Reading Review: The Experience Economy
I received a free copy of The Experience Economy after listening to one of the authors, James Gilmore, lead a session during ExhibitorLIVE.
In some ways, this book paved the way for the rise of the experiential marketing industry. After 30 years in print, The Experience Economy is still helpful for agencies and large brands wanting to understand how offering experiences to their clients will grow their business.
You can get a copy by clicking here.
After 30 years, can it still be good?
Generally, if any book is being read 25 years after its original publishing date, then there’s a good chance it will be read for another 25 years. Granted, some of the examples used in a few of the chapters are old, but the underlying principles are still in practice today.
And besides, any marketing expert worth their salt should know the history of their subject as well as its current fads.
The Experience Economy: Benefits
The Experience Economy may bore you if you aren’t in advertising or marketing or if you’re not a reader (obviously). I’d recommend this book for…
- Event Coordinators/Directors
You can expect The Experience Economy to…
- Stimulate you to think creatively and strategically
- Develop understanding of consumer psychology
- How to compete with the smart phone for time, attention, and money
- Explain why people spend more money on experiences than goods or services
- Teach you how to connect with customers in a personal, memorable way
The value of this book is in its easy explanation of a complex change that’s happening in our economy. According to Pine & Gilmore, the economy is making the leap from offering services to experiences. This change is due, in part, to how people value their time. Services are about time well saved while experiences are about time well spent.
The Experience Economy: Criticism
This book is not written in popular language. After all, it’s a serious argument published by the Harvard Review Press. The argument is convincing, and its strategies are equally intriguing, but it’s not a fast read. It requires time, careful reading and, in some places, rereading. If you’re stimulated by ideas, this book is a goldmine.
Also, something that might not be immediately apparent when you’re looking at this book is how far Pine & Gilmore run with the idea that “work is theatre.” In fact, the last half of the book is all about stagecraft. Every facet of business is considered some part of aspect of theatre, from the building to employees to the customers.
Pine & Gilmore are great at explaining the opportunities companies have in the new economic climate. The core principles are:
The four kinds of economic offerings
To show the monetary value of experiences, Pine & Gilmore outline the four different kinds of economic offerings, and the kind of money they attract. They are
They use coffee as an example to explain the price differences.
Companies that harvest or trade coffee beans (commodity) receive a little more than 5 cents per pound, which equals about 1-2 cents per cup.
When a manufacturer roasts, grinds and sells those same beans in a store (turning them into a good), then the cost jumps to 5 to 25 cents a cup. But when a diner takes those beans, brews them, and sells the cup itself (turning them into service), the cost jumps anywhere from 50 cents to a dollar.
“Depending on what business does with it, coffee can be any of three economic offerings—commodity, good, or service—with three distinct ranges of value customers attach to the offering. But wait: serve that same coffee in a five-star restaurant or a café such as Starbucks—where the ordering, creation, and consumption of the cup embody a heightened ambience or sense of theatre—and consumers gladly pay $2 to $5 a cup,” (Pine & Gilmore, The Experience Economy, pg. 2).
What puts this in perspective is the fact that Americans are now spending more money at restaurants than grocery stores.
The goal of experiences is not necessarily to entertain—it’s to engage. And you can engage participants in several different ways. The most common are
The cheapest is entertainment. The problem is the participants are passive and absorb what you’re doing. Think of a movie theatre.
Educational experiences give guests real value. They walk away with something they can use and will remember where they got it from. They still absorb, but they are also active. Think of Museums.
Esthetic experiences immerse guests, but do not require active participation. Think of a scenic overpass of the Rocky Mountains.
Escapist experiences require a lot more work to set up than the previous two. But the benefit is that guests are completely engaged as they are immersed in an interactive environment. Think Escape Rooms.
Work is Theatre
A wide variety of concepts is covered in this section, including
- Dramatic structure
- Enactment model
- Four forms of theatre
- Performance model
- The economic pyramid
The value in these models, graphs and illustrations come in handy during the latter half of the book.
The value of The Experience Economy
It’s worth noting that Pine & Gilmore are not one hit wonders. They’ve also published other influential works such as Authenticity, Markets of One, and Mass Customization.
However, The Experience Economy remains their breakthrough work and is well worth the investment.
Event Architecture provides unique structures that help brands make unforgettable experiences for their customers. To discover how we can help you attract more buyers, contact us here or give Event Architecture a call at 972-301-7713.