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Experience economy

Handbook Experience economy

Experience b

“People want experiences.
They’ve become more quality conscious. Who isn’t tired
of dreary luncheon buffets at
course venues? People want
more than that now.”
- Pia Thybo, director of
Nordisk Skoletavle Fabrik.


This handbook is the result of the ExBased project, funded by the European Commission. ExBased (experience-based business development in conventional SMEs) is aimed
at local and regional public-sector business consultants. It has developed a structured train-the-trainer programme, which includes a tool kit that enables consultants
and local/regional small and micro-companies to work strategically with experiencebased business development as a tool for company and product development.

In this handbook you will find: • • • An introduction to the concept ‘experience economy’. based on the major and standard academic works/theory in this field. practical tips on how to add experiential elements to products and ABOUT THIS HANDBOOK The current economic climate has led to an increase in turning goods or service offerings into commodities. Interested? Please visit www. NEXT STEPS 5 6 8 11 11 12 16 18 20 In addition the Exbased project has trained several consultants to assist companies to enter the exciting field of the Experience Economy.exbased. WHY? 2. Some basic. How does your company differentiate between your offerings? How does your company stand out? This is when your business needs to embrace the Experience Economy and let it take centre stage. and several inspiring case studies from across 3 .exbased. TABLE OF CONTENTS 1. WHAT? HOW TO STAGE EXPERIENCES 3.www. Companies are finding it more and more difficult to differentiate and to work out the right strategy on quality and price to help them to remain sustainable. HOW? TEN CHARACTERISTICS OF MEANINGFUL EXPERIENCES SIX DESIGN PRINCIPLES EXERCISE A CHECKLIST FOR CREATING AN EXPERIENCE BASED BUSINESS 4.

000 business managers have visited the company and that was before any money had been spent on marketing the new facilities. NSF’s new concept started out as an attempt to create an alternative to a classic showroom. If NSF had sent a sales rep on the road to get in touch with the same number of business managers. When faced with having to construct new headquarters. As a result of this development process the company created a showroom that provided not just a passive experience but also a conference centre with classroom facilities. the company saw an opportunity to carefully consider its business goals and development. more than 2.nsf. NSF is beginning to notice the synergy effects between the company’s new initiatives and the production of blackboards. During the 20th Century the business had lost market share in Japan and elsewhere and needed to reinvent itself and its image. but has now become a huge marketing tool for the business. At the same time they added a coffee bar. We’ve actually done a huge about-face. and other experience based offerings for employees and visitors which serve as a focal point for new corporate concepts. NSF has received many orders for blackboards and has high expectations for the future.Handbook Experience economy letavle fabrik o k s k is d r o N Case: Nordisk Skoletavle Fabrik was a traditional industrial company that produced blackboards for classrooms and conference facilities. So I must have been smarter than I Website: http://www. Through contacts established and built up in the conference facilities. Since NSF opened the doors of its new conference 4 . Case study available at http://www. this would have taken several years. fitness and wellbeing facilities.” – Pia Thybo. “We’ve gone from being very unit-based to very knowledge-based. Director of NSF.

Abundance: people have too much of everything. Several trends and evolution have given rise to a new economic era. the world is changing constantly from one technological revolution into another.” . people consume and shop in new ways and expect products and services not only to fulfill a function but also to provide them an experience. writer 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. a cosy family evening. Pink) • • • • • • • “We are shifting to an experience economy where experiences are becoming the predominant economic offering.exbased. discount wave. (Daniel H. Consumers are in a search of something more. they are looking for some- thing unique Rising consumer demands: rising brand awareness. production ethics). 5 . personalisation (self-staging) Increased levels of commoditisation: increasing focus on price (internet. an indulgent bath-time soak. Did you know? WHAT COMPANIES SHOULD DO? Businesses need to orchestrate memorable events for their customers so that the memory itself becomes the product – the “experience”. politically correct consum- ers (environment. Companies (mainly in the western world) are no longer able to compete just on price or Why? WE COMPANIES ARE MOVING INTO A NEW ECONOMY The world is changing. That in the United States of America there are 307+ million people and 90%+ of households can access electricity. 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? In the 21st century.Joseph Pine (A cofounder of Strategic Horizons LLP. But the candle business is worth $2 billion a year! Why? Because candles give us more than just light > an intimate dinner for two.

