Experience Economy & Personalized Travel
Intro: Experience Economy
The fact that inspired me to start writing this article was a publishment by B. Joseph Pine and James H. Gilmore in The Harvard Business Review called “Welcome to the Experience”.
“How do economies change? The entire history of economic progress can be recapitulated in the four-stage evolution of the birthday cake. As a vestige of the agrarian economy, mothers made birthday cakes from scratch, mixing farm commodities (flour, sugar, butter, and eggs) that together cost mere dimes. As the goods-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for premixed ingredients. Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at $10 or $15, cost ten times as much as the packaged ingredients. Now, in the time-starved 1990s, parents neither make the birthday cake nor even throw the party. Instead, they spend $100 or more to “outsource” the entire event to Chuck E. Cheese’s, the Discovery Zone, the Mining Company, or some other business that stages a memorable event for the kids—and often throws in the cake for free“.
B. Joseph Pine and James H. Gilmore clarified the terms of “services” and “experiences”. They depicted a perfect example of an old TV show Taxi in which “a usually atrocious (but fun-loving) cab driver (Iggy), decided to become the best taxi driver in the world. He offered sandwiches and drinks, conducted tours of the city, and even sang Frank Sinatra tunes.” Iggy was a hot thing! The personalized experience of riding in his cab became more authentic to passengers than the mere service of getting from A to B, and in turn, customers gave bigger tips. In fact, one passenger even requested going around the block again, he “paid more for poorer service just to prolong his enjoyment.”
What is Experience Economy?
Nowadays, we can identify and clarify this fourth economic segment because consumers unquestionably desire experiences, and more and more businesses are responding by explicitly designing and promoting them.
All in all, an experience is not an amorphous construct; it is as real an offering as any service, good, or commodity.
Commodities are fungible, goods tangible, services intangible, and experiences memorable. Experiences are inherently personal, existing only in the mind of an individual who has been engaged on an emotional, physical, intellectual, or even spiritual level. Thus, no two people can have the same experience, because each experience derives from the interaction between the staged event (like a theatrical play) and the individual’s state of mind.
Experiences have always been at the heart of the entertainment business—a fact that Walt Disney and the company he founded have creatively exploited. But today the concept of selling an entertainment experience is taking root in businesses far removed from theatres and amusement parks. New technologies, in particular, encourage whole new genres of experience.
You Are What You Charge For
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.
More than a B2B Thing or B2C – It’s a Value Thing
One of the main trails of heightened experiences is “connection”, a relationship that “unites customers with the event or performance. At one end of the connection, spectrum lies absorption, at the other end, immersion.” So, the question for a travel expert then becomes: how do you coordinate travel experiences that enable your clients to connect with, and immerse themselves in, the places they visit?
Well, creating bespoke travel experiences greatly increases your chances of connected clients with the experiences that are most likely to connect with them. Secondly, one of the key design principles of creating memorable bespoke travel experiences is to “engage all five senses”. According to the authors behind the article, “the more senses an experience engages, the more effective and memorable it can be.”
A Good Question
“What specific experience will my company offer?” That experience will come to define their business.
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.
Harmonize impressions with positive cues. While the theme forms the foundation, the experience must be rendered with indelible impressions. Impressions are the “takeaways” of the experience; they fulfill the theme. 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. Even the smallest cue can aid the creation of a unique experience.
Eliminate Negative Cues
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.
Details Make the Difference
It’s the cues that make the impressions that create the experience in the customer’s mind. An experience can be unpleasant merely because some architectural feature has been overlooked, under-appreciated, or uncoordinated. Unplanned or inconsistent visual and aural cues can leave a customer confused or lost.
Experience Economy in Travel
Today’s consumers are a digital bunch, and that’s an understatement if ever one existed. We’re constantly searching, communicating, and checking in. Each action we take, whether we’re on our mobile device of choice or at our desktop, has the same end game: Satisfy me. Give me the answer to my search question. Give me a platform to reach out to those around me. Give me a way to share and explore. Oh, and do all those things immediately, if you don’t mind.
Differentiation by creating personalized experiences that deliver far more than your clients expect.
For agents who might think because we sell experiences we are destined to make strides in this economy, it’s important to understand that travel is the result of the purchase. The commodity is the airline ticket or other vacation components, which can also be bought online and are competitively priced.
Because OTAs don’t provide memorable purchasing experiences, travel consultants should embrace this experience economy.
A New Generation of Travelers
Travel is booming, and it’s not because of Boomers…
As more Millennials have reached higher levels
of affluence, they’ve started to take more exotic trips. In fact, Millennials have the highest average spend per trip at $879 according to Mintel. Young people are spending a higher percentage of their free time and income on travel. Traveling has become a part of their identity, an important step in understanding the world and themselves. What’s more, this travel itch is not unique to Millennials; it’s helped define what it means to be a modern consumer.
Millennial Mindset Consumers have created the experience economy: this modern consumer isn’t defined by age and now values badge experiences – often as much or more than a badge product.
By: Ioannis Georgiadis – Business Development Executive at Snami Travel Boutique & Luxury Lifestyle Management DMC https://medium.com/@giannisgeorgiadis