Experience Economy: Great Experiences Begin with Great Service -Joe Pine

Joe Pine is an expert in the world of marketing and customer experience. As one of the men who coined the term “experience economy”, he stresses the importance of creating memorable events for customers.  In-Store Customer Experiences These events are meant to elevate the experience and increase the probability of economic exchange. Today, our economy is an experience economy– meaning that events that engage customers in a personal way are the predominant economic offering. It is important to understand that the levels of the economy build on each other. Great experiences begin with great service, and these services are built on goods. The goods are created from raw materials, which is the basis of all of the economy.  The key to success in today’s retail industry is to combine online and in-store experiences. Joe Pine points out: “We only ever transform through the experiences that we have; we are all the product of our experiences”. Anyone can purchase an item online without having to go through the hassle of going to a store. Retailers need to make customers want to come to the store by offering a memorable experience. According to Pine, “experiences are a distinct economic offering, as distinct from services as services are from goods. So many glom onto the language of “customer experience” or “experiential marketing” rather than truly design and stage experience output”. 86% of consumers prefer experience stores.  Makers and manufacturers are leading examples of an experience economy. In an attempt to challenge competitors, Starbucks opened a 15,000 square foot roastery in Seattle. The roastery is an interactive environment where customers can taste handcrafted coffee brewed before their eyes. This is just the beginning of the experience economy revolution. The Starbucks Reserve is an interactive experience for coffee lovers. Retailers compete solely on promotion and price, and they must introduce experiences to succeed. Certain retail stores understand the need to change to thrive in today’s economy. The popular American athleisure brand, Lululemon, is opening pop up shops that offer yoga. Ulta offers waxing, facials, brow bars, and hair salons to enhance the customer experience and attract customers to their store. Nike brings customers into their store by offering training sessions, running clubs, and design labs. Consumers should expect bold and exciting changes to their shopping experience. Read more about click and mortar here. Joe Pine’s take on the experience economy Joe Pine is one of the two people who coined the term “experience economy”. Can you describe the five levels of the economy? There are five distinct economic offerings. The beginning was commodities, the basis of the agrarian economy- the things you pull out of the ground, grow in the ground, raise in the ground -then there were physical goods. Manufacturers used commodities as a raw material to make or manufacture things that were the basis of the industrial economy. Then the latter half of the 20th century shifts into a service economy where services became the predominant economic offering. Today we’re in an experience economy where experiences (which are events that engage each person and inherently personal way and thereby create a memory) are becoming the predominant economic offering. That causes goods and services to be commoditized. Then there is a fifth one above even experiences, and that is as transformations. Transformations use experiences as the raw material to guide people to change to help them achieve their aspiration in some way such as in healthcare, in education and fitness centres and b2b and management consulting. Then the latter half of the 20th century shifts into a service economy where services became the predominant economic offering. Today we’re in an experience economy where experiences (which are events that engage each person and inherently personal way and thereby create a memory) are becoming the predominant economic offering. That causes goods and services to be commoditized. Can you describe how each level builds upon the previous one? So each one of these is built on the previous one. We only ever transform through the experiences that we have; we are all the product of our experiences. Transformations happen through experiences; experiences are built on top of services. If you want a great experience, you need to start with the base of great service that provides the activities that people want. Services are built on top of goods, you think about going to a restaurant in the fact you’ve got tables and chairs and cups and lights and so forth and then goods are built on top of commodities. They’re made out of the raw materials that that come out of the earth. Let ’s take the example of retailers. Are main retailers in the US and worldwide able to move into the experience economy?  Retailers basically have a choice about whether to compete on price and convenience or to compete on experience. If you have a physical store, very quickly it’s becoming the fact that the only reason to go to the store is for the experience. Otherwise, I can buy it off the internet at a lower price with much less of my time being involved, so you need to give a reason for people to come into the store. Retailers need to understand that the experience is the marketing, that the best way to generate demand for the merchandise is through an experience so engaging that people can’t help but come to the stores, spend time with them and then buy the goods basically as memorabilia for the experience that they have. Retailers need to understand that the experience is the marketing, that the best way to generate demand for the merchandise is through an experience so engaging that people can’t help but come to the stores, spend time with them and then buy the goods basically as memorabilia for the experience that they had. What happens if they didn’t manage to move into the experience economy? Not every company has to shift into the experience economy. I think every company can benefit from it, but not every company has to. However, if you don’t then sooner or later you will be commoditized. You’re going to have to live in a commodity environment where you have to automate as much as possible; you have to eliminate labour as much as possible, you have to reduce your prices as much as possible. The better way is to shift up this progression of economic value as I call it, to go beyond commoditize goods and services to staging experiences and perhaps even to guide transformations for each one of your customers. The post Experience Economy: Great Experiences Begin with Great Service -Joe Pine appeared first on Marketing and Innovation.