The Experience Economy Revisited Part 2: 10 Years Later

“If, and only if, you charge for the time your customers spend with you, are you in the experience business.”  — The Experience Economy

This is one of the most challenging concepts for business owners to understand.  At any scale.  It illustrates the fundamental gap between a service business (in which a company charges for people and products) and an Experience-based business.  After all, an owner asks, how can I charge for time when my team delivers hard goods (cars or air conditioners) and services (maintenance, follow up, tech support).    And so as a business begins to plan its way into an Experience mode the best way to understand this evolution is through correlation.  

I was 8 years old when Stars Wars (Chapter 4, New Hope) was released.  The hype was unimaginable for me, a second grader.  My mother took me out of school to see it on opening day.  We stood in a line that literally snaked around an entire Seattle city block in order to gain admittance.  And in the interim we both became emotionally invested in the expectation, the anticipation, and the final realization of seeing the film.  Naturally it was a game changer.  Thankfully my mother saw fit that I should skip most of second grade to stand in the same line (albeit shorter) and see the film again and again.  I was hooked.  Did I own the film?  Of course not.  Was I collecting royalties for my visits?  No.  Loyalty points?  Not one.  But I went back again and again and again.  The film had connected with what I’ll call and emotional subtext that became a siren song in my young life.  It made an emotional connection and for that I willingly paid to sit in the dark and watch the Imperial Cruiser loom overhead.

As a business begins to transform itself on an Experience scale it should be attempting to accomplish the same effect (odd as that may sound).  See, services and products are commodities.  As such they can be found almost everywhere and at very competitive prices.  They are inert, lifeless.  The customer knows this and, unable to really tell the difference between company X and company Y, will shop hard on price.  But at every level there is an emotional narrative or subtext to the process of making a purchasing decision.  And if a business is going to thrive in an Experience Economy then it must connect itself to the terrific power of this emotional narrative and align its story line and activities with this emotional current.  In other words, it must compel the customer to gladly stand in line, to happily buy a ticket, and to do it repeatedly.

What are a customer’s emotional needs?  I don’t think it’s too surprising to learn that they’re very much like yours and mind: to belong, to feel valued, to feel safe, to feel part of something bigger, to avoid regret, to be happy.  All very basic yet mostly overlooked by the service economy.  After all a product is just a product right?  Wrong.  Too many businesses fail to recognize that by overlooking the customer’s emotional core they themselves become commodities.  

After a business determines it’s story line, it’s cast of characters, it’s arc then it needs to extend this outline to the audience’s emotional needs.  Does the story line speak to a customer’s need to feel valued?  Do the characters connect to the customer’s need to both avoid anxiety and feel secure?  Does the arc reinforce the customer’s need for basic happiness when making an investment?  If the answer is yes then the journey has begun.  If the answer is no then the real growth begins: the moment at which a business recognizes and starts to repair the emotional disconnect it has with its customers.

The Experience Economy Revisted Part 1: 10 Years Later

It’s been just over a decade since I read The Experience Economy for the first time.  Bought it in hardback as there was no way to download it to a tablet.  It looked imposing: black cover, a weighty title, degreed individuals pouring mountains of research into a topic that, at the time, was so far outside of my abilities that I was only able to understand it conceptually.  In other words, these men were writing about global organizations and C-level decision making in a way that was utterly disconnected from where I was: Managing a small business in the Northwest, sitting in my office, feeling the book’s importance but not understanding how to apply it.  I just knew it was a good idea.

I don’t think the authors could have fully anticipated how interconnected we’d all be by now, nor how the mandate for such highly individualized experiences would become the standard for consumerism in the 21st century.  But here we are, and a decade later The Experience Economy is more relevant than perhaps it was back then, and equally as challenging.

In theory, the concept is simple: Engage your customers in a series of interconnected experiences or ‘stages’ as the authors called them.  Connect each individual in the sales/service cycle in such a manner that a cohesive series of continually escalating ‘stories’ are told.  And then create an emotional connection by breaking the storied ‘fourth wall.’  These days words like ‘engage’ and ‘meaningful’ and ‘authentic’ are bantered around so freely that we hardly stop to consider the words true purpose, but the application of an Experience demands just that.  (note: when I share this type of information with clients this is usually the point at which people smile, nod, perhaps jot a note, and then, well, ask “How?”)

