Understanding the value of out-of-home commercial experiences

In Western economies, rather than an economy primarily comprising tangible goods, 2/3rds of the economy consists of intangible offerings-services and experiences. The growth of experiences as a distinct offering with higher perceived value than goods, products, or services was first identified by Pine and Gilmore back in 1999 with the publication of their book, The Experience Economy.

Although there is no doubt that consumers value out-of-home (OOH) commercial experiences, including entertainment ones, there has never been a clear understanding of what motivates us to pay for experiences that stimulate our senses, emotions, and intellect. Researcher Susanne Poulsson at the BI Norwegian Business School has provided the answers.

Poulsson studied 15 different attractions and activities of tourism and travel, art and culture, entertainment, leisure, and play in five countries and conducted in-depth interviews with participants to uncover and identify the underlying factors and mechanisms that create value for OOH commercial experiences.

According to Poulsson's research, experience offerings have three main characteristics:

  • A promise of fun, flow, and magical moments
  • The need for physical and mental presence
  • A co-creation process of interaction between the consumer and the experience offering.

The magic is created by the interaction between the external stimuli and how each visitor perceives them. That is a personal and subjective process. A visitor invests time and is involved in creating the experience. For this reason, different visitors might see the same experience in very different lights.

Poulsson identified the seven factors that create experience value for a visitor:

  1. The social setting. The social aspects promote and enhance experiential values. For example, there might be interaction and a sense of belonging. Being present with others and feeling that one belongs together by sharing an experience will increase its value.
  2. Sensory richness and intensity. Varied, intense, and unusual stimuli of many senses promote and enhance the experiential value.
  3. Novelty. New and different things help promote and enhance the experiential value.
  4. Challenge. Elements that challenge the visitor promote the experience value. Such challenges might be tasks that are hard but not impossible to solve.
  5. Participation and interactivity. The experience value increases when the visitor is allowed to join the game (interaction). This might be through direct participation, an opportunity to impact and receive feedback on how they did. The greater the involvement, the greater the value.
  6. Suspense and surprise. Suspense and surprises evoke and enhance experience values. This might be done by building up expectations and then meeting them.
  7. Storytelling and dramatic structure. Devices such as plot, character, conflict, and message provide structure and context and give meaning to events and factual information. This promotes and strengthens the experience.

Susanne Poulsson's Star Experience Model

Poulsson says a commercial experience does not need a top score for all seven dimensions to create a brilliant experience. "But you need a high score, and you must provide something out of the ordinary in at least one of these dimensions in order to offer something that actually creates value for your customer." She says a commercial experience needs to be "a memorable event the customer is willing to pay for."

As Joe Pine and James Gilmore, in their 2019 revised edition of their book The Experience Economy, have since identified, the customer pays for commercial OOH experiences not only in money but also with their disposable leisure time. Accordingly, for experiences to be successful, they have to be time well spent or time well invested in the case of transformational experiences.

Poulsson also found that the amount of time spent engaged in an experience tends to increase the overall value of the experience. Thus, six hours at an amusement park is worth more than one hour of bowling.

Poulsson's seven experience values help to explain some of the trends we are seeing in OOH entertainment. For example, the declining attendance at movie theaters and the increasing viewing of movies at home and on mobile screens may be due to more than just convenience and economics. Being social with families or friends is hard, if not impossible, when sitting in a movie theater, as you can't talk or even text. However, at home, you can. Thus, the social setting of watching movies at home with someone or texting or chatting with a friend who is also watching at another location adds a social value dimension to movie viewing that can't be found in the cinema.

Poulsson's experience values also help to explain the growing importance of food and beverage offerings at entertainment-oriented venues. Food and beverage add sensory richness. Discovering new flavors of foods and drinks adds novelty to what could otherwise become a very familiar entertainment experience.

The well-executed values of social setting, sensory richness from the foodie-worthy and craveable F&B, the venue's design, and novelty, as well as the challenge and participation in a competitive game, are contributing to the success of fast-expanding social participatory eatertainment venues (also called competitive socializing venues), as they score high on Poulssen's multiple Star Experience Model values.

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