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  The store manager walked over, and before he could say a word I asked him, 'In addition to the fabric, which doesn't look any better to me, why is this suit worth $900 more than the one I'm trying on?'

  'Well, if I could just say a word about the fabric, sir, it's what we in the business know as a super 120 and it weighs 280 grams per square metre.' (Notice the use of detail.) Looking at me in a way that made me want to punch him in the nose, he continued, 'In layman's terms this simply means that it is a better quality fabric and will "sit" better on you.'

  'Really?' I wasn't about to give in easily.

  'Yes, sir. And then as to the stitching' – remember my wife in the Gucci boutique – 'much of this garment is hand-sewn for effect, while the fabric is laser cut ensuring perfect shape.'

  'Uh huh.' It was a good, practised spiel, but I wasn't ready to throw in the towel. 'That may be, but is that really going to make a difference to me over the life of the suit? I still can't see any of the differences you're talking about.'

  'Why don't you try it on?' the store manager said. He got me to put on the jacket, and repeated some of what he'd just told me about the fabric and the stitching.

  I switched jackets a couple of times, looking for a difference in the mirror.

  'I still can't tell the difference!' I exclaimed.

  'Ah, sir,' the store manager said in a mocking tone, 'I know you can't tell the difference, but I assure you the people you want to be doing business with can.'

  I bought the $1700 suit, not to save face in front of the allknowing store manager, but because I actually bought into the story that the suit would help me become more successful and respected in my business.

  I believed it would give me a seat at the right tables, so to speak, in front of the right kind of people.Guided deftly by the store manager, I built a story of myself in my head as a powerful player in the business community.

  Embarrassing, I know. You do the same thing. Every day!

  Language

  Finally on language.We looked at the importance of language in the sections on detail and characterisation, so let me just share two dramatic examples of how language influences our experiences as customers.

  One of Australia's favourite sons, Steve Irwin, epitomised a stereotypical view of what Australia is like. For the record, it is nothing like what the overwhelming majority of Australians are like, but he was loved the world over anyway.

  The best thing about Steve Irwin was that he wasn't putting on an act. He really was that enthusiastic and he really did use words like 'crikey'. This image of Australians is rampant around the world.While I was eating alone at a counter in San Francisco, a road warrior from New York asked me if kangaroos really hop up and down the main street of Sydney. 'Of course not,' I said. I would be willing to bet that more than half of Sydney's residents have never seen a kangaroo outside of a zoo. And we don't all talk like Steve Irwin either, but this hasn't stopped people making serious money from the outback 'Aussie' story.

  The best example of the use of language is when your brand name becomes part of the language:

  'Just Google it,' for a search online.

  'I need a Kleenex,' when you want a tissue.

  'Get me a Coke,'when you couldn't distinguish one brand of cola from another in a blind taste test.

  And so on.

  You may be aware that the founder of Illy coffee invented the first steam coffee machine and coined the term 'espresso'. When his grandson recently tried to trademark the word, the powers that be said it was too late, but he had the right idea.

  I have spent a lot of time on the story. I make no apologies for this. This is fundamental. The story, as superficial as it seems, is anything but. It is the reason why people do what they do. It is also the reason why it forms the basis for the pyramid. The model in this case is also the metaphor.

  FUNCTIONALITY

  Design without functionality will fade. That is, of course, unless the core purpose of the product is simply to look good, as is the case with, say, a piece of art or a collectible for your shelf. I think the best way to market your product is to build a good product. However, when talking about the total ownership experience, I am assuming that you have fast, good and cheap already figured out. What I mean by functionality here is how well the product or service integrates into a customer's life.

  Pronto Valet Parking is a functional service. So is Mercedes-Benz Airport Express. And here are a couple more that were designed purely with functionality in mind.

  First Luggage offer on their website that they will 'arrange for your luggage to be collected anywhere in the world and delivered to your chosen destination without stress or hassle'. Yeah, that's a cool idea.

  They note in their FAQs that many companies will ship your luggage for you if you ask, but First Luggage have it as their sole business – so there is no complex paperwork, no weighing of luggage, no boxing of your own goods, nothing like that. You just tell them where you are, where you're going and when you need to be there.Your bags will be there first. They also text you to let you know your bags have arrived ahead of you (ahh, peace of mind).

  First Luggage have also partnered with British Airways, and offer a 5 per cent discount to passengers who book through BA.The timing for First Luggage could not have been better as they cash in on increased baggage restrictions due to terrorism in the UK.

  Progressive Insurance have pioneered what they call the Immediate Response System – it's a high-tech network of GPS systems and emergency response vehicles equipped with laptops, printers and wireless net connections. It makes sure claims assessors are on the spot ASAP – sometimes even before the police – and can assess the claim, organise towing if it's required, write out a claim cheque on the spot in some situations and generally provide one hell of a customer experience.

  Progressive's Peter Lewis says of this system and his philosophy, 'We're not in the car insurance business, we're in the business of reducing human trauma and the economic cost of auto accidents'. Or as I call it, they are in the business of functionality – integrating, in this case during very traumatic experiences, as simply and powerfully into people's lives as possible.