Gilmore The term Experience Economy was first described in a book written in 1999 by B.J.” . nor services but sensation-filled experiences that engage them in a personal and memorable way. In it they described the experience economy as the new emerging economy to follow the agrarian economy. They were feeding coin after coin into the machine only to watch gumball after gumball circle around and around. And they weren’t 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. They define the experience economy as companies which “stage meaningful events to engage customers in a memorable and personal way”. Joseph Pine ll and James H Gilmore titled the “Experience Economy”. 6 . and cascading chutes—a roller coaster of sorts for gumballs. Today. the industrial economy and the most recent service economy. I saw some teenagers at a Wal-Mart putting quarters into one of those elaborate gumball machines with flashing lights.Handbook Experience economy What? “A few years ago. spiraling tubes. consumers increasingly desire neither goods.

Heineken not only adds value to its business but also promotes and creates brand loyalty. With this erience Heineken Exp The Heineken Experience is an example of a traditional beer manufacturer providing a staged experience through a museum which is dedicated to the beer brand Heineken through its brewery in Amsterdam. interactive expositions and two cafés. 7 . This museum offers you tours. It also takes you back into the history of the company and the development of the brewing process over the years.

Handbook Experience economy HOW TO STAGE EXPERIENCES If we take Coffee as an example we can observe progression of economic value leading to a staged experience as follows. 2. The customer is willing to pay more for the experience. Companies harvest coffee beans or trade it on the future markets at a relatively low value.10-0. 1. When this coffee is then made in a café and served to a customer the price jumps to between 2-3€ Competetive position 4. Stage experiences ‘Starbucks’ ´five-star restaurant´ Deliver services ‘order coffee in a café’ Make goods ‘box with coffee – Douwe Egberts’ Extracted commodities ‘coffee beans’ Customers needs Price 8 . However when a coffee cup is served in Starbucks with special combinations such as spices and nice surroundings it costs a little bit more than in normal café.20€ per homemade coffee cup (depending on the brand and package size). 4-7€. the price to a consumer is around 0. and much more. The manufacturer grinds. packages and sells those same beans to supermarkets. 10€ when it is prepared in a five-star restaurant or espresso bar in a special setting. turning them into a good. 3.

“Pim Pam Party … let the party begin!” Website: http://www. The company works locally and delivers pre-ordered packages themselves with last minute tips and guidance. easy and Read the case study at: 9 . The boxes offer a full package for a dream party making it possible to create a fun party M PARTY Case: PIM PA Pim Pam Party offers unique party boxes for unique children’s parties.exbased.exbased.

Handbook Experience economy hoes Case: TOMS S TOMS Shoes was set up by an American traveller. TOMS have a growing community (both on. 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 Read the case study at www. 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. TOMS have now given away more than 1 million pairs of shoes. Website: 10 . Blake Mycoskie.exbased. In addition to selling shoes. after he met children in Argentina and discovered they had nothing to wear on their feet.and offline) which encourages customers to hold events that raise awareness of their plight.

5. intangible.Boswijk. the Netherlands “Any experience concept will fail if the business model is not considered beforehand and continuously adjusted as learning proceeds in time. This makes experiences. 3. Thijssen & Peelen Boswijk.exbased. and that you will never for- get? • Which experiences. HAVE YOU THOUGHT OF • Which experiences actually changed your life. There is contact with the ‘raw stuff’. What do we need to do in order to bring about a meaningful experience in a commercial setting? We need to provide the customer a product/service which ensures that: 1. just like services. 9. TEN CHARACTERISTICS OF MEANINGFUL EXPERIENCES Experiences are not static units like products. 10.www. Their concept of time is altered. in a context with other people. the real thing. They feel there is a sense of playfulness. They are touched emotionally. The point of departure needs to be the individual’s personal experience: his or her everyday world and societal context. adventures and new initiatives. 11 . There is a clear goal. involving all senses. Their concentration is heightened and the focus is more intense. There is a balance between the challenge and their capabilities.Meaningful Experiences Albert Boswijk. Experiences occur in a process during which interactions take place in a certain setting – whether physical or not – between the individual and other people. 8. 6. will you never forget in your life? • Which experiences you will never forget in your life which you paid for? All these experiences are personal. Thomas Thijssen and Ed Peelen The European Centre for the Experience Economy. The process is unique for them and has intrinsic value. Thijssen and Peelen argue that the experience economy is about more than just offering a staged setting for an experience. 7.” . How? EXPERIENCES ARE INDIVIDUAL AND PERSONAL Based on: A new perspective on the Experience Economy . They are engaged or undergo a transformation. some more or less social and cultural and have to do with discovery. 4. There is a feeling of having control over the situation.

