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 / Autumn 2010 / Issue 60(originally published by Booz & Company)


What Experience Would You Like with That?

Pine and Gilmore created a wave of interest in customer experience that continues to build. Their book still sells 10,000 or so copies annually, according to Gilmore. (Most business books don’t sell that well in their first year, let alone a decade later.) And although the authors were not the originators of the concept of customer experience, their work has inspired a number of other thinkers. Most of these acolytes, however, are focused more on the potential profits that companies can reap when they enhance their customers’ experiences than on building an economy.

A Marketing Advantage

The idea that customer experience might be worth considering on its own merits originated in marketing. It was articulated by Morris B. Holbrook and Elizabeth C. Hirschman in “The Experiential Aspects of Consumption: Consumer Fantasies, Feelings, and Fun,” a paper published in the Journal of Consumer Research in September 1982 that is often cited as the urtext. In the same way that behavioral economists brought new insights to a field that had grown staid and sterile, the two marketing professors picked up threads of research from disciplines such as psychology and biology and applied them in a fresh way to consumer behavior, which had previously been seen as rational and logical, at least in theory.

In contrast to the traditional view, experiential consumption was governed by the pleasure principle. “This type of consumption,” the authors wrote, “seeks fun, amusement, fantasy, arousal, sensory stimulation, and enjoyment.” This approach was quite appealing to marketers who were looking for ways to cope with the price pressures created by the double-dip recession of the early 1980s.

This line of thought was most fully applied to marketing by Bernd H. Schmitt, a colleague of Holbrook’s at Columbia University’s Graduate School of Business and author of Experiential Marketing: How to Get Customers to Sense, Feel, Think, Act, and Relate to Your Company and Brands. In the book, Schmitt echoed Peter Drucker (who paved the way for marketing’s ascendancy when he said, “There is only one valid definition of business purpose: to create a customer”), writing, “Similarly, there is only one valid definition of the purpose of marketing: to create a valuable customer experience.”

Schmitt offered a jargon-rich framework for experiential marketing, saying that marketers could more effectively influence consumers by crafting messages based on five “SEMs” (strategic experiential modules, or types of experiences that correspond to the ways that people interact with the world — sense, feel, think, act, and relate) and delivering them via “ExPros” (experience providers, a category that includes standard marketing vehicles, such as advertising, logos, packaging, and so on).

The most powerful marketing, according to Schmitt, combines SEMs in integrated or holistic experiences. As an example, he pointed to the successful reintroduction of Volkswagen AG’s Beetle in the 1990s in North America, where it helped rescue the German automaker, which had gone from selling 500,000 cars in 1970 to selling fewer than 200,000 in 1988. The new Beetle tapped the sense SEM with its distinctive circular shapes, the feel SEM by eliciting smiles and nostalgia, and the think SEM with ads that asked, “0–60?” and answered, “Yes.” It also tapped the act SEM by suggesting the car would enable customers to inject more fun into their lives and the relate SEM by equating the car with hippies and flower power.

Get a Clue

While Schmitt focused on the role of sensory experience in marketing, others were exploring customer experiences in a broader sense, as a fundamental currency of corporate success. In the Winter 1994 issue of Marketing Management, Lewis P. Carbone, founder of the consulting firm Experience Engineering, and Stephan H. Haeckel, then a director at IBM’s Advanced Business Institute, wrote an article titled “Engineering Customer Experiences,” which began, “Customers always get more than they bargain for, because a product or service always comes with an experience.” In it, they introduced the idea of experience clues, which affect, for better or worse, customer perceptions that arise during the purchase and use of a product or service. (The only mention of Colonial Williamsburg in Pine and Gilmore’s book is the observation that the customer experience is degraded when costumed interpreters speak to visitors in modern vernacular, a finding confirmed recently when an interpreter nattily attired in colonial duds greeted my wife and me with a cheerful, “Hey, how ya doin’?”)

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Customer Experience Resources
Works mentioned in this review.

  1. B. Joseph Pine II and James H. Gilmore, The Experience Economy: Work Is Theatre and Every Business a Stage (Harvard Business School Press, 1999)
  2. Bernd H. Schmitt, Experiential Marketing: How to Get Customers to Sense, Feel, Think, Act, and Relate to Your Company and Brands (Free Press, 1999)
  3. Lewis P. Carbone, Clued In: How to Keep Customers Coming Back Again and Again (FT Press, 2004)
  4. Leonard L. Berry and Kent D. Seltman, Management Lessons from Mayo Clinic: Inside One of the World’s Most Admired Service Organizations (McGraw-Hill, 2008)
  5. Lior Arussy, Customer Experience Strategy: The Complete Guide from Innovation to Execution (4i, 2010)
  6. Gosia Glinska, James H. Gilmore, and Marian Chapman Moore, “The Geek Squad Guide to World Domination: A Case for the Experience Economy,” (Darden Business Publishing, 2009), DVD
  7. Jeanne Bliss, Chief Customer Officer: Getting Past Lip Service to Passionate Action (Jossey-Bass, 2006)
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