An Introduction to Experience Economy Strategies

Successful small businesses have demonstrated qualities such as vision, innovation, opportunity recognition, a passion for change, exceptional staffing, and extraordinary service (Morris, 1998). Exceptional staffing and extraordinary service reflect a customer-focused strategy, which remains a key competitive strategy for small businesses (McGee & Love, 1999).

Successful small businesses are keenly aware of the importance of customer value and emphasize a quality image for their store through customer-service, but customer value today is more than quality products and superior customer-service.

Creating these positive, memorable experiences is where qualities of vision, innovation, opportunity recognition, and a passion for change come into play for the small business operator. These positive, engaging, memorable experiences (experiential value) result in differentiation from competitors, large and small (Pine & Gilmore, 1999).

Adding value from positive, engaging, memorable experiences can offer competitive advantage for a business that:

• Fully satisfies customers
• Builds loyal customers
• Increases customers’ willingness to pay more
• Encourages positive word-of-mouth
• Recruits new customers
• Enhances the business image
• Differentiates the business from its competitors
• Makes it difficult for competitors to copy the business

Small businesses must develop opportunities that create value through innovation (Drucker, 1985). In the following modules, we present Pine and Gilmore’s (1999) Experience Economy strategies that help an operator innovate his/her business by creating experiential value for the customer.

These modules a) outline Pine and Gilmore’s perspective and four types of strategies for creating experiential value with examples of each found in small businesses, b) provide tools for the operator to assess experiential value of a business, c) outline how to communicate the experiential value of the business in the firm’s Web site, and d) provide tools to assess experiential value of the Web site.