grows with those changes in the value drivers coupled with the comparison of the economic offerings for Commodities, Goods, Services and Experiences in terms of economy phases, the economic function, the nature of offering, the key attributes, the method of supply and the factors of demand, makes the theory very easy to understand.

The book also talks about how the Experiences need to be Robust, Cohesive, Personal, Dramatic and Transformative to create the best possible engagement with the Customers.

The book also explains how to enrich the experiences by setting the stage, where the experiences will take place. Talks about how to create positive cues and eliminate the negative cues, to reinforce the message of the experiences. It also explores the complexity of Customization, including mass customization, explaining its different types, like Collaborative, Adaptive, Cosmetic and Transparent Customizations.

I particularly like the way the book compares the Dramaturgs to those who define the strategy (drama) and the Scriptwriters to the ones developing the processes, while the Actors are the ones making the experiences happen.

In summary, it is a great book and serves as a great reference to all we see these days in terms of the delivery of great Customer Experiences ….ooops …. One interesting thing about this book is that you will learn that Experiences are not delivered. Good Services are delivered. Experiences are Staged.

Enjoy the reading.