Developed by Miyoung Jeong, PhDAnn Marie Fiore, PhD Haemoon Oh, PhDLinda Niehm, PhD

Cheryl Hausafus, PhDApparel, Educational Studies, & Hospitality Management

Iowa State University

Acknowledgment – We thank the Southern Rural Development Center for funding this project. We also thank Steve Mickelson, Extension Specialist at Iowa State University, for his review of the project and Keila Tyner and Calista J. Yoo for their creative and technical assistance.

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Table of Contents

Lesson 1. An Introduction to Experience Economy Strategies

Lesson 2. Experience Economy Strategies Adding Value to Rural Businesses

Lesson 3. Aligning Experience Economy Strategies of the

Business and E-commerce Website

Lesson 4. Assessing Experience Economy Strategies of the

Business

Lesson 5. Assessing Experience Economy Strategies of the

E-commerce Website

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Lesson 1.1: A Progression of Economic Value

from Commodities to Experience

Lesson 1.2: Defining the Four Experiences (4Es)

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Successful small businesses focus on

• Vision

• Innovation

• Opportunity recognition

• Passion for change

• Customer-focused strategy

– Exceptional staffing

– Extraordinary service

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Customers want value

• High quality products

• Superior customer service

• Positive, engaging, memorable experiences

– Experiential value

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Competitive advantages of experiential value

• Satisfies customers fully

• Builds loyal customers

• Increases customers’ willingness to pay more

• Encourages positive word-of-mouth

• Recruits new customers

• Enhances business image

• Differentiates from competitors

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Added experiential value for customers: An example of Starbucks

• Interior Design

– Rich warm colors

– Contemporary furnishings

– Stylized graphics

• Music Media Bars

– Music heard in store

– Recommendations of music

– CD burned from selected music of vast library

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Pine & Gilmore’s Progression of Value

• Sources of

economic growth

in the U.S. have

progressed from

commodities to

goods and

services, and now

to experiences

(Pine and Gilmore,

1999)

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Pine & Gilmore’s Progression of Value

• The Experience Economy reflects expansion of

customer expectations to include positive

experiences

• In addition to quality goods and superior

customer service, businesses must add value

in new ways to differentiate themselves

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Progression of Value: An Example of Corn

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Four experiences based on level and form of customers’ involvement

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Definition of 4Es: Educational Experiences

• Increase the customer's skills and enhance his/her knowledge through active participation in the experience

Accommodation/ B&B

Restaurant Retail Rural tourism

• Applications for four different businesses

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Definition of 4Es: Esthetic Experiences

• Entail customer enjoyment of an enriched, unique physical design. The customer enjoys passively appreciating or “just being in a setting” of the business.

Accommodation/ B&B

Restaurant Retail Rural tourism

• Applications for four different businesses

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Definition of 4Es: Escapist Experiences

• Require that the customer actively participate in the events of a real or virtual environment. The customer shapes or contributes to the experience, which offers the customer a way of taking on a new persona.

Accommodation/ B&B

Restaurant Retail Rural tourism

• Applications for four different businesses

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Definition of 4Es: Entertainment Experiences

• Entail watching the activities and/or performances of others. The customer is not actively involved in the creation of the entertainment, but the mind is actively engaged during appreciation of the event

• Applications for four different businessesAccommodation

/ B&BRestaurant Retail Rural tourism

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Educational Experience: Accommodation/B&B

A B&B provides seasonal educational experiences about traditional Minnesota farm life, such as bread baking in an outdoor oven, making homemade applesauce, and berry picking.

Round Barn FarmRed Wing, MN

http://www.roundbarnfarm.com/attractions.htm

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Educational Experience: Restaurant

A local restaurant offers hands-on cooking classes, plus special events such as wine tasting, entertaining, and birthday parties.

The Chopping BlockChicago, IL

http://www.thechoppingblock.net/

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Educational Experience: Retail

A fabric store sells traditional/contemporary quilting fabric and supplies and teaches quilting classes to customers.

Cow Country Fabrics and Quilts

Dorchester, WIhttp://www.cowcountryfabrics.com/

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Educational Experience: Rural Tourism

A Dutch tourism attraction retail store and factory provides an opportunity for patrons to observe traditional wooden shoe carving. Visitor also can talk with artisans as they create wooden shoes and delftware in the old world tradition.

Dutch VillageHolland, MI

http://www.dutchvillage.com/park/activities.html

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Esthetic Experience: Accommodation/B&B

Landscape and interior design of this B&B offer an esthetic experience.

Beautiful B&BYarra Valley, Australia

http://www.worldvacationrentals.n

et/detailed/1157.html

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Esthetic Experience: Restaurant

Art-lined walls and accent lighting create an esthetic experience in this otherwise understated restaurant.

Café Des Amis Breaux Bridge LA

http://www.roadfood.com/Reviews/Overview.aspx?RefID=1900

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Esthetic Experience: Retail

The picture-perfect exterior along with beautiful products displayed inside offer an esthetic experience.

Belgique Pâtisserie & Chocolatier Kent, CT

http://www.roadfood.com/Reviews/Overview.aspx?RefID=491

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Esthetic Experience: Rural Tourism

Brilliant rivers and mountains of orange pumpkins of this festival offer an esthetic experience.

Pumpkin Festival Half Moon Bay, CA

http://www.sfc.ucdavis.edu/agritourism/agritour.html

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Escapist Experience: Accommodation/B&B

Murder mystery dinners held in a B&B provide an evening of mystery and intrigue. Each guest plays a character and attempts to solve the murder while being served a delicious gourmet meal.

Maple Hill Manor, KYhttp://www.bbonline.com/ky/maplehill/murdermystery.html

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Escapist Experience: Restaurant

A family-run restaurant offers a wide variety of activities for its customers, which make them feel like rangers by bottle-feeding cows.

Flying B Ranch, SD    http://www.flyingb.com/Calf%20Feeding.jpg

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Escapist Experience: Retail

Bike shop customers

can try out demo

mountain bikes on the

mountain trail, thus,

escaping from their

routine life.

http://

www.beautifulvista.com/

Recent_Photos/

Bike_Ride_Photos/

Bob_Mountain_Biking.JPG

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Escapist Experience: Rural Tourism

A small farmhouse offers a mini maze for little kids to wander through alongside a cornfield maze adventure for adults.

Scott’s Zellwood, FL.http://

www.scottszellwoodsweetcorn.com/cornmaze.htm

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Entertainment Experience: Accommodation/B&B

A B&B owner, dressed in colonial garb, shares recipes, cooking secrets, and narratives from the 18th century.

Elias Child House B&B, Woodstock, CT

http://www.bbonline.com/ct/eliaschild/specials.html

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Entertainment Experience: Restaurant

Servers entertain customers by singing for their supper at a restaurant.

Flying T Chuckwagon Supper & ShowRapid City, SD.

http://www.flyingt.com/

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Entertainment Experience: Retail

A boutique pet store offers a unique private birthday party for a pet, with the store’s owner providing birthday cake and entertaining music.

MetropawlisMilwaukee, WI

http://www.metropawlis.com/

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Entertainment Experience: Rural Tourism

Spectators cheer on their favorite pig at the World-Class Pig Races held on a farm.

Old MacDonald’s Farm, SD

http://www.oldmacsfarm.blackhill

s.com/Info/pr0402.jpg