Posts Taged function

The One Year, Thirty Minute Challenge :: Week 11 :: Value Creation :: Experiential Value

If you or I were swinging through a fast food drive through and placed an order for one of their value meals and the voice on the speaker announced they’d be collecting $25 at the window, we’d put a quick halt to that order. Why? Is it because we’re opposed to paying $25 for a meal? Probably not. We’ve most likely paid $25 or even more for a meal at our favorite restaurant. We’re just opposed to paying $25 for “that” meal, because the value proposition doesn’t work for us. $25 should buy us a better dining experience than a burger wrapped in paper, fries in a tiny cardboard box and a soft drink in a paper cup.

Experiential Value is the gap between what the customer pays for our product or service and the worth and enjoyment the customer experiences from the purchase. We want the gap between what the customer pays and pleasure they derive from the purchase to be as far apart as possible. We’ve already visited value creation in the short history of The One Year, Thirty Minute Challenge, but we’re going to touch on it again – this time, exploring steps to maximize the customer’s experiential value.

We’re pretty good at calculating Economic Value because the math is very easy


The math for calculating Experiential Value is a bit more squishy because it involves the sometimes subjective value that the customer assigns to his or her experience with our product or service.

How do we do build the experiential value? I think some of the best advice comes from an extremely practical book by Rich Karlgaard, The Soft Edge. In the chapter he calls “Taste”, he reminds us that we can interact with every purchase on three levels. Unfortunately, we rarely do. Let’s talk about them.

Function – Form – Feeling

Function is the most rudimentary level. I purchase an oil change for my car and I get an oil change – new filter, new oil – very transactional. I got the service and I paid the bill. Even if the product or service is a bit more sophisticated, it can still be only transactional. It could be a new computer, a medical procedure or meal at a sit-down restaurant. As long as there’s an equitable trade, we’re satisfied with the transaction. Clearly if we get less than what we bargained for, we going to feel jilted. We might ask to speak to a manager, leave a one-star online review or most likely, never return. But, if the transaction works, we might come back. Nothing special, but not a disappointment either.

Form is the next level of engagement. Was the item we purchased not only functional, but beautiful? I not only got a good diagnosis and treatment in the medical office, but beyond that, it was a bright, cheerful waiting room, it was easy to check-in and the magazines were from at least this decade. This level of engagement made the transaction easy and even pleasurable. Next time I need this product or service, I’m likely to return because both the product and the delivery were great.

The last level of engagement, Feeling, is hard to find but it cements customers to the company that provides it and it even forges personal bonds between the customer and representative of the company. It imbues the transaction with meaning. The customer connects with the company over shared values and the customer feels validated for choosing this company to provide the product or service. Simon Sinek might call this finding customers that share your “why” or Seth Godin might call it finding your tribe. Whatever it is, it’s a connection that turns customers into brand ambassadors. It’s the company that you tell your friends about. It might be the great meal delivered by a friendly, attentive server. It might be the doctor who delivered bad news, but sat there in the treatment room until your last question was answered and seemed totally unhurried even though you knew other patients were waiting. When customers connect on feeling the bond is strong – loyalty is high and can drive premium pricing – because the relationship has moved beyond transactional to a desire to repeat that feeling. Any employee can deliver feeling with the right amount of coaching and the right support from the organization.

Why have I gone to great length in talking about delivering function, form AND feeling before kicking off this week’s exercise? Because measuring the distance between what the customer pays and the enjoyment they experience is hard to do, but the payoff is big and the payoff is long. Here’s another important thing to know about experiential value – it buys you a mulligan or two. If you fail, you’re most likely going to get a chance to make it right – maybe multiple chances. But, like all business transactions, you ought to work like crazy to earn it every time you get the chance.

So, let’s jump into this week’s exercise.

This is getting mentioned almost every week – gather your most trusted team members and work through these topics. Doing this with your team allows you to mentor and to see the strengths of various team members as they embrace the subject matter. It might also allow you to identify topics for employee development. Keep notes, create action items and assign them to specific people to carry them out. In a couple of weeks, reconvene and check on progress.

Function


How does your product (list the factors) deliver the basic functionality that your customers seek? For example –

  • it’s a fairly-priced, quickly-served, tasty fast food meal
  • it washes dishes using an appropriate amount of water and detergent in an acceptable period
  • we show up on time and the garage door works when we’re done

For the question above, which of these rudimentary tasks could we screw up the easiest, causing us to fail at the most basic level? For example –

  • We frequently schedule jobs too close together causing us to miss appointment times
  • The final price regularly comes in above the estimate
  • We frequently run out of items on the menu

What can we do to hedge against failure in delivering these baseline products or services?

Form


How can we improve the delivery experience?

  • Can we communicate better before, during and after the sale?
  • How can we improve customer onboarding so that expectations are clear and realistic?
  • Can we make the product or packaging more attractive?
  • Can we improve usability making the product easier to access?
  • Can we make the invoicing and payment process easier or faster?

Feeling


Can we make customer feel smarter, better or more noble by purchasing and using the product or service?

  • Can we show that the value proposition is demonstrably better than the value proposition for those who purchased competing products? If your warranty is twice as long as your competitor’s, let the customer know they are insulated from problems twice as long as everyone else who bought a competing product? They made a smart purchase.
  • Can we give them access to a customer service experience that will get them immediate help if they need it?
  • Can we show that they supported a cause (think Tom’s shoes) or a group of people (a locally-owned family business or a group of now fairly-compensated foreign farm workers) with their purchase?
  • Can we identify our connection (a real connection, not a contrived one) with a group of people to whom they already feel connected (veterans, environmental advocates, gun owners, local business owners, artisan food makers)?

 

One quick note about all of this. Customers and potential customers can smell a phony a million miles away. Function, form and feeling have to be delivered by an organization that sincerely embraces a desire for an excellent product or service, delivered in a winsome way by people who sincerely care about and want to connect with their customers. Anything less and none of this works.

For those who do it well, delivering on function, form and feeling will generate increased loyalty and create enthusiastic brand ambassadors for your organization.