TIP: Beyond rational benefits

If you worry about adding to costs when you enhance the customer experience, Customer Experience Strategist Susan Abbott blogged, there's a chart in the current BusinessWeek that might give you some comfort:

  • Coffee as a commodity has a value of about $.01 - .02 per cup
  • Ground coffee in the grocery store has a value of about $.05 -.25 per cup
  • Adding service, a la Dunkin Donuts or Tim Hortons gets you up to $.75 - $1.50 per cup
  • Adding experience, a la Starbucks, gets you up to $2.00 - 5.00 per cup

...the point here is simple: the value of the service you deliver increases exponentially when you bring in experience components. What the heck is an experience component, you ask? It's what happens inside your customer:

  • Emotional benefits, like feeling happy, content, relaxed, comfortable
  • Psychological benefits, like feeling successful or confident
  • Sensory benefits, like taste, smell, and a soft place to sit
  • Rational benefits, like convenience or a better interest rate

...So instead of trying to cut a few pennies from your per-unit costs, consider trying to add to the experience in a way that engages all the benefits: rational, emotional, psychological and sensory.

You will reap the margins of robber-barons if you do it right.

Category: C++ Quant > Fix the Job You Got

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