April 9, 2015
My family and I recently took a trip to Universal Studios in Orlando, mainly to visit the “Wizarding World of Harry Potter” sections — Hogsmeade and the relatively newly opened Diagon Alley. While we had an excellent visit, a thought occurred to me fairly quickly after arriving… “Where are all of the rides?”
In comparison to other major theme parks — Disney World/Land, Six Flags, etc. — Harry Potter World contains very few rides. Don’t get me wrong, the main rides are spectacular, but the dearth of rides certainly plays a large part in the often 3+ hr wait lines. The pricer in me then re-worded my original question to: “With so few rides (that all have long lines), why is everyone paying so much to come here?” (I kept this a mental discussion; nothing will ruin a family trip like bringing up “value”).
After further inspection, I realized people weren’t getting their primary value from doing or seeing, but from being. Specifically, being a wizard (or witch) in a world they had longed to be a part of for years after enjoying so many books/movies. In fact, which Hogwarts “house” you belong to (defined by the gear you are wearing) is a central discussion topic among random guests. It was all about the experience.
I didn’t need to look much further than my own wife — an accomplished individual who is about to complete medical school and has teenage children — who after about an hour in the park was donning her Gryffindor robe and scarf, Head Girl pin, and McGonagall’s witch hat; was waving Hermione’s wand around; and was quaffing butterbeer like a true Hogwartian.
As we walked through Diagon Alley, it dawned on me that we were basically in an immersive thematic shopping mall with a large cover charge — brilliant! At other theme parks, you mainly go to ride rides or see shows, with an occasional souvenir purchase. But here, every dollar spent enhances your entire trip… the more you buy, the better your experience!
This got me thinking about experiential pricing, and while I couldn’t think of many cases where product sales were an experience-enhancer of this magnitude, I could think of a couple places that managed to incorporate some sort of experience to enhance product sales.
- Starbucks single-handedly increased the price of a cup of coffee by several-fold, not by making coffee that much better than their competitors, but by integrating the product with a unique (at the time) coffee-house experience (hip decorations, board games, indie music, etc.) and then pricing the value of the experience, not just the coffee.
- Domino’s pizza made a raging comeback around 2010 in part after implementing the Online Order Tracker, which gives you updated step-by-step information on your pizza’s progress. Knowing that “Bob” is currently putting your pizza in the oven has nothing to do with your final product, but the experience seemed to tickle millions of pizza lovers and increased online ordering profits a whopping 23%.
The next time you are developing or pricing a product, ask yourself: am I including an experience for the user? If your product isn’t an experience in and of itself, can the sales process itself include an enhanced experience? Does your pricing model take into account that experience? A good customer experience can drastically increase profit, market share, and customer loyalty.
Even Harry Potter would call that magic.