From product to... experience

When I started my career, back in 1980, we used to sell products. These were thingies, physical objects to be accurate, with a touch and feel and sometimes... a smell, depending what they were used for. The science and practice of Marketing then was all about the notion of selling physical objects to customers. And above all, positioning them in their target market segments. And about becoming market leaders in those same segments. It pays off to be a market leader, you see. The experience curve math easily proves why. It's a question of profits and price setting. The more units you sell (the closer you are to a market leading position, that is), the cheaper it'll cost you to manufacture a product, and the higher your margins will be. So, if a smart ass, ranked after you in market share, decides to challenge you in your leader's throne with a cunning price war, you simply drop it to a level they eventually end up subsidising the darn thing (selling at a loss) to be able to sell anything at all. And eventually get their ass kicked out of the market. This is the sort of thing that was occupying the minds of marketeers back then. The 4 P's that later became 5 or 6, I guess. I lost count... Or is it still 4? Who cares anyway... Nobody was thinking about the fundamentals of the product 'concept' per se, then. In other words, what is a product? Existential questions kinda thing, like, is there a God after all? Sort of... Up to the late eighties, questioning the concept itself of a product didn't quite seem to be that much of an issue. A product was a product, no question about it...

Although existing for much longer than then, during the 80ies another business line started picking up in terms of real revenue volumes. It was the Services Industry. Countless business enterprises were created to provide all sorts of consulting services to companies, HR related, Marketing, Organisational Strategy, Market positioning and strategy, and last but, by all means, not least, IT consulting. It suddenly sounded unnatural to talk about products in the services business. There was little evidence of a 'physical' product, other than a 'final report' or project documentation. Reports in book form so to say, bound and bright with the consultant's and customer logos nicely printed on the front cover, in three or more copies for a client company's management to 'study' and 'classify' them (often vertically). Paying millions of dollars for those books (if they were to be considered the equivalent of tangible products) was simply a hilarious concept. Each and every page of those reports should have been printed with platinum ink on golden pages to be intrinsically worth the price companies paid for those reports and services. So, the physical 'product' concept wasn't too natural to grab if it was all about delivering a service to a customer. How about hospitals then? Treating a patient for a disease and curing him in a hospital, for instance. What do you call this? The patient is the customer, right? He comes in sick, he gets out hopefully alive and cured to join the living again. Where's the (physical) product in that case? Is that the medicines the patient consumed? Or was it the single bed facility that cost twice as much than the next multiple bed facility available? Patients pay loads of money for doctors and their hospital stay, that's for sure! But, where's the product? Same situation for banks. Actually, if you come to think of it, the only task one does with banks is to either deposit or withdraw money. That's all. Nevertheless, banks, who never talked about 'product' for as late as the back end of the 80ies (at least in this country), all of a sudden discovered the concept of 'products' and kept slapping them flat onto our gobs ever since. Not to mention those 'monkey business', hedgie inspired, 'structured' products, and the obscure financial engineering constructs that led to the global financial disaster of late 2008 with no recovery yet in sight. Banking is a 'service' too then, and products in their lingo is nothing else than packaging yours and mine financial resources (loans and deposits) in a myriad different ways. Still, no feel and touch, or smell of a physical thingie product...

How about restaurants then? Are they a service or a physical product provider? That's a tricky one. If you think of the food dishes in a menu, yep, they look and feel, and even smell like products, but what's the difference between using those same products (eat them) at a restaurant or carry out (and bring 'em) home? Is there a difference? Is that same difference, if any, that makes a restaurant take up a dual role, that of a physical product provider's and of a service provider's the same time? Worth mentioning, there have been some smart cookie restaurant owners, who defined their business as a genuine services business from the outset. Lemme explain. There's a scholar's definition claiming that 'services' business distincts itself from a classic object product business in the sense that in the former case the customer (consumer of the service) participates in the production process! A hospital patient sees and feels everything undertaken upon his/her body during the recovery process. A banking customer is also in the middle of each and every banking transaction. A company that hires a consulting firm participates via interviews, information gathering, validations, and collaboration of any color and taste during the entire course of project execution.

In services in other words, it seems that customers start off in State One, participate in a 'production' process, and end up in State Two, whereby State Two is different (and preferably augmented) vis-à-vis State One. In this case, the actual 'product' must really be the process itself that moved a customer from One to Two. A patient was cured. A hungry one got his stomach full. A tired hotel guest paid for the shelter, to get relaxed after a night's sleep and a good morning shower and shave. It's a typical fact we find in learning services too, for instance. People enter a training course with their brain neurons reflecting a state of knowledge A and, if they didn't fall asleep for much of the course, concluded the programme with new neuron synapses in their brain leading to incremental knowledge A+. That participation and incremental status change idea led a few smart cookies in the restaurant business to organise their establishment like Japanese stake houses, where trained chefs prepare delicatessen in front of you, as you stand there dressed up in enormous white napkins like a ghost (I always hated that bit in those tents). Again, customers here participate in the production process, by observing their dishes being prepared in front of their eyes... A primitive experience reminiscent of the years we all sat in the kitchen as kids watching our moms and grannies do the same the good ol' granny way. The Tokyo originated Benihana restaurants (Japanese Stake Houses) are a franchise like this, having introduced the concept to the US long ago by a Japanese ex-boxer, turned entrepreneur. This venture became so notoriously successful that they were soon made into a business case for MBA students at the Harvard Business School, of all places.

