How to increase the value of what you sell
At the Build-a-Bear workshop, a retail store, teddy bear lovers can build their own teddy bear from scratch, choosing everything from the type of fur and clothing on the outside of the bear to the type of heart they want embedded in the chest.
At the American Girl Place in Chicago, little girls sing the American Girl anthem, take their broken dolls to the doll hospital, and pose for photos so they can leave the store with a photo of themselves as if they were featured on the cover of American Girl magazine.
In Tomahawk, Wis., Case Manufacturing lets customers actually dig in the dirt and ride on earth-moving equipment before they buy it.
All three companies – using goods as props and services as the stage – design such memorable events that customers want to buy, buy, buy. It’s part of what B. Joseph Pine II calls “The Experience Economy.” Pine was the featured speaker at a Dec. 10 event hosted by TEC (The Executive Committee), an executive development group for CEOs, presidents and business owners.
Pine says companies are what they charge for, and that goods and services are no longer enough. “If you’re competing solely on the basis of price, then you’ve been commoditized, offering little or no true differentiation,” he said. “Today, more and more consumers are looking for experiences.”
Why does a cup of coffee at Starbucks cost more than a cup at the corner diner, or a cup you can brew at home? Because Starbucks is a lifestyle. It offers customers a place where they can sit, sip, relax and watch everyone else. They don’t just want coffee. They want to revel in being part of the experience.
Here are ways companies can create memorable experiences for customers.
– Direct your workers to act and to be a part of the play. When sales people go into a prospect’s office, factory or home, they have no control over what they might find there. The best sales reps use whatever they find on hand as props. Neither bothered nor frustrated by interruptions, they use a well-timed remark or expression to draw disruptions into the flow of the overall performance. What looks improvisational is, in fact, rehearsed with lots of practice, practice, practice.
– Charge admission. Ask yourself: “What would we do differently if we charged admission?” Then do it, and charge. Just as people pay an admission to experience museums, theaters, concert halls and theme parks, they will pay an admission for memorable experiences you can create for them.
– Mass-customize your offerings. So often businesses overwhelm customers with so much product proliferation that they throw up their hands and walk away rather than go through a lengthy decision-making process with little or no support. Pine says customers do not want choice. They want exactly what they want. Dell knows that, and builds computers – lots of them – according to the exact specifications of its customers.
– Go beyond the experience. Smith Kline Beecham, makers of Nicorette gum, offer not only nicotine gum and patches, but customized mailers for quitters. Company studies show that those who participated in the mailings have a more than 50% likelihood of actually quitting smoking than those who had no follow-up program.
One member of the audience said Pine’s “experience economy” mantra indeed has merit. Ginny Gilbert, CEO of Gilbert Construction Corp. in McFarland, Wis., said creating an experience for her customers helped take the company out of the red after it suffered its worse loss ever two years ago.
Gilbert said the company removed its front entry way and, instead, created a construction museum. Visitors can now view the company’s projects via live Webcams. Photos of each project are displayed on the floor under glass, forcing them to look down. Everywhere they look, they see a project in various stages of completion. That experience, she said, was suggested by one of her friends, and it’s a success.
Pine’s book The Experience Economy is $24.95 and available at major bookstores and amazon.com.
Dec. 21, 2001 Small Business Times, Milwaukee
