In the Experience Economy, Participation Trumps Service Interactions

1
668 views

Share on LinkedIn

There are two strategies to ensure success in the experience economy. First, understand how it differs from the commodity, production, and service economies. Second, understand how customers value their time.

Unlike the manufacturing and service economies, in the experience economy spending time is more important than spending money. Time is the real scarcity in life because everyone, rich or poor, only has 24 hours in each day. So, the customer’s perceived value of time spent is a critical benchmark for the value proposition of your offerings.

These Photos by Unknown Authors are licensed under CC BY-SA

How customers value time differentiates a service from an experience. Consumers want time spent in a service to be as short as possible; it is a low-value engagement. They want a service to be reliable and efficient to get the job done in as short of time as possible and to achieve a reliable result. They prefer no unpleasant encounters along the way that could result in distraction or dissatisfaction. Hence, companies in the service industry expend great energy trying to avoid unpleasantness in their encounters with customers.

In contrast, an experience is not something a participant wants to rush through. Rather, they want to extend and savor the time spent in an experience. It is highly valued time worth a great deal to the participant.

These Photos by Unknown Authors are licensed under CC BY

Service Interactions vs. Experiences

Service interactions cannot rise to the level of the gratifying experiences and transformations that characterize participation in the experience economy. Interactional sociology and recent discoveries about human behavior from positive psychology inform us of this. The dynamics of interaction associated with receiving a service versus participating in an experience or transformational engagement are fundamentally different. Why is this?

In his new book, The Age of Experiences, historian Benjamin Hunnicutt introduces the concept of Intrinsically Motivated Productive Consumption (IMPC) (Hunnicutt, 2020) for which one is not paid. The value in IMPC resides in the rewards and emotive memories that intrinsically motivated participation in experiences provides. For example, a sailor will gladly pay someone to scrape and refinish his boat. The scraping and painting of the boat is productive work, but not so intrinsically motivating. It is a service wherein someone is doing something for another person. People must be paid to do it, an external versus an internal reward system provides the motivation.

This same sailor would never think of paying someone to captain the boat. He engages in IMPC, a valued use of time, treasured when there is an opportunity to engage in it and sometimes resulting in a memorable experience or a personal transformation. The individual who scraped and painted the boat is providing a service for which he was paid, but he did not have IMPC. The sailor did.

The astute observer can find many similar situations and realize that time spent in experiences and transformations is more valued than time spent in receiving services.

Intrinsically Motivated Productive Consumption

This concept is at the heart of the experience and transformation economies. How to support and be a catalyst for IMPC are the keys to business success.

The social psychology underlying experiences and transformations that characterize the experience economy deliver IMPC. Research in positive psychology has discovered key principles for the design of successful experience products that attract participants. They include active participation (having control of outcome), intrinsic motivation, personal growth (improving one’s future), self-actualization, plus meaning and purpose.

Personal gratifications and memories derived from engaging experiences require that participants “do something”, to be the cause of an act. This point is made clearer when one moves up to transformational experiences. In these experiences, the participant changes in some way. These are not necessarily “come to Jesus” changes, but the individual has grown, they are different in some way. This is only possible through an investment of self. For example, a piano student learns to play minor chords and now knows them in addition to playing major chords. They have been transformed in their piano playing ability.

The experience economy consists of intentional, engaged experiences and transformations. Much to the chagrin of businesses, good experiences and transformations can often be organized by individuals thereby transforming them to “prosumers”, i.e. producers of their own experiences rather than consumers.

These Photos by Unknown Authors are licensed under CC BY-SA

However, there are still many business opportunities once you realize your role in supporting these experiences and transformation engagements.

Woodworking, one of my favorite experiences, is a good example. This is something I do myself; that is the whole point. Lowe’s and Home Depot sell many different products and offer classes to woodworkers. A more upscale provider is Rockler who sells high-quality tools, exotic woods, and provides classes on many woodworking skills and techniques. Their business model is designed to support the woodworking experience, not so much to provide it. They understand and support prosumer woodworkers. Their business plan is well advised by understanding the experiences and satisfaction of woodworking and the outcomes woodworkers are seeking.

These Photos by Unknown Authors are licensed under CC BY-NC

Williams and Sonoma operate a similar enterprise supporting cooking and baking. They supply high-quality cookware, unusual and high-quality ingredients, and other housewares associated with cooking and baking. They provide support to prosumers of cooking and baking by helping people prepare higher quality meals at home. Again, their business model is enhanced by understanding the cooking experience and meaningful transformations (i.e. sought-after cooking skills) for home cooks. Mastering the preparation of Beef Wellington or a souffle are indeed high-end demonstrations of one’s cooking acumen.

These Photos by Unknown Authors are licensed under CC BY

Examples of this phenomena are replete and include gardening, making beer or wine, a variety of arts and crafts, etc. Prosumers create and sustain their own experiences. They do not need you to do this for them. But they consume many products you can provide them in their pursuit of these experiences and transformations.

If you want to successfully participate in the experience economy, focus on areas where customers value spending their time, intentional, engaged experiences and transformations. Consider that they are most likely prosumers, not consumers. As such, your potential customers are probably engaging in intrinsically motivating productive experiences (IMPC) that they self-organize.

Your sales opportunities are enhanced by understanding the products that enable prosumers in most engagements; high quality readily available supplies, instructions that develop and transform their skills, and opportunities to meet and interact with others who share their interest. Once you understand this, you can develop more sales opportunities to sustain prosumers.

1 COMMENT

  1. Great post, Bob! I love how you bring together your work in Designing Experiences with Ben Hunnicutt’s work in The Age of Experiences.

    Time is the absolute key! So companies must become designers of time.

LEAVE A REPLY

Please enter your comment!
Please enter your name here