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Volksw age in Wolf n AG’s Autos tadt sp sburg. G en er hotel. which c t $417 million ral pavil onsists to build in effor ions sho o tt wing of f a www.exbased. s a new facility that sell o transform in f all ix re du s www.efte or ce extr just another d s – all avaganz ealership cars to a car b stry stereotyp the VW group ce a theme n e ri e p x e e h t e Giv cues e iv it s o p es ns with u io s c s e r e p v e im egati rabilia n Harmonis e t a emo roach s Elimin m in app sense Mix c i ist ive l o d h all f n a e al g r a u Eng Nat Examples of using a theme and offers eme park o nights. a nd seve many. a uying e e ’s brand tostadt from xperien . h t g n li e w to the Eft r one or t just near fairytale world fo is l te o ng H in a The Efteli pportunity to live o e h t guests ling. 13 .

ww p th their to take u ar) to get e g r e n n ru by Adidas one tim k e e the the ienc Apo exper sseapo e s ires can laire e La e place m at any plased a green est iv e c re r e b each runn personal fter 42 km ngrave with their a ager n e o h t ry e ra v e in Ma were ould rl c e rs y e B e n l h n a t e ru t R a th 00 unded In the m Adidas than 65 0 ime (surro t ro re f e o t m M le o . al ’s v dam rmacy r e t ha ms in A this p ek. Example of Avoiding Negative Cues Disneyl an Disney d charact ers www.dis neyland can only be se en in on paris.Handbook Experience economy Examples of Using Positive Cues ith c w nn y se in s are h your s n g sio ou pres ion thr m i l s i . Example of Including Memorabilia .de h t e At th ere. You ww.c g to wait rlin Adida 14time in the Beis offer and were willin personal bracelet.adidas. w ho eac as it w ses. e s c re e om quit s sto tic bra w.

Porsche ri d re t s a e ju p p s disa astic a y offer for e nature ay. Wha ed witch anufa s la m p e e h m il c o b c rs o o s n P rou mov Autom ght. th eatre a xample.www. globa t inspir lg at unforg ettabl ion about th arden where e learn e worl events people ing da in c www. m rts.exbased.e the greene experiences round them an learn abo . nd mu sic 15 .eu Example of Engaging all Five Senses w car sure a ne ine e k a m o h oled eng cialists w an air-co have spe m rs ro t was f re u d t e c ints. Whe ey received nume . st pos T denpro ut a h n e d fant sible w ject. ld o e d he heaven an was as close to t h ic h w d soun Example of Natural and Holistic Approach Eden P roj and ge ect is a rich . th orated a smell ooled on Porsche sound had stem which incorp c rte a w to a ust sy miliar . r? The fa new exha s possible the matte arth to develop a iliar one a m fa .

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? Natural and holistic approach Does the business concept leave an impression of being natural and authentic? How? Use positive cues & avoid negative cues Are all the impressions harmonized by means of positive cues in the business concept? Yes No Is there something that could be done better? 16 . Is there a risk of negative cues? Yes No How can business avoid/eliminate those negative cues? 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? Engage all five senses What senses is the business concept engaging? Sight? Hearing? Taste? Smell? Touch? How? What other senses could be engaged and in what way? 17 .

