According to Pine & Gillmore in their book The Experience Economy (1998), when making an economic offering to your clients, there has been, from a historical perspective, an economic progression of value.
Progression of economic value consists of:
Each level is totally different from the others, and each is enveloped by the next.
Now, using coffee as an example, imagine a coffee bean. A coffee bean is a commodity. For the large part, commodities are extracted. Prices are set by the market.
Goods are tangible items that are created from commodities, and are a main component of the industrial economy. They command a higher price because they can be used immediately. Now, imagine roasted coffee beans. Goods are made.
Services are what you do with goods, like obtaining a cup of coffee at McDonald’s. Services are delivered or provided, and thus create the Service Economy.
Experiences are a mindset, staged and authentic to the business. Experiences are a “distinct economic offering” that are as different from services as services are from goods. When buying coffee at Starbucks, you not only buy the coffee, but a dynamic “hot spot” environment in which to spend some time and use the free Wi-Fi. You are buying the Starbucks experience, but at a higher price than the coffee at McDonalds.
Customization allows you to move up the ladder of economic value. However, concepts can be copied, or the operations may lose connection with the concept. Or, the element of surprise becomes smaller: “been there, done that.” Then, your offering is commoditized, and you move down the ladder.
After the economic offering of experience, we approach the next steps, according to Pine & Gillmore, which are referred to as “transformations.” Transformations are becoming the ultimate economic offering for any corporation, value network, or independent contractor.
By customizing an experience to create a learning experience, making it just right for an individual – providing exactly what he/she needs right now– you cannot help changing or transforming that individual. You coach your client to change. Transformations, a changed person, are a result of what the company does. In other words, the customer is the product, and hence, transformations are the last and final economic offering.
So, in brief, “a transformation is a tailor-made experience with an educational element and a changed individual as a result.”
Working from this point of view, we learned at Seats2meet.com that the “educational element” for our stakeholders is the “unexpected relevance,” or serendipity, of an experience. Since we are in the people-meeting-people industry, we realized that, by offering a stage for stakeholders to act upon, and by facilitating the process of “unexpected, relevant, serendipitous, meetings” between stakeholders while visiting our S2M locations, we achieved co-created transformations as manifestations of our added value, and thus, our right to existence.
How we facilitate the process of serendipitous meetings will be discussed in a later chapter.
Your challenge is to figure out how to co-create unexpected, relevant experiences together with your stakeholders in order to ensure your right to existence in the interdependent economy of Society 3.0.
Joe Pine introduces the Progression of Economic Value, the foundational model for understanding the role of Experiences in the h
Joe Pine shows that once Experiences are customized, transformations result where the customer is the product.