Experience economy: An analysis of ‘Welcome to experience economy’ paper

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Experience Economy: The page discusses the evolution of forms of economic value over years. At the
onset of the 21st century, with IT industry boom and opening up of economies, businesses have to
operate in hyper-competitive environment. To succeed in this competitive environment, businesses
have to move to the next level of economic value- Experience.

PROGRESSION OF ECONOMIC VALUE

Commodities Goods Services Experiences

Undifferentiated, Industrial, tangible Intangible and Experience based

fungible and and standardised customised personal and
Natural value, value, inventoried economic value, memorable
stored in bulk, and after production and delivered on offering, revealed
demand based on demand based on demand and over a duration
characteristics. features demand based on and demand based
benefits on sensations

Nature of Experience:
1. Memorable and personalised in nature: An experience occurs when a company intentionally use
services as the stage, and goods as props, to engage individual customers in a way that creates a
memorable event.
2. Guest-Stager relationship: The experience provider has to ‘stage’ the experience to the potential
customer who is termed as a ‘guest’ who will receive a unique and personalised experience.
3. Revealed over a duration: Giving experience to a customer is an event in which the customer is
aimed to be engaged throughout in itself and is not a one-time transaction unlike goods and services.
4. The rational way to monetise an experience is to charge a ticket price or admission price since in this
way you directly link the experience with the revenue stream. However, in order to do this, the
experience must be worth the ticket price and so needs to be varied, immersive and memorable.

Characteristics of experiences:
The characteristics of experience can be shown on a two-dimensional grid: Participation and Connection as
shown below:
 Experience economy: An analysis of ‘Welcome to experience economy’ paper
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Absorption

Entertainment:
customers participate
more passively; their
connection with the
event is more likely
one of absorption
Educational:
tend to involve more
active participation,
but customers are still
not fully immersed.

Passive Active participation

participation

Esthetic:
teach as much as Escapist:
Entertainment and Customers are
Educational immersed in the
experiences but they activity but have little
involve greater or no effect on it
customer immersion

Elements of a successful experience engagement:

Experience design will become as much a business Immersion art as
product design and process design are today. 5 key
experience design elements as identified by the paper are as below:
1.Theme the experience: There should be a central theme that connect all dimensions of the
experience together and can serve as a reference point.
2. Create positive cues that reinforce the theme: There should be activities and design elements
that constantly provide reminders of the theme, such as in customer service experiences.
3. Eliminate negative cues: Care should be taken to avoid anything that diminishes, contradicts and
distracts from the theme.
4. Memorabilia and merchandise: It will create lasting impressions of the experience and serve as
an additional revenue stream.
5. Engage all five senses: Experience should be holistic and immersive in nature which should
engage the senses of touch, smell and taste over and above the obvious visual and auditory
dimensions.