Price and value

We deliver value when a product becomes an experience. Taking your iPhone out of it’s cover is not about the phone – it’s about the experience. It isn’t just about the packaging, the wait for the phone, or even the phone itself – the experience is more than a sum of the parts. And the best service experiences are frictionless.

To illustrate, Resorts A and B charge about the same amount for a night’s stay. Both resorts are up-scale. When you check into resort A, they take orders for all your meals for the day and you pay for them at checkout. No worrying about signing bills, no calling room service, and no contact required – just go ahead and enjoy the experience.

Contrast this to resort B – every morning at breakfast, you are reminded that while breakfast is free, a cup of coffee is not. The cup of coffee costs $3.50. Instant friction. Would a guest staying mind if $3.50 was pre-included in the bill? Absolutely not. But, somehow, resort B decided it was in its best interest to remind guests about the cost of a cup of coffee. I’m sure they had their reasons and I just hope they were good. At least for me, it was an instant turn off.

Approaching pricing from a cost plus margin lens blinds us to the customer’s need to experience what we offer. It’s not about the money. It’s about the surprise and delight. It’s not about the number. It’s about the feeling. The moment we make our product or service an experience, we deliver value.