On any given work day, I put on a tie, head up to the IT floor, amble over to my standing desk in my state-of-the-art open office and set about addressing the challenges of the university using the tools at my disposal—online learning, predicative analytics, adaptive learning systems and all manner of emerging digital doodads and gizmos.
To some, my department represents a hopeful antidote to the increasingly grim financial reality in higher ed—decreasing state funding, rising tuition and inflating costs. To others, I am not much more than a lever used by administration to pry-up at the floorboards of faculty authority and to pick away at the cladding of academic quality and rigor.
And while neither of these perspectives gets at the real promise or the peril of emerging technologies, both points of view do stand on some hidden truth about what’s happening to the experience of higher education.
The provocative thought that I’ve been mulling for a while now combines classic research on consumer behavior with some straightforward observations about how students think about our institutions to arrive at new way of thinking about, and addressing, the current challenges in higher education.
To get there, we need to talk about a change that has been happening in the consumer market—in our students.
In 1998 B. Joseph Pine II and James H. Gilmore borrowed and updated some ideas about consumer behavior suggesting that people act less like price-maximizing computers and more like people looking for meaningful connections with the world. They dubbed their idea “The Experience Economy” and wrote a book arguing the appeal of experiences was so powerful in our day and age that it signaled a shift in the how our economic markets work.
In their view, economies start out as commodity markets, selling raw goods—chicken, wheat and lumber, for instance. Soon, these markets develop into product markets, where goods are transformed into more useful things—like milling grain into flour and flour into bread. From there, product economies eventually transform into service-driven markets, where a deli, for example, takes the bread and starts making sandwiches and serving them to you for lunch. For Pine and Gilmore, things get interesting when those service economies start to move into experience markets providing meaning and context to the goods and services provided. It’s not any deli you visit for lunch, it’s the World Famous Carnegie Deli, a lunch you can talk about and post pictures to Facebook for your friends to see.
Gilmore and Pine use the price of a cup of coffee as a powerful textbook example.
How much is a cup of coffee worth? Starting with the commodity value of the green coffee beans it takes to make a cup of joe, you are looking at only a few cents. Take that commodity and turn it into a roasted, ground and bagged product, and now a cup of it is worth maybe 25 cents. Spend the time to brew that coffee and put it in a cup and serve it at your local McDonald’s and the cost of the cup as a service has risen precipitously to a dollar. The magic happens when you take the same coffee and serve it up in the Starbucks experience, or perhaps in an elegant cup and saucer in the lobby of the fanciest hotel in your city. Now the value of that single cup of coffee has now risen to two, three or more dollars per cup. People value experience and will pay for it.
Pine and Gilmore dig into their idea at book length. But the core argument remains compelling: People want more than things or even things handed to them. They want—and often find that they are willing to spend a lot more on—the experience of how that product is served to them.
The Experience Economy is at work on our students too.
This is the first installment in a three-part series by David Thomas discussing the potential for understanding the realities of today’s higher education industry by viewing it through the Experience Economy lens. The second part will delve into student consumers and the diploma mill.
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