A store in Australia has been critized for charging customers $5 to come into the store. In other words, if you're "Just looking," it's going to cost you five bucks.
While many people have criticized the store for taking such a bold step, creating a "cover charge" to enter a store isn't such a crazy idea. You just need to frame it right, and provide enough value for the fee.
If you want to enter a SAM's Club, you need to show your membership card at the door. To get that membership card, you must pay between $40 and $100 annaualy.
If I want to take my family to an amusement park, I'll have to pay to enter the park, then I'll also have to pay to go on rides, and have refreshments.
If you want to go into a nightclub, you'll have to pay a cover charge (after waiting in line). Then you still must pay for drinks once you're inside.
Here's The Point:
People are used to paying cover charges to enter an establishment. What makes it acceptable is the value received for the cover charge. This value can take different forms.
In the SAMS's club example, the value is lower prices.
In the nightclub, the value is the pure experience: a unique environment, with a perceived entertainment value. The amusement park value is similar - a unique experience.
In the best-selling book, "The Experience Economy," authors Joseph Pine and James Gilmore explain this dynamic well:
"The history of all economic progress consists of charging a fee for what once was free."
Charging a $5 fee to enter the store isn't such a crazy idea. If the retailer can create a "wow" experience that will cause customers to want to go inside, the $5 cover charge will be considered a true bargain, instead of an outlandish insult.
And of course, the retailer must also frame the fee as an admission for the experience, instead of a penalty for "showrooming."
If you can deliver a unique experience, customers will not only willingly pay for that experience, but they'll bring their friends with them, and gladly wait in line to pay you for it.
"You can't focus exclusively on security; you've got to be mindful of customer service."
If you've done much air travel since 9/11, you've experienced the "all business" approach of those TSA agents in the airports, and their annoying tactics, from the shoe and belt removal, to the random bag checks, to the ever-popular pat-down.
At times, it seemed the TSA agents would do everything they could to make our lives as passengers in a hurry, more difficult.
But time are changing, and so is the TSA. A recent New York Times article describes how the TSA has begun a number of intiatives to improve the experience of airport passengers.
What's in it for the TSA?
Greater customer loyalty?
Better Customer Service for the sake of Better Customer Service?
Customer Service doesn't always require a profit motive. Sometimes it can be simply for the customers' sake.
Last week, I bought a pair of shoes. The cashier asked me how I'd like my receipt:
Without hesitating, I opted for the email receipt. That would mean one less piece of paper in my wallet. One less receipt to lose now, and spend time finding later, should I need to return the shoes. One less step in the transaction. One less thing to deal with.
For me, the paper receipt offerned no value; it would only add to the clutter in my life, and cause me to have to take additional steps to later remove that clutter (searching for a trash can, and cleaning out my wallet.)
"It's only a paper receipt," you wonder. Why is he making such a big deal about it.?"
Well, you're right - it is only a small, relatively insignificant component of the transaction. In fact, it's a piece of necessary overhead that we've accepted as a fact of retail life. But it's also a powerful example of transaction overhead - those "requirments" that surround the act of finding, evaluating, buying , using and owning a product or service, but add no value to either of those steps.
If you were to remove all the low-to-no-value components from the buying experience, all that would be left would be value - pure value.
Think of how customers buy your products or services. What are the low-value elements that you or your processes impose upon them? What would happen if your removed those elements? Or at least transformed them to become less visible to the customer? How would that enhance the customer experience?
Don’t just sell more; sell more value.
At the McDonald’s drive-through when you order a cheeseburger, the cashier asks, “Would you like some fries with that?”
At the Best Buy register, the cashier asks, would you like the two-year warranty with that that covers all repairs for any reason?
At the car dealership, the salesperson highly recommends the leather upholstery and the towing package.
Upselling adds more top-line revenue, and from the company’s perspective, that’s good. But if done poorly, upselling can alienate the customer, and that’s bad. Alienated customers don’t come back.
