No, I’m not calling you stupid, dear reader. But I AM calling a common myth in business stupid.
The myth goes something like this: open up your business, deliver a great product at a great price (and THEN discount it more if you need to), and business will come a knockin’ down at your doors.
I see all sorts of retail outlets following this model. And failing. (That includes my very own former bike shop, Cycle 9)
In the past month alone, I’ve seen two local places go down, one a wine shop, and the other a clothes store. I walked by with sadness, noting two more needless victims.
It’s not JUST retail that succumbs to this. But retail is a great place to illustrate the myth – a myth that is a killer in any modern business.
The horrible shoe experience
I have big feet for a girl. Almost bigfoot sized.
None of the local shops carries shoes for bigfoot. Last time I asked at one of the local retail outlets, they said enthusiastically “we can order them for you!” So I asked in return: “If they don’t fit, will you return them?” They said, “No, we can’t afford to do that, we’re just a small shop!”
There’s a reason they’re a small shop. It’s because of their answer, not the other way around!
In so many words, their answer told me this: they are there to sell the goods that they have in stock, according to some arbitrary decision they made a year ago when they ordered the shoes.
They are NOT there to give me a great experience so that I want to come back again and again.
They are just there to sell me stuff…
Do I need more “stuff??” No fucking way. I’ve got plenty of stuff! I want something else.
It’s something that nearly every customer with lots of choices these days is looking for, but that many small business owners like this shop doesn’t understand.
It’s killing businesses to not understand this.
Before giving you the answer, let’s think about one more example:
Why online spells the death of retail (until owners wake up)
I got tired of being told to just buy some boy’s shoes every time I went into a local shop. Boy’s shoes are so damn boring. Hell, back when I was a boy, it seemed like they had more variety. I remember having sandals with purple straps at one point. But no. Now it’s all brown, olive green, and black. Gawdamn.
Just because my feet are big doesn’t mean I want to wear camo green and brown shoes! No thank you.
I got tired of being looked at like I was a Big Foot mutant with green fur every time I asked for large women’s shoes, so now I buy all my shoes online at the big Z (Zappos). They have a great selection, they send stuff very quickly, and they have a very liberal return policy!
While I’m at it, I often buy other stuff. Just like I do if I’m in a local store and buy something – I’m more likely to buy something else with it.
So the business owner that sells me shoes also sells me other stuff!
Lots of people shop online these days, because it’s fast, there’s a huge selection, it’s easy to compare prices, read reviews, etc.
How can any small business compete against this?
By focusing on the experience, not the products (DAMMIT!)
When I went into that shoe store I was looking for the experience of being told that I am wanted as a customer. I was looking for the experience of being catered to (within reason). I was wanting them earn their markup by helping me find a great pair of shoes, without me having to do a bunch of research on my own.
See, although I shop at Zappos, there’s a BIG drawback. – a big deficiency to that experience. It can take an hour of time to wade through all the massive number of choices to figure out what’s the right one. I don’t have time for that. So I don’t often do it.
That’s why I’m still wearing the same damn brown (men’s) sandals I’ve had for at least 3 years.
If that local store could give me the experience of simply solving that problem for me, I’d shop there in a heartbeat. If they saved me time, made me feel great, made me feel “normal” rather than like an alien, Zappos would have some tough competition.
But these local business owners, most of them are like me when I owned my bike shop.
They think it’s about the stuff. They think it’s about the money. They think it’s about the markup.
It’s about NONE of those things.
It’s about the experience!
With choices everywhere for customers these days – often leaving them totally overwhelmed (like I am when I see 100’s of choices online) – it’s the experience that differentiates. It is the experience that determines whether someone will return, or not.
Disneyland vs the local amusement park
Last night I was at a party. One of the moms complained about how Disneyland was so much more expensive than some other amusement parks. Based on that – and because she then talked about how she won’t even pay for a Kindle book because it’s “too expensive” so she checks it out of a library – it’s clear she’s a “bargain shopper.”
The temptation as a business owner is to cater to people like that. It’s tempting to join the race to the bottom. I’ll write another time about that, but it spells death.
Ask yourself – as a retirement investment, would you rather own Disneyland, or a local amusement park? Which would give you the higher yield?
If you answered the “Big D” there’s a reason why. It’s not that Disney has bigger and better rides. Or better prices.
Nope, none of that.
It’s the experience. People plan their vacations around going to Disney – with expensive plane tickets and hotels. Who does that for the small, local amusement park? Almost nobody.
That’s because the Disney experience is unique. For the right kind of person (hint: kids either in body or mind) it is THE place to go.
Disney has created an experience, not just amusement parks. It’s not an experience for anyone or everyone. No experience is.
For example, I don’t particularly want to experience knitting at this point in my life. People who do like knitting probably don’t want to experience crazy whitewater kayaking down class IV rapids.
What we each want to experience is unique to us and our interests. Different businesses need to cater to different desires for experience.
You’re convinced that “it’s the experience, stupid” – so how to create that?
It’s a big topic. I can’t cover it all in one little blog post, but I’ll hit some highlights with a few key things you’ll want to consider:
- 1. What “experience niche” are you targeting? Some marketing gurus will have you identify a particular demographic niche you’re going to serve. That’s a lot better than having no clue (like I did with my bike shop). BUT, even better than demographic niching is to identify the “experience niche.” For example, if you are creating an online knitting membership site, you could identify women between 50 and 65 as your niche. Yet there are many women in that age range who have zero interest in knitting, and there are probably some men that DO have an interest. What would work much better is to ask yourself: what kind of knitting experience do these people want to have? What are they looking for? The answer might be: social interaction, inspiration for new designs, etc… Those answers will lead you to thinking about the experience you are delivering, and how to deliver it. This is how you should do your niche targeting!
- 2. You can charge more if you deliver a better experience to the right people at the right time. One of the business-killers I see all around is the under-pricing of goods and services. It’s endemic (and lazy) to think that lowering prices will bring more customers. Often, lower prices make people think the thing you’re offering is less desirable. Instead, rather than lowering prices, think about improving the experience. People will pay for that. It’s why Pink Floyd can charge over $300 for concert tickets when they play a show.
- 3. Consider: What emotions am I generating in customers? What emotions do I want to generate in them? If you’re thinking about your products/services as just “stuff” you are ignoring the most important thing: the emotions of your customer! People buy for emotional reasons, always and every time. Rationality is just there to provide a good-sounding justification for it after the fact. Most people want to experience a feeling of belonging. A feeling of safety. A feeling of fun. Those kinds of things. So, once you’ve identified whom you’re serving, then identify “how do they want to feel?” Finally, figure out how you can help them do that. That is the magic formula, my friends. When you can generate those feelings for your clients, nothing will stop you. It’s like me and my shoes. I want to feel belonging, fun, and ease with my shoe shopping. Nobody really provides that experience as of yet. I’d pay twice as much if someone did. I’d be a dedicated customer for life (or at least the next decade!). Why does almost nobody do this?
Now, if you want to have your own experience of support, help, and understanding related to your business challenges (like growing your business without it taking over your whole life), then you’ll want to sign up for my newsletter, video series on über-productivity, and the creative wealth e-book. All for totally free. I want you to have a great experience, before you ever become a customer!
Have fun, always,
p.s. For more like this, sign up HERE to download my Creative Wealth e-book and more.