Today experiences are more important than products or services

“Welcome to the Experience Economy” under this title, Joseph Pine and James Gilmore published an article in the Harvard Business Review. They suggested that the world as we know it, based on the service economy, is about to end, and the age of experience economy is coming. The article was written over 20 years ago — the authors also wrote a book on this topic — and has never been more up-to-date than today.

Pine and Gilmore argue that businesses must create memorable events for their customers and that memory itself becomes the product: the “experience.” It can manifest itself in various forms and relate to multiple aspects of the business, the environment of using the service or goods, customer relations, or how employees feel and identify with the organization.


Before I go into the examples, let’s go back a moment to understand better the revolution of the experience economy that is happening right now. In the agrarian economy, when we wanted to drink a cup of coffee, we needed coffee beans, which we roasted and brewed at home. The best raw material source was a farmer or a merchant who had just arrived at the village. It was the age of commodities.

With the beginning of the industrial age, our requirements as consumers began to change. We no longer had the time-consuming process of buying and roasting beans. That is why the raw material is replaced with the finished product — selected grains, roasted by a specialist, ground, and prepared for sale in convenient packaging. Now it was enough to go to the market or the store and buy the coffee we wanted (or which we afford).

Service and Experience

After the industrial age, the service economy has come. Today we don’t need to have coffee at home when we want it. It’s enough to go to a cafe, petrol station or find a coffee machine to drink it. So coffee from the usual commodities has turned into a service available practically everywhere and for everyone.

Have you noticed that Starbucks cafes are not lit outside? Instead, the only light comes from inside, placing customers on the display window, drawing the attention of passers-by.

The largest coffee shop chain in the world is a champion in building positive experiences.

If you were in one of them, the barista probably asked for your name. Starbucks will start writing them down during the 2012 championship, not only to avoid confusing orders, but most of all, to create a better personal connection with its customers.

Starbucks has even gone one step further by giving its customers the ability to order coffee on the go. Thanks to the mobile application, you can order your Americano from the bus and pick it up at the cafe. Maybe thanks to this you will not be late for an important meeting.

And here, the service economy turns into an experience economy.

Cafes are no longer just places where we come to drink regular coffee. Here we meet with friends, talk about business, work with a laptop or collapse in a comfortable armchair, drink the warming cinnamon Late, and read The Master and Margaret. We choose specific places not only because we like coffee there (because coffee tastes similar everywhere) but because we feel better in a particular cafe than in another.

Not only coffee

Of course, coffee is just an example that shows how the world’s economic evolution has proceeded. Today, when we expect the highest service standards, we can replace coffee with any product or service.

Uber brings us the taxi experience all over again. Before we get in, we know how much we will pay, which way, and with whom we will go. And when we get there, we immediately rate the driver. And all this anywhere in the world (where the service is available), without dishonest taxi drivers or cash problems.

Apple not only delivers iconic products but embeds them in a perfectly designed consumer path. From ascetic stores, packaging designed down to the last detail to an almost perfect environment of connected devices.

Disney created the world’s first theme parks, which immerse guests (never “customers” or “clients”) in rides that not only entertain but also involve them in an unfolding story.

When we pay for the experience

When we buy a service, we buy a set of activities that someone will do for us. But when we buy experience, we pay to enjoy a series of unforgettable events that the company stages, especially for us. We can quickly change commodities, products, or services, but the experiences will remain with us for a very long time.

Today it is important to us when and how we get the first information about the product, how the seller behaves during our purchases, how the product is packed and whether it will be easy for us to handle. And if we encounter an obstacle, the supplier (manufacturer) will efficiently help us solve our problem. When sharing our opinion with friends or on social media, we will first pay attention to experiences, and they will remain in our memory for the longest time. You may not remember the shoes you have seen, but you will remember the professional service and excellent seller.

Deliver the best experience

The most crucial question that managers may ask themselves today is, “What specific experience is our company supposed to deliver to clients?” Answer this question will define their business. The tools to answer this question like observation, qualitative and quantitative research, real-time direct contact, social media, and conscious collecting of valuable data have never been so readily available. But you have to use these tools consciously. Experiences, like goods and services, are created due to iterative research, design, and development process. It is continuous exploration, observation, and prototyping.

On the one hand, we analyze the collected data, and on the other, we look for answers by constantly experimenting and improving the experience. This process should be part of an organization committed to delivering the best possible experience. When the company understands how to deliver them and constantly improve effectively, it will win a customer for many years.

A pound of coffee (approximately 0.45 kg) costs less than $ 2 on world exchanges, enough to make 48 cups of coffee. So one cup of Arabian coffee costs the farmer less than 4 cents. But, on the other hand, we will pay at least $ 4 for an average Latte in a cafe. The difference is not only the costs of transport, premises, or employees but also more and more often the price of the experience in which we want to be a part.

When Joseph Pine and James Gilmore wrote an article about the experience economy, Netflix sent DVDs by regular mail. There was no Google, Facebook, or Instagram. However, they understood where the world was going. Today, customers can love or hate the company in a split second. We live in a world where not the product or service counts, but emotions, impressions, or values. They make up the best experience for which we consumers are willing to pay more and more.

Words by Stanisław Eysmont, Service Designer at Altimetrik Poland



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