Nordic Track Book Club Review: The Experience Economy

Its been weeks since I spent quality time on the Nordic Track, but I’d like to think I’m back.  Why is it that when you need to exercise the most you exercise the least?  Anyway, another Nordic Track Book Club Review for you:  The Experience Economy by B. Joseph Pine.  One of those pleasant books that stimulates some thinking, but only a 3-out-of-5-star read.  It took the Work as Theatre model a bit too far in my opinion and I was happy to complete the book and move onto something new.  Below are excerpts I noted while reading though it.


Experiences represent an existing but previously unarticulated genre of economic output.  Decoupling experiences from services in accounting for what businesses create opens up possiblitlies for extraodinary business expansion.  Merely mentioning commoditization sends hivers down the spines of executives and entrepreneurs alike.  Differentiaion disappears, margins fall through the floor, and customers buy solely on the basis of price, price, price.


Experiences are as distinct from services as services are from goods.  Entertainment is only one aspect of an experiences…they engage customers, connecting with them in a personal, memorable way. The coffee bean…from commodities to goods to services and then to experiences.


Services accomplish specific tasks they want done but don’t want to do themselves; goods merely supply the means.  In a services economy, individuals desire service.  Service providers are not wedded to tangible offerings. Manufacturers must focus on the experience customers have while using their goods.  The radar ball displays a kid’s throwing velocity.  Other types of capabilities could measure curves, sliders, height from ground when caught, etc…enhance the customer’s sensory interaction with the product.


“The best things in life are not things.”  Consider the birthday party…Staging experiences is not about entertaining customers, it’s about engaging them.  Escapist experience aspect draws your guests further…focus on what you should encourage guests “to do” if they are to become active participants in the experience.  Eliminate anythng that diminishes, contradicts, or distracts attention from the them…a rule of thumb for spotting bad design: Look for posted instructions.


You are what you charge for.


The history of economic progress consists of charging a fee for what once was free.  If you told returning GI’s after WWII that in the near future typical families would pay someone else to change their oil, make their kid’s birthday cake, mow their yard, and so on, you would have been thought crazy.


The more the customer teaches the company, the better it can provide exactly what he wants–and the more difficult it will be for competitors to lure him away.  Customer sacrifice decreases through number of interactions.  Ritz-Carlton: “we don’t want our customers to ever think about how our product gets there, only that it always IS there.”  Businesses must focus first on increasing customer satisfaction, then on eliminating customer sacrifice, and finally on creating customer surprise.


Work is theatre.  It is not a metaphor but a model.


Thinking about interfaces is thinking too small.  Designing human-computer experience isn’t about building a better desktop.  It’s about creating imaginary worlds that have a special relationship to reality–worlds in which we can extend, amplify, and enrich our own capabilities to think, feel, and act.


How Barb’s position as cafeteria pre-paid card swiper at Univeristy of Pennsylvania cannot be distintermediated, downsized, or automated by some self-serving turnstile.  page 118.


Transformations are individual.  Once the Experience Economy has run its course, the Transformation Economy will take over.  Then the basis of success will be in understanding the aspirations of individual consumers and businesses and guiding them to fully realize those aspirations.


If you charge for stuff, then you are in the commodity business; if for tangible things, the goods business; activities you execute, the service business; for the time customers spend with you, the experience business.  If you charge for the demonstrated outcome the customer achieves, then and only then are you in the transformation business.


 

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A long time developer, I was an early adopter of Linux in the mid-90's for a few years until I entered corporate environments and worked with Microsoft technologies like ASP, then .NET. In 2008 I released Sueetie, an Online Community Platform built in .NET. In late 2012 I returned to my Linux roots and locked in on Java development. Much of my work is available on GitHub.