A View from Blue Grotto

Thursday, January 04, 2007

The experience economy

I just came across an article from the July-August 1998 Harvard Business Review that seemed to prove timely even now – Welcome to the Experience Economy by B. Joseph Pine and James Gilmore. And even though eight years ago feels like a lifetime in the context of 24-hour news, text messaging and Tivo, I clipped it way back then because their topic – creating value by creating an experience for the customer, not just by simply providing a service or product – seemed so cutting edge.

In the article, Pine and Gilmore discuss the evolution of economies as moving from distinct products and services to a business climate that demands more than widgets. They claimed the “next competitive battleground lies in staging experiences.” Walt Disney aside (he may have been the original purveyor of experiences for sale), their examples would appear today to be obvious: Niketown, Cabella’s, the Hard Rock Café – all offer activities, displays and interactive opportunities during the shopping/eating excursion.

Now, eight-years later nearly everything feels like an experience. I wonder if the authors realized how prophetic their research would prove to be. Pine and Gilmore took up eight and a half pages of HBR, with charts and graphs to boot, to academically outline the progression of this new experience economy of which I am not capable of a full translation.

But as I read through it again, I was struck by one of the call out quotes: “Companies should think about what they would do differently if they charged admission.”

Two relatively simple observations from the authors: 1) You don’t have to develop your own theme park to convey a sense of experience {“…when a Rainforest Café host declares, ‘Your adventure is about to begin,’ it sets the stage for something special.”}, and 2) The challenge of ensuring the integrity or consistency of the customer experience.

We work with Blue Grotto clients to document their best practices. Documentation interviews allow our clients to better gauge things that may not be obvious to management – the nuanced information as we like to call it. Anecdotal research often offers a more realistic reflection of what is and isn’t working. A dialogue with customers, employees, partners, even people in the communities you operate in gives you a better foundation of what’s needed to inspire, excite and support those who are vital to your purpose.

Email me with examples of how your company has generated value by making your business more than just a transaction. And I will scour my collection of past issues of HBR for equally interesting ‘research.’

Yvonne Hundshamer
President, Blue Grotto Inc.