Welcome to the Transformation Economy
This article originally appeared on LinkedIn.
There is a lot of talk these days about ‘experience’ and its role in design and business. Whether it is applied to user experience, customer experience, or even employee experience, there is a growing desire by brands to create remarkable customer interactions which are memorable and life-changing.
REMEMBER THE “WELCOME TO THE EXPERIENCE” ECONOMY?
This topic of experience, however, is not a new one. As a formal idea, it was introduced almost twenty years ago. In 1998, B. Joseph Pine II and James H. Gilmore wrote a Harvard Business Review article called, “Welcome to the Experience Economy” which was followed by a book in 1999.
They described the concept of the Experience Economy by outlining The Progression of Economic Value. This principle describes how the values by which consumers base their purchases have evolved, or progressed, over the last century. Let’s use a cake to describe the idea:
- The Commodities Economy was described as an agrarian-based economy in which traders farmed natural products and brought them to market. The cake consumer would purchase the raw ingredients and bake the cake from scratch. The cost to make this cake was at its cheapest.
- The Goods Economy was an industrial-based economy in which manufacturers made standardized products and made them available to users. The cake consumer would purchase these cake-mix products to bake the cake. The cost to bake the cake in the good economy is slightly higher.
- The Service Economy was a service-based economy in which providers delivered on-demand, customized services to their clients. The cake consumer would go to the local bakery to purchase a baked cake which they can personalize with a frosted greeting. The consumer trades cost for convenience.
- The Experience Economy is an experience-based economy in which stagers staged personal and sensational moments for their guests. Currently, we are in the Experiences Economy. The cake consumer is no longer satisfied with a commoditized product, or even service. They are willing to pay an exponentially higher price for a shared experience. Parents-turned-party-planners now choose Chuck E. Cheese or Disneyland to enjoy entertainment, community, and memories to enhance the birthday cake experience.
An early pioneer of the experience economy was Walt Disney, a man before his time. While his early storytelling success was based on being a cartoonist and then as an animated film visionary, he soon grew wary of two-dimensional stories that could only be observed from a screen.
He began to imagine a three-dimensional, story-driven experience in which the audience members could be transformed into participants, or even guests. The question became, “What would it look like to create stories in which the guests could interact with the characters and the environments?” The answer was the development of Disneyland, the “Happiest Place on Earth.”
The “Be Our Guest” anthem has become the cornerstone of Disney’s experience-based approach. They understand that every guest touchpoint must be as intentional as if it were a scene in a film. From the user experience of the website, the customer experience of ticket purchase, the parking of a car, the walk/ride to the gates, the walk down Main Street, the interaction with the characters, the first view of the castle…I think you get the picture. Every interaction is strategic, designed and layered with back story.
In fact, Disney story and experience-driven legacy inspired and informed the development of our ideology and methodology at Visioneering Studios to create stories through spaces. Our principals, current and past, were trained at The Walt Disney Company, Walt Disney Imagineering, and AECOM, a significant Disney consultant.
THE UPSIDE AND DARK SIDE TO EXPERIENCE-DRIVEN DESIGN
People are willing to pay for experiences because they offer a benefit and stimulation to consumers. People also base the value of experiences on their ability to cause them to tell stories about them. Lastly, people like experiences because they put the individual consumer, the “Me,” the I,” at the center of the attention. It’s like pulling up a chair at a table and being served a feast.
But the consumption aspect of experience is part of the problem. This is the dark side of experiences — even experiences can become commoditized. Most experiences are remarkable, but only for the space of time in which they are being experienced. When an experience is consumer-based, it’s based on consumption. You are no longer impacted when you are no longer consuming it. It’s like food with empty calories — you know that Snickers Bar that is delicious in the moment, but fleeting in its impact.
I say that it’s time to move beyond a consumer-based approach to experiences. It’s time to move beyond the experience economy. In the words of songwriter, Lanny Wolff,
“ I’m so tired of being stirred, but not being changed.” - Lanny Wolff
So, what’s the answer?
WELCOME TO THE TRANSFORMATION ECONOMY
Even Pine and Gilmore predicted that the next era would be the Transformation Economy, in which the “Yodas” of the world will guide aspirants through experiences which result in sustained change in their lives. People are willing to pay for experiences that have the potential to change the way people live, work, and play.
In fact, there is evidence that this transition is already happening in culture. Through the advances made by technology, it is widely acknowledged that we are more globally connected, yet more locally disconnected. People are looking for deeper reasons to connect.
Angie Thurston and Casper ter Kuile of the Harvard Divinity School released a study called “How We Gather.” In it, the researchers were interested in understanding why Millennials specifically are moving away from church attendance. The research uncovered six themes emerge: the desire for community, personal transformation, social transformation, purpose-finding, creativity, and accountability. The argument is made that the Church is not providing strong enough alternatives in these areas of life, so they are in search of other communities which do provide this.
One of the ten case studies cited as emerging communities is Crossfit. In fact, there is this growing idea of ‘Crossfit as Church.’ Crossfit provides a sense of community where the “Me” of the Experience Economy transitions to the “We” of the Transformation Economy. In addition to community, Crossfit is a place to undergo personal transformation and accountability. It is very common for a ‘cross-fitter’ to be called to explain why they missed a workout.
With this in mind, we are proposing a transformation-experience approach. How can we re-imagine the future of spaces in which we gather — where we live, work, and play? This is the future.
THE ARCHITECTURE OF TRANSFORMATIVE EXPERIENCE
I believe that the future of design is Transformational Experience. I say future because I believe that strategic design anticipates where our future is headed. We say design because we believe that design is the process of envisioning and creating an experience that transforms. I say experience because…
- I believe that experience should be Emotional – Brian Solis, a futurist, says that “Experience is an emotional response to a moment.”
- I believe that experience should be Holistic – “Experience is the sum of our interactions with the world around us.” –Gensler
- I believe that experience should be Transformative – Truly transformative experiences leave the person forever changed by them; going from an experience to an encounter.
The challenge becomes… how can we create spaces which elicit emotional, holistic, and transformative experiences? In future writings, I will explore how space can facilitate transformative experiences.