Apr 09 2007
Of BBQ and Burgers
The best understanding of how the customer experience affects the pricing on a product is to take a look at restaurants. The restaurants that understand the customer experience almost always charge more for that experience.
Here in Boise, GoodWood Barbecue Company is my favorite BBQ place. I especially like their chicken and ribs (a place I would miss should they go away).
What makes GoodWood such a positive experience? Why is it that GoodWood is a brand the people comment on? Why do people take their friends to GoodWood over other locations?
In marketing, you look at the four Ps when developing a marketing plan. Product, price, promotion and place. When you find the right mix, you have optimized the customer experience. One thing to bear in mind is that the product for a restaurant is not just the food. It is the atmosphere, the service… all that goes into delivering the food.
Understanding how GoodWood is successful requires an understanding of another way the customer experience can be delivered. For that, we can look to McDonald’s. McDonald’s is very successful. People know McDonald’s. People like their burgers. But, McDonald’s provides it’s own customer experience.
With that said, how many times have you said to your friend, “Holy cow… you have got to try the Big Mac… it is incredible” or “I just love McDonalds’ service, they take such good care of their customers.”
Buying a meal at GoodWood costs about $18. Buying a meal at McDonald’s costs about $6. If people bought only on price, then no one would ever go to GoodWood and would only go to McDonald’s.
The experience people have at McDonald’s is worth a certain price and if price moved too much higher without the experience improving, people would stop going to McDonald’s. If McDonald’s could provide me with the same experience as GoodWood, but at the McDonald’s price, I would never go to GoodWood again.
Corey Smith is the Vice President of Innovation at Fisher’s Document Systems where he maintains a blog on business and technology.
[…] (scarcity causes an increase in perceived value). I have talked about this a lot on this blog here, here and here… to name a few. When the product is the same, the sale will go to the person […]