The Experience Economy Offers A Few Nuggets for Programmers

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With the world lurching toward Y2K, the hope and optimism
of a new millennium is tempered by the perils lurking over the hill. Will the Balkans go
up in flames? Will bulletproof vests be de rigueur in American high schools?

Just as pressing a question for most of us: How am I gonna
make any money in the 21st century?

It is a daunting question. The challenges posed by the
dizzying pace of technology and the deadening parity in the marketplace is unsettling.
It's enough to make the staunchest of corporate chieftains a little queasy.

But put away the Maalox for now, because authors Pine and
Gilmore have the answers to your woes.

Spouting the credo, "Work is theatre and every
business a stage," B. Joseph Pine II and James H. Gilmore -- who cut their teeth with
such heavy hitters as IBM and Procter & Gamble -- are the cofounders of Strategic
Horizons LLP, an Aurora, Ohio-based management-consulting firm.

Sounding less like Peter Drucker and more like a weird mix
of P.T. Barnum and Tony Robbins, the pair have just published a book that claims to be the
blueprint for prosperity in the new millennium.

The Experience Economy, a new release by the Harvard
Business Press ($24.95 in hardcover), argues that the key to business success is the
avoidance of "commoditization." In today's myopic business environment,
which has been marked by thuggish pricing wars, maintaining a strong brand identity can be
next to impossible.

In fact Pine and Gilmore posit the idea that "The
Internet is the greatest force for commoditization known to man," as it eliminates
the human element in traditional buying and selling situations.

The remedy for this stifling corporate malaise, according
to our high-minded duo, is to transform every last transaction -- be it for a TV set, a
new car, or the most mundane widget sold in Iowa -- into an event, whereby the
"experience must leave indelible impressions" with the customer.

The authors argue that price points in the 21st century
should be "a function of the value of remembering the experience."

In their hierarchy of values, commodities are fungible and
goods tangible. Services are considered intangible, while experiences are
"memorable."

The book points out, albeit in cursory fashion, some
top-drawer companies that adhere to this experiential MO.

British Airways CEO Robert Ayling -- whose carrier flatters
itself as "The World's Favourite Airline" in its ad campaigns -- is now
working on "in-flight entertainment systems." He hopes that there will come a
time when more people will see movies in the air than in cinemas.

Arguably, companies that sell services would seem to have
an advantage in "experientializing" their products, but Pine and Gilmore
aren't about to let manufacturers off the hook.

They point to Rawlings Sporting Goods out of St. Louis --
the exclusive provider to Major League Baseball -- which brought to the consumer market a
"radar ball." The ball contains a digital chip that allows one to turn the
benign, time-honored tradition of playing catch into a referendum on manliness by
measuring the speed of the throw.

The company seemed to be banking on the premise that
consumers would dole out extra dollars for the competitive element brought to the
experience of playing catch. Besides, a radar gun would cost thousands.

A crucial element in staging experiences, according to the
authors, is "theming the experience. It gives customers something to organize their
impressions around," the duo insists.

Pine and Gilmor give special props to Leonard Riggio of
Barnes & Noble for the ability to understand themes very well. Riggio built his
superstore business by thinking of his outlets as theaters and adding cafés as
intermission.

The authors' version of commercial utopia is a
full-fledged "Experience Economy," where retail stores and shopping malls get
away with slapping every person with a cover charge for setting foot in a store.

For those of you who have walked inside the cavernous
Niketown in midtown Manhattan, the possibility of having to part with a couple of
hard-earned greenbacks to tour the Air Jordan mausoleum doesn't seem all that
far-fetched.

The authors also warn against complacency for those
marketers who already have religion. They urge "experience stagers" to
constantly refresh their experiences by tweaking, adding, or dumping elements to keep the
product exciting.

Pine and Gilmor attribute the poor repeat business at
places like Planet Hollywood to the proprietors having eased up on the gas pedal.

Many of the dyed-in-the-wool cynics in the cable-TV
business may discard these ideas as sheer pabulum. After all, MSOs have traditionally been
assailed for their seeming lack of interest in corporate branding and their brazen
disregard for customer service.

Let's not forget Vice President Al Gore's
stinging barb to John Malone a few years ago, where the current Liberty Media Group
chairman was referred to as the "Don of the cable Cosa Nostra" for some of
TCI's controversial tactics.

So cable operators may perhaps be well-served by
considering Pine's and Gilmore's message, if they have not already taken it to
heart.

Programmers are probably the more likely candidates in the
cable business to take credence in the ideas found in The Experience Economy. In
fact, the authors point to Walt Disney as the original "experience stager" with
the opening of Disneyland in 1955.

Ultimately, The Experience Economy is an interesting
-- although, at times, a tedious -- read. The authors take 200 pages to lay out an
argument that probably could have been better served in the format of a long magazine
article.

The compelling spine of the book is marred and obscured by
the textbook approach that it employs, with the theoretical ramblings of the authors
spewing forth ad nauseam.

It would have been more provocative, not to mention
practical, if the authors focused more on a company that has bought into this concept --
say, a Disney -- and really laid out in greater detail how these "experiences"
are "staged" and how the benefits can be reaped.

Especially tedious for this reviewer was a sizable portion
devoted to the craft of the theater, which seemed strangely out of context. If I wanted a
primer on Stanislavsky and the Method, I would've gone to the Actor's Studio.

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