The Experience Economy

1. The Experience Economy Lecture Notes By Richard L. Routh, Ph.D.

2. The Four Types of Economic Offerings • Very low profit margins (coffee beans) • Moderate profit margins (ground and packaged coffee) • Good profit margins (Coffee at the corner diner) • Great profit margins (coffee in venice) • Commodity • Goods • Service • Experience

3. Bottom Line • Work to move your company’s goods and services into the highest profit margin opportunities as possible. • This means, figure out how to create customer experiences • Experiences are memorable • They are themed • They are staged • Usually have huge IT components behind the scenes • “You are what you charge for” (so don’t be charging for goods or services)

4. Some Examples • Barber Shop/Beauty Parlor • Car Tires • IT services • What else?

5. Various Modes of Theater • Improv: “winging it” in customizing each customer interaction with the company. • Street Theater: The typical sales experience where the stage is never the same, but the salesman must deliver an impressive and entertaining “display” for the customer.

6. Various Modes of Theater • Platform Theater: Formal scripting of customer experience such as fixed-agenda trade shows. • Matching Theater: Integrating the outcomes of work across many disparate business performances. E.g.: flight attendant matches across the various steps in the process of flying: boarding, safety briefing, introduction of in-flight entertainment, food service, landing, & deplaning. • Another example: A sales tracking system matches across time by integrating and connecting different sales calls into one cohesive experience.

7. Steps to Creating an Experience • “ing” the thing • Create a theme • Select a type of theater • Focus on creating a lasting, quality memory • Design and implement the IT necessary to make all the above work and hang together.