Experience economy Experienced brands sell experiences instead of products

THE best brands sell feelings instead of products. Entrepreneurs are creators and curators of experience.

An experience economy is the sale of memorable experiences to customers. The term was first used in a 1998 article by B. Joseph Pine II and James H. Gilmore describing the next economy following the agrarian economy, the industrial economy, and the most recent service economy.

What are you selling to customers? Is it an expertise or an experience?

The entrepreneurial economy is a value-adding economy. Entrepreneurship is essentially about value creation. Business, on the other hand, is about customer creation.

The experience economy can be quantified as the economic value of an experience, which is a psychological process people can go through. The experience economy is often consumed as product or service, or as pure experience product such as sports, and online dating.

A few years ago, I introduced one of our products to a prospective buyer. In his reaction and remarks, I could feel his acceptance of and satisfaction about the product. He said “I would buy this product any amount it is sold wherever I find it.” Experience economy is the sale of feelings. Feelings are captured by emotion, perception and evaluation of consumers. Experienced brands sell memorable experiences to customers instead of products or services.

I love memorable experiences. I would pay any amount to have them. Photographers are the best creators of memorable experiences. Everyone can attest to the positive feelings they get when they are proud of a memory captured by camera. The camera had a price tag. The photographer gave a price tag. The memory has no price tag and keeps appreciating in value. What can you say about an experience with a piece of music you love the most or a video game that keeps you engaged each time you play? This column, Entrepreneurship Rendezvous and others in this newspaper offer an experience economy to readers that transcends the present value. For this singular reason, those who pay for space for advertisements in the newspaper and those who buy newspaper get beyond the value they paid for because the newspaper is not only rich in content, but also offers an experience economy that captures qualitative information from different reliable sources for readers’ enjoyment. It is therefore my observation and submission that, the newspaper is highly subsidized both for the readers and clients who use the platform for happiness and business purposes, respectively. Imagine if Nigerian Tribune decides to capture and commercialise the positive experiences individuals and organisations take with them, how much do you think a copy of the newspaper will be worth?

If makeup artists knew what an experience economy they could capture and commercialise, then they would take their craft beyond art. The same is true for everyone who creates value. Remember, entrepreneurship is about creating value, while business is about creating customers. The creation of value is not the same as the creation of an experience. An experience adds value to a product or service. Brands create experiences! Experiences create customers.

The economic value of an experience is not only of entrepreneurship and business importance, it also matters significantly in other areas. Imagine an experience economy among married couples that captures the feelings associated with love. Many couples have achieved great things with their experience economy at no extra cost beyond the initial marital rites. There is however no romance without finance between married couples. Memorable experiences are products of investment in products and services.

Like married couples, brands should take the position of husbands by spicing up their products and services. In return, the positive emotions and memorable experiences that are spurred as a result of this investment are the brand’s tradable and sustainable products and impacts.

Joseph Pine II and James H. Gilmore argue that businesses must orchestrate memorable events for their customers, and that memory itself becomes the product: the “experience”. More advanced experience businesses can begin charging for the value of the “transformation” that an experience offers, e.g. as education offerings might do if they were able to participate in the value that is created by the educated individual. This, they argue, is a natural progression in the value added by the business over and above its inputs.

Experience economy is created when memorable events are orchestrated around a product or service. There are dynamic experiences in every static product. These experiences are created and curated by entrepreneurs. The memorable experiences that resonate from consuming a product are the fabrics that make up experience economy.

Memorable experiences can be created, captured and communicated through design thinking, product development and service upgrades. The entrepreneurial spirit is essentially for Business Management, Innovation, Newness, Designs, Service, Experience and Transformation (MINDSET). #BUSINESS MINDSET

Management – Service managers are the drivers of service marketing. The thinking of a business manager goes a long way in giving memorable experiences to customers. Brand management is about creating value for customers, while business management is about creating customers. The entrepreneurial mindset drives both value creation and customer creation.

Innovation – Innovation is the application of creative solutions to problems and to opportunities to enhance and to enrich people’s lives. An innovation without a vision is a limitation. Vision makes an innovation dynamic through the provision of sustained and sustainable contents and programs that all together make the experience economy.

Newness – Experience economy is a function of newness and the genuineness of an innovation. Customers want new and genuine experiences.

Designs – Design thinking is the imagination, creation and application of Design Mechanics, Aesthetics and Techniques (MAT) to customer brand engagement to improve their experiences of a product or service. #DESIGN MAT

Service – Artificial intelligence is limited in certain areas of service rendering to customers. Such areas include customer care, empathy, ‘flow’ and ‘smarts’. Flow for instance is a construct for understanding customer’s uniqueness, while smarts is about the instinct to give customers memorable experiences.

Experience – Experience economy is orchestrated by experienced brands. It is the fusion of technology and psychology. The best way to communicate value to customers is to understand their psychology and leverage the right technology for its seamless dissemination.

Transformation—The value of an experience is in the transformation it brings. For instance a digital gamified platform created by a dental outfit to raise an awareness level of the importance of dental health can awake the sub-consciousness of users through a good User Interface/User Experience (UI/UX) design. The performance of behavior is the best metric for customer experience of a product or service.

 

PS: Watch out for my next article titled ’‘Buyology’—the psychology of buying.

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