Thursday, March 14, 2024

Addictive, exclusive, experience: Critical factors for new products or companies

 I had quite a day yesterday, meeting with a potential partner at Starbucks, getting my iPhone repaired at the Apple store and a number of other activities.  Along the way I encountered a couple of very successful companies:  Starbucks, where I met a potential partner, Apple, where I went to get some repairs done on my iPhone and Chik-Fil-A, which was down the hall from the Apple store.

Compared to other nearby competitors, these three outlets were exceptionally busy and seemed to be doing very well.  While they appear to be very different in their product offerings, in many ways these firms highlight some characteristics that new businesses and people creating new products should review.

When you boil it all down, what makes these companies successful is the 1) sense of uniqueness or exclusivity or 2) the customer service and customer journey or 3) the addictiveness of the product.  Note that while these firms are in different industries or sectors, I think these factors are what differentiate them and keep customers flowing to their outlets and products, even when you could argue that two of them (Starbucks and Chik-Fil-A) provide a commodity product.  Let's look at the three to understand what we can extract from what they are doing.


If we consider the three factors I described above (exclusivity or uniqueness, customer experience and addictiveness) we can look at what Apple does with its products, retail outlets and service to see how closely they align to these features.  First, Apple has always positioned itself as the anti-PC, so it is somewhat unique and exclusive.  What's more, as you acquire more Apple devices (Macs, Watches, etc), you gradually build a moat where data is easily transferred and shared.  Second, consider the journey.  Apple tries to make its products and services well-designed, even the boxes are highly engineered.  Apple retail agents are kind, open to discussion and explanation and never pushy.  The customer experience around the product and the service is top notch, compared to other hardware providers.  Finally, the concept of addiction.  While I have an iPhone and a Mac, I swap between those platforms and PCs at work, but I do know a number of people who only operate on the Apple platforms.  I do think there is a badge of loyalty and some addictiveness to the Apple platform.


While Apple commands high premiums for its products in a high-tech space, Chik-Fil-A operates in a highly competitive, low-tech space.  In fact, many of Chik-Fil-A's competitors have created new chicken sandwiches to compete directly with Chik-Fil-A, and several of them, including Popeye's new chicken sandwich, are very good.  Let's consider the three factors as described above in context of Chik-Fil-A.

Chik-Fil-A is relatively exclusive, strangely enough, carefully controlling the number and spacing of its stores.  In an area that might have several McDonalds or other fast-food competitors, Chik-Fil-A will only have one store, and that store is always closed on Sunday.  Evaluating Chik-Fil-A on a customer experience journey map is interesting, because Chik-Fil-A seems to ignore all concepts of throughput and line management.  Unlike say McDonalds, which wants to serve customers very quickly, customers at Chik-Fil-A seem comfortable fighting long drive in lines and going a bit out of their way for the sandwiches.  However, the in person service is uniformly excellent, down to the "my pleasure" as you drive away.  I think it's because the sandwiches and fries are addictive that people overlook the drive through issues.  It remains to be seen, as other competitors close the gap on the chicken sandwich, if Chik-Fil-A can attract customers who have to wait for the sandwiches.


Starbucks, like Chik-Fil-A, sells a commodity product - coffee, but its retail establishments are constantly busy.  It was unique in that it was one of the first truly national coffee chains, with its own brand and own distinct flavors.  I'm not quite so sure that Starbucks is as unique or exclusive as it once was.  As an infrequent customer and a non-coffee drinker, the customer experience is frankly a bit bewildering, but I think that adds to the mystique.  I can never tell the difference between sizes or flavors or types of coffee, but that simply makes me a coffee outsider.  Starbucks customers know their sizes, flavors, caffeine doses and have their own language.  What to me seems rushed, slow and disorganized to Starbucks aficionados seems poetic.  Finally, their products are addicting.  Caffeine is a legal drug and Starbucks has created dozens of flavors and sizes to both introduce coffee to people who don't drink it and to entice existing coffee drinkers. 

One other thing about Starbucks - the coffee brings you in, but the social aspect of a third place cannot be overlooked.  Starbucks is providing a place for people to meet and work, and that additional benefit cannot be overlooked.

