If you’ve been following the buzz in marketing strategy lately, you might have heard of what experts have coined The Experience Economy, but what exactly does it mean? Keep reading as we walk through the basic idea of the Experience Economy.
Most of us are familiar with the traditional progression of our economy: long ago we began with an Agrarian Economy which progressed into an Industrial Economy, where we began packaging resources and selling goods. When that market saturated we progressed into the Service Economy, which is where we’ve been for the past few decades. The service economy was the next natural step once companies could no longer compete simply with selling goods. Not only did new services develop but we began packaging traditional goods as services. Well now we are maturing as a service economy, and economists are hypothesizing that we are progressing into a new era: The Experience Economy.
The progression of value is as follows: We extract commodities, we make goods, we deliver services and now we’re staging experiences. Thus, the staged experience is the most differentiated offering and with that comes the sought after premium pricing.
Looking at the quadrant above we can see the four basic types of experiences.
Entertainment: The entertainment experience is the “original” experience economy. Guests absorb the staged experience with passive engagement.
Examples: Concert, Symphony, Live Reading
Educational/Edutainment: Similarly to the entertainment experience, the audience or students, if you will, in an educational experience absorb the experience unfolding before them. But unlike in an entertainment experience there is an educational component. Thus, “Edu-tainment” involves the active participation of the audience. Our customers are there to learn something new while being entertained.
Examples: Vineyard tour, Writing Workshop, Cooking Class
Esthetic: In the esthetic experience participants are immersed but not actively participating. They soak in their environment through their five sense but leave it untouched.
Examples: Grand Canyon Visit, Art Museum, a Café in Old World Venice.
Escapist: Guests of an escapist experience are completely immersed and actively participating in the experience. They are transported to a different reality, a far away world or living the story as it unfolds in front of them.
Examples: Paintball War, Video Game, Murder Mystery Dinner
The entertainment guests go to enjoy, the educationalists go to learn, the escapists want to go and do, and the esthetics just want to be. There are many ways for the small business to up their game by including experiential components with their normal offerings. Own a winery? Host a tour or live music! Run a restaurant? Invite your guests to be a guest chef for one evening. We encourage creativity, but as always it comes with the same disclaimer: Stay on brand!
How would your business change if you thought of it as an experience? Call us for a complimentary consultation, let’s talk experience!