The Characteristics of Experiences
Before a company can charge admission, it must design
an experience that customers judge to be worth
the price. Excellent design, marketing, and delivery
will be every bit as crucial for experiences as they
are for goods and services. Ingenuity and innovation
will always precede growth in revenue. Yet experiences,
like goods and services, have their own distinct
qualities and characteristics and present their
own design challenges.
One way to think about experiences is across two
dimensions. The first corresponds to customer participation.
At one end of the spectrum lies passive
participation, in which customers don’t affect the
performance at all. Such participants include symphony-goers,
for example, who experience the
event as observers or listeners. At the other end of
the spectrum lies active participation, in which
customers play key roles in creating the performance
or event that yields the experience. These
participants include skiers. But even people who
turn out to watch a ski race are not completely passive
participants; simply by being there, they contribute
to the visual and aural event that others
experience.
The second dimension of experience describes
the connection, or environmental relationship,
that unites customers with the event or performance.
At one end of the connection spectrum lies
absorption, at the other end, immersion. People
viewing the Kentucky Derby from the grandstand
can absorb the event taking place beneath and in
front of them; meanwhile, people standing in the
harvard business review July–August 1998 101
welcome to the experience economy
Some companies will eventually
be like trade shows,charging
customers to sell to them.
infield are immersed in the sights, sounds, and
smells that surround them. Furiously scribbling
notes while listening to a physics lecture is more
absorbing than reading a textbook; seeing a film at
the theater with an audience, large screen, and
stereophonic sound is more immersing than watching
the same film on video at home.
We can sort experiences into four broad categories
according to where they fall along the spectra
of the two dimensions. (See the exhibit “The Four
Realms of an Experience.”) The kinds of experiences
most people think of as entertainment –
watching television, attending a concert – tend to
be those in which customers participate more passively
than actively; their connection with the
event is more likely one of absorption than of immersion.
Educational events – attending a class,
taking a ski lesson – tend to involve more active
participation, but students (customers, if you will)
are still more outside the event than immersed in
the action. Escapist experiences can teach just as
well as educational events can, or amuse just as well
as entertainment, but they involve greater customer
immersion. Acting in a play, playing in an orchestra,
or descending the Grand Canyon involve both
active participation and immersion in the experience.
If you minimize the customers’ active participation,
however, an escapist event becomes an experience
of the fourth kind – the esthetic. Here
customers or participants are immersed in an activity
or environment, but they themselves
have little or no effect on it –
like a tourist who merely views the
Grand Canyon from its rim or like a
visitor to an art gallery.
Generally, we find that the richest
experiences – such as going to Disney
World or gambling in a Las Vegas
casino – encompass aspects of all
four realms, forming a “sweet spot”
around the area where the spectra
meet. But still, the universe of possible
experiences is vast. Eventually,
the most significant question managers
can ask themselves is “What
specific experience will my company
offer?” That experience will come to
define their business.
Experiences, like goods and services,
have to meet a customer need;
they have to work; and they have to
be deliverable. Just as goods and services
result from an iterative process
of research, design, and development,
experiences derive from an iterative
process of exploration, scripting, and staging – capabilities
that aspiring experience merchants will
need to master.
Designing Memorable Experiences
We expect that experience design will become as
much a business art as product design and process
design are today. Indeed, design principles are already
apparent from the practices of and results
obtained by companies that have (or nearly have)
advanced into the experience economy. We have
identified five key experience-design principles.
Theme the experience. Just hear the name of any
“eatertainment” restaurant – Hard Rock Cafe,
Planet Hollywood, or the Rainforest Cafe, to name
a few – and you instantly know what to expect
when you enter the establishment. The proprietors
have taken the first, crucial step in staging an experience
by envisioning a well-defined theme. One
poorly conceived, on the other hand, gives customers
nothing around which to organize the impressions
they encounter, and the experience yields
no lasting memory. An incoherent theme is like
Gertrude Stein’s Oakland: “There is no there there.”
