Qualtrics Summit: Experiences Can Elevate Products from Competition
When a kid puts a quarter in a gumball machine, the transaction is seldom about the actual gumball so much as it is about watching the colored candy spin down and around the machine until it comes out at the bottom.
And when that kid grows up, he’ll probably still be drawn to brands and products that give him both the product he wants with an unforgettable experience, said Joseph Pine, author of The Experience Economy, at the Qualtrics Insight Summit Thursday.
“We’re shifting into an experience economy. That’s where growth and jobs and GDP is going to be,” he said.
When Maxwell House was looking at ways to roll out a new product, they looked to that new experiential market.
“Coffee at its core is what? Beans. You know it’s a commodity—you can look up the future price of coffee in the Wall Street Journal, and if you break it down to the cup, it’s about two cents per cup,” he said. “You take those beans and you roast them, grind them, put them on a shelf, you get five or 10 cents for a cup of coffee. If you make it for someone, you can get $1, $1.50. Surrounding that cup of coffee with the ambiance of a Starbucks around it, you get $5 or $6 for a cup of coffee with only two cents of coffee in it.”
So, Pine said, Maxwell House created the Nespresso, a sleek-looking machine that allows users to make a cup of espresso from a Keurig-like pod of beans that can be regularly delivered automatically. To launch it, they opened a venue featuring the machines in a swanky café-like atmosphere to let people try it themselves surrounded by that ambiance.
“If you want to create a true distinctive experience, what you need to do is not just make things nice—nice is nice, but it rarely rises to the level of memorable,” he said. “Experiences are inherently memorable. Where do experiences happen? Inside of us. They’re a reaction to the things around us.”
ING Direct, which has since been purchased by CapitalOne, made a similar move with their ING Café, in which customers would come to a European-style café and be served by financial baristas, who would give them their coffee with a side of financial advice or offers of services the institution offered, Pine said. Perhaps the most well-known example is of the Apple Store, he said, in which Steve Jobs combined high-quality products with a futuristic experience.
While those companies saw success with venue-based experiences, memorable experiences can be had over the internet or even the phone, Pine said. Blendtec, an Orem-based blender maker, was relatively unknown until they launched their wildly popular “Will it Blend” video series online, and their sales jumped 700 percent as a result, he said. Zappos! rewards call center employees not for having the shortest phone calls, but the longest and most pleasant, he said—and the record is over 10 hours.
Case Construction’s Tomahawk Welcome Center lets would-be customers try out the equipment in such settings as competitive digging or moving earth, said Pine, leading to drastically higher conversion rate. When people went to dealerships, he said, they saw a 20 percent conversion rate, verses 80 percent from the people who went to Tomahawk.
What these companies and campaigns all have in common, Pine said, is that they took already-competitive products and enhanced them with something interactive and memorable.
“You combine great products with great experiences,” he said, “that’s when magic can happen.”