What does this say about the creation of a new product or company?

The best products or companies are physically or socially or economically addictive.  Even when it's easier and faster to go to McDonalds or another fast-food location, people will endure inefficient lines or go out of their way to get Chik-Fil-A.  Google has made it so easy to use their search engine, and convinced people that it is free to use, that it has become ubiquitous, almost a backplane rather than an application.  Once you have an Apple product, you want other Apple products because each one individually is easy to use, and in combination they become easier to use.

New companies or new products should consider all three of these aspects:  uniqueness or exclusivity, customer journey and addictiveness.  How can your product or company distinguish itself on several of these components?  Note that even in what are essentially commodity markets - coffee and fast food - Starbucks and Chik-Fil-A are winning against their competitors, offering either better experience (Chik-Fil-A) or an additional feature, such as a co-working or meeting space.

But it's also clear that you don't have to have all three to win.  If you have a great product that's reasonably addictive with good but not great customer service (as I would argue Chik-Fil-A has) then your customers will endure long lines at the drive up.  Apple probably comes the close to the trifecta, providing reasonably good customer service and customer journey, combined with a sense of design and exclusivity, with a reasonably addictive set of products.  Starbucks is probably the weakest of the three, but it sells the product that is the most addictive.

What must you do to create a new product or company with these attributes?

  • Low barrier to entry, free trial or easy to learn.  Addictiveness starts with a simple trial that leaves the user (I mean customer) wanting more.  Your product or company must have a service or offering that is easy to try and really compelling.  This is why real drug dealers almost always provide free samples initially, to get the user hooked.  You need to provide a free trial or very inexpensive way to start using the product or service, or, like Starbucks and Chik-Fil-A, have a reasonably low-priced product with high throughput.  Apple violates this to some degree because their products have a high acquisition point, but they are easy to learn.  Increasingly, the iPhone is a gateway to other devices.  How do you make it easy for people to try out what you do, lower the barrier to entry?
  • Establish a theory of the business and ensure the customer journey. Make it dead simple for people to find and use your product or service, as much as possible simplify the customer journey.  Apple does this, to the extent that many of their products don't have user manuals.  Starbucks doesn't need to do this, because everyone drinks coffee anyway, so those of us that don't often find Starbucks a bit intimidating, but I use Starbucks as a meeting place, not a source of caffeine.  What does your intentional or (worse) unintentional customer journey communicate to customers?
  • Provide a secondary benefit.  For Apple it is a sense of design, of being on the cutting edge, of being integrated across platforms.  For Chik-Fil-A, its the "my pleasure" at the end of the transaction, as if the people at Chik-Fil-A actually get pleasure from serving you.  At Starbucks, the coffee or drinks are actually the price to pay for admission into a meeting space.  What secondary benefit can you provide that is either directly or indirectly linked to your core product?
  • Be Authentic.  I haven't used this word yet, because it is overused and has lost its value and meaning, but I think all three of these firms are truly authentic.  They are OK if you don't like how they operate, or the tradeoffs you must endure to use their products.  Apple is OK if they don't own all of the market share but want you to believe in their vision and way of working.  Chik-Fil-A isn't always the closest or easiest establishment to reach, and wears some of its beliefs on it's sleeve, but is pretty unapologetic. How do you create your authentic position and voice, and how to do you maintain that authenticity in every interaction?
  • Build a community.  As people and communities become less socially engaged, as we retreat into our corners, companies are stepping in to create communities where social organizations, bowling leagues and religious institutions used to fill a gap.  Starbucks creates a community of coffee drinkers who know what a "half-this, partial that, with room" means. In other words, they have their own language.  How can you create a community that shares values, focus and even language?
  • Make it addictive.  While I don't think there are a lot of products that are legally addictive, caffeine is one.  However, Apple has made its products addictive.  People start with an iPhone, migrate to the iWatch and end up on a Mac.  Suddenly they cannot escape the Apple platforms and are comforted by those platforms and rely on them.  Personally. I'm close to an addiction with Chik-Fil-A fries.  What about your product or company leaves people wanting more?

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posted by Jeffrey Phillips at 6:31 AM


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