1 / 17

The Experience Economy

The Experience Economy. Lecture #2. Review From Last Lecture: Four types of Economic Offering. Commodity Goods Service Experience. Very low profit margins (Barrels of oil) Moderate profit margins (Self-service gas pump) Good profit margins (Full service gas station)

emily-sparks
Download Presentation

The Experience Economy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Experience Economy Lecture #2

  2. Review From Last Lecture:Four types of Economic Offering • Commodity • Goods • Service • Experience • Very low profit margins (Barrels of oil) • Moderate profit margins (Self-service gas pump) • Good profit margins (Full service gas station) • Great profit margins (Nascar pit stop with Earnhardt & crew)

  3. Review From Last Lecture:Four types of Economic Offering • Commodity • Goods • Service • Experience • Very low profit margins (low-cost running shoes) • Moderate profit margins (Nike Running Shoes) • Good profit margins (Max Sports Wear—Ask a podiatrist to fit you with the best for you) • Great profit margins (Running Camp)

  4. Commodities • Commodities are fungible materials (traditionally thought of as being extracted from the physical world) • Traditional Examples: • Iron ore, Corn, Coffee beans, Beef (cattle), etc. • Modern Examples: • Milk, Nails, PCs?

  5. A Lesson in Market Pressures • The market is constantly pushing your offerings toward the commodity end of the economic offerings scale. Example: • Early 1980s: PCs were an experience • Late 1980s: Getting a PC was a service (smart guys had to help you) • 1990s: PCs were a good (still differentiable, but you didn’t need help) • Now: PCs are a commodity (low price decisions)

  6. Service • When you customize a good, you turn it into a service • How would you customize vitamin pills?

  7. Another Example:Four types of Economic Offering • Commodity • Goods • Service • Experience • Very low profit margins (Vitamin Pills) • Moderate profit margins (GNC Organic Vitamins) • Good profit margins (GNC Customized Packs) • Great profit margins (Health Fare with different stations/exhibits to encourage and customize health care for you)

  8. Experiences • When you engage a customer in a memorable way, you turn a service into an experience • Memorable way means: The memory becomes the PRIMARY reason the customer buys.

  9. More ExamplesFour types of Economic Offering • Commodity • Goods • Service • Experience • Very low profit margins (Silicon & copper) • Moderate profit margins (Integrated Circuit Chips) • Good profit margins (EE Design Services) • Great profit margins (Science Fiction World)

  10. Staging the Experience • Four types: Improv, Platform, Matching & Street • Here’s the key: “Staging experiences is not about entertaining customers; • It’s about engaging them” • What does it mean to engage a customer? • See Figure 2-1 in your book

  11. Engaging the Customer • One dimension: Guest participation • Passive: do not affect performance. Example: Symphony audience • Active: Affect performance. Example: LAN Arena • Another dimension: Kind of Connection/ Environmental Relationship • Absorption: Full mental focus. Example: watching TV • Immersion: Physical involvement. Example: playing a game of soccer, virtual reality game, … • Is it true that the more the customer is engaged, the more money s/he will pay for what you offer?

  12. More on Engaging the Customer • The richest experiences will: • Will be passive: Engaging the person’s mind • Also, they will be active: They will be affecting the outcome of the experience. • Also, they will be absorbing: Occupying the full mental focus of the customer • Also, they will be immersion experiences: Involving the person physically • Is this starting to sound challenging? • How do you do this with your company’s products/services?

  13. Where do you Start? • You start by envisioning a theme. • Theme for selling nails? • Theme for selling paint? • Theme for selling IT services? • The theme will give a framework for “inging” the thing. • It’s not paint, it’s getting you and the customer to focus on the painting experience. • It’s not IT services, it’s getting the customer to focus on ???

  14. The theme for your internal IT customer experience • It’s not IT services, it’s getting the customer to focus on ??? • the business experience!!! • Now, how do you do that? • (hint: see: IT Alignment & IT Governance)

  15. Some thoughts • Packaging (customizing it for an individual consumer) a commodity automatically turns it into a good. • Customizing a good automatically turns it into a service. • Customizing a service automatically turns it into an experience.

  16. Is Choice a Good Thing? • “Customers don’t want choice, they just want exactly what they want.”

  17. A Place to Start Looking • “Less customer sacrifice turns an ordinary service into a memorable event.” • In what ways are your customers having to sacrifice when they buy your services? • Network installations • New application rollouts • Restaurant experience?

More Related