Experience Economy Requires Authenticity
Back in February of 2004 when Joseph Pine (author of Mass Customization and now Authenticity) gave this talk at the TED conference, few people were using the words “Social Media” — “Joseph Pine: What do consumers really want?” But his comments speak directly to why (to quote one of my favorite articles on social technology’s disruption of 20th century methods):
Pine outlines these four stages of economic value which he associates (like Toffler) with an agrarian, industrial, and now a post-industrial economy. In the agrarian phase all we had were commodities and the production and control of those commodities was the central aspect of our economy.
In the industrial phase we took commodities and manufactured them into goods, which then could be distributed and marketed. But Pine describes a “commodification” of goods as the broad-based ability to manufacture a high quality and low cost product.
His first book, Mass Customization explored how companies should escape from the commodification of goods. His suggestion that companies add a service, customization. But this approach has been commodified as well as all providers learn that they can be equally good at customization.
This led Pine to the idea of “experience” and more recently “authenticity” as the differentiation which companies could strive to provide to keep their products distinct from those made by others. In his view it is not just the product that customers care about, but the experience of buying and using that product. Think of Apple’s retail stores as an example.
But as Pine observes, this new “experience economy” requires a high level of authenticity and most companies, in the age of social media, are unprepared to deliver. Charles Green wrote recently on the topic of Customer Centricity in his Trust Matters blog:
If your company is selling a product that has become equivalent in cost and quality to those of your competitors, Pine’s message is for you — you must now focus on the total customer experience and not just the product to succeed. And once you do, you will discover a whole new challenge in rising to the demand for authenticity. Meeting that demand will require you to reformulate your company’s policies, philosophies, and your organizational structure.
…the new media are rewarding more participatory, more sincere, and less directive marketing styles than the old broadcast media rewarded.” (Harvard Business School: Working KnowledgeIn his talk Pine provides a model for thinking about the “Progression of Economic Value” from agrarian society to the modern day.
“Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers” September, 2007)
Pine outlines these four stages of economic value which he associates (like Toffler) with an agrarian, industrial, and now a post-industrial economy. In the agrarian phase all we had were commodities and the production and control of those commodities was the central aspect of our economy.
In the industrial phase we took commodities and manufactured them into goods, which then could be distributed and marketed. But Pine describes a “commodification” of goods as the broad-based ability to manufacture a high quality and low cost product.
His first book, Mass Customization explored how companies should escape from the commodification of goods. His suggestion that companies add a service, customization. But this approach has been commodified as well as all providers learn that they can be equally good at customization.
This led Pine to the idea of “experience” and more recently “authenticity” as the differentiation which companies could strive to provide to keep their products distinct from those made by others. In his view it is not just the product that customers care about, but the experience of buying and using that product. Think of Apple’s retail stores as an example.
But as Pine observes, this new “experience economy” requires a high level of authenticity and most companies, in the age of social media, are unprepared to deliver. Charles Green wrote recently on the topic of Customer Centricity in his Trust Matters blog:
…”customer centricity” is so easily hijacked by the dominant ideology of competitive advantage. The competitive paradigm—our leading view of business today—is repressively tolerant of customer-centricity. The hijacking turns the new idea into merely a tactic to serve the old idea. Customer centricity is neutralized, subsumed into the competitive paradigm.Charles goes on to give specific examples, like the message when you are on hold with customer service assuring you that “your business is important to us.” This rings untrue to the caller, it isn’t what Pine would call “authentic.”
If your company is selling a product that has become equivalent in cost and quality to those of your competitors, Pine’s message is for you — you must now focus on the total customer experience and not just the product to succeed. And once you do, you will discover a whole new challenge in rising to the demand for authenticity. Meeting that demand will require you to reformulate your company’s policies, philosophies, and your organizational structure.