I have talked about the commoditization of the coffee business before. You can certainly get a good cup of coffee (or name your favorite coffee drink) at many of the coffee houses that sprang up over the past decade. So, when “quality” is no longer the differentiator that it once was, what is a coffee house owner to do? Well, as many industries are discovering, you start focusing on differentiating through the consumer experience.
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So many of us love a cup of coffee in our favorite cafe, but I don’t think many would call that a “transformational experience”. However, having a cup of coffee in a small cafe on the edge of the caldera at sunset in Santorini? Yes, a transformational experience that created a memory that I will never forget. What price do you put on such a cup of coffee?
The book “The Experience Economy” briefly mentions a key example that helps explain how a simple good can be economically transformed into an experience for which a customer is willing to pay one thousand times more. The following table outlines this transformation for the simple coffee bean. Read full article…Read More