Highlights from HITS Part 2: Experience Economics

IDEO’s CEO Tim Brown spoke a bit about experience economics. He showed a lot of shiny pictures from their work on the Prada store, but I was more interested in two frameworks he discussed. The first is a pyramid that comes from the book “The Experience Economy” (I don’t know if the ‘birthday party’ example is from there, too, or was Tim’s example).

Experience Triangle

The second interesting idea is that in order for an experience to have an economics, it must fit these three criteria:
– the customer knows they had an experience
– the provider owns that experience
– the customer can tell others about that experience

Later on, in an unrelated panel discussion, ID professor John Heskett mentioned that the key core element that design brings to the business equation is “value creation.” Of all the things the businesses desire in their processes, what design can most obviously and directly influence is the creation of “value” to be added to the product or service. I’ve heard this argument before, usually related to Michael Porter’s “value chain.”

4 thoughts on “Highlights from HITS Part 2: Experience Economics

  1. I especially like the Experience Economy framework because of its versatility. (I applied it to IT offerings on my work blog, leaving out the transformational level because I thought it was too high-falutin for our organization – we have enough trouble with the bottom three levels.) If anyone’s applied it in other ways, I’d love to hear about it.

    Adding to your notes from Tim’s talk and somewhat tying it into John Heskett’s discussion of value, I had this written:
    – the customer knows they had an experience (they can assign value to it)
    – the provider owns that experience (you can extract value from it)
    – the customer can tell others about that experience (value can be built with it)

    I should have some more of my thoughts about HITS posted by the end of the week.

  2. It’s also interesting that as you move up the pyramid, brands become more and more important, since they symbolize the emotional resonance that the experience is supposed to provide…and also that the value of each higher segment is further shifted from maximizing the margin to (for lack of a better word) supporting the brand.

  3. This experience triangle seems not to always work right way…

  4. The pyramide reminds some way A.Maslow’s motivation pyramide…
    same idea, different cases.