  The truth is the Progressive example is driven by cost savings too, because it cuts out a lot of costly back-office paperwork and administration while vastly enhancing customer loyalty.What a win–win. Save costs and improve the customer's experience.

  Online grocery shopping is another example of an offering based on functionality. Online grocery shopping has soared in popularity – although along its route to popularity there have been a few bumps. In 1999 the US online grocery shopping market was US$200 million. By 2004, Forrester Research reported that the market had grown 1200 per cent to US$2.4 billion. The Food Institute predicts that online grocery sales in the US will reach around US$5.4 billion by the end of 2007, and Key Note predicts the online grocery shopping market will continue to enjoy 20 per cent year-on-year growth until at least 2010.

  In mid-2006, Amazon.com quietly launched an online grocery shopping service that could deliver to anywhere in the United States. Almost all major supermarket chains in Australia, the UK and the US now offer online ordering and delivery. For instance, Tesco captured almost 70 per cent of the online grocery market in the UK in 2006 and their sales hit almost £1 billion.

  If you don't order your groceries online, you should – at least, in my opinion. It is so much easier than going to the shop it is almost a joke. Given that 25 per cent of our grocery purchases are convenience purchases, it is fair to say that most of the 75 per cent remaining are well thought out, planned purchases. In fact, if you are like most shoppers, you will do one big shop (weekly, monthly or whatever) and smaller fresh produce or convenience shops in between. The big shop rarely changes, in terms of the types of items you need and the brands you would normally buy.

  Online shopping remembers what you buy, has it all ready in a convenient list, knows your credit card details and where you live.
You then select your delivery time slot, usually in the next twenty-four hours. They deliver outside of normal business hours, which is important for the modern, busy person.

  On a different note, the emergence of home services and outsourcing of traditional chores has grown exponentially over the last decade. According to IBISWorld the average Australian household now spends $14,000 per annum outsourcing things they used to do themselves. Cooking, cleaning, washing, ironing, child care, gardening – you name it, there is someone who can do it for you. This whole industry has emerged to service the needs of people's time-pressured lifestyles. That is, the service integrates into the customer?' lives by removing the need for them to do it themselves.

  Ask yourself, how many of your processes or policies are set up to make life easier for you and how many make life easier for the customer? Change the ones that are about you.

  FORM

  Beautiful can be a form of competitive advantage. Apple is beautiful. Well-presented food is beautiful. The choreography of Cirque du Soleil is beautiful. Google's home page is beautiful.

  Bang & Olufsen is beautiful, and this Danish consumer electronics manufacturer also understands the often counterintuitive dynamic of consumer behaviour. Bang & Olufsen products are extremely expensive, but some audiophiles and home theatre enthusiasts sneer at them. I would agree with them on the sound, but I think the B&O panels are stunning. But hey, that is just my opinion. It sounds crazy, but whether it is the best audio or video is actually beside the point. Bang & Olufsen's success is built on the superficial areas of design and simplicity.

  People don't just buy B&O stereo equipment and flatpanel televisions to listen to music and watch DVDs, they buy them to look good in their homes. The essential functionality of B&O products in customers' lives is as stunningly beautiful interior design objects. Oh, and so their friends know they can afford to buy B&O products (part of their story).

  The company understands this very well. At one point Bang & Olufsen CEO Torben Ballegaard Sørensen wanted designers of B&O's Beomax 8000 television set to include a microchip that would be compatible with future HDTV standards. That would conceivably extend the Beomax 8000's selling life and its annual $10 million contribution to cash flow. The B&O designers refused to consider the CEO's suggestion, saying it was an 'affront' to the design of the television as a sculptural object in its own right.When the new HDTV standards were operational, they would design a new television as a sculptural object from scratch.

  I am not criticising the CEO. He is a flipstar in its purest form, sacrificing what would be potentially more revenue and profits in the short term to stay true to B&O's source of competitive advantage. Form not function. I also love that he was willing to be directed by the design team. He was willing to give up some control, the topic of chapter 6, 'To Get Control Give It Up'.

  The very affluent people who spend as much on a Bang & Olufsen stereo or home theatre set-up as the cost of a wellrespected motor vehicle aren't doing it to rock out with killer sounds and images, but so that the products themselves will look fabulous in their homes. Likewise, the equally affluent customers who are focused on audio and home theatre performance are unlikely to buy Bang & Olufsen.

  As I said, you can't actually separate form or functionality or service from the story. As Rich Teerlink, the former CEO of Harley-Davidson Motorcycles, once said, 'We don't sell motorcycles. What we sell is the ability for a 43-year-old accountant to drive through a small town dressed in black leather and have people be afraid of him.'

  The functional mechanical performance and the distinctive appearance of Harley-Davidson's products obviously combine to make that customer experience possible for communities of Harley-Davidson fans all over the world. But it is equally obvious that for Harleys, appearance counts for more than performance. It is the design that enhances the story.

