“The Experience Economy”, B. Joseph Pine II & James H. Gilmore, Harvard Business School Press, 254 pages

At first glance, a book on improving the retail experience might seem an odd choice for review in a publication focusing on one-to-one marketing. But in promoting customized interactions for consumers, “The Experience Economy” offers a marketing strategy that provides what authors B. Joseph Pine II and James H. Gilmore call “an escape from the all too easy practice of competing on the basis of price” by adding value through customer interaction.

Pine and Gilmore claim that an experience in which a customer has invested effort to co-create is one not easily surrendered. “No two people can have the same experience,” they say. “Each experience derives from the interaction between the staged event and the individual’s prior state of mind and being.”

Marketers, especially those with formal loyalty programs, should be able to take advantage of the ideas in “The Experience Economy.” A loyalty program that offers the same experience over and over again is going to risk losing its participants to a newer, flashier offering. “Buyers of experiences…value being engaged by what the company reveals over time,” write Pine and Gilmore. There are worse definitions for the emotional components of loyalty programs, as opposed to the reward aspects.

But readers better not take all of these nostrums as gospel. The authors’ suggestion of rewarding hotel guests with cash – a roll of singles bundled into a can in the snack bar – almost refutes their basic tenet of not competing on the basis of economics. Furthermore, cash is a commodity and does nothing to reinforce the brand. But they are dead-on when they say that a marketer should stage experiences for the customer and offer brand-reinforcing rewards. These things add a powerful element to a customer relationship – an emotional investment.

“The Experience Economy” does make a strong case against modular tailoring, which the authors feel incorporates all the drawbacks of customization with few of its benefits. The more standard features offered, they claim, the greater the likelihood of introducing some element that disqualifies the product with a particular buyer, either because the buyer does not want the element or does not want to incur the perceived higher cost for a marginal element.

Front-end marketers will find most of the information about setting the stage for an experience in the first part of the book useful, but should not gloss over the last five chapters dealing with “building a character” or putting a representative in the proper frame to deal with customers. Customer service managers will benefit from its tips on how reps can play roles to their company’s best advantage. One final note: Pine and Gilmore occasionally use footnotes for witty asides. Reading them adds to the experience of the book.

“Permission Marketing”, Seth Godin, Simon & Schuster, 242 pages

Now that the Direct Marketing Association has made adherence to its privacy principles a membership requirement, it wouldn’t hurt to make “Permission Marketing” required reading for its members.

“Consumers are now willing to pay handsomely to save time, while marketers are eager to pay bundles to get attention,” writes author Seth Godin. The solution is permission marketing, in which consumers consent to learn more about a marketer’s offerings for “some type of payment or benefit in return.”

Godin asserts that: “Permission marketers are totally obvious about their objectives with the consumer. They make it crystal clear what they will be doing with the data they collect, and exactly why it’s beneficial to the consumer to give this data.”

The book relies on easily digestible lists, such as Five Steps to Dating Your Customer, which sets guidelines for building relationships with consumers, and Five Levels of Permission Marketing, which maps out strategies based on the level of trust a customer has given a company.

To his credit, what Godin advocates is a long-term process that most quarterly driven companies will find daunting. “Permission marketing requires pati ence. Permission marketing campaigns grow over time – the opposite of what most marketers look for these days. And permission marketing requires a leap of faith.”

Godin implies that through electronic marketing, treating all customers as equal is possible. When he writes that technology provides marketers with “the ability to customize correspondence on the fly and deliver it for free via e-mail,” he overlooks the fact that electronic marketing channels are not yet ubiquitous. His contention that e-marketing is free is contestable as well, as it neatly ignores creative costs, for one.

Furthermore, when he exhorts readers to build strategies that further the relationship with newly acquired customers, he ignores an important intermediary step. Not all customers are created equal, and relationship marketers often triage them based on perceived value. In discussing the J. Peterman catalog, Godin writes that permission to mail more is given through a customer’s purchase habits, but “Permission Marketing” is light on the analytics that would help a marketer determine what the level of investment should be.

The book’s strength is as a tool for building customer relationships and for showing respect for consumers. But its weakness comes from its lack of application to a return on investment structure, without which it cannot be called a full-fledged strategy.