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Experience economy
Handbook Experience economy
ased
Experience b
Introduction
People want experiences. This handbook is the result of the ExBased project, funded by the European Commis-
Theyve become more qua- sion. ExBased (experience-based business development in conventional SMEs) is aimed
lity conscious. Who isnt tired at local and regional public-sector business consultants. It has developed a struc-
of dreary luncheon buffets at tured train-the-trainer programme, which includes a tool kit that enables consultants
course venues? People want and local/regional small and micro-companies to work strategically with experience-
based business development as a tool for company and product development.
more than that now.
- Pia Thybo, director of
Nordisk Skoletavle Fabrik.
2
www.exbased.eu
This is when your business needs to embrace the Experience Economy and let it take
centre stage.
TABLE OF CONTENTS
1. WHY? 5
2. WHAT? 6
HOW TO STAGE EXPERIENCES 8
3. HOW? 11
TEN CHARACTERISTICS OF MEANINGFUL EXPERIENCES 11
SIX DESIGN PRINCIPLES 12
EXERCISE 16
A CHECKLIST FOR CREATING AN EXPERIENCE BASED BUSINESS 18
4. NEXT STEPS 20
In addition the Exbased project has trained several consultants to assist companies
to enter the exciting field of the Experience Economy. Interested?
Please visit www.exbased.eu
3
Handbook Experience economy
N o r d is k s k o letavle fabrik
Case:
As a result of this development process the company created a showroom that pro-
vided not just a passive experience but also a conference centre with classroom
facilities. At the same time they added a coffee bar, fitness and wellbeing facilities,
and other experience based offerings for employees and visitors which serve as a
focal point for new corporate concepts.
NSF is beginning to notice the synergy effects between the companys new initiatives
and the production of blackboards. Through contacts established and built up in
the conference facilities, NSF has received many orders for blackboards and has
high expectations for the future.
Weve gone from being very unit-based to very knowledge-based. Weve actually
done a huge about-face. So I must have been smarter than I thought. Pia Thybo,
Director of NSF.
4
www.exbased.eu
Why?
WE COMPANIES ARE MOVING INTO A
We are shifting to an experience
economy where experiences are
NEW ECONOMY becoming the predominant eco-
nomic offering.
The world is changing. Companies (mainly in the western world) are no longer able to
- Joseph Pine (A cofounder of
compete just on price or quality. Several trends and evolution have given rise to a new
Strategic Horizons LLP, writer
economic era. (Daniel H. Pink)
and veteran consultant)
Asia and globalisation: how are we going to compete with China and India?
Automation and technological development: computers can outperform hu-
man left brains; the world is changing constantly from one technological
revolution into another.
Abundance: people have too much of everything, they are looking for some-
thing unique
Rising consumer demands: rising brand awareness, politically correct consum-
ers (environment; production ethics), personalisation (self-staging)
Increased levels of commoditisation: increasing focus on price (internet;
discount wave; growing competition)
Increasing wealth: how do customers spend their money?
Product life cycle and company life cycle: how do companies re-invent them-
selves day after day?
What?
A few years ago, I saw some teenagers at a Wal-Mart putting quarters into one of
those elaborate gumball machines with flashing lights, spiraling tubes, and cascad-
ing chutesa roller coaster of sorts for gumballs. They were feeding coin after coin
into the machine only to watch gumball after gumball circle around and around. And
they werent consuming the gumballs after they came out! What were they buying?
An experience! This gumball-spiraling episode struck me as an iconic representation
of the emerging Experience Economy. Today, consumers increasingly desire neither
goods, nor services but sensation-filled experiences that engage them in a personal
and memorable way.
- J. Gilmore
The term Experience Economy was first described in a book written in 1999 by B.
Joseph Pine ll and James H Gilmore titled the Experience Economy. In it they de-
scribed the experience economy as the new emerging economy to follow the agrar-
ian economy, the industrial economy and the most recent service economy. They
define the experience economy as companies which stage meaningful events to
engage customers in a memorable and personal way.