In a practical sense, in a small business sense, creating an Experience for a consumer begins with a simple series of questions: What’s our story?  Who are the cast members? What are their roles?  What is our story line?  These are big picture questions but they do require specific answers, forcing a team to drill down to the pertinent matter at hand: Does the business actually have any of these things?  In most cases the answer is ‘no.’  And the evolution begins.

For example, a business may have a cast of four or five people that play their respective roles in a customer service/sales cycle.  An administrator, a salesperson, a manager, a field team member, and an owner.  And in most cases each of these people remains somewhat disconnected from the other–operating as a function rather than a fusion.  The administrator may be outstanding at collecting the correct information.  The salesperson may be a real pro at capturing opportunities.  The manager may very well be an excellent resource for maximizing productions and people.  But do they actually work together?  Moreover, from the customer’s perspective, do they all seem to send the same message?  Do they each play a role in developing an emotional bond with the customer in a way that matters TO the customer?

These issues then become the jumping off point for the next critical question: What message does a team want to send, and how do they send it?

See, in an era of terrific parity and deeply individualized connections, total messaging has become more important than a product or a service.  People want to participate in something that makes them feel unique.  And in the course of determining the story behind this connection a more significant business transformation begins to occur.

Forget About Doing What You Love.

“Happiness comes from the intersection of what you love, what you’re good at, and what the world needs. We’ve been told time and again to keep finding the first. Our schools helped developed the second. It’s time we put more thought on the third.” — Oliver Segovia

As a young man I was encouraged to follow my dreams.  To do the things that I was passionate about and for.  This falls in to the “You can be anything you want to be” category of advice that well-meaning parents tell their children.  I’m not discounting the advice.  We are privileged to live in a country where the idea of limitless potential and passion is embedded in our national character.  But still, it rings a little hollow for millions of aspiring Fitzgeralds or Pollacks or Shaun Whites out there.  For most of us, passion is something that we eventually learn to fold into the daily necessities of being a professional adult.  To this very second The Food Network taps into the latent passion of millions of culinary hobbyists.  Yet passion and ability are two very different things.  Trust me, I’m no Jacques Pepin.

Ability.  We all have our natural abilities.  Call them god-given or call them learned and refined behaviors.  It really doesn’t matter.  You’re just good at something.  My brother has natural ability.  Baseball.  That was his thing.  As a young man he was physically gifted with the weapons needed to excel at the sport.  Probably still is.  One might argue that I have better abilities as a teacher or a talker.  It’s different for everyone.  But you have to do something, especially as an adult.  Doing what you’re good at is gratifying for a number of different reasons–not the least of which is that you don’t have to struggle quite so hard to excel.  And, if what you’re good at happens to be something that you’re passionate about then so much the better.  By contrast, if you’ve ever been in a position to do something that you’re not good at then you know the ‘pit of your stomach’ sinking feeling that happens when you punch the clock every day.  Sometimes necessity overrides ability and you have to do the grind in order to make ends meet.

Here’s a question: “What big ideas are you working on or associated with?”  By ‘big’ I mean things that are outside of your immediate sphere.  Things in your community?  Causes or movements.  Things that help others live better lives?  It’s a form of travel, really.  But travel in this case means moving outside of your comfort zone and down the unfamiliar paths that frequently involve a level of nervous anticipation as to what may occur.  People can be passionate about something.  And they can have natural ability.  And for most these traits will give them fine lives that meet their personal and financial needs.  But ‘why’ are these things important and ‘what’ is their best application?  Moreover, how can a person extend these gifts in such a manner that others benefit?  It’s a compelling question.  To extend the metaphor further, it’s the difference between taking an all-inclusive vacation and going off the beaten path to places that you’ve always imaged but were slightly afraid to tackle.    And therein lies the opportunity for us all.  Perhaps the finest expression of our passions and abilities is the application of these things in the world around us.  And perhaps the gratification we receive is a reflection of the world not only appreciating our contribution but, through small changes, thanking us in return.

