It was while enjoying a series of single malt whiskies, in the Three Crowns Pub, that I was reminded of a marketing lesson that too many businesses are missing in this new digital world.
On finishing our drinks, I asked my brother if he wanted another round. After agreeing to have “one more for the road”, I duly went to the bar and ordered another couple of doubles of Glenlivet. The price I was charged would have made the bottle of Glenlivet just over £100. Yet it is widely available to buy by the bottle for around £30.
Why spend so much extra? I could have easily bought a bottle of Glenlivet in my local supermarket and sat at home with my brother. The drink would have been of equal quality.
What is value?
The point is that the value was not in what this pub supplied — the drink. There are other pubs that sell the same brand, and there are also many other ways I could have purchased the whisky, many of which would have been more cost-effective.
Rather, the value was in how the pub delivered the product. In supplying pleasant surroundings, a comfortable place to sit, a good atmosphere, a log fire and showing the football, the pub created an experience that was bigger than just the quality whisky. The totality of the experience made the cost of the product acceptable at that moment in time.
Moreover, although this particular pub’s main product is beverages, the landlord had thought about other items a customer may want during their visit. Snacks including crisps, nuts and bowls of chips were available. There was also a quiz machine to play. OK, this is pretty standard inventory for a pub, so why the big deal?
The digital economy has seen the increasing commoditisation of products and services — whether you are a business-to-business company, or a business supplying consumers. We are all now working in the experience economy. Of course, products and services have to be delivered to a high standard in order to compete. However, today that is just the price of entry into any particular market.
The customer experience
The value for the customer is no longer in what you do. Your clients will, more than likely, have a multitude of options, of which you will be just one. The value is in how you deliver the product or service. It is the experience that will differentiate your business. It is also the experience that is more likely to be talked about, shared and which will generate referrals.
Moreover, what you deliver is likely to be the same as a number of other suppliers. This being the case, this is not where the value lies in your business. The most precious resource today is people’s attention. So the value in your business is more likely to exist in data and the customers you supply.
In other words, the real worth of your business is in the engagement and trust you have with your client base. The more you can deepen this, the more valuable your business becomes. Being able to provide added value to “the experience” enables an organisation to earn more money while creating more engagement and value for the customer.
Understanding your customers’ challenges and the contexts in which these occur, will enable you to create new offerings and obtain a greater share of a customer’s wallet. It means being truly customer centric and understanding what else a customer may require when they engage with your business. In other words, what is the equivalent of your crisps and nuts?
When jazz musicians Melvin “Sy” Oliver and James “Trummy” Young wrote the song ‘T’ain’t What You Do (It’s The Way That You Do It) in the 1930s, little did they know they would be providing the perfect comment on marketing in the digital economy.
Ultimately, what you do allows you to exist, how you do it enables you to compete and differentiate. Too many companies focus all their energies on what they do, rather than how they do it and for whom.
Now that is sorted, I am off for a well-deserved single malt! Three Crowns anyone?