6
www.exbased.eu
erience
Heineken Exp
7
Handbook Experience economy
Stage experiences
Starbucks
five-star restaurant
Deliver services
order coffee in a caf
Make goods
box with coffee
Douwe Egberts
Customers
Extracted commodities needs
coffee beans
Price
8
www.exbased.eu
M PARTY
Case: PIM PA
Website: http://www.pimpamparty.be/
Read the case study at:
http://www.exbased.eu/
9
Handbook Experience economy
hoes
Case: TOMS S
TOMS Shoes was set up by an American traveller, Blake Mycoskie, after he met chil-
dren in Argentina and discovered they had nothing to wear on their feet. The simple
principle behind TOMS is One for One for each pair of shoes bought by a TOMS
customer, a pair is given to a child in need in some of the poorest countries in the
world. TOMS have now given away more than 1 million pairs of shoes.
In addition to selling shoes, TOMS have a growing community (both on- and off-
line) which encourages customers to hold events that raise awareness of their plight.
These include an annual One day without shoes walk (for which TOMS provide a
downloadable toolkit) and a Style your Sole party where customers are encouraged
to get together to customise their TOMS.
Website: www.toms.com
Read the case study at www.exbased.eu
10
www.exbased.eu
How?
EXPERIENCES ARE INDIVIDUAL AND
Any experience concept will fail
if the business model is not con-
PERSONAL sidered beforehand and con-
tinuously adjusted as learning
Based on: A new perspective on the Experience Economy - Meaningful Experiences
proceeds in time.
Albert Boswijk, Thomas Thijssen and Ed Peelen
- Boswijk, Thijssen & Peelen
The European Centre for the Experience Economy, the Netherlands
Boswijk, Thijssen and Peelen argue that the experience economy is about more than
just offering a staged setting for an experience. The point of departure needs to be
the individuals personal experience: his or her everyday world and societal context.
All these experiences are personal, some more or less social and cultural and have to
do with discovery, adventures and new initiatives.
1. Their concentration is heightened and the focus is more intense, involving all senses.
2. Their concept of time is altered.
3. They are touched emotionally.
4. The process is unique for them and has intrinsic value.
5. There is contact with the raw stuff, the real thing.
6. They are engaged or undergo a transformation.
7. They feel there is a sense of playfulness.
8. There is a feeling of having control over the situation.
9. There is a balance between the challenge and their capabilities.
10. There is a clear goal. 11
Handbook Experience economy
inciples
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12
www.exbased.eu
e t h e e x p eri e n ce a theme
Giv iv e cues
p o s it
p re s s io ns with v e cu es
Harmonis
e im
t e n egati rabilia
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Elimin m emo roach s
in app sense
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Examples of using
a theme
and offers
e li n g t h eme park o nights,
to the Eft r one or t
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The Efteli pportunity to live
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www.efte
or more.
Volksw
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sburg, G tadt sp
hotel, a er en
nd seve many, which c t $417 million
in effor ral pavil onsists to build
tt ions sho o
that sell o transform in wing of f a museum, s a new facility
s du f all ix re
www.au cars to a car b stry stereotyp the VW group staurants, a
tostadt uying e e from s brand
xperien 13
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Handbook Experience economy
Examples of Using
Positive Cues
ith
y n c w n-
in s se
n s are h your
sio ou g
i m pres ion thr
, all i s
s v
terdam rmacy
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Example of Avoid-
ing Negative Cues
Disneyl
an
Disney d
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neyland can only be se
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plas-
Example of Includ-
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each runn
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b ing Memorabilia
ra t h o n a fter 42 km ngrave with their very e ager
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to take u
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by Adidas
www.exbased.eu
Example of Engag-
ing all Five Senses
w car
o m a k e sure a ne ine
cialists w
h oled eng
rs have spe f ro m an air-co t was
o b ile m anufa ct u re
rs c h e s witch e d
c o m p la ints. Wha ed
Autom n P o rou s mov
s t ri ght. Whe ey received nume e a re d . Porsche
smell s ju e, th disa p p orated a
w a te r- cooled on Porsche sound had stem which incorp
to a miliar ust sy .
r? The fa new exha s possible
the matte arth to develop a ld , fa m iliar one a
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Example of Natural
and Holistic Approach
Eden P
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15
EXERCISE
Below are some questions which you can apply to you own business.
Using a theme
Does the business concept have a theme?
Yes
No
What is it?
16
www.exbased.eu
Include memorabilia
What would the business want customers to remember from this business concept?