Retailers often offend the principle. They talk of
“the shopping experience” but fail to create a
theme that ties the disparate merchandising presentations
together into a staged experience.
Home-appliance and electronics retailers in partic-
102 harvard business review July–August 1998
welcome to the experience economy
The Four Realms of an Experience
Entertainment Educational
Esthetic Escapist
Active
participation
Immersion
Passive
participation
Absorption
ular show little thematic imagination. Row upon
row of washers and dryers and wall after wall of refrigerators
accentuate the sameness of different
companies’ stores. Shouldn’t there be something
distinctive about an establishment called Circuit
City, for example?
Consider the Forum Shops in Las Vegas, a mall
that displays its distinctive theme – an ancient
Roman marketplace – in every detail. The Simon
DeBartolo Group, which developed
the mall, fulfills this motif through
a panoply of architectural effects.
These include marble floors, stark
white pillars, “outdoor” cafés, living
trees, flowing fountains – and even a
painted blue sky with fluffy white
clouds that yield regularly to simulated
storms, complete with lightning
and thunder. Every mall entrance and every storefront
is an elaborate Roman re-creation. Every hour
inside the main entrance, statues of Caesar and
other Roman luminaries come to life and speak.
“Hail, Caesar!” is a frequent cry, and Roman centurions
periodically march through on their way to
the adjacent Caesar’s Palace casino. The Roman
theme even extends into some of the shops. A jewelry
store’s interior, for instance, features scrolls,
tablets, Roman numerals, and gold draperies. The
theme implies opulence, and the mall’s 1997 sales –
more than $1,000 per square foot, compared with
a typical mall’s sales of less than $300 – suggest that
the experience works.
An effective theme is concise and compelling. It
is not a corporate mission statement or a marketing
tag line. It needn’t be publicly articulated in writing.
But the theme must drive all the design elements
and staged events of the experience toward
a unified story line that wholly captivates the customer.
Educational Discoveries and Professional
Training International of Orem, Utah, stage a daylong
course on basic accounting skills to nonfinancial
managers. Their exquisitely simple theme –
running a lemonade stand – turns learning into an
experience. Students use real lemons and lemonade,
music, balloons, and a good deal of ballyhoo
while they create a corporate financial statement.
The theme unifies the experience in the students’
minds and helps make the learning memorable.
Harmonize impressions with positive cues.
While the theme forms the foundation, the experience
must be rendered with indelible impressions.
Impressions are the “takeaways” of the experience;
they fulfill the theme. To create the desired impressions,
companies must introduce cues that affirm
the nature of the experience to the guest. Each cue
must support the theme, and none should be inconsistent
with it.
George Harrop, founder of Barista Brava, a franchised
chain of coffee bars based in Washington,
D.C., developed the company’s theme of “the marriage
of Old-World Italian espresso bars with fastpaced
American living.” The interior decor supports
the Old World theme, and the carefully
designed pattern of the floor tiles and counters encourages
customers to line up without the usual
signage or ropes that would detract from that
theme. The impressions convey quick service in a
soothing setting. Furthermore, Harrop encourages
baristas to remember faces so that regular customers
are handed their usual order without even
having to ask.
Even the smallest cue can aid the creation of a
unique experience. When a restaurant host says,
“Your table is ready,” no particular cue is given. But
when a Rainforest Cafe host declares, “Your adventure
is about to begin,” it sets the stage for something
special.
It’s the cues that make the impressions that create
the experience in the customer’s mind. An experience
can be unpleasant merely because some
architectural feature has been overlooked, underappreciated,
or uncoordinated. Unplanned or inconsistent
visual and aural cues can leave a customer
confused or lost. Have you ever been unsure how to
find your hotel room, even after the front-desk staff
provided detailed directions? Better, clearer cues
along the way would have enhanced your experience.
Standard Parking of Chicago decorates each
floor of its O’Hare Airport garage with icons of different
Chicago sports franchises – the Bulls on one
floor, the White Sox on another, and so forth. And
each level has its own signature song wafting
through it. “You never forget where you parked,”
one Chicago resident remarked, whi