Home Business and Strategy The Experience Economy

Learn the key ideas of the book by James H. Gilmore , B. Joseph Pine II

The Experience Economy

Including the provision of an experience in company strategy

The Experience Economy was first published in 1999 and since then has been revised several times to incorporate new, contemporary material. Considered a classic in its genre, the book explains the importance of building an experience around goods and services, since it is precisely a company’s capacity to build memorable experiences, which will define its success. In a continually expanding market, experiences reinforce relationships, maintaining potential customer participation and attention levels high. According to the authors, Pine and Gilmore, everything revolves these days around the experience, so this should constitute the main part of every company’s focus, thereby contributing, in the foreseeable future, to the development and affirmation of the so-called “transformation economy”, which is just around the corner.

The Experience Economy
Read in 19 min.
Listen in 23 min.

Many useful tips to:

  • Understand the true meaning of the experience economy.
  • Comprehend how the concept of an experience can be introduced into a business strategy.
  • Reflect on the future of the economy, starting with a thorough analysis of the past and the present.

The author of the book:

James Gilmore is an American actor, renowned speaker and strategic consultant for companies all over the world. Working closely with J. Pine, he founded the consulting company Strategic Horizon, and European Centre for the Experience Economy training centre. He carries out research in the field of experience economy, meaning the ability to build value around economic offers. In his book Authenticity, which he co-wrote with J. Pine, he reflects on what consumers really want. Experiences trump products and services, thus Gilmore’s objective is to broaden people’s horizons, helping companies to adopt a different approach.

Joseph Pine is an independent American economist. A world renowned author, he has written several successful books. The Experience Economy, which he co-wrote with J. Gilmore, is a bestseller that has been translated into over 15 languages. Pine has spoken at many events, including the World Economic Forum and TED Conferences, and he often joins forces with Columbia University’s School of Professional Studies. His partnership with J. Gilmore led him to establish the consulting company, Strategic Horizon, and a training school, the European Centre for the Experience Economy.

IDEA CHIAVE 1/11

What do we mean by experience economy?

We are already inside the experience economy and it took a long evolutionary process to get us here. After all, the principle of any economy is always about supply and demand. However, if in the past the supply and demand process was first linked to the production of durable goods, then products and then services, we now have a new challenge on our hands. What is on offer nowadays has grown a lot and is greater and more varied than demand, which is why companies must find effective methods to attract the attention of potential customers.

The key concept in the experience economy is time. Time is, in fact, a limited resource, as is people’s attention. If a company manages to engage customers, they are more likely to spend time looking at the company’s offers. So a business’ primary goal is to be able to entertain potential customers and hold their attention. How? By creating specific experiences, which convince them that their time has been well spent.

Lego and Disney promise much more than just an object, they represent a value linked to the experience of spending time in a ‘world-setting’.

The best way to understand whether or not an experience works, is to look at the profits. We can use the case of City Walks in Los Angeles as an example; it is a place that brings restaurants, shops, theatres and cinemas together. Customers pay for parking. In Los Angeles, people get around exclusively by car, so they do not find it unusual to pay for a parking space to spend a day shopping, whereas they would find it strange to have to pay an entrance ticket for a simple walk. However, the parking money is then refunded to people who buy products in shops and restaurants in that area. This strategy is simple and effective. The goal is to get people to come in and spend money.

There are many types of experiences that can be created, but all of them must be engaging, interesting and incredible, to be considered a part of the experience economy.

  

The key ideas of "The Experience Economy"

01.
What do we mean by experience economy?
02.
How the service economy has evolved into the experience economy
03.
The main way to involve customers. The four realms of an experience: entertainment, educational, escapist and aesthetic
04.
Successful memorable experiences that have proven to be unforgettable
05.
The importance of giving the experience a theme that involves all five senses
06.
The –ing principle (the ability to turn things into an experience)
07.
The theatre metaphor applied to business: setting the perfect scene to put on a show
08.
How a company attracts the attention of potential customers with theatre
09.
The customer is the product: the economy of the future will be one of transformation
10.
Quotes
11.
Take-home message
 
 
preview.img

Try 4books Premium for free!