Economies Around the World

atonomy of economies

Today marketers shift from using features to benefits to market a service. There is a lot of buzz about storytelling, gamification, providing a better customer experience and creating shareable educational content. These are all part of different tactics to market a product. Why do companies use these methods?

A pragmatic answer is to get more exposure(awareness), engagement and get higher up in the search engine pages to get found. However a long term approach is to look at the customer journey and place methods such as story telling in a framework. The important thing to notice is where companies are charging for. Most companies today charge for the goods and service they provide and yet they offer free customer service and educational events.

The Experience Economy

Below is a table with the five economies. Gilmore & Pine wrote a book called ‘The experience economy” where they explain the progression of economies through the ages. I don’t fully agree since depending on industry and/or country all economies where already present.

experience economy

Each time we customize the economic value goes up, however when we commoditize the product the value goes down. With the industrial economy, it is about controlling costs of goods. Getting the costs down as low as possible so we can offer them to the masses.

Customizing a good automatically turned it into a service,because it was done just for a particular person and was delivered on demand to that individual person.With the service economy, it is about improving quality. Services become commodities when people don’t care who makes them as long as the price is acceptable.

For instance a good business school such as Harvard has many USP’s, charges the students(guests) in its care and the students are transformed when they attended. When Harvard would provide classes as a service, such as classes on-demand via the internet, it wouldn’t be able to charge as much, because the customer is paying for the activities Harvard provided not the experiences or setting to make the transformation happen. Also the competition is greater in the classes on-demand sector.

Transformation Economy by Design

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.

What does your customer aspire and where are they today? You can script a set of experiences to fill this gap, that takes them from where they are, where they want to be to make that transformation happen. And in the last phase the company ensures that the customer makes the leap to transform.

Authenticity

In the first paragraph I mentioned a few tactics to increase value such as storytelling and educational content. Storytelling makes you feel and perceive the world in a curtain way. Running apps started to integrated stories to make running more exciting. Now you probably guess in which economy the other tactics fit. So why aren’t companies charging for them?

Even though companies invest in education content and gamification they can’t ensure an experience or transformation. If you advertise and charge for offering an experience, but you can’t deliver you’re perceived as phony. People buy from people they like; brands they like and are authentic.

For now the majority of the companies shift gears from acting like a ‘goods’-company to a ‘service’-company. However you do need to move forward and not just stick to best practices but evolve or you will be commoditized. At the same time high speed internet, and user experience to a targeted audience are fuelling the ‘transformation’-offerings. For instance researchers Yee and Bailens on at Stanford University discovered that your online avatar influences your behaviour and the way you perceive yourself and view the world.

Make a list of the tactics you use today to determine if they contribute to your long term strategy. Gamification may be hip now, however it needs to be meaningful.

About author View all posts

cindy

My passion is combining technology and marketing to reach potential clients & retain current customers. Specialities: B2B, B2C, SMB, Social media, demand generation, brand management, analytics & customer insight.

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