The Experience Economy

There are a number of books recommended by Tom Peters in his new book Re-Imagine. The first book I have read from the list is The Experience Economy by James Gilmore and Joseph Pine. The ideas are great.

Consider the evolution of the birthday cake. Fifty years ago, you probably had the ingredients in your house to bake a cake and their value was somehwere between 10 and 30 cents. To simplify life, Betty Crocker put all the stuff in a box and charged a dollar. Soon, baking became a hassle and supermarkets collected twenty dollars to deliver the completed cake. Today’s birthday cake is a $200 trip to Chuck E. Cheese. [pg.21]

On a generic level, this has been the evolution:

Commodity->Good->Service->Experience

The authors argue that companies that can deliver experiences will capture larger sales from their customers. They make comparsions between these experiences and theatre. Companies need to consider casting, scripts, and backdrops to create compelling experiences for their customers.

One thought on “The Experience Economy

  1. Todd,

    You should add the final evolutionary step, transformation. As the speed of creative destruction of jobs accelerates, people will be looking (and willing to pay) for acquiring new capabilities.

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