Some retailers already border on the experiential. At the Sharper Image or Brookstone, notice how many people play with the gadgets, listen to miniaturized stereo equipment, sit in massage chairs, and then leave without paying for what they valued, namely, the experience. Could these stores charge admission?
Not as they are currently managed. But if they did charge an admission fee, they would be forced to stage a much better experience to attract paying guests. The merchandise mix would need to change more often—daily or even hourly. The stores would have to add demonstrations, showcases, contests, and other attractions to enhance the customer experience. With its Niketown stores, Nike is almost in the experience business. To avoid alienating its existing retail channels, Nike created Niketown as a merchandising exposition. If that is so, then why not explicitly charge customers for experiencing Niketown?
Would people pay? An admission fee would force Nike to stage more engaging events inside. The stores might actually use the basketball court, say, to stage one-on-one games or rounds of horse with National Basketball Association players. Afterward customers could buy customized Nike T-shirts, commemorating the date and score of events—complete with an action photo of the winning hoop. There might be more interactive kiosks for educational exploration of past athletic events. Nike could probably generate as much admission-based revenue per square foot from Niketown as the Walt Disney Company does from its entertainment venues—and as Disney should but does not yield from its own retail stores.
Charging admission—requiring customers to pay for the experience—does not mean that companies have to stop selling goods and services. Disney generates significant profits from parking, food, and other service fees at its theme parks as well as from the sale of memorabilia. In the full-fledged experience economy, retail stores and even entire shopping malls will charge admission before they let a consumer even set foot in them.
Some shopping malls, in fact, already do charge admission. Consumers judge them worth the fees because the festival operators script distinctive experiences around enticing themes, as well as stage activities that captivate customers before, after, and while they shop. With nearly every customer leaving with at least one bag of merchandise, these festival experiences clearly capture shopping dollars that otherwise would be spent at traditional malls and retail outlets.
Trade-show operators already charge admission to the experiences they create; individual business-to-business companies will need to do the same, essentially charging customers to sell to them. Diamond Technology Partners for instance, stages the Diamond Exchange, a series of forums that help members explore the digital future.
Current and potential clients pay tens of thousands of dollars annually to attend because what they gain—fresh insights, self-discovery, and engaging interactions—is worth it. No one minds that in staging the event, Diamond greatly improves its chances of selling follow-up consulting work.
Before a company can charge admission, it must design an experience that customers judge to be worth the price. Excellent design, marketing, and delivery will be every bit as crucial for experiences as they are for goods and services. Ingenuity and innovation will always precede growth in revenue. Yet experiences, like goods and services, have their own distinct qualities and characteristics and present their own design challenges. One way to think about experiences is across two dimensions. The first corresponds to customer participation. Such participants include symphony-goers, for example, who experience the event as observers or listeners.
At the other end of the spectrum lies active participation, in which customers play key roles in creating the performance or event that yields the experience. These participants include skiers. But even people who turn out to watch a ski race are not completely passive participants; simply by being there, they contribute to the visual and aural event that others experience.
The second dimension of experience describes the connection, or environmental relationship, that unites customers with the event or performance. At one end of the connection spectrum lies absorption, at the other end, immersion. People viewing the Kentucky Derby from the grandstand can absorb the event taking place beneath and in front of them; meanwhile, people standing in the infield are immersed in the sights, sounds, and smells that surround them.
Furiously scribbling notes while listening to a physics lecture is more absorbing than reading a textbook; seeing a film at the theater with an audience, large screen, and stereophonic sound is more immersing than watching the same film on video at home. We can sort experiences into four broad categories according to where they fall along the spectra of the two dimensions. Educational events—attending a class, taking a ski lesson—tend to involve more active participation, but students customers, if you will are still more outside the event than immersed in the action.
Escapist experiences can teach just as well as educational events can, or amuse just as well as entertainment, but they involve greater customer immersion. Acting in a play, playing in an orchestra, or descending the Grand Canyon involve both active participation and immersion in the experience. Here customers or participants are immersed in an activity or environment, but they themselves have little or no effect on it—like a tourist who merely views the Grand Canyon from its rim or like a visitor to an art gallery.
But still, the universe of possible experiences is vast. Experiences, like goods and services, have to meet a customer need; they have to work; and they have to be deliverable. Just as goods and services result from an iterative process of research, design, and development, experiences derive from an iterative process of exploration, scripting, and staging—capabilities that aspiring experience merchants will need to master. We expect that experience design will become as much a business art as product design and process design are today. Indeed, design principles are already apparent from the practices of and results obtained by companies that have or nearly have advanced into the experience economy.
We have identified five key experience-design principles. The proprietors have taken the first, crucial step in staging an experience by envisioning a well-defined theme. One poorly conceived, on the other hand, gives customers nothing around which to organize the impressions they encounter, and the experience yields no lasting memory. Home-appliance and electronics retailers in particular show little thematic imagination. Consider the Forum Shops in Las Vegas, a mall that displays its distinctive theme—an ancient Roman marketplace—in every detail.
The Simon DeBartolo Group, which developed the mall, fulfills this motif through a panoply of architectural effects. Every mall entrance and every store-front is an elaborate Roman re-creation.
Every hour inside the main entrance, statues of Caesar and other Roman luminaries come to life and speak. The Roman theme even extends into some of the shops. An effective theme is concise and compelling. It is not a corporate mission statement or a marketing tag line.
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But the theme must drive all the design elements and staged events of the experience toward a unified story line that wholly captivates the customer. Educational Discoveries and Professional Training International of Orem, Utah, stage a day-long course on basic accounting skills to nonfinancial managers.
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Their exquisitely simple theme—running a lemonade stand—turns learning into an experience. Students use real lemons and lemonade, music, balloons, and a good deal of ballyhoo while they create a corporate financial statement. While the theme forms the foundation, the experience must be rendered with indelible impressions. To create the desired impressions, companies must introduce cues that affirm the nature of the experience to the guest.
Each cue must support the theme, and none should be inconsistent with it. To create the desired impression, companies must provide cues that affirm the nature of the experience. The impressions convey quick service in a soothing setting. Furthermore, Harrop encourages baristas to remember faces so that regular customers are handed their usual order without even having to ask. Even the smallest cue can aid the creation of a unique experience. An experience can be unpleasant merely because some architectural feature has been overlooked, under-appreciated, or uncoordinated.
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Unplanned or inconsistent visual and aural cues can leave a customer confused or lost. Have you ever been unsure how to find your hotel room, even after the front-desk staff provided detailed directions? Better, clearer cues along the way would have enhanced your experience. And each level has its own signature song wafting through it. Ensuring the integrity of the customer experience requires more than the layering on of positive cues.
Experience stagers also must eliminate anything that diminishes, contradicts, or distracts from the theme. Most constructed spaces—malls, offices, buildings, or airplanes—are littered with meaningless or trivial messages. While customers sometimes do need instructions, too often service providers choose an inappropriate medium or message form.
Experience stagers might, instead, turn the trash bin into a talking, garbage-eating character that announces its gratitude when the lid swings open. Customers get the same message but without the negative cue, and self-busing becomes a positive part of the eating experience. The easiest way to turn a service into an experience is to provide poor service—thus creating a memorable encounter of the unpleasant kind.
Peoples reported from Washington. Associated Press writer Colleen Long in Washington contributed to this report. Copyright The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Enhanced subscribers are provided an ad-free experience, but if you would like to see local ads click this button.
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