Are You Managing the Operation

John Lawn, Editor-in-Chief

Or are you managing the experience? That's a question readers of this magazine should ask of themselves and of their staff on a regular basis.

The answer, of course, is that you need to manage both. But the experience side of the challenge often gets short shrifted, especially in an era when cost management and operational efficiency are so highly emphasized in many organizations.

While customers appreciate efficiency when they experience it as faster service or a “good price,” operational economies alone tend have little impact when it comes to generating repeat business, higher check averages, better participation rates and the other metrics that also matter to onsite operators.

What does affect those metrics is the quality of the dining and service experience those customers associate with your café, food court or lunchroom. And that experience is a much harder and more subtle thing to manage than efficiency.

Brent Frei's article on exhibition cooking (it begins on p.26) takes a thoughtful look at this issue and at why successful servery food presentations entail much more than just cooking or finishing off food in front of the customer. As he suggests, the best programs focus much more on affecting the way customers perceive and are engaged in café foodservice than on the food action alone.

An action station is simply a mechanism to attract attention. But to get the most out of it means capitalizing on those moments of attention and turning them into an experience that is memorable and filled with the kind of mental images and associations that will change and improve how your customers think about your operations for the long term.

As Frei points out, business authors B. Joseph Pine and James Gilmore expertly explored this dynamic several years ago in their fine book, The Experience Economy. They suggested that the value chain — the path along which raw materials evolve into finished goods or services — occurs four stages. Product in the first stage is basically a commodity, differentiated by little other than its natural characteristics and availability.

In the second stage, commodities become goods as manufacturers add value by grading, processing and packaging the product, giving it consistent and convenient distribution. The third stage is characterized by the provision of services, a stage that dominates much of our own economy today.

Service providers customize products, providing value that is often intangible and hard to measure (sound familiar?). While many services are described in terms of their features, their true value exists in the benefits they provide to customers.

Where Pine and Gilmore broke new ground was in exploring what they saw as a fourth stage, the providing of experiences. Just as the original service providers quickly outclassed sellers of commoditized goods by customizing those goods for the specific needs of customers, Pine and Gilmore see today's “experience providers” as adding additional value to basic service delivery.

“Just as people have cut back on goods to spend more money on services, now they also scrutinize the time and money they spend on services to make way for more memorable — and more highly valued — experiences.

“The company — we'll call it an experience stager — no longer offers goods or services alone but the resulting experience, rich with sensations, created within the customer.”

Successful “experience-stagers” offer customers consistent, well-developed themes that engage the five senses and bridge the gap between what customers expect and what they perceive themselves as getting. They seek to deliver surprise, even to returning customers. They become experts at mass customization and at training employees to see themselves in roles where they actively engage customers to transform the nature of service into something that is “inherently personal.”

The Experience Economy — and Frei's article — provide much food for thought along these lines. At a time when onsite operators must intensely compete with the value customers so often perceive in street-side restaurant operations, a stronger focus on experiential service offers a strategy that can help you bridge and overcome this “Value Gap.”