and preparedness to engage in a specific experience. the customer’s engagement with an experience can increase. and engagement. and by providing him/her with positive feedback. Motivation acts as a catalyst for learning. • Novelty can be defined as ‘a change in stimulating conditions from previous experience’. The novelty principle is based on the fact that people are attentive and attracted to something that is new and different. By actively involving the customer through asking for customer input. 18 • Personal Relevance is the individual’s internal state of emotion.Elämystalouden käsikirja A CHECKLIST FOR CREATING AN EXPERIENCE BASED BUSINESS Based on: The Experience Economy and Commercial Experiences Susanne H. . surprise. and reinforcement increases the likelihood of specific responses occurring in future. with needs and goals serving as the stimuli. Poulsson and Sudhir H. and reinforcement. response. novelty. • Surprise: An experience will be considered surprising if it contains outcomes that are unexpected. activation. • Learning: The elements that further learning are motivation. cues. one or more of the following sensations and feelings need to be apprehended by the customer: personal relevance. and these unexpected outcomes contrast with domi- nant expectations of the consumer. Response encapsulates an individual’s reaction to the cues. G. Cues are those stimuli that provide direc- tion to motivation. Kale Poulsson and Kale argue that for an encounter to be labelled an experience. • Engagement can be induced in an experience through interacting with the customer. learning.

Just sitting in a kayak going down the rapids was Personal Learning aEngagement Novelty aProduct/ novelty. assessed in relation to the five elements. Frank’s ‘Experience Scorecard’ Experience River Rafting Wine Tasting Ghost House Football Game Personal Relevance x x Novelty x x x Surprise x x x Learning x x x Engagement x x x The wine tasting session similarly scored well in all categories. Still. not to mention. and confirmed his identity as that of somebody. In the end. the same four experiences could very well have resulted in a quite different scorecard. but the experience was a lot less intense on each omy Exbased econ An illustration To illustrate how one or more of the above elements contribute to create various experiences. the illusions startled Frank on more than one occasion. Watching his favourite football team play in the stadium. with surprises at every turn and twist.www. and he had no idea how they got it to work. For another person. Someone who hates soccer and has no feelings for the teams involved would find the football game personally irrelevant. Surprise Learning to manoeuvre kayak on his Relevance service own was something that engaged him fully. he felt that the course had also given him a new sense of self.exbased. The table below presents Frank’s ‘scorecard’ for the various experiences. Frank has had an eventful year and visited a range of experience providers. Frank had a very intense experience when doing a river rafting course. neither a lot of new learning. Does your product/service have: Product/ service Personal Relevance Novelty Surprise Learning Engagement Experience Personal Relevance x x Novelty x x x Surprise x x x Learning x x Engagement x x River Rafting Wine Tasting Ghost House 19 . Frank felt a strong sense of personal relevance. nor personal relevance was experienced in this visit. watching the game with his friends and other supporters of the team. So while the experience was clearly high on novelty and surprise. he found that the game itself did not hold much novelty for him. The trip to a ghost house had some illusions that Frank had never seen before. boring. who was always up for a challenge. and nothing new was learned either. These five elements of experience can thus act as a checklist for experience business. let us present Frank.

