by Dennis

Services And Experiences – The Difference

There is something you likely believe that is wrong and threatening to the survival of your business. Unless you figure this out, you will try harder and harder and fail anyway.

You need to understand something a little differently about services and experiences, and I hope for your sake that with this clarity, it will help you get turned around and headed in the right direction and stop you from continuing to harm yourself.

Services and experiences are not the same thing.

Most people believe that really good service becomes an experience and that is incorrect. Really good service becomes a commodity, and nothing else. Meaning, really good service just gets cheaper.

Services are things that you pay someone else to do on your behalf, like pouring a cup of coffee, or fixing a fence or organizing a financial plan.

Experience is what the offering (service) feels like. The experience is the feeling or impressions that your client continues to feel long after the business is complete.

Experience has nothing at all to do with service.

The Starbucks experience has nothing to do with what is in the cup. The impressions they are trying to make have nothing to do with the coffee; neither does the specific-to-Starbucks language they use. Nothing at all about the experience affects the coffee in any way. Good coffee is good coffee, and plenty of places that are not Starbucks sell good coffee. People don’t go to Starbucks for the coffee; they go to Starbucks because of how it makes them feel.

What is significant is that people pay more for Starbucks coffee because of the experience and not the coffee itself.

Beware incorrect, poorly thought-out career-ending advice shilled out to the masses, for free, on LinkedIn.

Most of the advice that is offered to you on improving your customer experience focuses on improving your service or products, which is wrong and is dangerous advice that will render you obsolete so fast you’ll find yourself out of work and looking for a new forge to do your blacksmithing at.

Goods and services, no matter how important, have become commoditized, which means that they compete on price. Do you get paid more or less than you used to? Most consultants and advisors that I work with get paid a lot less than they used to. The products are cheaper, and the advice can be had for 1%. I know, it’s an outrage. Talk to the lamplighters about it.

Consider cars. You can buy an entry level vehicle today that is loaded with options that would have been reserved for only the top line models 20 years ago, and cars got cheaper, not more expensive. What did improving the cars with more and better features and the services (warranties) do to the price of the cars? Nothing. The cars got cheaper.

Consider the car service Uber, which replaced (for me) Boston Coach and taxi cabs. Uber is a far superior service; their payment and invoice tracking is excellent and it costs less, not more.

Consider the investment business. You used to pay a broker commissions to buy and sell stuff, and she or he had all the information. Now you can call your broker, with both of you looking at the exact same information on Morningstar. You can both google the latest news on the company, and you can both get at-a-glance information in moments about the PE ratio and company rating. That’s why your advisor now gets paid 1%. Her services are a lot cheaper than they were 15 years ago.

Consider the travel business. You book trips yourself. You don’t need a travel agent (a what?). You can check yourself onto the plane, check your own bags and get the best priced ticket through a service like Expedia which will organize your travel options for you, quickly, based on price, duration of flight or stops. All of the companies you use – from airlines to cruiseships to hotels – will offer you reward points that you can accumulate and use for future free travel. So all of this is even cheaper still. Isn’t this better than whatever system was in place for buying plane tickets in 1987? Of course it is, and it’s cheaper. See a pattern here?

Not yet? Fine. Consider shopping online. You can in your underpants and buy an outfit that can be delivered in 24 hours by FedEx. The shipping is included in the price of the garments which are already priced for less than in a store, and if you don’t like them, or your fanny is too big, you can ship them back for no charge and jam more cake into your mouth.

Did somebody say cake? In mere moments, you can have a cake made and delivered to your home with a customized message on top written in icing that says “It’s not your fanny, it’s the pants, they have a funny cut” for a fee. And whatever that fee is, it will be even less soon.

Goods and services will always compete on price, and it won’t stop until it’s so cheap that nobody can make a living at it. Note the empty office beside you or just down the hall …

Experiences on the other hand cannot be commoditized. People have proven, time and time again, that they will not only pay for experience, they will line up for it.

So what is your experience? And if you say “great service,” slap yourself.

Where does great service lead to? Commoditization.

Where does experience lead you? To value.