So much of what I’ve read and been thinking about lately has to do with Gratification and Happiness.  What causes these things to occur?  Brain chemistry?  Habits?  Friends?  Philanthropy?  Most likely it’s all of these things.  But when considering what one does as a job I think it’s equally important to recognize that every day we all get up, get dressed, go to work (whatever that may be), make money, pay the bills, save a little, spend a little, and do it again (and again).  And if that’s the case then how can we get the most out of the requirements?  I’d love to go off the grid from time to time and surf.  Or start a small burger joint.  Or learn to paint.  It’s simply not what I’m good at.  Passionate, yes.  Good at?  No.  But these things give me motivation to learn and try new things.  I can ride a few waves.  And I can cook a wicked burger.  But I’m not great at either.  So I do what I’m good at (which I also care deeply about).  I teach others.  I speak and write and share information.  I help people see things in their businesses that can get them where they want to go.  It’s massively satisfying and gives me a quality of life that I enjoy.  But it’s the outer extension where the best stuff happens.  It’s the point at which others are enriched by what I do, or what you do, or what we all do together–that causes the most happiness.  It becomes ‘the perfect storm’ of passion, ability, and helping others that puts the real power of this combination into focus.

Ironically, you can be whatever you want.  The question is, however, is what you want the best expression of your total self?  So forget about doing what you love.  Do what you love, and what you’re good at, and what does the most Good.

The Lost Art of Appreciation

The research firm Towers Watson recently released a fascinating study on employee engagement, appreciation, and job satisfaction.  Their findings are summarized as follows:

“The single highest driver of engagement, according to a worldwide study conducted by Towers Watson, is whether or not workers feel their managers are genuinely interested in their wellbeing. Less than 40 percent of workers felt so engaged.” (source: HBR)

“Engagement” in this sense refers to a sense of authentic connection and commitment to one’s job and to one’s purpose as an employee.  It means you’re not a cog in a wheel.  That you’re more that a function.  That what you do matters.  Less than half felt it did.

These results beg the question: Can a manager be considered a “good” businessperson if the majority of his team feels both unappreciated and therefore unengaged?  Can any business sustain the growth and innovation needed to be competitive in today’s market–in any field–if the employees are ‘phoning in’ their jobs every day?  Most would argue ‘no’ and I’ll agree.  Business is dynamic these days.  The mandate to be innovative has never been greater and the speed with which a company is expected to innovate has never been faster.  It simply cannot make sense to have a team of employees that don’t care because they don’t feel cared for.

This isn’t ‘Manager Bashing Day’ by any stretch of the imagination.  Managers have some of the toughest, and most replaceable jobs, in any company.  It’s a role that’s often treated in stark terms.  But if the Towers Watson report illustrates one thing it’s that managers, like people, are often times more comfortable highlighting the negatives in their staff rather than the positive.  Business can be difficult, I get that.  But then the question quickly becomes: ‘Does spending time highlighting the things in business that suck actually improve results?’

Appreciation.  A simple idea that’s tougher to implement that one might think.  For many managers the mindful act of appreciating an employee isn’t part of a daily practice.  But it should be.  People want to feel like they’re part of something bigger than themselves.  A cause.  A purpose.  A battlecry.  Appreciation is the small affirmation that holds a person together during bad times and reinforces their efforts during the good.  If you’ve ever sat in a cubicle all day then you know exactly what I mean.

Appreciation prevents a person from having an Existential Employee Crisis: “What I do is meaningless.  What we do is meaningless.  What this company stands for is nothing.”  Now THAT is a terrible feeling.

So how does one begin to improve his skills in demonstrating sincere appreciation to others?  It’s not that hard, but it’s a new set of activities.  And like any, they need to be done regularly.  As such:

1.  Empathy.  Spend more time considering a person’s position and values.  What’s it like to do their job?  What if you had to do it every day?  What if your family’s livelihood in part depended on it?  And what if they fail at something?  How does this impact them?

2. Practice on your own life.  It’s funny how infrequently we actually express appreciation for the things we have–regardless of how big or small.  Yet it’s one of the easiest ways to create an Appreciation Habit.  Start with yourself.

