Seventeen years after the prophetic Pine & Gilmore book and HBR article “Welcome to the Experience Economy” published, we see their concepts gaining momentum. In the past, companies embracing the concept were the exception; now embracing the Experience Economy is the rule. In other words, the idea of the Experience Economy is not just for organizations like Disney, Apple, and the Rainforest Café any more. Companies are wise to make their Experience their competitive difference today.
Forbes had an interesting take on how the concept is important to all businesses, including yours. More Customers are craving an adventure. They might even desire risk. This can culminate in trying a new food truck or shopping at a new pop-up store with no reviews to support its reputation. The idea is the adventure of discovery is worth the trade off in security.
The idea of creating a sense of adventure for Customers isn’t for solely no-name, pop-up stores either. Big names like Virgin Airlines, who is focused on creating a unique flight experience (not adventurous or dangerous for goodness sakes!), embraced the concept. The Ritz Carlton in Tucson, Arizona, leverages its desert landscape and the related activities it provides to enhance their guests’ stay.
Restaurants also recognize the importance of making something more out of the dining experience. Some restaurants provide you with an option to cook the steak yourself, guided by the chef. Others give you not one dish, but three little dishes at once. There are also those who invite funny chefs to make a show for you while they cook at the same time. Consider this hilarious video from Benihana:
What about this video regarding the “new assistant” for the KLM Lost and Found service:
Man’s (and forgetful man’s especially) best friend indeed!
The Experience concept is getting so much momentum there are even Death Cafés, establishments where people drink tea, eat cake and discuss… death! It’s not just a cafe, it’s an experience! They also sell memorabilia, as Pine and Gilmore suggested/predicted in their article nearly 20 years ago.
Movie theatres don’t want to be left out, either. Vienna’s old cinemas, struggling to compete with more modern theatres, tap into retro charm to create a distinct and memorable experience only they can. In London, artisan cinemas create experiences that stimulate not only the visual and audio senses but also taste. Why? Because the best experiences engage all the senses.
Even police can create a better experience–when writing you a ticket no less!
Take for example the fate of Michael Porter’s Monitor Group. Monitor, a consulting firm that ruled the business world in the 1980s founded by Harvard Business School’s Michael Porter, built their business on the concept that business is a matter of defeating the competition, not making a better product or experience for Customers. We studied Michael Porter in the b-school. He believed that your best strategy was to protect yourself from your business rivals. There were five forces involved in the image to the right:
Source: Forbes.com. “What Killed Michael Porter’s Monitor Group? The One Force That Really Matters.” 20 November 2014. Web. 29 January 2015.
The main problem was his basic strategy. It was about avoiding competition and seeking profits that were protected by barriers to entry into your industry. He was all about figuring out how to do these things without actually improving your product or service.
Porter’s strategy ruled for decades. Many of you reading this know it well. However, some things changed, and they made a big difference. A world economy took over, and the Internet changed the way we get our goods and services. As a result, barriers to entry were crushed, competitive pricing bottomed out, and Customer’s decided they would pay more for a better experience. The best product, yes, but the best experience, too. Monitor couldn’t adapt the way they consulted their clients. Not surprisingly, their Customers decided that the Monitor experience wasn’t worth it. And they filed for bankruptcy in 2012.
Whether you like it or not, the Experience Economy is here. Customers want you to add value to their experience, from outdoorsy activities in the Sonoran desert to tossing a freshly grilled shrimp in your mouth! Everyone down to law enforcement is embracing the concept. If you are not, you might be in danger of being left behind the Experience Economy.
The question is are you designing processes or experiences? Will you be left behind like the Monitor group by the Experience economy?
Zhecho Dobrev is a consultant and project manager for Beyond Philosophy. He has worked with a wide array of large corporate companies. Zhecho’s expertise inludes Customer behavior analytics, Customer loyalty, complaints management, and journey mapping. He holds an MBA and Master’s degree in International Relations.
Please follow Zhecho on Twitter @Zhecho_BeyondP