Everything You Need To Know About Strategy – A Baker’s Dozen Verities: Customer Service

By Tom Peters

    1. Do you “serve” and “satisfy” customers … or “go berserk” attempting to provide every customer with an “awesome experience” that does nothing less than transform the way she or he sees the world?

The “M” in IBM stands for “machines.” Except IBM doesn’t make computers anymore. It’s effectively the world’s largest consultancy. CEO Sam Palmisano aims to be no less than system architect of industry upheavals.“Palmisano’s strategy,”claims Fortune,“is to expand tech’s borders by pushing IT users—and entire industries—toward radically different business models. The payoff for IBM would be access to an ocean of potential revenue—Palmisano estimates it at $500 billion a year—that technology companies have never been able to touch.”

UPS is a collection of brown trucks. Except it wants us to forget the trucks … and ask “What Can Brown Do for Me?”“UPS,” said ecompany.com,“wants to take over the sweet spot in the endless loop of goods, informa- tion, and capital that all those packages [it moves] represent.” BusinessWeekchimesin: “BigBrown’sNewBag: UPS Aims To Be the Traffic Manager for Corporate America.” The fastest growing element at IBM is IBM Global Services, the consultancy-industry rainmaker. The fastest growing element at UPS is “SCS” … Supply Chain Solutions, now at $2 billion and featuring 750 locations; UPS’s 24 recent acquisitions include a bank and other financial services assets that permit the company to be your one-stop-shop-consultancy-sys- tems architect for all logistical and supply chain con- cerns and opportunities now and forever more.

Omnicom is a professional services firm that “makes” ads. Well, sure, but …

But the “ad bit” is now the minority partner in the $8 billion firm. Omnicom would like, say, a Chevrolet or Frito-Lay to “outsource” all its marketing concerns— much the same way that an EDS does 95 percent of the IS/IT work for its giant clients. That is, Omnicom is now in the “integrated marketing services” biz—of which ads are an important but no longer dominant part.

Club Med doesn’t provide “great rooms on a cool beach.” Starbucks isn’t about a cup of java … and Harley-Davidson surely doesn’t sell two-wheeled transportation machines. Try instead: “Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an entirely new ‘me.’”—Jean-Marie Dru, CEO TBWA/ChiatDay, Disruption “We have identified a ‘third place.’ And I really believe that sets us apart. The third place is that place that’s not work or home. It’s the place our customers come for refuge.”—Nancy Orsolini, Starbucks District Manager.

“What we sell is the ability for a 43-year-old account- ant to dress in black leather, ride through small towns and have people be afraid of him.”—Harley-Davidson exec on “experiencing the ‘rebel lifestyle’”
At the heart of Re-imagine! is my extensive tour of the economy, from consumer offerings (such as Club Med, Starbucks, Harley) to business-to-business services (such as IBM, UPS, Omnicom). The emergent story line is the same everywhere: As global competition heats up (and up and up), merely making a “quality product” or “quality service” is no longer enough, not nearly enough. We need to offer far more. One useful—com- pelling, actually—name for this new “it” that pre-occu- pies everyone from UPS to Starbucks is “experiences.” As in providing remarkable experiences instead of just products and services. The core logicis provided by Joe Pine and Jim Gilmore in their seminal The Experience Economy: Work Is Theatre & Every Business a Stage.“Experiences,”theauthorswrite,“areasdistinct from services as services are from goods.” Former Harley CEO Rich Teerlink translates this into CFO- speak. He told me it took him almost a decade of relentlessly “pounding on Wall Street” to convince ana- lysts that “We are a ‘lifestyle company,’ not a ‘machin- ery manufacturer.’”Teerlink’s successful sale to the Street led to about a $10 billion leap in the former machinery manufacturer’s market cap!

It’s all easier said than done, of course. And as usual with true transformations,“culture change” (not con- cocting the “right strategy”) is the necessary aim and test. One premier strategy buff who took that lesson aboard, albeit reluctantly, was former IBM CEO Lou Gerstner.“If I could have chosen not to tackle the IBM culture head-on, I probably wouldn’t have,” Gerstner wrote in Who Says Elephants Can’t Dance.“My bias coming in was toward strategy, analysis, and measure- ment. In comparison, changing the attitude and behavior of hundreds of thousands of people is very, very hard.” Gerstner’s was a full-fledged conversion:“I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game.”

In this case even “culture change,” daunting as it is, is not a fully adequate term. Requisite is a particular type of culture change that flies in the face of most tradi- tional training and development practices of, say, the last hundred or more years.“Most managers,” says Danish marketing guru Jesper Kunde in Unique Now … or Never,“have no idea how to add value to a market in the metaphysical world. But that is what the market will cry out for in the future. There is no lack of ‘physi- cal’ products to choose between.”

What about a new degree, an MMM (Master of Metaphysical Management) to supplant the MBA? Another Dane, Rolf Jensen, head of the Copenhagen Institute for Future Studies, is poised to hop aboard this bandwagon.“The sun is setting on the Information Society” he writes in The Dream Society: How the Coming Shift from Information to Imagination WillTransformYourBusiness,“evenbeforewehavefully adjusted to its demands as individuals and as compa- nies. We have lived as hunters and as farmers, we have workedinfactories,andnowweliveinaninforma- tion-based society whose icon is the computer. We stand facing the fifth kind of society: the Dream Society. The Dream Society is emerging this very instant—the shape of the future is visible today. Right now is the time for decisions—before the major por- tion of consumer purchases are made for emotional, nonmaterialistic reasons. Future products will have to appeal to our hearts, not to our heads. Now is the time to add emotional value to products and services.”

Longtime premier brands executive Gian Luigi Longinotti-Buitoni takes this line of argument to the extreme, contending that winners will get into the “dream marketing” business.“A dream,” he says,“is a complete moment in the life of a client. Important experiences that tempt the client to commit substantial resources. The essence of the desires of the con- sumer. The opportunity to help clients become what they want to be.” Longinotti-Buitoni then shortens dream marketing to … dreamketing: “Dreamketing: Touching the clients’ dreams. Dreamketing: The art of telling stories and entertaining. Dreamketing: Promote the dream, not the product. Dreamketing: Build the brand around the main dream. Dreamketing: Build the buzz, the hype, the cult.”

“We do not sell ‘furniture’ at Domain. We sell dreams. This is accomplished by addressing the half-formed needs in our customers’ heads. By uncovering these needs, we, in essence, fill in the blanks. We convert ‘needs’ into ‘dreams.’ Sales are the inevitable result.”
— Judy George, Domain Home Fashions

“No longer are we only an insurance provider. Today, we also offer our customers the products and services that help them achieve their dreams, whether it’s financial security, buying a car, paying for home repairs, or even taking a dream vacation.” —Martin Feinstein, CEO, Farmers Group

You may or may not cotton to “dreamketing” per se. But I contend that the evidence I’ve presented in this very truncated business tour d’horizon is compelling. And ubiquitous.“Dreamketing” at a home furnishings chain (Domain)? Sure. But isn’t the Domain story at essence the same as “What can Brown do for you?” (UPS) story? I think the answer is clear as a bell, from financial services (Farmers Group) to logistics services (UPS) and enterprise re-imaginings (IBM) … to vacations (Club Med) and a cuppa java (Starbucks).

Feel free to choose your favorite term:“experience economy,”“dream society,”“dreamketing,” or some other. No matter what your choice is, the operative idea remains: NOT OPTIONAL.