The Challenge of Selling Experiences

on July 7, 2016

There’s a famous story about the Pepsi Challenge campaign back in the 1980s and Coca-Cola’s related (and misguided) decision to launch New Coke in 1985. The story – as told by Malcolm Gladwell in his book Blink – is that the Pepsi Challenge appeared to show people liked Pepsi better than Coke in blind taste tests, which panicked executives at Coke into rethinking their formula for the drink. Subsequently, it emerged people actually preferred Coke to Pepsi when drinking a whole glass or can, but preferred the sweeter Pepsi under the specific conditions of the Challenge, which only had them sip each drink.

A few years back, I was meeting with a senior US executive at Nokia and mentioned this story in the context of the company’s efforts to sell Windows Phones. Whatever other challenges Windows Phone had, one of the biggest in the early days was it looked radically different from every other smartphone operating system out there – instead of a grid of app icons, Windows Phone featured a mosaic of colorful squares of different sizes, many of which moved around and changed as the user watched them. There was actually a lot of value behind that approach, with the richer information presented on the Live Tiles. But, at first glance, the OS just seemed unfamiliar and strange and many users rejected it out of hand. In that sense, Windows Phone was like Coke in the Pepsi Challenge – given only a very brief exposure, people preferred the alternative but, given a deeper experience with the product, people might come to like it better. My conclusion was that one of the things Nokia (as by far the largest seller of Windows Phone devices) had to do was to find ways to get people to spend some time with a Windows Phone device and really see its merits. (I was somewhat amused later to hear that the same executive had been using this analogy with colleagues since our meeting, though the fortunes of Windows Phone never really improved much)

I mention this now because this same challenge confronts a number of other technology product categories today and that’s the difficulty of selling what is ultimately an experience rather than a product. There are at least three categories that come immediately to mind but there are doubtless others too. What they have in common is the value proposition isn’t obvious just by seeing a box on a shelf in a consumer electronics retailer or even having someone explain it to you. You have to experience it to really understand the value proposition and, in some cases, simply experiencing it can be enough to sell you on the idea, whereas nothing else will get you over the finish line. The three categories I have in mind are the smart home, home speaker devices like Amazon’s Echo, and virtual reality.

As I’ve written here previously, the smart home market suffers from a number of different challenges. One of the biggest is it’s really hard to convey the value of smart home technology in words alone – you kind of have to see it working in a real home or at least a decent mockup home to really get it. Simply seeing a connected lock, doorbell camera, or smart thermostat in a box on a shelf at your local Best Buy likely won’t do it, no matter how attractive the packaging. You really have to see it in action in a somewhat realistic setting to understand the potential. Arguably, the ideal sales setting is your own home, with someone to walk you through the possibilities, show you where devices could be installed and how they would work in the very setting where you’ll be using them.

From a home speaker perspective, it’s similarly difficult. I finally had to break down and buy an Amazon Echo to try for myself because I had heard and seen so many people talk it up in ways I just didn’t find compelling. It’s hard to imagine what you might use something like that for unless you have it around for a while and spend some time understanding what it can do and the scenarios in which it’s helpful. For example, the idea of setting a timer on Echo wasn’t that compelling to me in theory because I regularly use my watch and phone to do that. But the first time you have your hands full in the kitchen and need to do it, the value proposition of something like the Echo becomes a little clearer. And there’s no way I would have predicted how much entertainment value my kids would have got out of simply asking Alexa to tell them jokes. At the end of the day, I returned the Echo to the store because I wasn’t convinced it was worthwhile to me but I never would have understood the value proposition as well as I do now if I hadn’t had one in my home for a few weeks.

Lastly, virtual reality. This is perhaps the only category I can think of where you could probably divide the population very neatly into those who have tried it and are sold on the idea and those who haven’t tried it. Virtual reality just doesn’t sound all that compelling when you explain it to someone. But once you’ve experienced it there’s a definite “Aha!” moment. As John Carmack likes to say, virtual reality makes converts on contact. As with the Echo, that doesn’t mean we’re all going to be buyers just because we spend some time with it, but it’s infinitely easier to sell if someone has a proper experience with it.

For each of these three categories, that creates significant challenges in actually selling the products. Giving people real experiences with the smart home, home speakers, or virtual reality takes time and, in some cases, a significant amount of space. For retailers accustomed to devoting shelf rather than floor space to consumer electronics, this may well require a change in mindset. It also likely means store associates spending considerably more time with potential customers than they might have done traditionally because doing a full-on demo takes more time than just directing someone to the right part of the store. Perhaps the most powerful ways of selling experiences have nothing to do with retail at all and are instead based on word of mouth marketing, in which trusted people who have already had those experiences share them with their friends. The key thing here, though, is marketing some of these experiential products requires some radically different approaches from those traditionally used for consumer electronics.