< Twelve CEOs were staring at six bottles of nail polish I had placed on the conference room table. (Two women and ten men were participating in their monthly LEVERAGEDWISDOM peer learning meeting. I asked the women to hold their answers.)

Raising one small clear glass bottle filled with nail polish, I asked, “What color is this”? Purple? No! Plum? No! Blue-violet? No!

Holding up another bottle, I asked, “and this one?” Deep pink? No! Rose? No!

One more. “How about this one”? Red? No. Maroon? No!

OKAY!!! Okay, we give up, the men shouted, “What’re the colors?”

The purple polish is called Meet For Drinks. The deep pink one is named Techno Girl and the red is Got The Blues For Red. The three others centered on the conference table were Mermaid To Order, Cajun Shrimp and Yodel Me On My Cell!!

What’s going on?

Years ago red nail polish would have been named “deep red”, “enamel red”, “bright red” or “dark red”. All very descriptive names and all including the word “red”. Today, nail polish manufacturers, merchandisers and distributors are no longer just selling a color they are promoting an experience.

Hence, purple is now Meet For Drinks.

Ask yourself, how many reds can you sell to one customer versus how many experiences can you deliver to any one customer and their friends. According to the number of nail polish bottles in my wife’s collection she is having a lot more experiences than she is buying any one color. When a friend asks my wife “What color is that” pointing to her nails…and she answers, in a throaty voice Got The Blues For Red…the experience is shared and the sale cycle goes on. “Where did you buy that”, asks the friend.

When my wife holds her hand out and asks me if I like this color…it’s called Mermaid To Order. The answer is more than just “nice color”.

What’s the lesson?

According to Joe Pine II and James Gilmore authors of The Experience Economy we have transitioned through the agrarian economy, the industrial revolution and the service economy to the here and now, “The Experience Economy”.

And the lesson is… today, whether selling to the consumer or the business community; you have to deliver a memorable experience.

Birthday Cake!

In a HBR article published prior to their book release, Pine and Gilmore explained: “The entire history of economic progress can be recapitulated in the four-stage evolution of the birthday cake. As a vestige of the agrarian economy, mothers made birthday cakes from scratch, mixing farm commodities (flour, sugar, butter, and eggs) that together cost mere dimes. As the goods-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for premixed ingredients. Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at $10 or $15, cost ten times as much as the packaged ingredients. Now, … parents neither make the birthday cake nor even throw the party. Instead, they spend $100 or more to “outsource” the entire event to Chuck E. Cheese’s, the Discovery Zone, the Mining Company, or some other business that stages a memorable event for the kids—and often throws in the cake for free. Welcome to the emerging experience economy.”

“An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event. Commodities are fungible, goods tangible, services intangible, and experiences memorable.”

Example 1:
Experiences have always been at the heart of the food and entertainment business. Walt Disney World embodies all the deliverables of an amusement park, zoo, restaurants and vacation into memorable experiences that have now been shared with three generations.

Example 2:
Apple iPad transformed the computer into an interactive experiential device that continues to engage with every new App that appears in their App Store. Very young kids who are learning and playing on iPads waddle over to the family TV and start pushing on the screen looking for their interactive experience to continue.

Example 3:
A long haul billion dollar transcontinental trucking (logistics) company was looking for a local trucker (a LEVERAGEDWISDOM Member) to deliver their freight the last mile. The freight, typically coming from California, would be off-loaded onto the local trucker’s dock to then be placed in smaller more maneuverable trucks for delivery in the streets of New York City and surrounding boroughs. The long haul company assumed the Member Company could deliver their goods based on a well-earned reputation of excellence. What the visiting client wanted to see on their first inspection tour of the Member’s facility was the bathrooms, cafeteria and vending machines. The long haul company believed that the driver’s experience upon arrival after traveling cross-country was important to the moral and well-being of their work force which translated into more on-time deliveries and less employee turnover.

Example 4:
A new internet technology company raised over 6 million dollars to scale their workforce and improve their deliverables. To do so the CEO Member of LEVERAGEDWISDOM sought out new work space. The choice among alternatives was easy when one of the 10,000 square foot spaces came with a 6,000 foot terrace overlooking downtown Manhattan. While all the other New York City technology companies were also providing, pizzas, ping pong tables, refrigerated beer and lounge areas for their engineers…in this hotly contested market for talent the terrace filled with clusters of chairs, benches and tables became a major attraction for recruitment. When they moved in they had a Cinco de Maya party on the terrace that was the envy of many other start-ups.

If you would like to transform your work place, products or services into memorable experiences that drive business, create life-time valued customers and enhance employee recruitment and retention then join us for lunch at an upcoming LEVERAGEDWISDOM meeting.

Richard Lavin, Founder
917 405 6987

Mary Olson’s Best Business Picks, 2013 – LEVERAGEDWISDOM

LEVERAGEDWISDOM, founded by Richard Lavin is a remarkable business model. Lavin created a member community for entrepreneurs, owners and CEO's of privately held businesses. Recently, Richard discussed the tackling tough questions that keep owners of privately held businesses up at night. Two scenarios:

What’s the expiration date on your business, service, product, sales process? When will your top sales person stop producing at a peak rate? Is your customer base no longer loyal?  As CEO, if you are incapacitated what happens?

The stark reality is that there is life cycle to everything. The Panama Canal had to be widened. What happened to Kodak? Steve Jobs died. TB became resistant to the preferred drug protocol.

Is your equipment delimiting your growth or ability to deliver new products? Will your customers abandon you for the "new, new"? Is it a fad or trend? Do you have the banking resources to go the distance?

Are you making, selling, servicing or supplying "Twinkies"?

Tough questions are often difficult to ask within your own leadership team because everyone has an agenda and a vested interest in the status quo. Further, calling into question each other’s competencies, judgment and vision is threatening.

In these situations, LEVERAGEDWISDOM CEOs have found the confidential setting of our meetings to be a place they can openly discuss their concerns about all of the above, without risking undermining the confidence of their team or telegraphing their next move.  Further they’re able to candidly discuss their personal financial risks or the financial commitment needed to support change.

On the other hand, an enlightened management team can take on these tough questions through the strategic planning process. (Though, the team will rarely assess the personal financial, reputational and psychological risks of the owning CEO.)

The classic strategic planning scenario is to put on the wall sticky flip chart pages titled Strengths, Weaknesses, Opportunities and Threats (SWOT Analysis). Management dutifully fills out the pages, votes on priorities and builds a consensus view as to what the team should be focusing on during the next 12 to 36 months.

CEOs at LEVERAGEDWISDOM find the most important and therefore most challenging conversations around the headings Weaknesses, defined as internal weaknesses and Threats, defined as external threats.

Internal weaknesses and External threats are where in the strategy session the leadership team becomes most vulnerable and has to work outside their comfort zone. That’s why we like to start with these two categories and drill down to expose frailties. This takes courage; but, eventually, these are the discussions that lead to the biggest breakthroughs and real opportunities.

Whatever the setting, wise leaders work hard to get out of their own comfort zone and push their leadership team get out of theirs.

To continue the conversation, you can reach Richard Lavin at 917 405 6987.

Richard Lavin, Founder