The Experience Economy
Starting Crafting Experience for Your Brand!
We all pay admissions to get into Disneyland, museums, country parks and even universities. What if I tell you that, in the future, you will be charged a fee for setting foot in a Nike shop or Starbucks? You must find this notion repulsive. But why
We all pay admissions to get into Disneyland, museums, country parks and even universities. What if I tell you that, in the future, you will be charged a fee for setting foot in a Nike shop or Starbucks? You must find this notion repulsive. But why is it that you feel obliged to pay the former group but offended to pay the latter? Is it just because of the very nature of the places (we should pay an admission fee to theme parks but not shopping malls)? Of course not, for we will be more than happy to pay to enter a Nike shop if it will add a Roller Coaster, plant some trees, showcase some wild animals and yes, bring us a world of fantasy. In the end, what separates companies which can charge an admission fee from those which cannot (without infuriating customers) depends on their ability to stage memorable and worthwhile experience. In The Experience Economy, the authors believe that the traditional way of dividing sectors of economy into agriculture/ extraction of raw materials, industry and service is obsolete. A nascent sector, which is very often overlooked or mistakenly fused with service, emerged in the latter half of 20th century and is called "the experience sector".
Review the first group of places again and see if you can identify a common trait. In fact, they all primarily sell experiences. Although goods and services are also involved in the process, they are a means but not an end. The authors argue that people scrimp on goods and services to pay for what they find more valuable: experiences. Experiences are valuable because they are relevant to the customers and engage them in a personal way. Recall the last time you visited a haunted attraction (e.g. Ocean Park Halloween Bash in Hong Kong) when you literally paid to be scared. You lavished hundreds of dollors for nothing tangible, nothing akin to a service - but congratulations, you got an unique experience which made headline in your exchanges with family and friends while it lingered on your mind for months, if not years.
Companies in the experience sector charge more, reap repeated patronage and enjoy higher customer loyalty than those considered to be purely service providers (Starbucks charges 5 times more for a cup of coffee than your neighbouring coffee shop when the production costs vary only slightly). If they dare push it to the extreme, they could even consider charging admission fees. The prerequisite? Coordinate every details of your business as if you are putting up a show in a theatre, treat customers as your guests, indulge them in memorable experiences which make them feel embarrassed not to pay for.
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