Selling Products? or Experiences?

Are you in the business of selling a product, or selling an experience?

Let's take cupcakes as an example. A company could see themselves as a seller of cupcakes. They could choose which flavor(s) to sell - vanilla, chocolate, or a combination of flavors and icings and decorations. They could choose a price for their cupcakes. They could choose their delivery method - in a storefront, to grocery stores, or as an online retailer? As individual cupcakes, or packaged together? Then they could choose to promote their brand: "we sell cupcakes."

Or, a company could approach their cupcake business like Cupdates does.

Cupdates is "a cupcake delivery and catering business, serving the Hampton Roads [Virginia] area," according to the Cupdates Facebook fan page. But they aren't in the business of selling cupcakes. They are in the business of selling cupdates - "sweet and memorable experience[s] that [are] created when two or more people gather together to share in the delight of eating a beautiful and delicious gourmet cupcake." (again, from their Facebook fan page and their website.)

What is the difference?

Most cupcake purveyors think that they are selling cupcakes to customers who want cupcakes.

But most customers don't want to eat cupcakes just any old time, and most customers don't want to eat cupcakes alone.

They want cupcakes as a treat - as part of a joyous occasion. Cupcakes are most delightful when they are shared with friends and family in celebration of a birthday, or holiday, or party, or event.

And so, Cupdates doesn't sell cupcakes. They sell something more compelling and valuable for customers - they sell the experience of enjoying, with friends, the delightful creativity and wonderful deliciousness of a gourmet cupcake.

It is as the saying goes, "a person doesn't want a drill; he wants a hole."

When a company shifts perspective from selling drills to selling holes - or from selling cupcakes to selling sweet experiences - it becomes more able to solve the customer's real need, and enjoys more flexibility in the way it meets that need. The company also takes on another level of responsibility. When you sell experiences, you are no longer responsible for just the product. You are responsible for the delivery, the customer service, the life of product. You are answerable for the solution to the customer's problem, not just for a product you provide.

What might have happened to American railroad companies if they had seen themselves as in the business of transporting people, rather than the business of running trains?

What will happen to Cupdates as they see themselves as selling "sweet and memorable experiences," rather than selling cupcakes?

And what would happen to your organization if you begin to see yourselves as providing experiences, rather than providing products?