Bringing down the house • 3
Photo by Nikola Bikar on Unsplash
Theater has been used for decades as a metaphor to highlight the differences between services marketing and product marketing. Standing on the shoulders of giants, I am using my version of the 7P framework to draw parallels between theater productions and service experiences.
(Product, Place, Physical Evidence, People, and Process were covered in previous blog posts.)
Promotion: Integrated marketing, sales, customer education, etc.
For theater productions, this means attracting sponsors, selling tickets, balancing demand and capacity, building loyalty, educating the audience (for example through podcasts and talkbacks), etc. For service providers, the equivalent would be carrying out integrated marketing activities before, during, and after the delivery of the service to attract, retain, and grow the right customers. To balance demand and capacity, service providers can either adjust capacity to demand or shape demand patterns (e.g., by shrinking or stimulating demand through innovative pricing strategies) (Wirtz & Lovelock, 2016).
Price: Revenue streams, pricing strategies, etc.
For for-profit theaters, the main revenue streams are corporate sponsorships, membership fees, ticket sales, concessions, merchandise, corporate events, etc. An effective pricing strategy for tickets must do two things: attract the right audience(s) to the show and raise sufficient income to make a profit; the difficulty is that these two aims are often at odds. The situation is further complicated by the fact that the theater typically attracts multiple audiences, which may require multiple pricing strategies. (Caird, 2012). Service providers can utilize a wide range of business models, from freemium services to multi-sided platforms. Just like theaters, service providers need to determine the right pricing strategy (or strategies) based on costs, perceived value, and the competition (Wirtz & Lovelock, 2016).
Work is theater
Taking the theater metaphor one step further, Joseph Pine and James Gilmore published the influential book Welcome to the Experience Economy: Work is theatre & every business a stage in 1999. To them, theater is not a metaphor (‘work as theater’), it is a model (‘work is theater’). Workers are on stage and must be directed to act accordingly.
The authors argue that companies compete not by making better products or by delivering better services but by staging better experiences. A ‘good’ experience is perceived to be meaningful, memorable, and ultimately transformative (creating a better version of ourselves).
Pine and Gilmore (1999) identified four forms of theater: platform theater, street theater, matching theater, and improv theater. For example, platform theater is the traditional theater where the script does not vary, the performance takes place in front of the audience, and the audience has little to no input into the performance. In improv theater, the actors think on their feet, responding to new and changing demands from the onlookers. According to the authors, all four types of theater have their place in the business world.
Pros and cons
Just like any metaphor, theater puts the spotlight on certain aspects of the production and delivery of services (and neglects or downplays others).
Advantages
Highlights the three-act structure of service experiences (acts and scenes)
Highlights the importance of roles and scripts to plan, manage, and control behaviors
Highlights the importance of place and physical evidence to manage expectations and determine service quality
Highlights the contribution of backstage/invisible aspects to the effective delivery of services
Highlights the need for a visionary and creative artistic director to set the vision and bring all of the elements together
Highlights the importance of cross-capability collaboration to plan, design, stage, and support live performances
Highlights the importance of enabling processes to attract, retain, and grow the right talent (casting and rehearsals)
Highlights the importance of customer education (to understand and enjoy the experience)
Highlights the need to balance demand and capacity (e.g., through innovative pricing strategies)
Disadvantages
Does not work as well for services that are highly personalized and customized (which require customers to become co-creators)
Does not work as well for services based on automation and self-service
The audience typically plays a more passive role in theater performances than in high-contact service experiences
Most service providers do not have the equivalent of the artistic director
References
Caird, J. (2012). Theatre tickets: When is the price right? The Guardian.
Pine, J. & Gilmore, J. (1999). Welcome to the Experience Economy: Work is theatre & every business a stage. Harvard Business School Press.
Wirtz, J. & Lovelock, C. (2016). Services Marketing: People, technology, strategy (8th ed.). World Scientific Publishing.
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