B. Joseph (Joe) Pine II has been interested in the vendor-customer relationship for a long time.
Pine and his partner, James H. Gilmore, have written numerous books and articles that lie at the heart of the CRM approach to business. Together they have written The Experience Economy: Work Is Theatre & Every Business a Stage (Harvard Business School Press, 1999) and Markets of One: Creating Customer-Unique Value through Mass Customization (Harvard Business School Press, 2000).
Pine also wrote the award-winning Mass Customization: The New Frontier in Business Competition (Harvard Business School Press, 1993), and he has published numerous articles in Harvard Business Review, the Wall Street Journal and Chief Executive, to name a few publications where his insights can be found.
Pine and Gilmore recently published Authenticity: What Consumers Really Want, a book that tries to strip away the layers of phoniness that companies and products seem wrapped in today. Like The Experience Economy, which initiated nearly a decade of discussion about the customer experience and its place in CRM, Authenticity promises to initiate a long conversation about how companies can be more “real” to their customers, leveraging their genuineness or authenticity for market share and profit.
Influencing the Marketplace
Pine recently shared his thoughts on his latest research and the remarkable influence his work — with and without his partner — has had on the CRM world and beyond.
Denis Pombriant: You and your writing partner James Gilmore have been responsible for introducing some important ideas into the business world, like mass customization and the experience economy. How do you come up with ideas like that?
Basically, we observe what is happening in the business and world scene. I read four daily newspapers, subscribe to over 40 periodicals, purchase scores of books every year — notice I didn’t say I read them all — travel around the world, and constantly interact with clients and peers, and then develop ideas and models that make sense of it all. We joke that our company should’ve been named “Frameworks ‘R’ Us.”
Although we’ve been described as “futurists,” we really are not. We discern what’s happening here and now that people don’t yet see clearly, and then show executives and managers a lens through which they can see it too, along with frameworks for them to figure out what to do about it.
Pombriant: Your last book, The Experience Economy, is almost 10 years old, but it still exerts enormous influence on the marketplace — especially the CRM market. Does this surprise you?
Not really! We knew when we wrote the book that we were describing a fundamental change in the very fabric of the economy — a change that would take decades to play out. Remember that the agrarian economy lasted for millennia, the industrial economy for a couple hundred years, and the service economy for the last half of the 20th century. So we have a ways to go for the experience economy to play out — even though the transformation economy is hot on its heels.
We are very gratified, of course, at the response to our ideas and the book’s acceptance across many industries and occupations. I hasten to add that we didn’t invent the experience economy — we discovered what companies and people were already doing in these industries and occupations, put the right name to it, and again provided ways for them to decide how to stage even more engaging experiences.
There is one more step that needs to happen, by the way: Economists as a class need to accept experiences as a distinct economic offering — one that has always been around but only recently identified. It took them until the late 18th century to identify services in this same way, so I’m not sure I’ll see it in my lifetime!
When Concepts Take Off
Pombriant: Has the market’s reaction to the idea of experiences been what you had hoped for?
Yes and no. The acceptance amongst certain classes of folks — particularly environmental and interaction designers, developers and marketers — has been terrific, as well as in certain industries, such as hotels, technology, financial, and, surprisingly, healthcare. I’ve had hardly any clients in the retail industry — but a lot of manufacturers that are getting into retail to create place-making experiences in order to generate demand for their goods.
One thing is really bothersome, and that is that so many folks who claim to have read The Experience Economy missed — or act and talk as if they missed — the main thesis: that, as I noted earlier, experiences are a distinct economic offering, as distinct from services as services are from goods. So many glom onto the language of “customer experience” or “experiential marketing” rather than truly design and stage experience output. If that continues, the concept will devolve and become bastardized.
Pombriant: In your experience, how long does it take for an idea to really penetrate the market to the point that it’s well known and influential?
A lot longer than you think it will! Consider “mass customization” — a term coined by Stan Davis in 1987 in his path-breaking Future Perfect, when it truly was an oxymoron. I followed that up with my book in 1993, which I subtitled The New Frontier in Business Competition. Well, it took at least another decade for the concept really to take hold, become commonplace, and, in this case, become the new imperative. Just two months ago, for example, I keynoted the fourth annual Mass Customization & Personalization Conference — a sign that it now is a true movement!
The idea of an experience economy proceeded more quickly than that — the book sold more than five times as many copies as my first one — and in many circles was very quickly accepted as the right description of what was going on. Now if we could just get all those economists to ascend to the same proposition.