So, the challenge is how to upsell well, without alienating the customer. Or better yet, how to upsell in a way that gives the customer good reason to smiling, because they feel that received more value than they originally expected.
That’s exactly how my wife and I felt, after a recent Sunday morning stop at the Starbuck’s in the Barnes & Noble Booksellers #2048 in the Eden Prairie Center Mall in Minnesota. The woman that took our orders was a master upseller. But here’s the interesting part about it…. We didn’t feel like we were being sold anything; we felt like we were being offered a better value; we felt that the person who had the information was sharing the information with us, to help us get the best value that we could. And as customers, we appreciated it in a big way.
So, what was her secret?
She wasn’t selling; she was sharing information with us; she was helping us to see a way to receive more value.
We ordered four items, totaling $12.55. But she didn’t simply take our order; with each item, had something to say, that was all about us.
My wife ordered a medium Caramel Macchiato. The server suggested that for just 30 cents more, we can have a large size. As she said that, she held the two cups next to each other, so that we could clearly see how much more Caramel Macciato we’d have for just 30 cents more. In a very literal sense, she showed us the value. And we gladly bought it.
Here’s the point:
When upselling, don’t simply suggest the additional item; don’t just ask the customer if they want it, and don’t just tell the customer why it’s a good deal. Instead, share information in a concrete and visible way, that will make it easy for the customer to see the value themselves.
Help the customer to clearly see the value, and you’ll accomplish two things:
You’ll deliver a better customer experience.
You’ll improve customer loyalty.
And yes, you’ll increase top line revenue.
To upsell well, share information with your customer to help them clearly see how they can receive more value.
It’s fascinating to see how people lived two hundred years ago.
The McLellan House in Portland, Maine was originally built by a shipping magnate in 1801. Through the efforts of the Portland Museum or Art, the McLellan House has been preserved as a wonderful place to learn about 19th century architecture and design. It's also a great place to learn how QR codes can deliver a better customer experience.
This past Friday night, my wife and I joined some friends in touring the house, and this was far more than a walk through. While there were no tour guides within the house, we came away from the tour having enjoyed a complete room-by-room learning experience.
What made the experience so fulfilling was the way that QR codes were placed surreptiously throughout the building; in many rooms and hallways, and on artifacts inside this stately mansion. The QR codes are used in an innovative way to enrich each patron’s experience, by delivering short contextual videos throughout the tour. Among them are a video of a master woodworker restoring the flying staircase (shown at left), and the creation of a painted floor cloth.
Like most consumers, I’ve become accustomed to seeing QR codes printed in magazine advertisements, as a direct link to a webpage, and as a way to draw the reader farther into lead qualification, or a sales process.
The Portland Museum of Art uses QR codes in an entirely different way; not to sell, but to serve; to serve their patrons with a richer, higher quality experience while touring an exhibit. This is in fact something that any business can do; using QR codes to deepen customer touch-points in a way to enrich the customers’ experience, and ultimately build customer loyalty.
So, how can you put QR codes to work in your business, in ways that will delight your customers, so that they tell more people about you? Think of the various high-traffic touch-points between your company and your customers, and then think about how live videos might enhance that touch-point.
For example, if you sell products that require assembly, consider printing a QR code on the front page of the assembly instructions. Your customer can take a picture of the code with his smart phone, and be brought directly to an on-line video that shows the customer how to assemble the product. That would be a lot easier for the customer to follow, than small-font text, wouldn’t it?
Check out this list to learn about some of the cool ways that others have used QR codes. Then think how you can do something similar for your customers.
If QR codes can tell the story of a 200-year old building, just think how they can create a rich history for your business.
Times are tough for the U.S. Postal Service, and there’s much concern among Americans over the fate of the US Postal Service, and how to fix what’s broken.
When we look at the USPS, we need to look at it in a larger context.
The USPS began moving mail from sender to recipient in 1775. In that larger context, the USPS was in the communication business.
Roughly 100 years later, the telephone was invented, and gradually provided an alternate means of communication.
