Tuesday, June 14, 2011

The Strange Case of the $18,000 Seat -- How to Augment Sales of Your Service

In Principles of Marketing, Philip Kotler and Gary Armstrong offer ideas on marketing a product that also apply to marketing a service.

Specifically, their Augmented Product concept explains how one seat on an airplane can cost $18,000 -- with applications you can use to increase sales of your service.

Background: Kotler and Armstrong suggest that a product be viewed on three levels:

Level 1: Core Product. What intangible benefit(s) does your product offer? Example: Customers who buy a car are really buying transportation and convenience.

Level 2 Actual Product. This is the physical item. With the car, it is the vehicle that you buy and drive home.

Level 3: Augmented Product. What extra, intangible benefits can you offer to add value? Examples include outstanding service, worry-free guarantees, speedy delivery, bonus goods, etc.

With these three levels in mind, take a look at the service you sell.

How can you create an Augmented Version at a higher price, by adding extras with a high perceived value?

For ideas, take a look at this article, describing the First Class service on Emirates Airlines.

Here's one passenger's description of what you get with a first-class ticket from New York to Dubai ...

Checking In: "When you buy a first-class ticket Emirates sends a town car, and I get picked up around 8 p.m. for the 11 p.m. flight from JFK. The Emirates porters take your bags right from the car, wait for you to check in, and then they walk you to security, where there’s never a line. There’s a special lounge from which first and business passengers can board the plane directly, so there are very few people -- it’s empty."

Pre-Flight: "The Emirates lounge at JFK is ridiculous -- it’s big, clean, everyone’s friendly. My first flight, I took pictures of the bathroom to send to my family. And there’s great food. I wait until I get there to eat dinner. In Dubai there’s a separate first-class lounge that’s even nicer."

Not a Seat -- a Suite: "I boarded, got to my suite, and the bed, which goes completely flat, is big! The suite has noise-canceling headphones and a minibar with water and Diet Coke. I changed into the pajamas they give you and closed myself off -- it’s like being in your own bedroom."

The Amenities: "I always take the amenity kit because I like the little jackknife brush comb, and the pajamas -- brown sweatpants and a sweatshirt -- are great workout clothes."

What do those extras add up to?

A $16,000 difference.

Emirates’ round-trip fares from JFK to Dubai are around $2,000 for economy ... and $18,000 for first class.

How can you augment your service? Start thinking -- and adding -- today.

You'll find more ideas like these in my Free Report, Guaranteed Marketing.

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