The Experience Economy

The Experience Economy by Joe Pine and Jim Gilmore was published ten years ago by Harvard Busienss School Press this coming Tuesday, April 28.   

I'm raising my glass to Joe and Jim for this seminal contribution to creating a tipping point for acceptance of experience practice around the world.   200,000 copies and 12 languages later, The Experience Economy continues to be the best starting point for understanding the importance of creating intentional experiences to creating profitable growth and customer advocacy.

The Experience Economy gives us a great model to understand this progression of economic value to customers:

• Commodities.  Easily interchangeable and undifferentiated materials from the natural world.
• Goods.  Tangible offerings (products) you can mass product and hold in inventory.
• Services.  We'll do it for you - intangible activities for specific customers. 
• Experiences.  "Experiences are events that engage individuals in a personal way." (from The Experience Economy, pg. 12.)
• Transformations.  Game changers; life-altering engagements.

The insight that "The Customer is the Product" (chapter nine in the book) delivers a remarkably clear view of how to understand customers and the opportunities presented by re-perceiving markets. 

I'm a fan. 

Mutual Benefit

Mutual benefit is a multiplier effect in relationships. When mutual benefit is perceived (there's something in this for both of us), goodwill is created to nurture future interactions.

The attributes of mutual benefit are:

• Stage 1: Conditional. Simple transactions without ongoing relationships.
• Stage 2: Reciprocal. Formation of relationships and having a memory of the customer.
• Stage 3: Integrated. Sustainable interdependent relationships that fuel each other's growth.

Sensing mutual benefit or perceiving an obligation to act in kind is a powerful motivator and foundation for an ongoing relationship.

Context and its Role

Context provides the connection for a brand's relevance in specific cultural or economic situations. There are three stages of brand contextual maturity:

• Stage one: Reflects. The brand mimics the social and economic environment. (dependent)
  
• Stage two: Adapts. The brand actively changes in relation to the environment. (independent)
  
• Stage three: Projects. The brand creates new social constructs or economic rules for other to mimic or adapt to over time. (interdependent)
  

Brands in stage one that reflect merely imitate the competition - they live for the day with little regard for the future. Brands that adapt earn the right to survive over time. Brands that project themselves earn a position to thrives by changing the rules and the fitness landscape for everyone else.