About 100 years after the invention of the telephone, email was invented, and provided yet another major means of communication.
Around that same time, Federal Express (now FedEx) was founded as an express courier, who promised to deliver your mail a lot faster that the USPS.
As people and businesses began using these other forms of communication, there were far fewer pieces of mail that needed to be delivered, so the USPS began to see a steady decline in revenue.
But the USPS still considered itself to be in the mail delivery business, even though its customers were communicating began communicating through different channels.
If the USPS saw itself as being in the communication business instead of the mail delivery business, it might have evolved into a very different enterprise than what it is today.
To understand this "myopic mission" of the USPS, it helps to think of the railroads:
Before the Interstate Highway system was built in the 1950’s, people more frequently travelled by railroad. Back then, railroads were a much bigger industry; many more towns had a train station, and daily train service.
Transportation occurred largely by rail. But the big railroad companies didn't consider themselves to be in the transportation business; they considered themselves to be in the "railroad business."
When alternate modes of transportation were developed (highways & affordable air travel), fewer people chose to travel by trains, and eventually, passenger train service all but disappeared.
The Railroad industry failed to evolve and adapt to newer modes of transportation. Hence, it downscaled dramatically.
Similarly, the USPS has failed to evolve and adapt to newer modes of communication. Hence, it is now downscaling dramatically, by closing many of its brick-and-mortar branches.
So, how do we solve the problem?
We solve the problem by eliminating the USPS' non-profitable services, and focus more on those services that the USPS does well.
What else do we do to save the USPS?
We cut back on daily mail delivery, and go to every-other-day, or we outsource USPS mail delivery to another company that already has a fleet of delivery vehicles on the same roads (and in the process, reduce the carbon footprint!)
And we re-define the business in a way that aligns with 21st century communications.
And when the sun sets, if the USPS has gone out of business, its customers and the private sector will adapt, as they always have, with more effective and more efficient solutions.
The message here for any business that ever feared facing extinction is this: Define your business according to the problem that you solve, and not the product or service that you deliver. And once you’ve done that, never stop thinking of new ways to solve that problem.
So ask yourself: What business are you really in?
I love when a company surprises me with something that's both cool and convenient.
Dominos did that when I ordered a couple pizzas from their web site last night.
After selecting the pizza, toppings and crust and, I clicked “Order.”
Up popped the “Domino’s Tracker” – an application that shows you exactly where your pizza is in the preparation and baking process. At first I thought it was nothing more than a novel idea – a little bit like the NORAD website on Christmas Eve, where you can visually track where Santa is at a particular moment, as he makes his annual world tour en route to your house.
That's when it hit me...
The Domino’s Tracker could make my life easier, by telling me when I should leave the house to pick up the pizza, to get it at just the right time. How many times have you arrived too early, and had to wait around, or too late, after the cheese no longer has that delicious just-melted texture?
With the Tracker on my computer screen (or my smartphone), I could see exactly when the pizza was going into the oven, about to leave the oven, and being boxed and prepared for pick up.
But this blog post isn’t just about pizza; it’s about what a company can do to add value to a normally mundane experience; adding value by making it both fun and functional. And this concept can be applied to any business, if you can bring yourself to think outside the pizza box.
Think about the product or service that you market, sell or service. Now think about all that goes through the customer’s mind, as she goes through the process of researching, selecting, ordering, installing or using your products or services. What does the customer think about, and what actions does she take throughout the process? What assumptions does the customer have to make? What information can you as the seller provide, that would be useful to the customer? What action steps can you perform for the customer, to make her life easier?
Domino’s went through this same thought process when they created the “Domino’s Tracker.” It solves a simple, but persistent problem that every customer has after ordering take-out:
“Exactly when will my order be ready?”
But the “Tracker” isn’t only practical. (Only practical can be boring, and soon taken for granted.) Domino’s makes it engaging by delivering the information in a fun-to-follow-format that inevitably draws your eyes to the progress meter. And they make it more personalized by allowing you to select any of several themes for your Tracker. And you can even change the theme mid-stream, if you like.
