1 Lesson 2.1: The 4E Strategies to Differentiate Your Business From Competitors Lesson 2.2: Making Offerings Memorable Through Experience Economy Strategies

2

3 Competitive advantage is: A distinct combination of offerings that customers want and only you can uniquely provide What makes your business more attractive than your competition

4 How small businesses develop competitive advantages: Traditional ways: –Delivering goods to customers better, cheaper, or faster Non-traditional ways: –Enhancing customers’ experiences as a way of creating value for them

5 Experiences as a key competitive resource for small businesses because they: Can be very unique Are hard to copy Are difficult for larger firms to effectively deliver on a personal customer level Can be personalized and flexible

6 According to Pine & Gilmore, a “better” business means having: Differentiated offerings from competitors, such as experiences High quality goods and services Retail “Escapist” – Harry Potter party Pegasus & Pendragon Books: Berkeley, CA om/

7 Experiential offerings can: Address a higher level of customer value Uniquely position and differentiate your small business Create value for your business

8 A differentiation strategy must: Offer a competitive advantage Attract customers by positioning offerings in a unique and distinctive way Be truly different in the eyes and mind of the customer Be of value to the customer

9 Diagram for creating a unique combination of offerings to achieve differentiation Adapted from: Kotler, P. (1997). Marketing Management: Analysis, Planning, Implementation, and Control. Upper Saddle River, NJ: Prentice Hall. Pine, B.J., & Gilmore, J.H. (1999). The Experience Economy: Work is Theatre and Every Business a Stage. Boston, MA: Harvard Business School Press.

10 Using the diagram from Pine & Gilmore’s theater example: Consider the following: –Goods are like props –Services can be seen as the stage –Personnel are the actors –Experiences are added to each element All of the elements must work in coordination with each other for the “play” to be a hit

11 When considering your differentiation strategy, you must keep in mind: All elements make sense and hinge on a common theme How your customer experiences the theme All of the details that support your theme taken into account

12

13 Making something memorable means to make a positive experience easy to recall or remember at will As a business owner, you should aim to make your business memorable

14 Experiences that may come to mind when you say, “I remember when….” Situation of personal significance such as –Getting engaged –Winning an award Rarity, surprise, or suspense such as –Spotting a mountain lion when on a neighborhood walk –An acrobatic circus show

15 Experiences that may come to mind when you say, “I remember when….” Special design or sensory features such as –Decorations of a party or holiday –Incredible natural beauty of nature like the colors of a setting sun Intensity of emotion such as –A really scary roller coaster ride –An exciting moment in sports

16 Memorable experiences lead to Word-of Mouth (WOM) advertising, which is: Positive communication by the customer to friends and relatives A cost effective promotional strategy Often referred to as “free advertising” Considered a more persuasive message when coming from a trusted source Likely to reduce perceived risk associated with patronizing a new business

17 Creating memorable experiences requires the following specific techniques: Repetition of information Personally relevant experiences Making sense of unexpected information Physical performance of an action rather than simply observing Multi-sensory (e.g., sight, smell, sound) experiences Emotionally arousing experiences

18 Memory making techniques are embedded in Pine & Gilmore’s experience economy strategies by: Creating a theme and harmonizing the cues around the theme reinforcing the business message Offering educational and escapist experiences that actively engage the customer Providing rich, multi-sensory settings Arousing customers’ emotions