The Experience Economy

The Experience Economy is a not-so-new concept, it was properly introduced to the public for the first time in 1999 by B. Joseph Pine II and James H. Gilmore when they published their book “The Experience Economy: Work is Theatre & Every Business a Stage”. Throughout this book, they talk about what customers really value, better yet for what would they pay premium? And their answer is of course “Experiences”.

If you were to start a business and you are competing solely, basing your competition on Price, you become trapped in commodity. Therefore, you are considered  to be “offering little, or no true differentiation” to your customers. But if you are using goods as theatrical material and the services as a stage, the experience is created. That experience is evaluated on how personal and fulfilling it was for the customer.

“Companies stage an experience when they engage customers in a memorable way.”

 

The Progression of Economic Value

 

This diagram illustrates the process in a much simplified way.

If we look carefully, experience economy is everywhere around us. One of the examples listed in this book is the “Golden Opulence Sundae” served at Serendipity 3, a New York City restaurant. How much are you willing to pay for an Ice cream? $10? $50? or even a $100?

Suprisingly, this ice cream will cost you US$ 1000!

 

The Golden Opulence Sundae

 

This Ice cream dessert is made out of 5 scoops of ice cream, adding vanilla beans from Tahiti, vanilla from Madagascar and Chuao from Venezuela. The Dessert is served in a Baccarat crystal goblet and eaten with an 18 carat golden spoon. In 2008 this very same restaurant added the “Frozen Haute Chocolate” to its menu costing  $25 000!

 

"007 Golden Eye" Bungee Jump. Locarno, Switzerland.

 

Fan of extreme sports? The wall of the Verzasca Dam in Switzerland is among the top 10 bungee jumping destinations world wide. It got more popular after James Bond took the leap from this place in Golden Eye. The dam, measuring 220m in total, takes a whole 7.5 seconds to fall. However, you need to pay US$ 235 in order to be “engaged” in this experience, while you pay $60 to $80 for a 70m height bungee jump, which makes perfect sense.

Taking the leap

7.5 seconds is enough time to admire this staggeringly beautiful scenery, that’s if you don’t get struck by an adrenaline rush!

Dinner in the sky, Downtown Beirut.

One local example that deals with experience economy is the dinner in the sky, which has been around for a while, but was recently introduced to the Lebanese high society. It’s a 22 guests table that goes up to 50 meters high with the dinner catered by La Table d’Alfred.

 

Random (rich) people enjoying good food and amazing scenery

 

La Table d’Alfred is a fine dining restaurant offering speciality cuisine for around $80 per person. However the price list for the dinner in the sky experience is much different!

06:00 PM: $120 per person. You get to watch the sunset, and they serve you appetizers and drinks.

Lunch or Dinner: $250 to $350 per person for a complete meal!

People are always waiting on new experiences, and basically, if you manage to offer a unique and an inherently personal experience to your customers, you can set the prices high. You only become differentiated when your experience is sold at a premium price. Therefore, if you have a good idea, regardless if you are in the business industry, you need to be a good demagogue, find an investor and go for it!

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