Tuesday, September 01, 2009

Experience - the ultimate differentiator

I was shopping for a friend's birthday cake when I decided to go to Fresh Market, a small grocery chain known for its bakery and fresh items. The market is meant to remind you of an older, perhaps European market, with fresh vegetables, a butcher shop and a huge selection of loose grains, coffees and other edibles. The Fresh Markets I've been to are arranged so that a shopper can easily browse the goods, and the buildings are dark, with wood flooring and very helpful service. The Fresh Market is definitely different from most grocery stores, which have shelves that appear ready to tip over on top of you, bright fluorescent lights and sales or "specials" all over the store.

But what really started me thinking about innovation and the Fresh Market was their slogan. Experience the Food. Not, for example, "Taste the Food" or some argument about how you shop or the freshness of the produce, or the lowest prices. In fact they say nothing about the quality of the food, whether or not it is organic, or the prices of the food. Locally, we know that Fresh Market is on the more expensive side. But what they choose to focus on, at least with some of their marketing messaging, is Experience. They are innovating the grocery store model to focus on the shoppers' and the customers' experience of the event, and of the food.

Now, the Fresh market isn't the first to focus on the "experience" of the food for the consumer. Forbes Magazine and other periodicals have suggested that Whole Foods has a "food porn" strategy, telling stories about the food, how it was raised and the life stories of those who grew the apples, raised the cows, fed the chickens. But Whole Foods was ultimately about a lifestyle that rejected the pre-packaged ways of traditional grocery stores and was about embracing a new, and sometimes counterculture way of doing things.

Both of these firms understand that Customer Experience is one of the most compelling differentiators in the market. Even in the financial environment we have in 2009, Fresh Market and Whole Foods are holding their own, while traditional grocery stores struggle. People identify and are willing to pay more for Experience, even in what should be a commodity like groceries. Apple (the electronics manufacturer, not the food) understands this and has always had excellent Customer Experience, to the point that it ships its iPhone with no evident user manual. Nordstroms understands this, offering customer service and experience that's not found anywhere else in the clothing retailers.

Yet, the few examples I provide above indicate that while Customer Experience is powerful as an innovation opportunity and differentiator, few firms focus on Customer Experience. It appears to be too expensive, too labor intensive, too different for their situation or industry. Let's look at retail banks as an example. Does any retail bank offer a unique customer experience? Most interact with customers at branches through bullet proof glass at the drive up or in those velvet roped lines inside the branch. Most require that you fill out antiquated forms and recite 15 digit numbers to access your money. Most branches feel like a cross between a prison and an elementary school, with the really important executives in hushed offices at the back, while tellers and greeters act as the guards on the watchtowers. Could there be a different experience than this? Absolutely. The only bank I've see experimenting with its customer experience is Umpqua Bank in the Northwest. How many bank branches do you think get written up in Architecture Week Magazine? Banks are just one of many industries that have yet to recognize the sustaining power of innovating around Customer Experience.

Think about the airline industry. Can you name a recent positive experience you've had with the airlines? Only Virgin Atlantic seems to be paying attention to innovation around Customer Experience, while the rest of the industry seems focused on driving costs down and driving away customers with terrible service and experience.

Why would a grocery store take as its motto "Experience the Food"? Why would a bank radically alter its branches? Why would an airline examine how its customers are treated? Because they understand that what appears to be a commodity can be innovated, especially around customer experience.
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posted by Jeffrey Phillips at 5:55 AM


Anonymous James Todhunter said...

Yes, the experience is a critical aspect of great innovation and design. This is a core concept in Jochimstaller's "Hidden in Plain Sight."

Experience as a driver of change can lead to big steps forward. I recently engaged in just such a project around knowledge enablement for innovation focusing on the most common innovation task -- secondary research. Understanding the goals and aspirations of these knowledge workers has led to an entirely new metaphor that moves away from the old paradigm of search and now lets people experience the information.

7:33 AM  
Anonymous Robert Gu said...

This is a great article. I agree that the customer experience/customer support is crucial.

Zappos found a niche in the online e-commerce market by focusing on customer service, shipping products super fast, randomly calling customers and giving them gift certificates etc....

12:07 PM  
Anonymous Ravishankar said...

The "Experience the Food" is truly a refreshing a slogan. This is percieved though not said in the Indian street side grocery and vegetable shops ( called Kirana stores) through the relationship between the shopkeeper and the customer, a kind of neibourhoodness and warmth. There is probably an unsaid social & cultural connect that exists between the two.This makes shoping and ( alongisde small talk with the owner) at this single counter shops regularly for day to day items a rythmn rather than a routine. Similar is the case with the Indian Nationalised Banks where the service is cumbersome but the connect between the staff and the user makes for personalised attention most times with concern rather than professional which add up to the comforting experience.

11:48 PM  
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