In my early career, I was given some great advice about what to do.
The advice was this: “Work in a role that finds problems. If you work in a role that solves problems, technology will eventually make you obsolete”. What my mentor was getting at was simple. Will you be a transaction machine, or provide an experience to those you work with in the world.
Disruptors Know The Difference
Flipping this to business and competition, with all the talk of market ‘disruptors’, it’s sometimes heartening to stand back and look at how well your business stacks up for the future. For, disruptors are simply looking at how they deliver a transaction in a new way that solves a customer pain through a better experience.
This one has been doing the rounds of the interwebs, but makes an interesting point.
- Uber did not kill the taxi industry. They did it to themselves by limiting the number of taxis and with fare control.
- Apple did not kill the music industry. They did it to themselves by forcing people to buy full-length albums.
- AirBnB did not kill the hotel industry. They did it to themselves by limited availability and pricing options.
In our opinion, these businesses understood the difference between Transaction and Experience.
In a recent event, we posed the following question to a group of business leaders and owners:
“Do you provide a transaction or an experience?”
For many businesses, this is somewhat confronting. The instant reaction is usually – “of course we’re providing an experience”, but then reflection sets in. Are we actually only focused on ‘getting the sale’ with limited regard for repeat purchase. Are we intentionally creating an experience, or it is just happening? Do we think we’re on the pulse by talking about the ‘buyers journey’?
In fact, in what you would expect as the most experientially-focused industry, even many tourism businesses struggle with reframing their view. What is posed by marketing slogans and pretty brochures often doesn’t match the internal workings and culture. Are we geared and configured to provide a transaction or experience?
Reframe: Transaction To Experience
So what, why bother? Won’t that cost me more money? I already smile – isn’t that enough? (or, wait for it…) My business is different – we don’t need an experience focus.
We can see these lines carved into the headstones of failing businesses of all sizes.
Transactions (working well) are now a given. In fact, any less and you’re starting from behind the eight ball.
In our view, taking an experience (over transaction) focus will deliver:
- More customers – word of mouth is still 100x more powerful than advertising, and positive experiences are what gives bragging rights around the watering holes
- Better margins – the cost of acquiring customers is always higher than retaining existing ones. The experience view reduces customer churn, lower the overall cost-to-serve
- Greater spend – when engaged in an experience, customers are more likely to relax, increasing trust and the chance of additional or incremental revenue opportunities.
If those three reasons aren’t enough to at least ponder the question,then get ready to be disrupted.