Most product companies try to differentiate their offerings by focusing primarily on the product. But while Domino’s has taken steps to improve its pizzas, they’ve also enhanced the customer experience beyond the pizza, by delivering useful information that every customer can appreciate, and delivering it in a way that’s fun and engaging.
In fact, the next time I order pizza, I’ll probably order it from Domino’s again, just so I can watch the Tracker. But I’ll also know exactly when to stop watching, and when to start driving to go get the pizza.
Every once in a while, we experience an inflection point that makes us stop and say, “Holy %^*#!”
We’ve all been there, right?
It happened to me twice this week. The first time was at the gas pump. As I was filling my tank, I looked up and noticed the price per gallon:
It was over $4.00.
Granted, that was on the Super Unleaded, but I’d never seen that a price that high on a gas pump in my entire life! Call me naïve, but it was still an emotional shock.
The second event was less dramatic, but still a sign of the times: I picked up a bag of Columbian coffee beans – the same 12-ounce bag I always buy, and it had gone up over 50 cents since the last time I bought it – a week earlier.
It’s inflation, and it’s real. Soon, looking for lower prices will be a futile effort, since rising prices are a moving target.
So what’s a consumer to do?
Look for greater value. That’s right, instead of searching for the gas station with the lower price, look for the one with the added value – like the dollar-off car wash with the fill-up. Or the coupon for the free coffee.
When prices climb, smart customers look for added value.
As a company, what are you doing about it? How can you deliver greater value to your customers? What can you do differently? How can you get creative? What other forms of “overhead” are born by your customer, in the process of finding, buying, using or disposing of your product or service? How can you deliver additional value in those areas, to reduce the customers’ overall expense?
When you figure it out, don’t forget to promote it, because if the customer doesn’t know, that too, will have been a futile effort.
Inflation is here. Customers are feeling it. Use the opportunity to be more creative, and more innovative, to create more value for your customers. And remember to tell them when you do.
Thanks to the Norwak Reflector for this inflationary photo.
It's often the little stuff that makes life complicated.
When a company can make that little stuff go away, they make my life easier. And when they make my life easier, I remember them. And I'll do business with them again and again.
Last week, my truck was at the collision center to have some damage repaired. The insurance company told me they'd pay for a rental vehicle, and that I could go to the rental company of my choice.
As advertised, they picked me up, brought me to the agency where I signed some paperwork (which, by the way, was prepared in advance), and off I went. That was easy.
Oh, and the agent told me that when I pick my truck up the following week, to simply leave the rental at the collision center, so that I wouldn't have to deal with driving the rental to Enterprise.
A week later, that's exactly what I did. I drove the rental to the collision center, and left it there. I got in my truck, and drove home. That was easy.
The Convenience Factor
The added convenience that Enterprise offered, at both ends of the transaction, made my experience as their customer, a very positive and painless one. Two less rides that I'd need to arrange; two fewer favor requests that I'd need to cash in!
Not once, but twice
It was the convenience factor that drew me to Enterprise. I knew they offered the convenience at both ends of the transaction: They brought me to the vehicle, and they did not require me to bring the vehicle back to them.
1. A Great First Impression
By doubling the convenience, they created two opportunities to delight me. The initial convenience - picking me up - was a very positive first impression. And you know what they say about first impressions.
2. A Second Impression to Remember
That second convenience - allowing me to leave the vehicle at the collision center created a strong final impression. And if the first impression is the most important, the last impression is the second most important, because it reinforces the first impression, and solidifies my perception of the Enterprise brand.
3. Don't Keep Convenience a Secret
Now, what's interesting is that Enterprise isn't the only car rental company that will pick you up. There are plenty of others that will. But I knew Enterprise would, because they make the convenience crystal clear to their customers, through their advertisements. If the others also do, perhaps I just haven't noticed.
The convenience factor at Enterprise won me over. But what about you? How important is convenience for your customer experience? And what companies have you seen do it well?