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The Experience Economy

By Bruno Azevedo, RM HUB's Consultant and Trainer


It has been more than 20 years since the term Experience Economy was coined by B. Joseph Pine II and James Gilmore where they argued that the next revolution would shift from a service economy to an experience economy. The core of this concept is that consumers are willing to pay more for experiences than for products or services. The experience economy represents a completely different concept of consumption, a holistic approach to the act of consumption in which all the senses are activated.

Hospitality is a good example of an industry dedicated to producing experiences. Everything is thought out in detail to emotionally involve the consumer and take care of their desires. The raison d'être of our activity is to produce happiness and satisfaction for the consumer. However, and given the current scenario in which tourists have very different origins and cultures, this challenge is quite complex and difficult to accomplish. The experience economy requires a high degree of personalization and knowledge of a client's motivations and psychological journey. Experience saving does not mean pleasing everyone in the same way. It is about creating their own functional systems that allow them to quickly and autonomously respond immediately to all requests that promote this experience, as opposed to rigid and bureaucratic systems.

Experiences can vary and be small and subtle or thunderous and impactful. This point of contact is called “a moment”. A moment is something unique that produces an impact that is relevant to the consumer. An experience is the set of countless moments of consumption that, together, create a positive image of a given act of consumption. For example, in top hospitality, the friendliness and availability of help from employees is often more important than the hotel unit's own hardware. Thus, one of the most important tools available to hotel organizations is the creation of open systems that allow employees to make spontaneous decisions that improve the customer experience. These systems must be implemented and enforced by everyone. Training plays an extremely important role in this concept and I still don't understand how this tool continues to be given so little importance.

Experiments are not empirical, not made up of atoms or magnetic waves, proteins or numbers. Experiences are a subjective phenomenon and are composed of sensations, emotions and thoughts. At any time, my experiences are composed of what I feel (cold, heat, tranquility), what moves me (joy, fear, anger) and the thoughts that come to my head. As a consumer, I have different motivations for consuming certain products. I can be innovative or one of the last to buy a product, I can be a fan or consume to acquire status. Whatever the motivation, it will always demand the best of experiences.

The future is to evolve from the economy of experiences to personalization. Consumers are willing to pay even more for a personalized experience. The act of consumption is not the same for everyone and being able to create a system that further personalizes the experience can help to create added economic value by positioning the offer at an even higher level. Each consumer develops a different sensitivity to the countless contact points and moments that make up the experience.

The experience-based economy is economically more profitable and is perceived by the consumer as being of higher quality. It is intended that each hotel company creates a culture of quality based on impactful experiences for consumers, thus increasing satisfaction and valuing our offer. Training is the ideal tool both when implementing policies and systems that promote a culture of experiences and to spread this message permanently throughout the company's journey.

The search for a culture of experiences is part of a modern revenue management policy, as consumers are willing to pay and spend more in places that create unique and unique experiences. Peter Druker's phrase occurs to me in which he says that “culture eats strategy for breakfast”. Understand, cultures focused on providing experiences and not focused on simply selling products.

RM HUB is your ideal partner to start a service culture.