Maslow-Minded Merchandising

OK, it's that time of year when we all become transactional. We overstuff our bellies on Thanksgiving Thursday and then overextend our credit on Black Friday when America's malls remind us that capitalism is alive and kickin' in the good old US of A. But, what if a retailer were to take a more transformational approach to their customers during this busy time of year? Or, what if you or I were to purchase experiences rather than possessions as a way of gifting our relatives and friends?

Abraham Maslow suggested that we all aspire to self-actualization in the course of our lifetime after we've had our base needs met. In my book PEAK, I suggested that peak-performing companies move beyond the transactional nature of most customer relationships at the bottom of the pyramid so they can address their customer's higher needs (which are often unrecognized or unspoken by the customer). A great company creates peak experiences for their customers in a way that almost transforms them into a self-actualized customer.

I was reading the SF Chronicle today where I saw a Business page cover story on how Apple is remaking their already-successful retail stores. The first line of the article is "Not a cash register in sight." Ron Johnson, who runs Apple's retail stores worldwide (and is quoted in my book), tells the reporter, "We try to pattern the feeling to a five-star hotel. It's not about selling. It's about creating a place where you belong." Apple's "Genius Bars" (friendly technical support, especially for those self-actualized Apple customers who pay $99 annually as part of the Procare program which allows them one hour a week of extra training and attention) have been expanded. It's almost like a hotel that came to realize they were making big bucks on their lobby bar so they decided to extend the bar. Well, at Apple, they're dispensing wisdom, not cocktails, but they're finding this relationship-driven approach to selling computers to be highly profitable. It's a far cry from Radio Shack.

In fact, Apple has now banished the cash registers so that their "concierges" who help customers find their products can just whip out a portable scanner on the spot in order to facilitate the payment for the goods. Notice that the transaction is the last step of the process and is completely understated. Has this worked? You bet it has. Conventional wisdom in 2001 (when Apple opened their first stores), suggested computer retailing was passe as Dell's "Direct" approach was going to take over the world and Gateway was going out of business. Yet, Apple became the fastest retailer of any kind to ever make it to $1 billion in sales. Now, they're up to $4.2 billion annually just in retail sales.

So, how can you apply Maslow's Hierarchy of Needs to your shopping habits this holiday season? First of all, just remember that most of us have way more stuff than we need and we have precious little storage space to "stuff" all this additional stuff we're going to receive these next few weeks. Take a lesson from MasterCard - who frankly would appreciate it if we all bought billions of dollars of useless crap for each other - which reminded us that what's most important in life is what's "Priceless." What's priceless in our lives isn't the material possessions, it's the experiences and memories we create with our loved ones. The big gift I give the 11 members of my extended family each Christmas is an annual family vacation. Last year, it was an art-themed weekend in LA. This year, we're going (along with an additional 3 family members) to the Ahwahnee Lodge in Yosemite where we'll have a traditional white Christmas and experience the legendary Bracebridge 17th century English yuletide ceremony (which has been celebrated annually for 80 years at the Ahwahnee and has to be booked a year in advance).

If you want to create a transformational holiday experience - as opposed to the typical transactional approach - consider the following three questions: (a) what kind of unique experience can you create that your family or friends will remember for years? (b) what kind of gift can you give that will self-actualize your gift recipient (for example, how about donating $100 to a teenager's favorite cause?)? or (c) what's an educational experience you can gift someone that will boost their sense of esteem and will benefit them for years to come? In sum, as the feverish shopping season kicks into gear, consider a new approach to creating a more meaningful season of giving.

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