When we enter the so-called Experience Economy, you appeal to emotions. Experiences are inherently personal and only exist in our own internal, subjective, mental universe, not in the outside world. And the tool for addressing the personal mental self and appealing to emotions is story-telling. People have always told stories. I think that emotions have been important for a long time. But the massive impact in our lives is of the last decades. I think we increasingly want to be addressed emotionally. I think it’s because we increasingly want to define ourselves by having unique stories.Being a factory worker from Rotterdam used to be a perfectly fine identity. Today it is increasingly about consumption and biography. Today you can be a hip-hopping business professor that likes Prada. Pick your tribes. It creates your story. It makes you authentic; it makes you differ from ‘the rest’.
But the idea of authenticity has come in an age in which ‘makeability’ is also a conviction. So you have to be able to fabricate, more or less, authenticity. I think it’s a brainteaser, because how can you be real as a product? How can you propose yourself as a made identity and be perceived as real. How do you become perceived as real when people have become critical at what they see and buy. A phony story is easily detected. The story that is being told has to be authentic, real and fit the product. And as a company you’ll have to breathe the story and you’ll have to truly want to breathe the story naturally.
The odour of Chanel number five does not increase the chances you will marry a rich man. But the stories are clearly related. They’re related because of the packaging, because of the store, because of the history of the thing. But if the odour actually repelled attractive men, if it didn’t give you self-confidence, then it wouldn’t work. So the stories must be intertwined to the extent that they support each other.
I think that existing products and services are good enough as they are and leave little room for improvement. Additionally, people want to ‘create’ their own unique selves and have critical of attitude towards commercial messages. I think telling real and authentic stories is a powerful tool for addressing the individual. These stories are about being different, not being better.
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Stefan, very intersting. I do certainly believe that experiences are a key aspect of how we value stuff and are thereby an important aspect in allocating your time, money and energy towards certain products and services. I doubt that the it is the dominant parameter and therefor still dislike the phrase ‘experience economy’. Maybe we get more intelligent (from both consumers as well as producer) perspective on how to influence experiences, maybe we want more or better experiences… but that still doesn’t change the paradigm of the economy?!
What do you mean by a ‘real story’… Walt Disney is ‘not real’ but is telling great stories etc… How important is real? The current hip-hop albums are hard to be called real… more real-fake =) So what is real and what is authentic? Original, genuine, historically rooted?
Can a brand ever be authentic… when its origins is about making money and seducing to buy their goods over those of a competitor?
I agree with your disliking of the phrase ‘experience economy’ for the reason I think experiences are luxurious accessories and not replacing ‘ordinary’ product. I do however think that all products are related to stories. I think people create stories with everything they experience and that all the little stories in our head help us define and understand the world. Even a random chair has a story. Not a very interesting one, but it tells me a small story about the owner. The more connection I make with a story, the more experience I derive from that story. I think people and manufacturers are understanding that and it becomes a tendency. Services didn’t replace goods, nor will experiences replace services.
Additionally , the products we consume already all seem to work perfectly fine, everything is being copied and there is little space for further improvement. But with the abundance of choice this has created, people also have something to choice and more and more choosing means defining yourself, so choice becomes important. And with that, authenticity kick in. The word “real” was badly chosen, I didn’t want to contradict Pine’s matrix of FAKE-REAL. “Genuine” would of been a better choice, for I think “back-in-the-box-thinking” suits this time better.
I also wonder about whether a brand can be authentic as “makeability” is also of our time, but I do think that a story like the one of Chanel No.5 can be perceived as relatively genuine. All the elements of that story seems to fit together.
In my opinion the ‘experiences around a product or service’ you describe or the stories around it, are not experience economy at all. I believe that the experience economy (and that phrase should only then be used) is an economy in which people pay for an experience (and that is the only thing they’re paying for). So, if a manufacturer creates a story around his product, that is not the experience economy. They customers still pay for the product. Best example of something that is experience economy I think is Disney Land. People pay an entrance fee to have an experience. They wonder around in the park and pay to be able to spend their time there (for everything else: from the drinks to the food, to the merchandise they pay extra. Meaning: they pay additionally if they want to buy a product). This new market to make money of people spending their time with you is not new, in our sense of new. The first Disney park opened in the fifties. But compared to how long a market for products is around it is relatively new.
