The Experience Economy / Beyond Goods and Services

You Are What You Charge For

-An event created just to increase customer preference for commoditized goods services that a company actually sells is NOT an economic offering -Need to charge an admission fee for economic experience (Ex. Safe House in Milwaukee)

Four Realms of Experience: Entertainment

-Customers participate more passively than actively -Connection with event is more absorption than immersion -Watching movie, attending concert

5 Key Experience-Design Principles: Mix In Memorabilia

-Customers purchase memorabilia as a physical reminder of an experience -Disney: Insane popcorn holders, Avenger's hand cast drink holder, roller coaster pics

Four Realms of Experience

-Entertainment -Educational -Esthetic -Escapist

5 Key Experience-Design Principles: Harmonize Impressions With Positive Cues

-Experience must be rendered with indelible impressions, or takeaways, of the experience to fulfill the theme (Ex. "Tomorrow Land" has metal palm trees that mechanically open up to provide shade, curl up at night to add light)

Progression of Economic Value: A Sixth Offering?

-Go beyond the experience to make a transformation: guide customers to change -London Business school, psychiatrists

FOMO

-Increase in spending in "experiences" especially for millennials -Social media shows other people doing cool things

Four Realms of Experience: Esthetic

-Minimizes customers' active participation -Customer immersed in activity or environment but have little or no effect on it -Tourist who views Grand Canyon, visitor to an art gallery

Progression of Economic Value: Make Goods

-Packaging things together -Increasing from undifferentiated and is different from other competitors -Can charge more (Ex. Pork with veggies on the sides, books)

5 Key Experience-Design Principles: Engage All Five Senses

-Sensory stimulants that accompany an experience should support / enhance the theme -Disney's Main Street: you can smell the candy shop by holes in the walls that pump out smells

Four Realms of Experience: Escapist

-Teach just as well as educational events / amuse just as well as entertainment, but involve greater customer immersion -Immersion and active participation -Acting in play, playing in orchestra, descending grand canyon

Four Realms of Experience: Educational

-Tend to involve more active participation -Customers are still more outside the event than immersed in the action -Attending class, taking ski lesson

5 Key Experience-Design Principles: Theme the Experience

-Theming provides customers with expectations -Poor or no theme gives customers nothing around which to organize the impressions they encounter (Ex. Safe House in Milwaukee)

Progression of Economic Value: Order

1. Extract Commodities 2. Make Goods 3. Deliver Services 4. Stage Experiences 5. Guide Transformations

5 Key Experience-Design Principles

1. Theme the experience 2. Harmonize impressions with positive cue 3. Eliminate negative cues 4. Mix in memorabilia 5. Engage in all five senses

5 Key Experience-Design Principles: Eliminate Negative Cues

Experience stagers must eliminate or disguise anything that diminishes / contradicts / distracts from theme (Ex. Disney disguises trash cans)

Progression of Economic Value: Deliver Services

Going to a restaurant (We can cook on our own, but we have someone else do it)

Progression of Economic Value: Stage Experiences

Keep differentiating yourself from competitors and able to charge a premium for it (Milkshake emporium)

Progression of Economic Value: Extract Commodities

Utilitarian-type products (fuel, wood)