The Experience Economy: Work Is Theater & Every Business a Stage

But, according to Joseph Pine and James Gilmore, the bar of economic offerings is being raised again. In The Experience Economy, the authors argue that the service economy is about to be superseded with something that critics will find even more ephemeral (and controversial) than services ever were: experiences. In part because of technology and the increasing expectations of consumers, services today are starting to look like commodities. The authors write that "Those businesses that relegate themselves to the diminishing world of goods and services will be rendered irrelevant. To avoid this fate, you must learn to stage a rich, compelling experience."

Many will find the idea of staging experiences as a requirement for business survival far-fetched. However, the authors make a compelling case, and consider successful companies that are already packaging their offerings as experiences, from Disney to AOL. Far-reaching and thought-provoking, The Experience Economy is for marketing professionals and anyone looking to gain a fresh perspective on what business landscape might look like in the years to come. Recommended. --Harry C. Edwards

Product Description
Future economic growth lies in the value of experiences and transformations--good and services are no longer enough. We are on the threshold, say authors Pine and Gilmore, of the Experience Economy, a new economic era in which all businesses must orchestrate memorable events for their customers. The Experience Economy offers a creative, highly original, and yet eminently practical strategy for companies to script and stage the experiences that will transform the value of what they produce. From America Online to Walt Disney, the authors draw from a rich and varied mix of examples that showcase businesses in the midst of creating personal experiences for both consumers and businesses. The authors urge managers to look beyond traditional pricing factors like time and cost, and consider charging for the value of the transformation that an experience offers. Goods and services, say Pine and Gilmore, are no longer enough. Experiences and transformations are the basis for future economic growth, and The Experience Economy is the script from which managers can begin to direct their own transformations.

Pine & Gilmore explain The Experience Economy; Wolf calls it The Entertainment Economy. Schmitt suggests that Experiential Marketing creates or sustains demand for this New Economy, however it is named. For all of these authors, "work" should be viewed as "theatre" and every business should be viewed as a "stage." If they are correct (and I believe they are), the quality of sensory experience is critically important. That is to say, it is no longer sufficient to offer high-quality goods or services for sale at competitive prices. Most (if not all) goods and services have become commodities. Competing on price alone seldom succeeds...especially against those which have superior purchasing power. Competing on quality alone succeeds only for those who offer what no one else has. The challenge is to achieve differentiation. According to Pine & Gilmore, this challenge is best met by understanding what the Experience Economy is (and isn't) as well as how it works; only then, thus informed, can an organization (almost literally) function as a theatre company: formulating a script which has both an exciting story line and interesting characters; assigning roles to those who have the appropriate talents; and then conducting rigorous rehearsals. Finally, it's "show time"!

Pine & Gilmore observe, "Since all commerce is moral choice, every business is a stage for glorifying something. Who or what does your business glorify? Your answer may not help you accept what is next, but it will certainly help guide what you do today." At its best, live theatre can delight, amuse, excite, inform and even inspire those who experience it. Why cannot it also be true of business relationships? Of course it can. It is certainly true of those organizations which prosper. Southwest Airlines is but one example. Its CEO once observed:

"I keep telling [those interested in Southwest Airlines] that the intangibles are far more important than the tangibles in the competitive world because, obviously, you can replicate the tangibles. You can get the same airplanes. You can get the same ticket counters. You can get the same computers. But the hardest thing for a competitor to match is your culture and the spirit of your people and their focus on customer service because that isn't something you can do overnight and it isn't something you can do without a great deal of attention every day in a thousand different ways. That is why I say that our employees are our competitive protection."

Kelleher's comments are relevant to virtually all organizations which now struggle to succeed in the New Economy (however it is named). To understand this economy, to understand what it requires of your own organization, I urge you to read The Experience Economy...as well as The Entertainment Economy and Experiential Marketing.


Business as Performance Art. Yes!   July 23, 1999
Christopher Locke (Boulder, CO USA)
70 out of 81 found this review helpful

As co-author of the cluetrain manifesto .......... I'm often asked by companies how they can implement the ideas we talk about. This book is a great place to start. Unfortunately, the listing here leaves out the subtitle: "Work Is Theatre & Every Business a Stage." That's what got to me. Acknowledging the role of serious play in serious commerce is long overdue, but The Experience Economy makes up for lost time. While most business books are little more than literary Sominex, this one will stretch your head in new dimensions. Even if you disagree with bits, it'll wake you, shake you, make you think.

