Research

Rendering authenticity: How to succeed in the experience economy

The new consumer sensibility, widely heralded in the business press, is the Experience Economy. Our world of mediated, staged and multi-sensory experience — an increasingly unreal world — gives rise to people desiring authentic or "real" experiences. But what is authenticity? In their new book, James H. Gilmore and B. Joseph Pine II provide an answer. It's a fascinating — if sometimes difficult to follow — analysis of the matrix of real/fake and the many and mixed positions therein. By the end of the book the reader should emerge with the ability to understand the mechanics of authenticity as it applies in the world of economic offerings.

2008-01-30

In the beginning, there was the Agrarian Economy, and the dominant consumer sensibility was availability. How to grow, make, and transport food and goods was of primary concern to all. With the rise of the Industrial Economy, cost became the dominant sensibility, when consumers would purchase based on affordability. Could the family budget manage the purchase of a radio, a car, a dishwasher?

Next came the Service Economy, when quality emerged as the new sensibility. As you consider paying somebody to mow your lawn, cut your hair, cook your food, quality naturally emerges as a reason to buy. The new consumer sensibility, widely heralded in the business press, is the Experience Economy. Our world of mediated, staged and multi-sensory experience — an increasingly unreal world — gives rise to people desiring authentic or "real" experiences.

Authenticity defined

But what is authenticity? In their new book, James H. Gilmore and B. Joseph Pine II provide an answer. It's a fascinating — if sometimes difficult to follow — analysis of the matrix of real/fake and the many and mixed positions therein, and by the end of the book the reader should emerge with the ability to understand the mechanics of authenticity as it applies in the world of economic offerings.

As the logical follow-up to their 1999 bestseller The Experience Economy: Work is Theater & Every Business a Stage, Gilmore and Pine in their new book target businesses that want to get serious about bringing authenticity to their customers.

"Goods and services are no longer enough," the authors state in the introduction. What customers want today are experiences. But in a world increasingly filled with deliberately and sensationally staged experiences — an increasingly unreal world — consumers choose to buy or not buy based on how real they perceive an offering to be.

"Business today, therefore, is all about being real. Original. Genuine. Sincere. Authentic." In the context of business, the authors define authenticity as "the new consumer sensibility, or dominant purchase criterion that's emerging in the Experience Economy." Essentially, it is the consumer's "purchasing on the basis of self-image — not just on the basis of performance, cost, or even availability of the offering."

"Increasingly, people are making decisions based on whether what's being offered conforms to their own self-image," Gilmore says. "Therefore, businesses have to respond by understanding that the number one business imperative becomes that of rendering authenticity, of managing customers' perception of authenticity."

It's all fake!

The somewhat confusing part comes in Chapter 5, where the authors contend that nothing from businesses is really authentic. "Everything is artificial, manmade, fake," they state boldly. Bolstering this thesis, they make case after case that virtually nothing in the world has not been touched and altered by human beings.

But if the reader allows herself to go with the flow of the authors' message, somehow it all comes together in time. That's because authenticity is actually a matter of perception — it is a judgment made by the consumer which is linked to self-image, and the desire to purchase goods or services that are closely aligned to that self-image.

Moreover, the authors state, "Consumers' perception of what is and is not authentic changes over time, based on life stages, personal experiences, and changes in brands and offerings they habitually use." Still confused? Here is an excerpt from a recent online interview at tompeters.com, in which the "fake" message is explored:

TP: But, as you say, everything around us is fake —

JP: We don't say everything around us is fake. We say all economic offerings —

JG: — all business enterprise —

JP: — are fake.

TP: There are people who think that Starbucks is really cool and people who think that Starbucks is crap because it's no longer authentic.

JP: But the thing is, they're both right because authenticity is personally determined. Two people, buying the same offering, having the same experience, can have two completely different perceptions of authenticity based on who they are and what previous experiences they have had.

TP: Doesn't that make it impossible for a business to figure out how to render itself authentic?

JP: No, but it is difficult. You just have to realize that you may be able to render authenticity for some of the people all the time, maybe all of the people some of the time, but never all of the people all of the time.

Gilmore and Pine go on to chart a matrix of fake/real aspects of goods and services. There is a place for nearly every economic offering in this matrix. The challenge to business is to focus on what they do, where they are in the matrix and where they want to be. Using steps carefully outlined in later chapters, a company can position itself to move forward, backward or around the matrix, with the objective of being true to its purpose.

The authors use real-world examples to analyze the authenticity matrix, including Disneyland, Starbucks, American Girl, reality TV shows and many more. It is challenging reading, but whether or not you intend to put their plan into play within your organization, "Authenticity" will make you see the business world in a whole new way.

Bottom line

How does a business render authenticity? There are some fundamental things that companies first must realize. The authenticity paradox, as defined by James H. Gilmore and B. Joseph Pine II, contains the following axioms:

• If you are authentic, you don't have to say you're authentic.
• If you say you're authentic, then you'd better be authentic.
• It's easier to be authentic, if you don't say you're authentic.
• "Authenticity" is much more than a business book. It has a lot to say about consumerism, postmodern culture and the human condition.

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