At a time when many integrators are still struggling with how they can launch a managed services offering, Joe Pine, co-founder of Strategic Horizons, told almost 140 people at the InfoComm AV Executive Conference that even services are becoming commoditized.
These days, says Pine, customers are more interested in the experiences they’ll get and where they’ll get them than the goods or services they’ll receive.
“Goods are becoming commoditized because of the Internet, and services are becoming commoditized today too,” says Pine, who co-wrote “Welcome to the Experience Economy” in 1998 and inspired InfoComm to urge its members to focus on creating what the association calls “exceptional experiences.”
“Goods and services are no longer enough,” says Pine. “We now have to stage experiences for our customers. Experiences are a distinct economic offering. We need to innovate in our experiences.”
Pine walked AVEC attendees through several examples of how experiences enhance a customer’s response to what they’re offering and also can boost an integrator’s bottom line. He started with an example centered around coffee, noting beans cost about two or three cents each, with the price of Maxwell House instant coffee about 15 cents per bean because of the roasting and packaging involved. Brewing the beans, like is done at 7-Eleven, makes the per-bean cost about 50 cents, says Pine, and experiences such as those in Starbucks allows that company to charge $5 per cup and millions of people to pay for it every day.
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“You’re competing against the world for time, attention and money,” says Pine. “When you combine great products and great service with great experiences, that’s when the magic happens.”
In another progression, Pine talked about how birthday parties used to involve a child’s mother making the cake from scratch before eventually moving on to cake mixes such as Duncan Hines. When people became too busy to make cake from a box, companies that sold their own cakes capitalized on the opportunity. Today, kids and their parents prefer their birthday parties to be at Chuck E. Cheese’s, where it’s a one-stop shop of cake, tokens and fun.
The AV industry is certainly not immune from such a progression, says Pine. Commodities, he says, are converted into goods. Those goods enable services, says Pine, and those services create the experiences customers want, need and expect.
For those who don’t believe experiences are what matters most to people, consider these words to open AVEC from Betsy Jaffe, InfoComm VP of member services: “The biggest taxi company in the world (Uber) has no cars and the biggest media company (Facebook) has no content of its own.”
