Re-FOCUS your business

Commodities, Transactions, Service and Experience

To see the business you have created become successful, I believe you need to go beyond a Commodity and Transaction realm, then beyond the Service realm and enter into the fourth realm which holds the highest value…the Experience Realm.

Think about this illustration of the lowly coffee bean. It is grown and then sold as a Commodity to a middleman where, per cup, it is at its lowest price. Once it goes from middleman to the manufacturer who roasts and packages it, it is at the Transaction realm and a consumer can purchase it at a grocery store for a bit higher price, exchanging money for a product. Now serve that coffee at a diner, street cart or corner restaurant, and the price may be a dollar per cup. That is the realm of Service where a server takes your order and fulfills it and perhaps starts forming a relationship if a client is a “regular.” 

Now let’s take that same cup of coffee and put it in a Starbucks, expresso bar or high-end restaurant and that same cup of coffee gains value in the “Experience” environment and now is priced at $3.00 to $5.00 per cup. This Experience realm is one we are looking for at our studio and is critical for every high-end business in order to charge appropriately for their goods and services.

When Tim and I were in Florence, Italy, we were taken with how awesome the cappuccinos were. In our hotel, there was a breakfast room where we could dine privately every morning. Now, here in America, we would expect to pay $5.00-$8.00 for a light, continental breakfast, which is what they served in our hotel. No waffles, omelets made by a chef, or any hot items for that matter were served. In this hotel, it was a flat rate of $15.00 per person every morning and most of the time, all we wanted were the cappuccinos! Did we complain? No! That's how much we loved them; that's how much we valued them and the fact that we were in Florence, Italy, was a huge factor as it provided an amazing backdrop of experiences and memories for which we were willing to pay a higher price than we were used to here in the USA for a cappuccino.

This illustrates what I consider the Experience realm, where services and goods have high value, high emotion, are memorable and can demand more money.  First, let's look at the Commodities/Transaction realm, the first two of four realms in business. I have put these two together as they are not ones I want to concentrate on and they have many similarities.

Commodity/Transaction Realm…

.Performs a function for a price or exchanges money for product/service 

.Does not create loyalty

.Based heavily on the best price in the market

.Based on supply and demand

.No relationships are formed

Of course, none of us want to be in this realm as photographers and entrepreneurs. I wanted to include it in this discussion to show the comparison to this realm vs the other realms. 

Next, let's look at the Service Realm where some of us may operate.

Service Realm…

.Good manners and etiquette are used

.May create a low level of loyalty if there is no competition

.Gets the basics of the job done

.Always looking for the easiest or cheapest way of doing things

.Little vision is seen in this level

.Clients are thought of as clients without relationship building 

.Has employees who are happy with the status quo

The Experience Realm is the place to be in order to be successful with today’s many competing businesses! Selling goods and services alone is no longer good enough! 

The future lies in creating and offering experiences for your clients that nobody else can. 

While clients love discounted pricing, businesses who plan to stay in business for a while cannot rely on that. In fact, they will perish.

We need to add value to our products-not discount them! If you start discounting, like honey draws flies, you will start drawing the WRONG client to your doorstep. They no longer come because they love what you do, but they come to get a discounted product. No longer will you ever be able to charge full price for any product and your clients will start seeing what you sell as a commodity.

When a person buys a service, it does add another dimension. He is purchasing an intangible activity carried out on his behalf. However, when he buys an experience, he pays to spend time enjoying the memorable events that are created on his behalf (like a play in a theatre). 

Experiences cannot rely solely on entertainment as that is only one aspect of an experience-the trick comes in engaging the client in a personal and memorable way. 

“The businesses that relegate themselves to the diminishing world of goods and services will be rendered irrelevant. To avoid this fate, you must learn to stage a rich, compelling experience.”  

~ The Experience Economy

Experiences need a theme, a vision…a core to organize a client’s impressions around for lasting memories.