In last week’s post, “Paper Towel Holder $79.99,” I rhetorically asked why so many of those forking over eighty bucks for a kitchen fixture would be shocked, shocked at the thought of spending that much on a symphony ticket.
The shellfish eaters among you are familiar with the term ‘Market Price’—the cold-hearted son-in-law of ‘Please Inquire’ and ‘Ask for Assistance.’ Supply and demand are factors (Sam Spade: Then you think the dingus is worth a million?), but their not-always-skillful manipulation is, to our credit and shame, marketing’s stock-in-trade.
Luxury goods such as diamonds and wine and commodities such as oil—crude and olive alike—maintain their high prices (if they can) by restraining supply and fanning demand.
There does not appear to be a supply issue with TowlHub. Though the price of nickel skyrocketed in 2006, it has returned to earth, and current world reserves are estimated at 75 million metric tons. (Fred C. Dobbs: This is the country where the nuggets of gold are just cryin’ for ya to take ’em out of the ground and make ’em shine in coins and on the fingers and necks of swell dames.)
In the absence of precious metals, $79.99 would be steep for a tube on a stand. And there is no mention of ‘While Supplies Last’ or ‘Limited Time Offer.’ But the perceived value of the SkyMall dingus ascends as it becomes the stuff that dreams are made of: device-charging and music-delivery.
The confined, high-altitude shopper enters into a fantasy of family contentment or, possibly, adult romance. (Billy Dannreuther: Let’s say she uses her imagination rather than her memory.)
What we see here are the benefits of encasing a tangible product—a paper towel holder, a bathing suit, a dining room set, a tablet, a car—in intangibles, a process that may require physical modifications (charging ports, speakers, replaceable stopper). Less obvious are the benefits of encasing an intangible product—a performance, a museum visit, a hotel stay, a flight, a yoga class—in tangibles.
Services marketing explains that these intangible products of the arts and culture, banking and finance, education, entertainment, government, health, hospitality and tourism, information technology, insurance, and transportation industries (that should be most of them) are in fact bundles of goods and services that the consumer consumes as they are delivered.
More recently, the emphasis has been on the experience and, even more recently, on engagement, requiring staff members to be not only ‘cast-members,’ Disney-style, but ‘Gentils Organisateurs,’ Club Med-style. (Philip Marlowe: Next time, I’ll come on stilts, wear a white tie, and carry a tennis racket.)
More than ever, we fear that the live cannot compete with the virtual. Somewhat desperately, we discount, we post rehearsal photos on Facebook and Instagram, we hire greeters, we add pre- and post-performance talks and ice-breakers. We install flat screens in our halls, we simulcast in HD. We live-tweet, we retweet, we create hashtags, we run selfie contests. In general, these doings make sense as a way to capture the interest of younger audiences. (I will address the obsession with millennials in a future post.)
But this Engage-or-Die thinking (though he’s no Miley Cyrus—see my post “Vevo-va-voom!”—Brian Solis has 225,000 Twitter followers) has drawn our attention away from the tangible-intangible issue.
Let us return to the bundle-of-goods-and-services concept.
Cultural products, among others, are described in services-marketing textbooks (which are goods) and courses (which are bundles of goods and services) as ‘perishable.’ We talk about seat-inventory, but there’s no furniture warehouse. And—strictly speaking—you can’t see tonight’s performance tomorrow.
But can you eat the same meal twice? Certainly, I’ll bring you a box.
I, myself, am not a doggie-bag person. A member of the Clean Plate Club as a boy, I had to later learn not to eat every last morsel in social settings. Nonetheless, I can appreciate the satisfaction of taking home at no extra charge the makings of a second meal. (My position re loading up on Splenda packets and slipping buffet items into your purse—you know who you are—remains unchanged.)
Starting a job in Manhattan in late August of 2001 (yup), I arranged for direct deposit of my paychecks into a new account at Commerce Bank, Regis and Kelly’s bank, which during its period of rapid expansion became known as McBank. (Founder Vernon Hill earlier ran a business finding sites for McDonald’s, driving Ray Kroc around. I see that he published a book in 2012 and will get back to you after giving it a read.)
“America’s Most Convenient Bank” is now TD Bank (eh?), which acquired Commerce in 2007, but for this customer it wasn’t the same. I’ll never forget the slow cooker I got—free!—when I opened my account, as if I were banking in 1950s Ohio. (This was in addition to the free pens, lollypops, and dog biscuits available whenever I stopped in.) The thing cooked like a dream. And there was branding in every bite (see my post “Love is Brand”).
My joke when I join or donate to an organization is that I’m doing it for the tote bag, but this type of giveaway or premium—today’s cool kids call it ‘merch’ and ‘swag’—can seal the deal. It’s like being given a present. You get pursuit of happiness and property, the trip to Hawaii and the lousy T-shirt.
As with TowlHub and other tangible products, even if your dreams don’t work out, you still have a durable good, an object that occupies space and can be used again and again by anyone and everyone. And you can take it with you or pass it on when you relocate or pass on yourself. (Okay, you can’t take it with you when you die, but it fits nicely in the coffin. Or might I interest you in a tasteful urn that’s also a charging station?)
It’s even better when there is an element of surprise. (Philip Marlowe again: What you see is nothing, I got a Balinese dancing girl tattooed across my chest.) It’s the feeling you get when the waiter brings you a free dessert, but you get to take it home and save it forever like that slice of wedding cake in your freezer, the dried flowers, the signed Playbills, the framed posters, the bobbleheads, the marathon bib numbers…. (Charlie Allnut: We’ll never lack for stories to tell our grandchildren, will we?)
I invite you to share your own adventures in premiums and any other thoughts about making the intangible tangible. We will play it again, I promise.