By John Howe
Michael Coles, founder of The Great American Cookie Company, advances this formula when he discusses what he considers critical to establishing customer loyalty.
Here’s the translation: Product plus Experience plus Service equals the Experience Factor.
The experience factor is the way a customer feels about a business, and in part determines whether the customer returns or goes elsewhere. The product offered must be good, to be sure, but the emotions generated are important too.
Coles addressed a group of M&A advisors attending the week-long Certified Merger and Acquisitions Advisor program at Kennesaw State in Georgia, which is jointly presented by The M&A Source and the Coles College of Business. I was fortunate enough to attend, and hear his presentation in mid-March.
Coles co-founded the company in 1977 and grew it into the largest franchisor of cookie stores in the United States with sales reaching over $100 million before he and his partner sold. He went on to apply his energy as CEO and President of Caribou Coffee Company. He now is working on a book which explores ways to capitalize on the “experience factor”.
Coles explained that the company he founded was successful in part by offering good cookies that people didn’t need but very much wanted. Filling mall locations with the wonderful smell of fresh cookies baking in the oven certainly contributes to the experience and attraction.
When it came to the coffee shop business, Coles said he found happy and positive staff people who were passionate about coffee and eager to please their customers helped the Caribou chain distinguish itself to compete effectively against better known rivals.
Coles is not alone in believing strongly in the “customer experience”.
Recently I listened to a podcast interview conducted by “How I Built This” host Guy Raz with Kendra Scott who started a jewelry business in a spare bedroom in her home in Texas. This followed a failed attempt at age 19 to start a store offering nothing but hats. Unlike the hat enterprise, her jewelry caught on.
Her aha moment came when she moved from selling strictly to other retailers to open her own store. Rather than displaying products in locked cases, she put them out for customers to try on. She even provided a design station where customers could pick out gems that were then placed in fittings right in front of them.
Up ‘til then, she had been catering to the tastes of buyers for other stores rather than focusing on the customer and making the experience of buying fun. That pivot changed everything.
Today, her products are featured in such retail powerhouses as Nordstrom and Bloomingdales. The business has over 50 of its own stores. Last year it attracted an investment from Berkshire Partners which values the company north of $1 Billion.
These two examples are exceptional, but there’s a takeaway here for anyone in business.
Consider the formula that has worked for them: P+E+S=EF
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