Experience Economy, Economy Of Experiences, Or..


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A couple of days ago Joe Pine tweeted on how the new European Union needed ‚my’ (and your) help on the Public Consultation about the Experience Economy” as an emerging industry.


What triggered me most was the last two words: emerging industry”. Since when did a platform of thoughts develop into an emerging industry, other than the army of consultants that make money with it? Or to put it differently: aren’t all industries, in all parts of the world, involved in the co-creation of experiences with their Customers and other stakeholders? The EU seems to think differently though, and unfortunately she is not alone.

Digging more deeply revealed more of how the EU currently defines the Experience Economy”. In this document, referred to as a reference document on the website of the Public Consultation, they define Experience Industries as the combination of six sub-sectors: Accommodation and tours, Food and drink, Gambling, Museums and parks, Sports and leisure, and Arts.

Of course there is nothing wrong with the EU wanting to support and bring together all kinds of stakeholders to develop an (infra)structure to stimulate the advancement of economic sub-sectors that show similar characteristics. Whether it makes sense to do this for these sub-sectors is not the topic of this post.

Customer Experience Thinking

But its question does bring me to discuss the different kind of viewpoints on Customer Experience (Management)” and try to spark some debate around them, since I believe the prevailing opinion(s) on the topic have some (significant) room for improvement.

Without trying or claiming to be academic about this and likely not complete either, I believe there are roughly three dominant lines of thought with regard to Customer Experiences:

  1. First there is the original line of thought from Pine and Gilmore that believes we have evolved (and need to evolve) from simply providing value through producing products to providing value by delivering experiences that are distinctive (their thoughts have evolved since). This line of thought thinks of The Experience Economy” as a level of maturity, much in line with Maslow’s pyramid. Some have taken it a step further claiming that entertainment is the key differentiator. This is probably the dominant line of thought within the EU departments.
  2. The second line of thought evolves around staging (or designing) experiences” that are meaningful, authentic and/or ‚wow-ing’. This line of thought strongly believes that experiences can and should be designed – with intent of (positive) emotions to be generated – in detail. The peak-end rule is one of the well-known aspects of this ‚school’.
  3. Thirdly there is a line of thought that focuses on the role of the Customer in the process of value (co-)creation. Some even include the notion that Customers completely create their own experiences. This line of thought seems to be less bothered with the actual value created and more drawn to the HOW value is co-created. One of the major arteries of thought in this line is the practice of Mass-Customization which relates to the personalization of experiences.

And of course the lines between these three are blurred or strangled when practices by both scholars and practitioners.

Or economy of experiences?

In their book Economy of Experiences” Boswijk, Peelen and Olthof seem to take a hybrid point of view, with elements of all three lines of thought, in which staging of entertaining experiences” has evolved into the (intentional) creation of emotionally engaging, thematized and meaningful stories or experiences with Customers. Where ‚meaningful’ is interpreted as ‚adding (life-changing) meaning’ to their lives and where ‚with Customers’ is mainly used in a context of designing value-propositions together with Customers or improvement thereof based on their input/feedback. (Even if you do not fully agree with the point of view of Boswijk, Peelen and Olthof, like me, you should read the book, for it provides a good overview of the development of Customer Experience thinking and carries some excellent contemporary use-cases and case-studies. And you obviously already know my view on its limitations since you have come this far on my post already;)

I’m of the opinion that all three dominant lines if thinking have great ideas and methods to offer, yet they all seem to concentrate (too much, imho) on the upper part of Maslow’s pyramid and on the emotions evoked by or during the Customer’s experience.

So, what are these limitations, besides the obvious shortsighted scoping in six economic sub-sectors like I already made clear above, I see in the current thinking on Customer Experience Management and/or Economy of Experiences?

Where’s the functional job?

My main caveat is the absence of thinking about functional jobs-to-be-done the Customer hires your product or service for. With a focus on more hedonistic, sensory and emotional outcomes, it appears as if Customer Experience is something separate from fulfilling functional needs and associated desired outcomes. And this whilst most Customer’s frustrations seem to find their source in the inability to meet their functional goals of getting things done.

As a consequence of this omission many professionals (and consultants alike) taking cues from Customer Experience thinking are trying to improve or build Customer experiences by adding wow-ing features or characteristics. Also marketeers seem to focus their engagement strategies on the creation of entertaining experiences that are likeable or relate to some kind of general good cause” or symbol of authenticity”. This in an attempt to draw attention, appeal to an emerging ‚need’ for so-called shared values and by doing so drive vitality of their stories”. The result? Everyone is trying to satisfy hedonistic outcomes by adding and experience layer to the product or service, whilst most of the Customer’s experience lies in using the product (or service). In fact I believe we are creating the next level of commoditized products and services.

Biased assumptions?

Secondly I believe the above lines of thinking tend to pre-fill the needs Customers have, thus adding to the large base of assumptions and biases around Customer’s needs. By doing so it may look like there is no further need for companies to do proper research, or that it can be replaced my involving (emerging) Customers in the design process. Both are dangerous thoughts in my humble opinion, but unfortunately main-stream in my experience (if only for reasons not to have to spend a lot of money on research).

Top of the Pyramid only?

Another downside of the dominant line of thinking is that it might lead to the understanding that Customer Experience thinking is not useful in economies in which most consumers are still struggling to satisfy needs at the bottom of the pyramid, whilst there are plenty of cases proving the opposite.

Waste generating

Last but not least I believe this additive” line of thinking is resulting in complexity and waste for both Customer and company. Adding memorable, entertaining, compelling and meaningful experiences could be important elements for specific Customers and industries, but it’s hardly applicable to all Customers for all products. Most of the times making things easy to find, compare and buy is the best way to go and requires reducing layers and complexity, not adding to the clutter.

To conclude

All in all I think the limitative prevailing opinion of what Customer Experience is about, and where it is evolving to, is ignoring opportunities for companies to really develop a differentiating offering, a compelling service and profit generating experience that helps Customers get their jobs done in a way that she can live the life she wants, not the one you think she needs or wants.

A promise

I think the third line of thought “experience co-creation” holds the greatest promise, although it should make a more conscious effort to evolve thinking of co-creation in line with the Service Dominant Logic view on value co-creation. “Secondly it should stay away as far as it possibly can from maslow’s hierarchy of needs thinking and integrate the jobs-to-be-done framework/thinking and practice to avoid making easily misunderstood assumptions about Customer needs in the age of the “Consumernet of Things“. This should also help Customer Experience thinking to let go of the touch-point and channel centric approach. Although that could be a topic for an entire post in itself, and since I’ve already exceeded the six minute reading time, I will not elaborate further.

Experience Economy, Economy of Experiences, or…? Let me know what you think?

Republished with author's permission from original post.


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