Tall, skinny, extra hot…

… Latte.

aka the surge of modular selling …

Starbucks was one of the first brands to give people the perception of power by letting them’design’ the exact coffee they want. By allowing them to specify size, temperature and the intensity  they gave the perception of making not one but three consecutive decisions to people who otherwise would not have any decision making power in real life….

Empower your customers to design the product they want

End of last year, Motorola announced that they are ‘almost ready’ with a mobile phone (Project Ara), of which the user will be able to choose each component… (and recently the project got Google’s blessing) Choose your camera, keyboard, processing power… The owner will be able to have a Lego-like purchasing experience at a cost of potentially as low as 50$.

project-ara

The concept of building bespoke was – and still is- twinned in most people’s mind – and in reality too – with the painful consequence of paying a premium price.

Everyone remembers Nike’s failed initiative of allowing people to design their own shoes… It was expensive and at the end of the day it didn’t really add any value for the customer…

Easy and competitive pricing

Starbucks works because the consumer experience is easy, the customer actually creates added value for himself and the price level was accepted as the market standard.

What can we learn from these companies?

  • empower your customers – most people like power or the perception of power… Think about which items about your product or service you could let your customer ‘control’ when it comes to delivery. This has to make sense both for the business and for the customer.
  • in order to do the above, you have to itemise your value proposition (think about your whole offer) and break it into the tiniest organic components  (people used to sell coffee … When J.B., G.B. & Z.S.  started to sell milk type, intensity, temperature, size… mixed with coffee)
  • test with your clients if giving control on certain things would actually deliver them any extra value.
  • develop your products accordingly…itemising your value proposition will have a direct impact on what you will need to prioritise in your product development cycle, bearing in mind that it will also have a  impact on your supply chain.

M&S’ ‘dine in for two’ approaches the same concept but from the opposite angle. They already had itemosed offers (starter, main. desert, drink) based on which they went on and created package offerings but still preserving the idea of ‘empowering the customer’ to construct the ideal food palette for their evening.

Pure product development and standardisation is clearly driving the margin comversations, but whilst 80% of the requirements might be the same, 20% will always be different and when that 20% is the bit that keeps you in business or increases your market share, it will be worth every penny in your innovation strategy because at the end of the day… some people will always just like it hot.

F
ps- side research… What your taste in coffee reveals about you…

http://psychcentral.com/blog/archives/2013/09/11/what-does-your-coffee-reveal-about-you/

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