  In 2006 Harley-Davidson's net income climbed to US$312.7 million from US$265 million a year earlier. Revenue rose 14 per cent to US$1.64 billion, and shipments jumped 11 per cent, including a substantial 22 per cent jump for highend models. Predictions are that earnings per share will rise 11 per cent to 17 per cent by the end of 2009.

  There are lots of good motorcycles that cost a lot less to buy than a Harley-Davidson. In every category of product and service, the winning providers, the ones who have the highest profit margins in their fees and prices, are the ones who sweat the small stuff to create a distinctive, mind-blowing customer experience, as Harley-Davidson have done with the look and feel of their motorcycles. They go beyond the product or service itself to the total ownership experience that customers have, and they do everything in their power to make that experience truly unique.

  Apple, an obvious flipstar, have understood this for a long time. As my Apple mates say to me when comparing PCs to Apple computers, 'Apples are beautiful'. And it seems as though other computer makers are getting on board too.

  Dell's new cases look much more modern and slick. Asus have teemed up with Lamborghini (an instance of characterisation by association with a well-established brand) and produced a leather-bound laptop – not the carry case, but the actual casing of the laptop itself is leather. Hewlett- Packard have reclaimed the number one PC spot over Dell in large part because they have been faster to jump on the trend that design is a powerful differentiator.

  SERVICE

  Service usually gets the most attention in discussions of the customer experience. But in many cases, product form, functionality and story can trump bad service. That was my experience with an Italian lounge that I bought recently.Actually it only arrived recently; in fact I bought it some time ago.

  I want to mention the establishment by name, because their service was appalling, and they deserve to be called on the carpet, but my publisher's lawyers prevent me from doing so. It was a struggle to get assistance from the staff from the first moment my wife and I walked in the door. And after we had ordered the lounge, they sprung the good news that delivery would take three months. I was thinking more like three days so we'd be able to start enjoying the new lounge that weekend.

  Four months later, nothing. No lounge, no phone call, no email, no letter from the shop explaining what was happening. I rang and asked where in blazes my lounge was, and they told me there were always shipping delays from the Italian manufacturer. They assumed I was an idiot and didn't realise the true situation: that they were a small importer of specialty furniture with no inventory except what was on display, and that they minimised costs by only shipping full containers. They had obviously had a slow year, and as the rare customer who had actually bought something I was paying the price.

  Two months after that, half a year after I had initiated the purchase, the store called to say that my lounge would arrive the next day. This was with no update correspondence or any other communication in between. I called back to say that tomorrow was not convenient, but they would have none of that. I asked if they could at least tell me when it would be arriving, so I could arrange for someone to be home to receive it. No information there, either.

  To top it all off, the delivery people refused to take away the cardboard and plastic the lounge arrived in. 'Sorry, sir?' they said, 'that is your responsibility.'

  I could not imagine a worse service experience. But we absolutely love the lounge. It is both gorgeous and amazingly comfortable. It is a perfect fit for our space. When we have visitors, I can't resist pointing out that the lounge is imported direct from Italy, that it features a unique grade of leather, and that we sat on dozens of lounges and it is without a doubt the best lounge we tried.

  In other words, the service was appalling but the total ownership experience is still awesome. The trials and tribulations we went through to get the lounge only make the story better in the end.

  I'm not discounting the importance of the buying experience in general. If a product or service is highly commoditised, then it is the buying experience that may be the only thing that differentiates one offer from
another. Such is often the case in banking. In the case of, say, a hotel room, the customer service is the form and function and the primary reason for the transaction. One hotel room is very much like another, and it is the service wrapped around the room that makes the difference.

  Like all frequent business travellers, I stay in lots of hotels. Some I visit regularly, perhaps a few times a month. I belong to every loyalty program, but none of the hotels seems able to remember what my preferences are. Every time I check in, I still have to fill in my details on the form and say I like a non-smoking room with a doona and a firm pillow. I am sure any corporate road warriors reading this have similar stories.

  Several years ago I was staying at a hotel just off St Kilda Road in Melbourne, overlooking the F1 racing track. I'd been on the last flight from Sydney and landed well after midnight, only to have to wait forty minutes for my bags to come out at the baggage claim area. When I reached the hotel well after 1 am, dragging a rolling suitcase with a briefcase attached and a suit bag over my shoulder, the lady at the desk smiled and asked, 'Checking in?'

  Of course, this is what she had been trained to say and do, never forgetting the smile. But I felt like saying, 'No, I am taking my bags for a walk. What do you think I'm doing?' Instead, I simply said, 'Yes.'

  After checking in, I asked for a wake-up call for four hours later, which I got as per usual via a recording. Having worked in the hotel business myself, I wondered why a member of the hotel staff didn't call me personally and ask if I wanted room service, since the restaurant was not yet open. Or the lady who checked me in after 1 am could have dumped her script and suggested breakfast in my room.

  By showing a little empathy, the hotel could have made my morning more pleasant, increasing my likelihood of visiting the hotel again, and if I'd ordered room service they could have generated a 20 per cent increase in high-margin revenue on my bill. Instead, I have never stayed at that hotel again.