Minneapolis marketing consultant Dan Wallace thinks the Twin Cities might have a top “cluster” of thought leadership in managing a better customer experience. He makes a good point.
In the Twin Cities we have Lou Carbone, a writer, consultant and former marketer behind the consulting firm called Experience Engineering. We also have B. Joseph Pine II, an author and consultant who rose to prominence as co-author of a 1999 book called “The Experience Economy.”
Others in the region have made their own contributions to the field, including Wallace. With two co-authors, he explained how the customer experience is a fundamental step in creating brand value in the 2016 book “The Physics of Brand.”
“Place matters,” Wallace said.
He and his co-authors “were able to see how customer experience turns into brand value because we knew Joe Pine and Lou Carbone personally, and we had early access to their insights. New ideas don’t arise out of a vacuum. New ideas are built with existing ideas.”
There doesn’t seem to be complete agreement on what these consultants mean by the term customer experience. At the risk of rounding too much off pretty sharp insights, I came to think of it as how a customer feels about the time they spent with a company’s product or service.
Carbone described how, when he got his start more than three decades ago, very few people could have even defined the term customer experience. It’s now “very widespread,” he said, generating nearly 60 million hits on a Google search.
Now there’s even something called the Customer Experience Professionals Association. It happens to be based in the Twin Cities.
And Wallace is certainly right that veterans in the field here seem more than happy to share a little of what they know about a far from simple management challenge. Carbone returned a call within half an hour, and Pine readily agreed to meet, too.
Carbone got his start in advertising, and he described seeing businesses earlier in his career that did create great customer experiences. Yet they were rarely intentional about it or had good ways to measure how well they were doing.
Mostly the top brand managers cared about how the consumer felt about their brand or product, from intense loyalty to indifference. Carbone said he learned it’s far better to know how the customer felt about themselves while experiencing a product or service. And a customer survey is a lousy way to try to find that out.
“A lot of people still don’t fully understand the full potential that can be unleashed by being a company that understands that the ultimate value proposition is the total experience,” he said.
He calls his work “experience management,” and you might have seen evidence of some of it in Minnetonka-based Medica’s recent marketing campaign. The campaign had the big health plan promising members that it would “listen up.” It reflected the finding that Medica members felt good about themselves after being heard.
Carbone first crossed paths more than 20 years ago with Joe Pine, then inside IBM. Pine had worked in Rochester and later on the East Coast with IBM’s consulting arm. IBM was planning to cut him loose in the early 1990s in one of its big cost-cutting moves. He was ready — with a Harvard Business Review article that he knew would launch an independent consulting career. With partner James Gilmore, he now runs Strategic Horizons.
Pine made a point, after we sat down at a Starbucks inside a White Bear Lake grocery store, to say he doesn’t usually talk about the customer experience. But he went on to say the experience itself — not just the product — needs to have enough value that customers want to buy it.
Take Starbucks, he said.
A bag of coffee beans is just a simple agricultural commodity, worth maybe pennies of the cost of a cup of coffee. The drink itself, hot coffee in a paper cup — that’s a product. A service is the process of a Starbucks barista making the coffee exactly the way the customer wants and presenting it with a flourish.
At each step in the progression, the value to the customer goes way up. Where it gets interesting for a store operator like Starbucks is at the next level, in what makes a visit to Starbucks pleasurable and memorable. If Starbucks could consistently provide a unique and memorable half-hour visit, it could be charging money just for that, selling the right to come into the shop. The coffee could even be given away.
While that may sound silly, Pine said he knows of innovative retailers who do charge money for just coming in the door, like a cigar store in the Netherlands where 35 euros buys a customer time in the backroom for a little tobacco seminar. The premium cigar gets tossed in for free.
Pine also has written about many other ideas, but it’s interesting to note that he talked in our recent conversation about something customers really value more than even an experience. That’s a transformation, some sort of change in the person. That ranks further up the scale of what customers are willing to pay for.
One problem he’s identified: With even a rich experience, a customer might start to get a lot less out of it the second or third time through. Instead, businesses need to think of providing some experience that literally changes customers in some way. One example may be health care, as when a person comes out of surgery with no more back pain. That would be worth a lot.
Being able to change a customer’s life seems like a distant goal for any shop owner, but providing an experience worth paying for is much more within reach. And there seems to be plenty of people around here willing to help business owners figure out how to achieve it.