Get the newsletter · 2018 essays (PDF) · Featured · Recent

Product versus Experience

Fun little analysis at Information Arbitrage: Joe, that little coffee shop: Starbucks Beware.

As many people are aware, "product design" and "product management" and "product marketing" are all becoming obsolete. The reason is that EXPERIENCES are starting to dominate the conversations that once was about products.

Take software, for example. If you thought of the actual bits and bytes as your product, then you might focus on making sure the right features were in place, that the technology was reliable, and all those other good things. That’s great, and that’s served the industry well for decades.

The problem is that people don’t CARE about your product. They just care about their problems. So when you think about the bits and bytes as your product, in fact you should be a lot more worried. The EXPERIENCE cycle for the customer starts, in fact, before they are a customer. They might include things like:

  • The first time they hear about your company/product
  • When they here an opinion from a trusted source
  • If they go into a store selling your product and look around
  • When they see the packaging
  • Or if your product is a website, when they see a blogger link to it
  • Then, when they use your product, what happens
  • After they try your product out, what they say to their friends
  • How you charge them for the product, and how that interaction goes
  • If they have problems, how that gets handled by your company
  • What the product allows them to accomplish, and how that feels
  • How people interact with your customer after the product gets used
  • After they use your product for a while, and think they need a new one
  • … and the cycle goes on

Either way, this customer experience is obviously a lot more important than the product, which might really traditionally encompass one or two lines of the cycle described above.

So the coffee story is a good one, which really reminds tech guys like me, who obsess over things like "product differentiation" and feature checkboxes that there are many industries – particular CPGs – where everything is a commodity and people buy based on things other than features. Instead, focus on what the customer wants, and maybe that’ll mean less features (but hopefully the "right" features).

Another great example, other than coffee, is Chinese restaurants. Whenever I go to Chinese restaurants, I inevitably talk about the same thing. Most restaurants run by Chinese immigrants tend to be in a race to the bottom, when it comes to pricing. Then you go to a restaurant like PF Chang’s. The one here in Bellevue has a hour-plus wait anytime of the week, and they charge more and the food is mediocre. But it works because it has a great experience (other than the wait), where the location is convenient, the decor is very upscale, they hire servers that resemble the customers, and that gives them the ability to price higher than any normal restaurant. Again, it’s not about the food, it’s about the experience.

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.