Of all the questions onsite operators ask, the one that seems most perennial is, “Why are my customers so willing to pay more for a sandwich on the street than they would in my cafÈ?”
The answer, of course, is at the same time both obvious and (for FM's readers) immensely frustrating. Simply put, customers often perceive commercially available product as having more value, whether they do so consciously or unconsciously. Two sandwiches may be identical for all intents and purposes, but the service experience that accompanies them is perceived differently. For lack of a better term, let's call it the “Value Gap.”
I found myself considering that gap again and again as we researched this issue's feature story on station design. Clearly, onsite foodservice capabilities are greater today than they have ever been before. When wellexecuted, our foodservice products equal or exceed any of those available in comparable casual restaurants. How then to span the gap that still remains in some customers' eyes?
Several years ago, in their book The Experience Economy, business authors B. Joseph Pine and James Gilmore suggested that the value chain—the path along which raw materials evolve into finished goods or services—can be broken down into four stages. Product in the first stage is basically a commodity, differentiated by little other than its natural characteristics and availability.
In the second stage, commodities become goods as manufacturers add value by grading, processing and packaging product, giving it consistency, quality and convenience and arranging for its distribution. Goods are distinguished by these value-added features.
It is the third stage, the provision of services, that dominates most modern economies today. Service providers customize products, often providing value that is intangible and hard to measure. While many services are described in terms of their features, their true value exists in the benefits they provide to their customers.
Where Pine and Gilmore broke new ground was in exploring what they saw as a fourth stage, the providing of experiences. Just as the original service providers quickly outclassed sellers of commoditized goods by customizing those goods for the specific needs of customers, Pine and Gilmore see today's “experience providers” as adding additional value to basic service delivery.
“While commodities are fungible, goods tangible, and services intangible, experiences are memorable. Buyers of experiences ... value being engaged by what the company reveals over a duration of time. Just as people have cut back on goods to spend more money on services, now they also scrutinize the time and money they spend on services to make way for more memorable— and more highly valued—experiences.” “The company—we'll call it an experience stager—no longer offers goods or services alone but the resulting experience, rich with sensations, created within the customer.”
Pine and Gilmore—just like many of the sources interviewed for our story on station design—point repeatedly to theme park operators like Disney as the masters of this approach. But they also cite a wide variety of other businesses that have managed to add a significant experiential component to their products: Bass Pro Shops, Nike, the House of Blues, Borders, and many others, including a number in the foodservice field.
What are the common denominators for these successful experience-stagers? They offer customers consistent, well-developed themes. They support those themes with indelible and memorable impressions-. They engage the five senses. They focus on bridging the gap between what customers expect and what they perceive themselves as getting. They seek to deliver surprise, even to returning customers. And they become experts at mass customization.
The core of Pine and Gilmore's thesis is that, in the experience economy, work is theatre and “every business is a stage.” They say, “Theatre is not a metaphor but a model.” It is in training employees to see themselves in roles, in encouraging staff to actively engage customers, and in “managing the performance” of your enterprise that you transform the nature of your service.
The Experience Economy provides much food for thought for FM's readers and I recommend it for those who wish to further pursue the ideas I've summarized here. But all of this is not to say that the “value meal” is dead. Indeed, onsite operators must be bedrock realists to survive. They not only have to compete with the experience offered by commercial restaurants on the street, but also fight the “other battle” every day against brown-baggers who for economic or other reasons see food mostly as a commodity.
Clearly, all the experience-staging in the world is not going to make brown-bagging or “going out to lunch” a thing of the past.
At the same time, there are always opportunities, large or small, to make the dining experience a more pleasant, engaging and interactive one for your customers. That is the essence of Food Management. And it's the way to bridge the “Value Gap.”
JOHN LAWN
Editor-in-Chief