I also don’t think that telling stories around products is new. Even before talked about something like ‘marketing’, people told each other stories to share that a product they bought was good: “the bread of baker Johnson is the most delicious bread ever, it tastes just like my mum used to make it”. That is a story as well. But…in the heyday of marketing it was believed that you could sell anything as long as the story was good. I think that because of the transparency of the internet that no longer works. If your product sucks, the story will not ’save it, because consumers will share their ‘bad experiences’ with it more rapidly then the manufacturer can come up with an explanation. So you have to be authentic. I’m not so sure what that has to do with ‘choices’?
Paying for an experience is The economy of experiences but that doesn’t make an experience economy.
Okay, but by that analogy you could also say it’s an economy of products or services? Does it have to be the dominant economic offering for it to be called a …. economy?
I would say yes… maybe not perse dominant in volume, but surely important as a driver. Services have indeed grown bigger than materials distributed… so it is a service economy. I see an experience as a service and not as a leading item of the current economy.
And do you think it will never become a leading item?
Indeed, I don’t think it will ever become a leading item. For two reasons:
- An economy is created by supply and demand. I find this very hard to connect to ‘an experience’ other than a staged experience, like theater.
- Ofcourse items like trust, authenticity, glamour, status etc ect will become more and more important… but I doubt that the ‘experience’ is what differs this economy from any other economy. A service economy is different from a material economy for many reasons… weightless, instant, virtual etc… but how is an experience significantly different from a service?
If the experience economy is exclusively about experiences en excludes tangible products, what would this story be:
A dinner in a room with large video-screens. As you enter the room that look like a room in a submarine. You are welcomed by the ‘crew’ and shown to your seats. Through the video-screens you see the harbor. As you sit down you hear the distant sound of the ship’s horn and as you meal is served, the video displays the increasingly distant harbor and finally dives underwater, changing thbe light into more blueish…. you look at you plate and there is a fish. Now, is this within the so-called experience economy or did the fish just ruin it?
It’s not just the fish that ruined it
For me this is a service, called restaurant. The restaurant has a certain image, quality, menu and theme which might make it more unique and therefor it can ask a higher price. All those aspects are part of the experience… so it maybe is a good service they provide… and experience is a part of that.
Maybe, just maybe, you could look at it like this:
THE SERVICE IS THE PRODUCER PERSPECTIVE (PUSH), THE EXPERIENCE IS ON THE OTHER SIDE - THE CONSUMER ( THE PULL). So maybe experience economy than accounts for a service-economy from the consumers point of view?
Some say the experience is the customization of the service, as is the service the customization of the product. However, the experience is still very mass customized. I just wonder what will happen if mass customization and personalization will become increasingly important how will the service economy ‘react’ to that. If the experience is the consumers perspective on the service economy it might become more important.
Supply and demand is what a customer is willing to pay for something. So if the experience distinguishes itself and people are willing to pay for it…aren’t we moving from push to pull anyway?
I don’t think so. People are now paying far more for hygiene than 50 years ago (toothbrushes, washing machines etc) - just an example- and we are not calling it a Hygiene-economy. Ofcourse experience will be more important in the Product-plus, but what you pay for the experience still has to so with its uniqueness (supply vs demand. I don’t see a shift in the economic-paradigm/ model… just a shift in how we allocate our time, money and energy.
Just a minor addition: Only a free market is a true economy where supply and demand really count. When a market is regulated the products or services are just that; the (user) experience doesn’t matter that much. Only if it’s for the good of the producer the (user) experience may be something to keep in mind.
When a market is truly free the (user) experience of the product or service is something with which a producer can outplay a competitor and users can distinguish themselves with. So, couldn’t we speak in general of both service AND experience? Although experience will always be something ’subjective’. But, shouldn’t subjectivity matter all the time? :-)
(As usual a lot of dicussions depend on definitions. And as a matter of fact, definitions used in daily language come partly from experience. Than again, what is the definition of experience? :-) And, and, and…)
(with the risk of adding to the confusion, and sounding like an expert on the subject of economy (which I’m not), I’m adding the following statement)
I think we can call it an experience economy (as opposed to e.g. a planned economy or a feudal economy), because experiences become the dominant factor. Especially because of the transparency the Internet creates, the experience (or the hype in some cases) is a very relevant factor. Take for example the launch of the iPhone or the first day/week/year trading of Google-stock. The actual product is necessary but insufficient in accounting for the total value.
In this day and age everything is talked about (positively and negatively) regardless of the marketing around it. Consequently, the storytelling around a product adds to the authenticity of the product. And the companies that know how to ’spin’ this storytelling are the true leaders of the experience economy.