Are there things customers can take home to remind them of the business concept/
experience?
Sight?
Hearing?
Taste? How?
Smell?
Touch?
17
Elmystalouden ksikirja
Poulsson and Kale argue that for an encounter to be labelled an experience, one or
more of the following sensations and feelings need to be apprehended by the cus-
tomer: personal relevance, novelty, surprise, learning, and engagement.
Learning: The elements that further learning are motivation, cues, response,
and reinforcement. Motivation acts as a catalyst for learning, with needs
and goals serving as the stimuli. Cues are those stimuli that provide direc-
tion to motivation. Response encapsulates an individuals reaction to the
cues, and reinforcement increases the likelihood of specific responses
occurring in future.
18
www.exbased.eu
omy
Exbased econ
An illustration
To illustrate how one or more of the above elements contribute to create various
experiences, let us present Frank. Frank has had an eventful year and visited a range
of experience providers. The table below presents Franks scorecard for the various
experiences, assessed in relation to the five elements. Frank had a very intense experi-
ence when doing a river rafting course. Just sitting in a kayak going down the rapids was
aProduct/ Personal
novelty, with surprises Novelty
at every turn and twist. Surprise Learning aEngagement
Learning to manoeuvre kayak on his
service Relevance
own was something that engaged him fully. In the end, he felt that the course had
also given him a new sense of self, and confirmed his identity as that of somebody,
who was always up for a challenge.
The wine tasting session similarly scored well in all categories, but the experience was
a lot less intense on each element. The trip to a ghost house had some illusions that
Frank had never seen before, and he had no idea how they got it to work; the illusions
startled Frank on more than one occasion. So while the experience was clearly high
on novelty and surprise, neither a lot of new learning, nor personal relevance was
experienced in this visit. Watching his favourite football team play in the stadium, he
found that the game itself did not hold much novelty for him, and nothing new was
learned either. Still, Frank felt a strong sense of personal relevance, watching the
game with his friends and other supporters of the team. For another person, the same
four experiences could very well have resulted in a quite different scorecard. Someone
who hates soccer and has no feelings for the teams involved would find the football
game personally irrelevant, not to mention, boring.
These five elements of experience can thus act as a checklist for experience business.
conomy
Experience e
Next steps
This section offers suggestions on how a business can be built or reshaped by applying
experience economy principles. This section also introduces further links, innovation
techniques and contact details.
The ExBased project was developed to present experience economy ideas and prin-
ciples in a structured manner which can be accessed by a variety of clients whether
they have had some or no knowledge of the Experience Economy. This has been
achieved by putting together a modular training session which was tested on more
than 50 consultants and a toolkit which has been compiled and finalised following
feedback from both consultants and businesses who took part during the pilot stage
of the project. As a result the toolkit has been developed in a way which assists con-
sultants to help small companies to work strategically with experience-based busi-
ness development.
Consultants are likely to meet companies at various levels of insights into the experi-
ence economy:
20
www.exbased.eu
For more information and full details on all the tools please visit the project website:
www.exbased.eu
Partners/Contact details:
Belgium: Flanders District of Creativity, www.flandersdc.be
Contact: info@flandersdc.be
Denmark: South Denmark European Office, www.southdenmark.be
Contact: info@southdenmark.be
Denmark: Business Academy South West, www.easv.dk
Contact: vest@easv.dk
Denmark: House of Business Aabenraa, www.ehaa.dk
Contact: post@ehaa.dk
Finland: Ideone Oy, www.creativetampere.fi , www.ideone.fi
Contact: ideone@ideone.fi
United Kingdom: North Staffordshire Chamber of Commerce, www.nscciprojectteam.co.uk
Contact:
United Kingdom: Creative Industries Development Agency, www.cida.org
Contact: info@cida.org
21
Handbook Experience economy
Welcome to the experience economy (1998) B. Joseph Pine & James H. Gilmore
THE EXPERIENCE ECONOMY A New Perspective (2007) Albert Boswijk, Thomas Thijs-
sen and Ed Peelen
Handbook for experience stagers (2009) Sanna Tarssanen (edit.) Lapland Centre of
Expertise for the Experience Industry
Disclaimer: The contents of this publication reflect the views of the author.
22 The European Commission is not responsible for any use that may be made thereof.
www.exbased.eu
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