LOS ANGELES—How good is the “theater” at your credit union?
Believe you’re not in the theater business? You are, according to Joe Pine, a former IBM executive who now leads a firm called Strategic Horizons and who keynoted the California/Nevada leagues’ annual meeting here with remarks aimed at getting credit unions to join the “experience economy.”
That experience economy, said Pine, is the latest stage in the “progression of economic value.” That progression he said, began with commodities, then moved to goods, then to services, and now to the emerging “experience” economy.
“Goods become commoditized when it’s about price, price and price,” said Pine. The greatest creator of commodities ever has been the Internet. Walmart’s entire reason for business is to commoditize everything it has for sale. But Walmart doesn’t just sell goods anymore, it’s increasingly in services. Now it’s health care and financial services, and services are being commoditized, as well.”
Credit unions would be mistaken to dismiss what consumers increasingly want and expect, cautioned Pine. “Experiences are a distinct economic offering. We’re now shifting into an experience economy. Experiences are what consumers are looking for today. You can see that in a number of industries, such as themed restaurants like Hard Rock Café. REI is another example. The whole notion is to get you to experience the goods before you buy them, and it shows you will buy them. Every great experience needs a theme. It’s the organizing principle for the experience.”
Where To Go
As examples of other places that offer great experiences, as recommended by Pine: The Library Hotel in NYC, which is organized around the Dewey Decimal system; and the Cerritos, Calif. Pubic Library, in which up to 3,500 people can be found every day “because of the experience they created. “
“We, as companies, have to innovate new experiences,” said Pine. “We need new and wondrous experiences to engage our customers.”
Coffee, said Pine, is the perfect example of the progression of economic value. A cup of coffee has two to three cents of beans in it when treated as a commodity. It’s 15 cents per cup when it comes from a can of Maxwell Cup. It’s $1 to $2 at a place such as Dunkin Donuts. “But when you surround it with the experience and theater of a Starbucks, it’s $5, at the core of which is two or three cents of beans.”
In financial services, Pine pointed to an ad from Ally Bank that read, “You know what I hate about going to the bank? Going to the bank.”
“People don’t want to go to banks or credit unions anymore,” suggested Pine. “No industry has commoditized itself more than banking. Bank doesn’t want to spend time with customers. Some banks are turning that around. Umpqua Bank is an example of that. Their branches have been redesigned as places where people actually want to spend time.”
Pine urged credit unions to recognize that “Your work IS theater. Whether they know it or not, your employees are acting when in front of members.”
Give Workers A Role
Pine said credit unions should “give your workers roles to play” and to characterize those roles with names and scripts.” He said the clothing employees wear in front of members is a “costume,” which is why Geek Squad employees dress the way they do.
“Employees need to act with intention,” said Pine. “It’s the difference between what and how. Services are about the what. The HOW is what turns a mundane interaction to an engaging encounter. You need to have dramatic structure. You have to have a beginning, a middle and an end. You must come to a climax, and then come down slowly. Authenticity is critical, and this is one of the advantages of credit unions. Banks lost authenticity when they lost the basic premise of banking: hold onto the money.”