From the September 1999 issue of Entrepreneur

Buyers for major retailing chains show up for a meeting with Boaz Shonfeld expecting to be sold discount gourmet food items, such as gift baskets loaded with coffee, teas, fruits and spices. Instead, they're sold an experience.

The South Hackensack, New Jersey, founder of 30-person Shonfeld's USA Inc. doesn't start by showing prospects the products he has for sale. Instead, he presents a slide show detailing how he will work with the retailer to decide which product will sell the best, for the highest margin, to that particular store's shoppers.

It's far more involved than a simple take it or leave it, says Shonfeld, 31. The process of research, analysis, design and revision of product plans with a typical large retailer may take months. Why so long? Shonfeld doesn't just provide products; he helps his clients revamp their businesses by introducing new and aesthetically pleasing items, thus enhancing their shoppers' in-store experiences. This process can involve the consideration of details as fine as the colors most likely used to decorate customers' kitchens. Not infrequently, retailers learn a lot about their own businesses, Shonfeld says.

After all that, making the actual purchase is almost an afterthought for many buyers, a fact which Shonfeld credits as much to the power of the experience as to the appeal of his products. "We create an experience from A to Z," he says. The customer is constantly involved while we work together to create the best merchandise. From the very beginning, we make it very different."

The trick of turning business interactions into memorable experiences might reshape business as significantly as quality management or reengineering, say experts like Bernd Schmitt, a Columbia University business professor and author of Experiential Marketing (The Free Press). Small businesses can take a cue from companies such as Gillette, MasterCard and Coca-Cola, which have recently recognized the central importance of customer experience in marketing their products.

Spurring interest is a conviction that when firms go beyond merely selling products and services, and offer distinctive and positive experiences, it creates fanatically loyal customers. "When you engineer experiences," says Lewis Carbone, president and CEO of Minneapolis management systems firm Experience Engineering Inc., "customers say things like `I'm not sure exactly why, but this is the best experience I've had in your industry, and I sure hope it's like this next time.' "


Mark Henricks is an Austin, Texas, writer who specializes in business topics and has written for Entrepreneur for nine years.

Early Experience

Twenty-five years ago, business professors Morris Holbrook of Columbia Business School in New York City and Elizabeth Hirschman of Rutgers University in New Brunswick, New Jersey, began researching experience as a factor in marketing, Schmitt says. They published their findings in a scholarly journal in 1982. Some companies, however, recognized the value of experience even earlier. Walt Disney, in particular, is an oft-mentioned pioneer. By attending to details such as piping the aroma of freshly-baked cookies into Disneyworld's Main Street, the entertainment giant turned an amusement park visit into a memorable and highly marketable experience.

Offering an experience means more than merely giving good service, stresses Carbone. Experience encompasses far finer details, including such things as the smell of the showroom or the feel of the floor. In fact, ideally, all the senses will be engaged for your customers, and their emotions, too.

Experience comes into play before and after the sale. For instance, Carbone told a health-care client that keeping fresh paint on the curbs in the parking lot would improve patients' experience before they even entered the facility.

Managing experience is also different from quality management. "Quality programs are about the elimination of negatives," says Carbone. "They don't build the things that make the experience of dealing with you so different that your customers won't buy from anyone else."

Getting The Edge

To improve your customers' experience, start by learning all you can about their current feelings toward your business. Some companies videotape clients interacting with sales or service personnel; others set up test facilities to see how customers react to different circumstances.

Analyze tapes or notes to find clues to what customers like and dislike about your business. First, identify negative experiences and eliminate them. For example, Carbone says, when a nursing home discovered visitors disliked the disinfectant odor in its lobby, it switched to an odorless cleaner, thus removing the negative stimulus.

But don't draw the line at simply listening to consumers, Carbone advises. They often don't know or can't express exactly what they want. Nor should you focus on benchmarking competitors. By definition, a copycat isn't creating a unique experience.

Breaking The Mold

Focusing on experience can work for many types of businesses, from manufacturers to service firms. Even old-line industrial companies that deal only with other businesses can work to get retailers of their products to provide appropriate customer experiences, says Schmitt. Only pure commodity sellers and companies in highly regulated environments, such as government contractors, are unlikely to gain from improving customer experiences.

There are risks in relying on experience, however. When experience becomes entertainment, consumers expect it to be continually updated, notes B. Joseph Pine II, co-founder of Strategic Horizons LLP, an Aurora, Ohio, thinking studio that helps businesses design new ways of adding value to their economic offerings.

"You can also choose themes that are inappropriate," warns Pine, who also co-authored The Experience Economy (Harvard Business School Press). For instance, a company whose customers value speedy and attentive service would err if it designed a laid-back experience. "But the easier way to go wrong with experience is to fail to refresh it. All experiences need to be refreshed, because the second time you experience it, it's not going to be as good."

The process of analyzing, improving and refreshing a customer experience need not be expensive. Entrepreneurs can even continue to use the same ad agencies and packaging designers, or their in-house equivalents, says Schmitt.

The marketers will have to work with a different goal in mind, however. "You can't focus on the features and benefits with a unique selling proposition anymore like [you could with] traditional advertising," Schmitt says. "Now it's about how you create an experience."

Wave Of The Future

Stressing the customer experience rather than features and benefits of a product or service may sound odd, but it's just an extension of recent trends focusing on quality and customer service, says Schmitt. It's natural to wonder whether this trend will take on a life of its own like quality and service did, and if experience will eventually be seen as more important than the product or service itself.

If so, say some experts, that won't be a bad thing. In fact, argues Pine, companies that make the most of their customer experience will actually charge for the experience, much as producers of theatrical performances and sporting events sell admission tickets. They may even throw in the product or service for free in exchange for buying the experience.

For now, though, even experience-oriented entrepreneurs are generally content to merely add a dollop of experience to an otherwise quality offering. It doesn't cost a lot, but it makes companies of any size stand out.

For Shonfeld, turning the process of buying from him into an experience has made all the difference. "We call it the selling experience," he says. "The sale is basically the last point, not the first. That's what everybody else does."

Contact Sources

Experience Engineering, (612) 942-8880, eemail@expeng.com

Shonfeld's USA Inc., (201) 883-0100, fax: (201) 883-0017

Strategic Horizons LLP, (330) 995-4680, pine&gilmore@customization.com