By now the experience Tim Kobe brought to life is familiar to anyone who has visited a major mall in search of a Mac or iPhone: the long tables with devices set up like artworks in an exhibit, the walls framed with screens and a long counter at the back with “Geniuses” ready to help.
The Apple Store may have marked a rare innovation in physical retail, but Kobe, the founder of Eight Inc., believes most organizations could achieve something similar if they stopped looking at the furniture and started looking at how they measure the impact of what they bring to their customers.
Speaking at the recent C2 Montreal event, for example, Kobe noted that many corporations are accustomed to helping their customers see return on investment (ROI) on the products and services they offer. Yet recouping costs or other basic improvements such as productivity is not enough to stand out as a brand, he suggested. Instead, Kobe advocates what he calls “return on experience,” where those who interact with a company have an encounter so much simpler, easier or more value than what they’ve gone through in the past that their connection is both emotionally positive and memorable. Kobe has co-authored a book of the same name which is due to be published early next year.
When companies are successful, Kobe said, they tend to forget about return on experience, hoping to recreate the magic of the past. This includes one of his most famous clients.
“No one cares about the iPhone 21,” he said, referring to successive generations of Apple’s popular smartphone. “We’re falling back into a pre-Steve Jobs era of incremental improvements.”
What people want are not new features and functions, according to Kobe: they want a better life. That may sound like a tall order for many B2B organizations, but doing otherwise means struggling to stand out from competitors.
“(When) customers see parity (in brand experiences), that leads to commodification,” he said. “These are things that become obvious in retrospect.”
Kobe saw a lot of initial resistance to the glass-enclosed spaces of the early Apple Stores, for instance, but today the company sees $5,546 in revenue per square foot, the most of any retailer. Being cautious about how the experience was designed would have been a huge mistake. “Wait and see can sometimes mean wait and die,” he said wryly.
More recently, Eight Inc. disrupted one of the oldest retail experiences in existence: the car dealership. Its high-concept The Lincoln Way store in China, for instance, may be most noticeable to visitors for the one thing that wasn’t included: a lot of human sales people. Instead, vehicles are placed next to displays where customers can get more information and even configure their own options for a true luxury purchase experience. This is in sharp contrast to the high-pressure environments most car buyers experience today, he noted.
The key to approaching return on experience starts with listening and paying attention, which Kobe described as having “receptors” of some kind that capture intelligence in real time. He pointed to heavyweights such as Facebook, Uber and AirBNB which, though B2C companies, act as a model for establishing strong feedback loops.
“Do you get smarter every time a customer touches your product?” he asked. “The key to passion and loyalty is when you create that connection between the company values and those of its community.”