3. The Take for Granted/Take Away Test.  Stop taking your employees for granted.  Ask yourself: ‘What do I take for granted or what do I assume about my team?’  If you take something for granted then you’re overlooking an opportunity to share appreciation.  Next, ask yourself: “What would happen if this person simply stopped doing the things that I do take for granted?”  Then what would happen?  Again, appreciate people that do the things you’ve grown accustomed to assuming will always be there.

4. Be specific.  There’s a big difference between a general “Thanks for being part of our team” and a specific appreciation directed at a specific action.  Blanket types of appreciation are fine, but people like meaningful specifics more.  It shows that a manager pays attention, observes, and cares enough to notice the details.  It shows that you’re engaged.  And when a manager is engaged the employee is more likely to be engaged as well.

Sitting here writing this I’m struck by how simple these things sound.  I’m also struck by how infrequently they’re actually done in a workplace.  A company cannot exist on the ego or ‘Will’ of a manager or leadership team.  Engaged employees produce better products, are happier people, and will not be as inclined to leave the job for greener pastures.

So start small, stay focused, and tell the people that work for you how, why, when, and what about their work you appreciate.  And do it on the regular!

How do you measure happiness?  It’s a fascinating question and one that blends psychology, neuroscience, economics, and other interdisciplinary measures.  Happiness research has also been finding favor among business types in the last few years as people attempt to determine exactly what makes us happy and if there is some fixed measurement to rank an individual’s happiness.

Harvard psychologist Daniel Gilbert recently published an articled entitled “The Science Behind the Smile.”  In it he argues that our assumptions about things that make us happy or unhappy, and the causal factors behind these things, are largely misunderstood or simply incorrect.  One might assume, for example, that purchasing a new home or taking that dream vacation will make us very happy.  And by contrast, that losing a job or a relationship will have equally damning effects on our attitude.  Mr. Gilbert’s research and conclusions, however, reveal the fleeting and rather superficial nature of both emotional conditions.

Turns out, happiness (and unhappiness) are temporary states that need to be reinforced or avoided accordingly.  For example, a twoweek trip to Bora Bora may make you radically happy.  But this happiness will not sustain itself.  It will last, best case scenario, for about three months.  Just long enough for the water cooler conversations to subside and the digital photos to be archived in your Flickr or Instagram account.  The same is true for other happy events: the start of a new romance, purchasing a home, professional achievement.  You’ll get about a three month improvement in your overall happiness.  The same time frame holds true for negative events.  You lose a job.  A relationship falls apart.  A big project is scratched.  You’ll be unhappy for about three months.  And then it subsides.

So what sustains Happiness?  That really is the question.  How do we keep it going?  The answer cannot be financial, as most of us would go broke trying to buy and buy and buy the next new shiny toy.  Ironically, Gilbert’s findings illustrate that consumerism is actually a double-edged sword.  In as much as it’s gratifying most of us realize that it’s not sustainable and, in worst cases, it can cause a depression all its own.  The answer cannot be simply interpersonal.  If that were the case we’d most likely be in the habit of building, destroying, and building new relationships three or four times a year.  So that’s a no-go.  The answer, turns out, is much simpler than that.

Doing ‘Good.’  That’s the secret to sustaining happiness.  ‘Good’ in this sense is obviously an abstract noun.  And although ‘Good’ is different for each of us, we all know what it means.  As the Greeks wrote:  ‘And what is good, Phaedrus,/And what is not good–/Need we ask anyone to tell us these things?”  ‘Good.’  Immutable and right.  Gilbert concludes that doing Good on a consistent basis: our best efforts, helping others, unrequited generosity, reciprocity, and health are the only ways to consistently reinforce happiness on a Life level.  These actions not only create habits but reinforce an understanding that we are capable of best efforts for ourselves and for the people in our lives.

“Doing” is a verb, and should be treated as such.  “Thinking” good thoughts is important.  “Feeling” good is a by-product.  “Believing” in good is a matter of hope and faith.  But “Doing” Good means there is action.  And action is tangible.  Proof that we can positively impact ourselves and others.  It is a manifestation of our best qualities.  This manifestation, this “doing” represents our finest selves (imperfect as they may be) and is the first step towards generating and sustaining Happiness.

