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Wednesday, October 22, 2014

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Ushering in the experience economy

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Business strategists B. Joseph Pine II and James H. Gilmore contend that economic history has moved through four phases, traceable through the evolution of the birthday cake. 

First, agrarian society was a commodity market. One procured flour, sugar, butter and eggs to bake a cake.

Next, in a goods-based economy, mothers bought Betty Crocker or Duncan Hines mix, which they baked and decorated themselves. Manufacturers competed based on the quality of the product they produced. 

As manufacturing was standardized and products were differentiated only on the basis of cost, the service economy took root. Companies prided themselves on their ability to cater to the needs of clientele and differentiated themselves through customer service. Families bought pre-baked, iced and packaged cakes, which could be customized with superhero or Disney character icing. 

Finally, time-starved families of the 21st century moved us into the experience economy, the latest progression in the economic model. In the experience economy, parents outsource birthday parties to Chuck E. Cheese, Mad Science or other venues. 

The experience economy is exemplified by companies such as Disney and the Rainforest Café, as well as by experiences such as sitting in a Parisian café or praying at the Kotel. Moving beyond service, the offerings aren’t simply customized, but personalized, existing in the mind of an individual engaged through the full range of senses as well as on an emotional level. Experiences ignite lasting memories. In the words of Pines and Gilmore, while services are delivered to clients, experiences are staged for guests.

There are a few offerings of the experience economy in the Jewish community. In my last column, I wrote about Shavuot retreats, combining nature, Jewish learning and recreation. UJA Federation of Greater Toronto’s Walk With Israel, with its 15,000 participants, each experiencing a personal journey, is an example of the experience economy. I carry memories from nearly three decades of walkathons, including years ago when I marched for a Russian refusenik.

Some of our community’s offerings, however, continue to base themselves on the goods or service economies. Some schools see their role narrowly as producing knowledgeable students – prepared for bar mitzvah, proficient in Hebrew, loving Israel and knowledgeable of Bible. Some synagogues see their function as offering services – Shabbat service, counselling, funerals and education classes. The limited scope of these offerings misses the boat of the new economy.

Even attempts at innovation in these settings – the “synaplex” model, which offers choice within synagogues, such as young families services, reflective hikes or musical services, or schools that offer electives, allowing students to choose between classes such as Jews in film or Israeli music – bring us back to customization, idiomatic of the service economy, rather than personalization, a key aspect of the experience economy.

Pines and Gilmore urge organizations driven by the experience economy to think about what they would do differently if they charged admission. As a thought experiment, consider how we might transform Shabbat services if they were ticketed events? What would Hebrew school look like if admission were charged at the door?

Conceptualizing communal institutions as stagers of experiences, focused on creating memorable and moving personal experience, will enable us to build our market while emphasizing the spiritual and intellectual growth of each individual.

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