so they are able to work with the best of them. Consultants are likely to meet companies at various levels of insights into the experience economy: • Awareness and Inspiration Some companies will never have heard of. • Innovation and creativity Some companies will have started to think about incorporating experiences into their business model. a link to this handbook and a list of recommended reading. the business potential in the experience economy. The ExBased project was developed to present experience economy ideas and principles 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. as well as assistance in developing a sound business plan. and inspiring them to look at. To assist the toolkit contains a presentation on what the experience economy is. nor do they know how. This section also introduces further links.Handbook Experience economy conomy Experience e Next steps This section offers suggestions on how a business can be built or reshaped by applying experience economy principles. innovation techniques and contact details. but they do not know if they should implement it. The Five Senses. To assist the toolbox contains the following tools. To assist the toolkit contains case studies highlighting what other businesses have implemented and contact details for local partners who will be able to link the business with a trained consultant. as well as prioritising these ideas. This requires that the consultant has some insight into the company. They will benefit from the consultant assisting them with brainstorming sessions and creation of ideas. The Prioritising Tool and an exercise on personal reflections. the Customer Experience tool. • Development of a sound business model Finally some companies will have a specific idea in mind. They will benefit from the consultant raising awareness of. 20 . As a result the toolkit has been developed in a way which assists consultants to help small companies to work strategically with experience-based business development. which incorporates experiences into their business model. and/or help to prioritise from a large pool of ideas. 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. They will benefit from the consultant’s assessment of the potential of their ideas. but they need one good idea. or thought about. the possibilities. Finland: Ideone Or please contact your local partner for assistance Partners/Contact details: Belgium: Flanders District of Creativity. Denmark: Business Academy South United Kingdom: North Staffordshire Chamber of Commerce. www.flandersdc. Contact: United Kingdom: Creative Industries Development Agency. Contact: 21 .be Denmark: South Denmark European Contact: Contact: Denmark: House of Business Contact: Contact: .eu BUSINESS PLAN Case Study Examples Local Partner Contacts Consultant’s expertise Diagram highlights contents of the ExBased toolkit INNOVATION & CREATIVITY 5 Senses tool Prioritising tool Personal Recollections Exercise AWARENESS & INSPIRATION What is Experience Economy? Presentation Customer Experience Tool For more information and full details on all the tools please visit the project website: www.ehaa.easv. Contact: vest@easv. www.www. www.

Gilmore THE EXPERIENCE ECONOMY A New Perspective (2007) Albert Boswijk. Kale The Marketing Review 2004. The European Commission is not responsible for any use that may be made thereof. Joseph Pine & James H.) Lapland Centre of Expertise for the Experience Industry The experience economy and commercial experiences (2004) Susanne H. G. REFERENCES AND BUSINESS CASE STUDIES A Whole New Mind: Moving from the Information Age to the Conceptual Age (2005) Daniel H. Poulsson and Sudhir H. Pink Welcome to the experience economy (1998) B. 4 22 Disclaimer: The contents of this publication reflect the views of the author.Handbook Experience economy RECOMMENDED READING. Thomas Thijssen and Ed Peelen Handbook for experience stagers (2009) Sanna Tarssanen (edit. .

which offers events . A design hotel that differentiates itself based on specialized bathrooms Marketing and communication consultancy that developed an experiental marketing strategy for Emma Bridgewater (tableware brand).eu Case stories: summary table – full case studies available at ViaPlaza X Pim Pam Party Todi X X Jyske Bank X Summerbird X X X X X X X Nordisk Skoletavle Fabrik X X X VIPP X X X Krsumolle X Tuoni Studiot X Left Foot Company X Rakennusapteekki Oy X STROOM X Plinkfizz/ Emma Bridgewater X X MCC Group X X Inspired Film and Video X X X X X X X X X X X X X X X X Magic Number Three Maria Lau X X X X TOMS Shoes X X Broadcasting station that offers digital media with a social added value Party boxes for chidren’s birthdays Indoor diving and snorkelling centre Bank services: objective to make bank business less serious and pretentious. regular seminars and events. Apple product and software knowledge. and the story that follows these raw materials. lifestyle products. a pair is given to a child in need in some of the poorest countries in the world.exbased. technical support and maintenance.aspx Belgium Belgium Belgium Denmark Denmark Denmark Denmark Denmark Finland Finland Finland Netherlands United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom USA 23 . workshops for different arts and crafts and rooms for parties or meetings. A conference centre that offers classroom facilities and at the same time. graphics and soundtrack to DVD design and duplication. Apple-certified training. competitions. A center. fitness and wellbeing facilities and experience offerings for employees and visitors. Company producing chocolate by creating a special taste experience. seminars and professional education. Film production company that offers services from scripting and planning. editing.www. stores with food specialities.exbased. their own spring water. interior design accessories. through filming. They also offer repair services. Center that specializes in traditional construction and building materials. Individually-fitted shoes for men with the help of technology. voiceovers. Fashion store Fashion jewellery Shoes & charity: for every pair of shoes bought by a TOMS customer. Designed waste bins and bathroom equipment. Country Business field Services Repairs Wholesale Retail Manufacturing B2C B2B http://www. based on the finest raw material. Controlled party game and interactive a coffee bar.