Standards of Authenticity
Pombriant: You know what they say, if you want three opinions, ask two economists, but I digress. The new book you wrote with Gilmore, Authenticity: What Customers Really Want, delves into how companies let their customers and other stakeholders down when they do things that are out of character for them or just plain off the reservation. You reference companies like Enron and Tyco and many others as examples, and I think we can understand just from the connotations associated with those names that these companies messed up big time. There are a lot of other companies that do things that are not as egregious but nevertheless manage to disappoint customers, employees, the finance community and others — and tarnish their reputations in the process. Is there a common thread here?
Absolutely, and it is that while companies today are afraid of all the fakes from China, so often they produce their own counterfeits and do things to get their offerings perceived as inauthentic. They do so by providing offerings that violate one or both standards of authenticity that we’ve identified: being true to itself, and being what it says it is to others.
Pombriant: Is that what it means to be inauthentic?
Yes, with the understanding that authenticity is personally determined — we decide for ourselves what is and is not authentic — and therefore the same offerings and same actions may be viewed by different people in different ways.
Pombriant: What can companies do to systematically avoid the kinds of calamities that make headlines?
As an aside, I find it interesting how you phrased each of the last two questions in the negative — which is exactly what philosophers have been doing for centuries, defining not authenticity but its opposite, and then essentially saying, “Don’t be that.”
Companies need to systematically examine their decisions, actions and, especially, their offerings with this new lens of authenticity. In this sense, authenticity is the new quality — it is a new management discipline, one that we are only now beginning to define, explore and delineate. Just as poor quality was the source of many calamities in the past — and in response, companies developed rigorous tools and techniques for managing quality that have dispersed across all industries — now companies must develop the same sort of rigorous tools and techniques for rendering authenticity. Our book is but the start.
Jumping on the Bandwagon
Pombriant: We’re already seeing some companies jumping on the authenticity bandwagon, but I wonder how closely they are staying to the concept. For example, some are highly self-referential — like Chevrolet with its campaign, “Genuine Chevrolet” or Levi’s with “Authentic blue jeans.” Can a company be authentic while being so clearly self-referential?
Well, again, it’s not a concept we’ve invented, only discovered, and if companies hadn’t been addressing the issue, we never would’ve made that discovery! And in many ways, it’s a bandwagon already much further along than when I wrote Mass Customization, or even when The Experience Economy came out.
But we think it a grave mistake for such companies as you point out to use the terms “authentic” or “real” in their advertising or packaging copy. Think, if the first time we met, the first words out of my mouth were “I just want you to know how authentic I am as a human being.” Your reaction would be to retreat posthaste! Companies shouldn’t say they or their offerings are authentic; they should render them to be perceived as authentic.
Pombriant: In Authenticity, you state that everything manmade is “fake, fake, fake,” but that covers a lot of territory. The human mind is responsible for all this fakery, but it is also necessary for perceiving something as authentic. Is there an inherent contradiction here?
We call it the “authenticity paradox.” All economic offerings are ontologically — in their very being — inauthentic, and yet we as human beings can phenomenologically — through our senses and perceptions — view them as authentic.
That’s why we use the term “rendering,” meaning “to make out of whole cloth.” Offerings aren’t authentic, they are fake, fake, fake, but despite that, you can — through design, production, packaging, demand-generation, and so forth — cause customers to perceive them as authentic. That’s rendering.
Pombriant: You like to use the S-curve as a graphical metaphor for the life-cycle of an idea; that’s something I like to do too. Where would you say we are on the S-curve for authenticity?
Good question! We’ve already seen, in many ways, the bastardization of “mass customization” as “customer relationship management,” which so often is just better, more precise target marketing rather than truly creating different offerings to meet the individual needs of each customer. And we’ve seen “the experience economy” bastardized with, naturally, “customer experience management,” which so often is about making transactions convenient, easy, nice and quick, rather than truly creating new economic experiences for guests.
If our prescriptions in “authenticity” were being bastardized, the first thing you’d expect to see is all the uses of the term in marketing and on packaging that we already see! So, again, it’s a bit different, in that with this book we’re identifying a concept already in currency and have to get companies to break a few bad habits.
Plus, I’m sure there are at least a few folks out there who think that we are the ones bastardizing the term — the folks who really believe, or really want to believe, that their firms truly are authentic and their offerings real. Authenticity being personally determined, they may very well continue to hold fast to those beliefs. But they fly in the face of all of the philosophical thought on the subject of what is and is not authentic, which we read, researched and applied to businesses and their offerings.
As we say in our fourth of five axioms of authenticity, it’s easier to render offerings authentic if you acknowledge they’re inauthentic. That acknowledgement is really at the beginning of the S-curve; without it, you’re probably on a whole ‘nother curve entirely.
Pombriant: Thanks, Joe.
Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].