If you have a business today, and you don’t, you can’t spend too much time listening, reading, or talking about the customer experience and the economics of the experience in general. It wasn’t always like that. In fact, it wasn’t until Joe Pine and his co-author James Gilmore introduced us all to the term economics of experience in a 1998 article, and then wrote the groundbreaking book The Experience Economy a year later. And things in business haven’t really been the same since.
Recently, my PlayM CRM co-host Paul Greenberg and I had the pleasure of having Joe Pine join us for a LinkedIn Live conversation about how the ideas in the book have evolved over time. and how companies have put these principles in the book. in action, especially during the turbulent last few years. Below is an edited transcript of part of our conversation. Click the embedded SoundCloud player to listen to the full conversation.
Origins of the economy of experience
Joe Pine: People use the word epiphany a lot. And it wasn’t even an epiphany. It was a joke. As you know, my first book was Mass Customization. And I’ve often talked about how mass customization turns a good into a service. I give all the economic distinctions in goods and services. You can see that if you customize a good thing en masse, you’re really in the business of helping people figure out what they want. Then do it and enter them individually: services are delivered on demand and inventory goods.
In the late 93’s or early 94’s, this guy in the back of the room with this workshop he was doing is kind of smart. And he raised his hand and said, you’re talking about service companies that are mass-customized, so what does a service become? And I said, mass customization automatically turns a service into an experience.
Hmm. Well, that sounds good, I’ll use it! So it was literally a joke, wasn’t it? He just came out. But then I thought, and this is where the epiphany comes in, that this is really true. If you’re designing a service, it’s so suitable for someone that you can’t help but let it go, go. And it makes it a memorable event … it became an experience. Therefore, the experiences would be a different economic offer. And you would have an experience-based economy and it all came down to that. It’s been a job for almost 30 years.
Experiences, Service and Moments
Joe Pine: Most people, when they use the term CX or customer experience, don’t talk about memorable events. They don’t talk about distinctive experiences in this context. They are really just talking about good service. That’s all CX gets, good service. All the technology you’re talking about is good service.
Basically, what we’re talking about is making our customer interactions enjoyable, easy, and comfortable. All are well, but they are features of the service. I mean, nice is nice, but it rarely reaches the level of memorability?
A distinctive experience must create a memory. If you didn’t create a memory, then it wasn’t a distinctive economic experience. When we talk about making things easy, it often becomes routine for our employees to facilitate customer service. This prevents one from being personal and the experiences are intrinsically personal. In fact, they pass inside us as a reaction to the events unfolding before us. This is one of the key distinctions. Services, goods, good services exist outside of us, experiences pass inside us.
Finally, comfort is the antithesis of what I’m talking about because it means getting in and out as fast as possible. As a company, we spend as little time with our customers as possible. When with experiences and what people value is their time, right? Services and less time well saved, nice, easy, comfortable, but the experiences are time well spent. They value the time they spend with the company and the experience they put on stage and are very distinctive.
Brent Leary: They seem counterintuitive. Companies think so, and you talk that way. How difficult is it for companies to make this turn?
Joe Pine: Incredibly tough. It really is a mentality issue. They have a mindset that includes getting people off the phone as quickly as possible because that is productive. We have to be productive, right? And so on and not recognizing the value of spending time.
Sometimes drastic measures are needed to change or so I say, sometimes a drastic measure needs to be stopped, which is in the contact centers … average handling time. Stop measuring the average handling time. Stop measuring how little time you spend with customers. Like Zappos, letting people spend so much time, rather than measuring the success of calls, measures what Zappos calls a personal-emotional connection. Measure the connections we have with customers instead of measuring how little time we spend with them. This may change the mindset, but it is a chicken or egg problem.
Paul Greenberg: How do you actually create these simple ideas based on the complexity of this? It’s complicated.
Joe Pine: Well, the first thing is to start with American Girl. I’ve been saying for a long time that it was the best retail experience in the world. The most amazing thing is, of course, that they are not a retailer, they are a manufacturer. In fact, they make dolls. Many of the best retail outlets in the world are from manufacturers, not retailers themselves, because they often fail.
The American girl from Chicago was the case that the average person passing by that store, the average girl walking to the store did not go out for more than four hours. If you imagine these four hours. I would often do experimental expeditions where I take people to various cities, even if we are in Chicago, New York or LA, you have to go to an American Girl just to see it. He often told people he didn’t have girls or that he … brought people from foreign countries. I say, “Okay, you might not understand. That’s all I want you to do. Look at the faces of these boys, just look at the faces of your girls, and then you’ll get it,” he said. happening?
Paul Greenberg: Exactly.
Joe Pine: Do you have this memory?
Do more companies get it now?
Brent Leary: Wow! AHT, Zappos … Is this 2022? These examples have been around for years. Does this mean that dominant business thinking has not progressed in the last 10 years?
Joe Pine: Well, there are many sectors of the economy where not much progress has been made. We just talked about retail contact centers, right? There are two who do not yet understand. I don’t understand what the possibilities are. I don’t understand, someone calling with the problem is a sales opportunity that you can manage in the contact center. You just have to be more discriminating with the help you render toward other people.
There are other sectors that are succeeding and have made great strides. As I said, manufacturers in particular go into retail or create flagship experiences like the Guinness Storehouse in Dublin or the Heineken Experience in Amsterdam, Volkswagen and so on. These are the companies that get the most out of it.
Much progress has been made in the technology industries and in financial services and hospitals in particular, although much work remains to be done. In fact, I’ve probably worked more with hospitals and other healthcare companies than with any other industry in the world for the simple reason that research shows that the better the patient experience, the better the results.
That’s what hospitals are all about, it’s a better result. There are many examples of hospitals that really create great experience and focus on it, but they do it again, they need to rethink, they need summary measurements, they require … Analogous to the contact center is, our job is not get the person out of the hospital bed as soon as possible. That’s not the job, though maybe that’s how they pay you, right? It is the end result. This often requires being in touch with him and so on. The hospital payment system, the hospital measurement system is so bad in relation to other industries because you have third party payers instead of the person who has the experience, who has control over the [inaudible 00:06:10] of how much you get from this experience that tends to spoil things.
Paul Greenberg: How do you begin to look at millennials and the Zers generation and design and create memorable moments for them, as opposed to the historical way we did it when we came to power?
Joe Pine: Whenever someone raises generations, I always want to talk about the fact that the differences between generations are just changes, not general changes. They simply move in hundreds of bell curves. When you talk about each individual, the fact that you know that they are members of a certain generation doesn’t tell you anything about who they are as an individual and what they want. This is where the modularity, the consumability, as you say, of experiences are so important that they still need to be treated as human, living, breathing, and not saying, “Oh, you’re Gen Xer, so that’s it.” . that ‘s right. “
I used to tell customers that the worst thing that can happen is if a customer pulls out their phone in the middle of your experience, because it means they’re leaving your experience effectively, right, they’re immersing themselves in what’s going on. on the phone. Now, of course, this is not true. Now design ways to use social media. Obviously, this is the biggest difference and there are many more. As you said about digital, I also think millennials are the first generation to grow in the economy of experience, right? Not just in the service economy, in an economy of experience. This makes a big difference in the way they treat things where experience comes first and services and goods second.
This is part of a series of individual interviews with thought leaders. The transcript has been edited for publication. If this is an audio or video interview, click the embedded player above or subscribe using iTunes or Stitcher.