At first, I was put off by the notion of the Internet as "the greatest force for commoditization known to man." This is only true when the net is seen as an extension of the broadcast model: think TV. But that's the wrong approach, as the authors later make clear: "Cyberspace is a great place for such experiences, but many businesses still don't get it. They're heading into the commoditization trap, trying to figure out how to better sell their company's goods and services over the World Wide Web, when in fact most individuals surf the Net for the experience itself."

E-commerce as performance art, I love it! So step right up, boys and girls, and get your ticket to the Pine & Gilmore Masque. The show's just about to begin!


looking at 'taking care of business' differently   August 7, 2000
Carol H. Tucker (Silver Spring, MD USA)
27 out of 29 found this review helpful

The Pine and Gilmore book about work and theater is a different, but not unique, way of looking at business. By concentrating on employees' ROLES instead of jobs and functions, this book encapsulates new thinking about:

-how a company presents itself to the customer -internal customer service

-the need for aggressive change management

-differentiation of products

-dynamic strategic planning [no more five year plans] -where actual economic value is found

A very quick and dirty overview of their concepts can be accomplished by looking at their definitions:

[cast=employees]must take on [roles = responsibilities] by each making choices to develop compelling [characterizations=representations] that form(s) a cohesive [ensemble = organization] to engage [guests = customers] in memorable ways

workplace = theater drama = strategy

script = processes

producer = shareholders, investors director = leader

Perhaps the most memorable section in the book that resonated with me was the statement that for every piece of work, one must describe his [or her] intention using the phrase "in order to"

what a powerful way to keep the focus! It brought to mind the story about the cathedral builders that I have seen in so many places....

And I was left with a solid suggestion on how to recognize the role of support departments -- those people who get left out when the sales incentives and bonuses are given out but without whom the entire organization will falter -- see the chapter on movie and stage credits!


Nardelli-led bounce gives book its just due   July 30, 2003
Andy Orrock (Dallas, TX)
12 out of 14 found this review helpful

As I write this review on July 29, 2003, I see 'The Experience Economy' is ranked at #624 in amazon.com's constantly updated sales rankings. Pretty heady for a fairly esoteric business book published in April 1999.

The reason has to do with the latest (August 2003) edition of 'Fast Company' magazine. The editors asked a series of business leaders to pick one "book that matters," noting that "one book can change the direction of a company -- or a career." Bob Nardelli, ex-of GE and now CEO of the Home Depot, chose 'The Experience Economy.'

That's a great thing, because this excellent piece of work really got the short shrift - with its April 1999 publication date, its message of capturing the full potential of face-to-face retail got buried in the tsunami of e-commerce hysteria.

Now that we all recognize the Internet as just another viable sales channel, this fine effort by Pine and Gilmore has a second life. The fact that Nardelli picked it as his one book that matters tells you all you need to know about his vision for the future of Home Depot.


What is your business's offering?   January 9, 2007
Kim C. Korn (Stillwater, MN USA)
7 out of 8 found this review helpful

The Experience Economy is truly a work of art. It is one of those rare books that provide insight, perspective, illumination, and rich content together in a unified framework. The book thoroughly explains the nature of an experience offering, clearly differentiating it from a service. Understanding your business as an experience provider can radically shift your thinking about the value of your economic offering... and your understanding of what your customers value.

Work is theatre. Every time an employee is in front of a customer they are acting...whether they know it or not.

As the higher value economic offerings of experiences and transformations come to dominate the economy, the understanding of experiential and transformational offerings becomes more critical. As individual buyer's needs are targeted by company offerings, the notion of a market of fictional average people gets replaced by individual buyers. The elimination of customer sacrifice requires the customizing of each offering to a specific customer's needs. Customizing goods turns goods into services, customizing services turns them into experiences, and customizing experiences turns them into transformations.

Though the book focuses on "experiences" as a distinctive economic offering, it also provides a comprehensive framework for understanding all economic offerings. The insights from the progression of economic value and the characteristics of each offering provide a frame of reference for assessing your current business and stimulating strategic discussion of what it might be.

Pine and Gilmore take great care in defining the five economic offerings -

* Commodities
* Goods
* Services
* Experiences
* Transformations

Each level is of greater value than the prior level. Tailoring offerings to reduce customer sacrifice adds value and moves the offering up the progression of value. At the same time, offerings are continually commoditized to bring greater value going the other direction.

The distinguishing factors of each offering are explicitly defined and reinforced throughout the text. These offerings are a progression. They build upon one another. For example, at the transformation level where the customer is the offering, guiding transformations can be explained in three basic steps:

1. diagnosing aspirations, with characteristics of a service,
2. staging experiences, to bring about the transformation, and
3. follow-through, to sustain the transformation.

Towards the end a terrific thought provoker -- "Who or what does your business glorify?" What a thought provoker!