The Experience Economy, Updated Edition

So ask yourself, What ing word is being most neglected within our enterprise? Once you identify the opportunity, make it your focus for creating an engaging experience for your customers.

Whereas commodities are fungible, goods tangible, and services intangible, experiences are memorable.

Finally, whereas commodities are natural, goods standardized, services customized, and experiences inherently personal, transformations are individual

Economic offering
Commodities
Goods
Services
Experiences
Transformations

Nature of offering
Fungible
Tangible
Intangible
Memorable
Effectual

igure 9-1: Completing the Progression of Economic Value

Bank tellers, insurance agents, and real estate brokers engage in theatre when they explain terms and conditions.

n the emerging Experience Economy, any work observed directly by a customer must be recognized within the dramatic structure of the performance as an act of theatre

One example should suffice to demonstrate customer suspense. Before Continental Airlines united with United Airlines, premier Continental flyers (those who traveled fifty thousand miles or sixty segments per year) received an elaborately packaged kit containing priority baggage check tags, upgrade coupons, a frequent flyer program guide, and other incidental reference material. The first year customers received this unadvertised package, they were indeed pleasantly surprised. In year two, Continental may have managed to surprise a few customers (those who forgot the previous package). But for Continental's consistently high-traveling customers, after three, four, or five years of receiving the same old kit … well, they not only came to expect it, they considered it a ho-hum occasion. Now suppose that Continental had cleverly changed the contents each year, one year adding a humorous letter from the CEO (à la Warren Buffet's annual stockholder letters), the next, a gift gleaned from knowledge about the past year's travel (for instance, a subscription to some magazine, a free dinner at a restaurant in the frequent destination city

To truly differentiate themselves, businesses must focus first on increasing customer satisfaction, then on eliminating customer sacrifice, and finally on creating customer surprise