To paraphrase President Bill Clinton, “It’s the Social Economy, stupid!”
The McCann Worldgroup says that we have moved from the Experience Economy to the Social Economy.
Their research indicates that the current economy is moving into a new phase where people seek to define themselves by their ability to connect, share and communicate. Consumers place more emphasis on something that can be shared not just by what they own or what they experience.
Thus we have the Social Economy.
History Of Economic Progress
Do you remember the “Experience Economy?” Authors James Gilmore and Joseph Pine first coined the word in a 1998 Harvard Business Review article Welcome To The Experience Economy.
Gilmore and Pine’s theory was that in economies of mass affluence, people are more interested in paying for an experience than paying to own things. The memory of the experience becomes the product.
Pine and Gilmore say that the evolution of an economy is analogous to the stages of a birthday cake.
1. Agrarian Economy
Parents made cakes from scratch, mixing inexpensive ingredients from their farm.
2. Industrial Economy
Parents paid a few dollars to buy premixed ingredients in a box thus showcasing the goods-based industrial revolution.
3. Service Economy
Busy parents paid significantly more, ten to fifteen times the ingredients’ price, to order a cake from a bakery or grocery store.
4. Experience Economy
Parents outsourced the entire birthday event at a local venue that creates a memorable experience for kids (Chuck E. Cheese, Discovery Zone, etc.). They spend hundreds of dollars for the experience and the venue includes the cake for free.
The Social Economy
The Service and Experience Economies have not disappeared. These economies now just need to be viewed through the lens of the Social Economy.
In the Social Economy, people carry their friends in their pockets and are always sharing their experiences with them. They text, chat, share digital “face time,” and showcase visual images whether through video or pictures.
Continuing the birthday cake analogy for the Social Economy, the birthday kid crowdsources with friends where their experience should be held. Their friends have more influence over their decisions than their family does.
During the experience, the birthday kid’s friends take pictures and videos, posting them online and tag the celebratory guest. In the Social Economy, it’s not good enough to simply do something…you have to tell people about it before it becomes real. In short, pics or it didn’t happen.
And the best is when someone else uploads a picture or video of you and tags you. You get all the credit without looking vain or egotistical.
Parents are not left out of the Social Economy. Parents now live stream the entire experience to family members that cannot attend. They take pictures and videos that they immediately upload to their social networks.
In the Social Economy, the sharing and connecting with others about the experience becomes the product.
Take a look at this video to understand how this company, john st., integrated the Social Economy into a traditional birthday party. Thanks Scott Gould for sharing this video.
Being Socially Useful
The challenge for many organizations today is thriving in the Social Economy.
It’s about more than just setting up posts in social spaces and connecting with others.
The most successful orgs have a deep understanding of what being social means to people. They will help their customers share, communicate, connect and narrate the experience they are having. They will help them manage their connections, make new ones and share the stories of their lives.
How do you see the Social Economy impacting your organization or work? What are some ways your organization can be more socially useful?