Experience Economy Is A Unique Concept In Services Marketing

What is the concept of experience economy?

Back in 1998, authors Joseph Pine and James Gilmore made the audience familiar with a new concept of connecting more with the customers to win their loyalty. The author understood that people are on the way to spending more money on gaining experiences from the brand and not from the products. Thus, the term “experience economy” came into play, which can be defined as the economy in which the services and the products would be sold by emphasizing the impact they can have on the consumer’s experience. The experience economy for the layman's term can be defined to be coming under a category like services or products. The experience can be sold by emphasizing the fact that would impact human life positively. The experience economy facilitates the goods and the services to combine among each other and sold for creating a distinctly memorable experience. The economy relies on creating and selling distinct experiences rather than physical products and services, constructing the idea that the experience is the product being sold by the businesses. Thus, in this economy, the complete economic growth value is driven by experience.

What is an example of experience economy?

The experience economy has been a part of the global economy for quite a time driving in a wide range of audiences seeking experience as a product. The example of the experience economy is visible in the case of Airbnb’s approach. The initial purpose of the organization was focused on helping the travelers to find cost-effective and quality accommodation while helping the homeowners to gather more money for offers services in their beautiful homes for the travelers. Airbnb with constant market research found out later that its target market is hungry for more facilities other than the roof over their head. The travelers were always looking for more options to have immersive experiences other than the plain old city guides and tours. Thus, the organization focused on its customer services, bringing in a wide range of facilities to offer an impeccable experience to their customers in form of additional activities. The consumers can now truly enjoy their experience by reflecting on their passion, helping the company gain more revenue by effectively redesigning the customer experience, and bringing in the concept of the experience economy.    

Why is economic experience important?

A shift in the global economy can be visible with the latest advancements in the experience economy having a major effect on the traditional business models. The experience has lately become the key to the fulfillment of personal desires from the combination of the services and products offered by brands. Recent studies suggest that over 80% percent of the youth and millennials with disposable income tend to spend their money by gaining their desirable experience. This shift in the economy has changed the concept of how people are spending their money, as the money is being spent on the experience the product offers not the product itself. The idea of economic experience promotes the idea of inclusion of the consumers and democratizing their happiness. The economic experiences can greatly enhance learning, and social connections and finally transform the global economy, being responsible for designing experiences that would reach a diverse range of audiences and benefit the whole world.

Reasons why the experience economy is an opportunity for brands.

Nowadays, products and services are being sold based on the experience that they offer, impacting the individual’s life. The modern experience economy can be an opportunity for the large brands that need to address millions of customers, understanding their need of gaining memorable experiences. Modern consumers have shifted towards buying a combination of products and services as experiences than just going for the product or the service. The people are positively impacted by the experiences offered to them by the service rather than just the material itself. The organizations are trying to stay competitive in a fierce market by offering experiences rather than services as service alone cannot give the brand enough edge. The products that offer experiences tend to show a clearer value proposition, offer meaning and inspiration, increasing the anticipation of use and offering added reasons for buying.  

Brands that take advantage of the experience economy

Hard Rock Café:

 Hard Rock Café turned the barriers into opportunities by bringing in an experience economy offering more than just food and dining experiences. The hotel offers a music-themed atmosphere bringing in local artists, and rock and heavy metal memorabilia offering a unique experience.  

Fortnite:

Fortnite had decided that offering virtual experiences over the internet are not just enough, bringing their game to life during the Paris Games Week, and facilitating thousands of people to interact with each other in real-life Fortnite scenario, mini-games, and photoshoots.   

Airbnb:

Airbnb has changed its ways of servicing its customers, changing from the traditional environment to offering the latest experiences hosted offline and online. People staying at the hotels during their holidays can now indulge in their favorite activities and follow their passions like having guided tours or taking online cooking classes.

McDonald’s Monopoly:

McDonald’s has recently indulged in the experience economy by introducing the monopoly board stickers that can be found with their meals bought allowing them the opportunity to participate in events and offer opportunities to win prizes by collecting several groups of properties. These opportunities are well-sought experiences that are participated by the consumers, not missing out on the social buzz.  

Conclusion of experience economy? 

People have thoroughly shifted from their ideology of buying materials and are looking for memorable experiences. Brands need to focus on their clientele on how they can provide an innovative experience to them, bringing in a positive impact. Economic experience is on the way to building long-lasting relationships between the consumers and the organization.   Organizations are offering live events and experiential marketing to reach more audiences with a unique spirit, raising awareness about the brand among the consumers and increasing the profits overall. The experience economy can be influenced by small activities like hosting events or posting on social media essay, resulting in effective benefits. Thus, the experience economy is important to be understood appropriately