Market analysts, especially in the IT industry, as are the likes of the Gardner Group and Forrester Research, love reinventing the business lingo of the industries they serve. They love to invent new words, or use old ones in new contexts, and have participants of their industries talk just like them. Visit one of the Gardner group Annual Conferences and you are guaranteed, at least if you attend their sessions and didn't hang out instead on bar benches sipping Marguerita's, to go back home and talk to your spouse and kids or show-off at the office using terms from the Conference...

One of such concepts most probably reinvented by a Gardner type industry analyst was 'solution selling'... that was the next big thing that came right after products, during the mid nineties. Who exactly launched the term the first time, I have no clue. If you happen to know, feel free to write to me. I know though that Industry analysts and Professional Sales Management trainers sucked the term like a candy. Solution Selling sort of gave a way out of the conflict between 'physical' products and 'intangible' services offerings of the eighties. Suddenly all of us started to sell 'solutions'. Products became a tête de Turc, a piece of crap that nobody wanted to touch, like it got infected by some allele of the Ebola virus. No sir, we are not selling you products, we don't even want to talk to you about them buggers. No, we are just trying to understand your issues and problems and come up with a real tangible solution that will make you successful. We are on your side, we almost do that altruistically, simply because we care for you. We are your friends and partners. And we simply want to make you happy. And if we need to use a competitor's products to achieve that (that argument was used by the most courageous among ourselves), so be it. Come to think of it, one of them companies who really meant it and did actually do this after all, was Almighty Big Blue, a.k.a. IBM. IBMers are all about getting the deal and deliver an entire 'mega-thingie' (the bigger the better) with good profits, that's what counts, without necessarily benefitting individual 'products' of their parent house. Good for them. Takes a lot of cojones to propose that.

Almost forgot to mention. Solution selling aiming at 'customer satisfaction' was actually the complete concept those days. What are any solutions good for if they fail to make you happy? At the least they are good for nothing, not worthy to be called solutions after all. So, happy customers had to complement any solution selling whatsoever, and that's exactly what they did. Solution selling without customer satisfaction was simply considered an oxymoron. It couldn't possibly be a solution at all if customers didn't like it or felt bad about it. Customer satisfaction then... the indispensable part of the sales lingo of the 90ies that no salesman, who respected his commission profoundly, ever forgot to place in the 'favorites' folder of his vocabulary. Until... until the next big term was invented. Forget customer satisfaction, it's no good no more, it almost sounds like a case of sexual harassment, almost certainly if those customer reps happened to be female. So, a new and better objective had to be found to aim for: Solution selling for customer success. Who cares about satisfied customers? The aim is to make them successful with your solutions. Whether they'll feel happy about it is entirely their problem. At least we can think about the dough they spent on us as 'money well spent'. And time passed by...

So, for about 15 years and change we have been 'selling solutions' for 'success' and kinda buried the classic notion of 'products' six feet under.It was so bad that in some cases it was almost impossible to identify what the real product was. After 2000 Apple championed a new sales approach leading to their dominance of a number of digital media markets. People referred to this new phenomenon as 'establishing an entire ecosystem'. Thus, another great lingo thing emerged again. The ecosystem. Take iTunes for example. If you'd consider iTunes alone, Apple actually loses money on its exploitation, or breaks even at best, but they can still maintain their overall company margins north of 40%. iTunes is a subsidised 'platform' in other words (another mega popular term this platform thing, not to forget 'subsidised') that created it's own ecosystem, where suppliers meet customers to exchange products and 'experiences' for money, with Apple being the law enforcement and the administrator responsible for transaction processing, third party contracting and the ever growing technical platform maintenance. Selling music, apps, games, books, videos, media, stuff!

And then came the infamous 'user experience' by. I've heard it so often the last five years that it slaps me in the face each time I witness it time and again, and it almost gives me a headache watching or reading IT presenters, reporters, technologists, entrepreneurs, evangelists, geniuses, or whoever, mention it during keynotes, training sessions, articles, blogposts or interviews. They all seem to have forgotten 'solution and product' selling altogether, and all they now seem to talk about is 'the user experience'. Especially in the market of video gaming. A 60 Billion dollar market annually. The only area in which Microsoft seems to still be doing well, by the way. Who started that 'experience' tsunami, I wouldn't know either. I suspect Apple were instrumental in the adoption of the term. Johnny Ive simply loves to talk about it! You gotta admit it. It sounds quite orgasmic. User experience is all about emotions. The more emotions the better. Emotions, like in casting memories into the human brains, are the kind of thing that ties you firmly to an object and turns you into an addict. 'Experience' is a pretty strong concept! I'd tend to believe that the boys from Gardner definitely had a say in that too. Or they simply sucked it, as usual. And became 'user experience' evangelists, again. As a parenthesis, quite hilarious indeed, I've witnessed many young salesmen selling simple smartphones to plain vanilla technology agnostics in electronics supermarkets or Phone shops, and over(ab)using 'user experience' beyond belief. It's quite funny to see them doing that. They look like anorexics dressed up in XXXL garments. They sort of seem to swim in the wake of their (pretentious) lingo. Especially when selling to cranky geriatrics like myself. Totally unsuspecting, they do their best to overwhelm me and others like me using a sort of rhetoric like: "C'm on grandpa, I'm gonna show you granny's... girl thingie".