The Experience Economy
By B. Joseph Pine II and James H. Gilmore
*A Book Review*
by Michael C. Gray
© 2021 by Michael C. Gray
How can your business avoid the trap of commoditization? Why will customers pay more to do business with some companies or buy certain products instead of others?
Authors Joseph Pine II and James Gilmore suggest one reason is because customers perceive they get a better experience with preferred products and companies.
According to the authors, companies should adopt the model of theater. The experience offered should be so good, customers would be glad to pay an admission fee. For example, people pay admission to the Renaissance Fair and Gilroy Garlic Festival basically for access to an outdoor shopping mall. The authors suggest if customers paid an admission or membership fee to a restaurant, the menu items could have lower prices that are more appealing. "You are what you charge for." By charging a separate fee for an experience, you can highlight its value.
Businesses should strive to avoid negative cues, frustrating experiences where customers find it difficult to do business with them, and strive to promote positive cues, pleasurable experiences where customers want to come back again and again, and tell their friends and family.
One way to create a memorable experience is using a theme, like the Rainforest Café, American Girl stores and the Hard Rock Café.
Businesses should also strive to provide their customers with pleasant surprises, creating good memories and not just goods and services.
Creating this theatrical experience requires training employees so they buy into the idea. They need to view their roles differently. Employees become a cast. Responsibilities become roles. Representations become characterizations. Organizations become ensembles.
Although scripts are helpful, employees need to be able to adapt to situations like street theater performers (flexible scripting).
Ultimately, customers are seeking a transformation from their transaction. Patients want to transform from being sick to being well. Customers for cosmetics and cosmetic surgery want to transform to a more confident and attractive appearance.
The book includes many examples and case studies.
If you want your customers to return to your business again and again and for employees to have more fun at work, get a copy of The Experience Economy and apply the ideas in your own business or job.
Buy it online at Amazon.com: The Experience Economy, Updated Edition
.
For our new reviews of business and self-improvement books, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight!
.
Home
Business Building Blog
Introduction
Seven Habits
Business Improvement
Book Reviews
Need Help?
Links