So without oversimplifying anything, Do Some Good.  Do Something That Matters.  I think you know what I mean.  To the best within you.

The Happiness Re-Wire

What is happiness?  You know when you’re happy–it’s a very circumstantial emotion.  You also know what makes you happy.  For some people it’s a trip to the mall.  For others it’s an unexpected call from a friend.  But what about the ‘why.’  Why are we happy when we’re happy?  It’s a question that Harvard scholar Shawn Achor spent nearly 10 years researching. His work examined brain chemistry, psychology, sociological factors, and personal habits that impact happiness.  And here’s what Shawn and his team concluded:  You can rewire your brain for happiness.

Imagine what this means.  You can re-wire your brain so that you’re fundamentally more happy.  A happier you. Every day.  Although I will surely advise you to do your own research on Mr. Achor I can cut to the chase for the sake of the blog: certain activities that are conducted over the course of 21 days will re-wire the ‘happiness’ function in your brain by causing greater dopamine production/release.  In other words, 21 days of ‘happy’ behaviors create a chemical reward system that wants to be reinforced.  I’m 4 days in to this program and I’m excited to see the results.  The very very worst thing that can happen is that you’ll have done some good along the way.  Here’s how the program breaks out: You have to complete the following 5 activities for 21 days:

1) 3 ‘thank you’s’ to people in your life, circles, work, etc.  This has been fascinating.  I’ve now sent 12 ‘thank you’s’ to people and have a 100% return on “Awwww, thank you!’ in return.  It’s amazing.

2) 1 journal entry of something that is good in your life.  Here’s my note for the day: “Mink oil reminds of my dad, and how he used to rub it in to my baseball gloves, ski gloves, and everything that was leather–always.”

3) Meditate.  This is challenging for some.  Meditation is about being quiet.  Breathing.  Focused unfocus.  It’s a beautifully relaxing exercise.  Turn off the phone, turn off the computer, find a quiet place and say a few “Om.”

4) Exercise.  Not much to say about this.  It helps you relax and releases all sorts of stress

5) Random or Not Random Act of Kindness.  I love this.  Do something unexpected for either a person you know or a person you don’t.  So far I’ve filled up a gas tank, put $15 bucks worth of food in a food bank, bought a back pack for a student, and bought some groceries for a person in need.  It doesn’t have to be a big expenditure but it feels great helping others in need.  It’s just rewarding.

According to Mr. Achor the result of doing these 5 things for 21 days is a dopamine increase in your body and a general re-wire in terms of how happy you are.  Just imagine.

And here’s added benefit: Mr. Achor’s research states that happier people are 31% more productive than folks that are either ‘normal’ or ‘depressed.’  So in the process of helping others you’ll help yourself!

Give it a go–be happy.  You deserve it.  .

The Thank You Note

I’m in the media business.  Let’s just get that on the table.  I’m not an ad man’ per se.  It’s something my company does.  I’d like to think that what I do has meaning beyond demographics, impressions, creatives, campaigns.  Advertising has changed, or at least, is slowly changing.  We’ve seen ‘the social media revolution’ roll in with its own irrepressible energy.  We’ve seen newspapers become digitized.  QR  codes that are richly engaging.  Website people throw around words like “sticky” these days.  It’s all very chic.  But what happened to just nice, person-to-person, friend-to-friend relationships?

There’s always going to be a better mousetrap.  And people in business love to go through “shiny new toy” syndrome–romancing and fondling that nifty task management software or that next “killer app.”  Yet there was a time, not that long ago, when what mattered more than anything were simpler ideals: gratitude, appreciation, reciprocity, being “good people.” That worked.  It might have worked too well.  Because like most things that prove themselves successful they’re quickly set aside–taken for granted as always having been there, always working, a trusted friend–and now let’s give it a rest.  We can supplant these angels of our character for faster and fancier medium.  Yet we cannot lose sight of their transcendent ability to connect us on a meaningful level.  And that’s what matters.

The Thank You Note is about connections, attitudes, habits, ways of thinking and living that are first and foremost designed to highlight our best characteristics.  In life and in business, these are the qualities that bring us together.  These are the qualities that last.

Cheers, Matt