Creating an Experience
I remember when I first started going to Starbucks many, many years ago, long before they were on every street corner. There was unfamiliar music playing, typically something from deep in the jazz catalog—Miles Davis, John Coltrane, Etta James. I had no idea what it was at the time but I later came to really love jazz and have logged many hours listening to the legends. Then there was the coffee. Sometimes it was from Tanzania. Where is that even? Or Indonesia or some other very beautiful and warm place, which made getting through an Ohio winter a bit easier. My imagination would go to these places. The packaging was also brilliant, full of vibrant colors and symbols of the countries of origin.
The baristas would remember my name and my preferred drink and confirm, “Caramel macchiato with an extra shot, right?” Yep. They nailed it every time. I’d sit in this immersive environment with the jazz and smell of coffee lingering in the air and my eyes feasting on the muted and relaxing colors all around as the snow would fall softly outside. I’d pay for my drink, which at about $4 felt like an absolute bargain even though I knew if I made it at home it would cost about 40 cents. I didn’t care! I was immersed in an experience and that is what I was paying for—not the coffee. Coffee was a small part of an overall package. I was paying for someone else’s creativity that swept me up into a completely different place than my cold Ohio morning. And it was worth every penny.
Coffee is a commodity. Being a commodity means that differentiation ceases and something is sold on price alone. In rough numbers, coffee sells for about $1 a pound so each cup costs about 2-3 cents. But if it’s packaged and distributed through a retail store—and this is where it is turned into a “good”—that cost goes up to $10 a pound, which translates to about 25 cents a cup. If it’s brewed and served, now it’s a “service,” which at a local diner might move the cost to 50 cents a cup. But if its served at a five-star restaurant or specialty coffee shop, the cost jumps again to $3 to $5 cup. Why? Because now, it’s an experience!
Is our industry becoming a commodity? In some ways, yes. Most service businesses are. Our labor rates are mostly fixed, at least within a pretty small range. We can battle this and try to change it and many of us should. But even if we win that battle, what are we gaining? By some counts, a lot. We’re taking back our industry. But in other ways, very little because if you’re in an average-sized city, there are dozens and even hundreds of competitors that will compete on price.
As one of my favorite authors on marketing, John Jantsch, says, “There’s always someone willing to go out of business faster than you.” At my shop, we cannot and we do not compete on price alone. So what is left? Well there’s still service. There are also relationships. But most of all—and the thing that fosters relationships and service and provides the overall context in which they happen best—we have experiences.
The question then becomes, how do we create a great customer experience? Here are a few ideas to get started.
The physical environment matters. Have you ever audited what your customers see when they first drive into your lot and then walk into your office? Is there ample parking that is clearly marked? Or is it more like a driver’s obstacle course to even get to a parking space? When they first walk in, do they see neatly ordered desks with refreshments available, or a chaotic tangle of messy papers and old parts just laying around? It is true what they say about first impressions.
How are people greeted when they first interact with your shop, whether that is through email, phone or in person? Is the person they first encounter pleasant or gruff? What is the tone of their voice: calm or hurried?
How are people treated during the process of repairs? Are they regularly updated on the progress? Are any delays clearly explained? Are any abnormal delays compensated for with some rental reimbursement or at least an apology?
People love to do business with shops that give them a professional and caring experience from beginning to end. If you’re not at least trying to do that, your customers will quickly tell others about it and turn elsewhere the next time they have a need.