What rollercoasters teach us about PERCEIVED VALUE

No matter what service or product you provide, perceived value is the key to selling it. Every time you (or your customers) make a purchasing decision, you subconsciously calculate what you are willing to pay using a calculation involving Quality, Service, Desire, Convenience, and yes- Price (although price is a surprisingly small part of the calculation- consider how few times you purchased the absolute cheapest version of the thing you were shopping for over the past month).

The calculation of perceived value changes with advancements in technology and- even more importantly- societal trends & consumer generations. John Antioco learned this lesson the hard way in September of 2000 when he famously turned down an offer to purchase Netflix for $50 million (Blockbuster went bankrupt in 2010, the market cap of Netflix is currently $244 billion). In 2000, Blockbuster's value proposition was "managed dissatisfaction." They knew their customers didn't like renting from them (almost half of Blockbuster's income came from late and rewind fees, their stores were notoriously unclean, and they often didn't have enough copies of the latest movies). However, they had one hook on which to hang their hat- if you wanted to watch a movie tonight, Blockbuster was pretty much the only place you could go!

Reed Hastings knew Blockbuster had a gaping hole in their value proposition (perceived value), and he also recognized the trend was towards conducting business on-line. Keep in mind Netflix wasn't streaming content in 2000, they were just renting the same VHS tapes as Blockbuster... but on-line. Antioco's comment was (direct quote from the meeting) "the dot-com hysteria is completely overblown." In 2000, this was a defendable (if in retrospect completely inaccurate) statement. However, I believe the ability of Reed Hastings to recognize this shift- and the inability of John Antioco to do the same- might be due to the fact that Hastings is 11 years younger than Antioco...

Here's my point- many of the owners of currently established optometric practices (and other businesses) are Baby Boomers and Generation Xers. Market research has repeatedly shown private practices are not capturing their fair share of the Millennial generation's business. Considering Millennials currently spend more money than any other generation ($1.4 trillion in 2020), that's a huge problem! Unfortunately, in market research I often hear optometrists saying "Those kids only buy single vision- my optical makes money selling progressive lenses." Well, the oldest Millennials turn 40 this year, so they're going to be purchasing progressives pretty soon.

Part of the reason Millennials don't want to visit private optometric practices concerns a lack of perceived value. Not surprisingly, many practices owned by Boomers and Xers are designed to appeal to... Boomers and Xers. Furthermore, many of these doctors are blind to the aspects of their practices that are unappealing to Millennials- because what the patient values as a consumer is different than what the doctor values as a consumer. I personally realized this during some research we conducted with Millennials during our launch of Eyezen+. In one session, a young lady casually mentioned (while tapping on her smartphone) "Yeah, if I'm standing in a line something has gone wrong." As a Gen Xer (the greatest generation of all time :), my first thought was "What?!? I mean even if the line is just two people long??? How spoiled can someone be???"

Then it hit me like a ton of bricks... Millennials have a vastly different perception of service and convenience than I do as a Gen Xer, and different doesn't mean wrong. This is what rollercoasters teach us... in the 1980s I spent multiple days each Summer at Hersheypark, which featured a new rollercoaster- the Sooperdooperlooper. I can still remember standing in line for over an hour for my turn on the ride (which lasts 1 minute and 45 seconds). I'm 53, and- as long as the line isn't too long- I still don't mind "waiting my turn." Now let's think about my 26 year old Millennial son. He would never wait in an hour long line at Six Flags in Dallas. Instead, he would download an app, make an appointment to ride, and show up to the ride when it was his turn. In all honesty, that may be (is) a smarter approach!

How does this tie into optometric practice? If I am a new Gen X patient at your practice, I expect to fill out a bunch of forms during my first visit- because I've been doing so my whole life. However, patients from my kids' generation are going to point out you should have sent them the forms ahead of time so they could fill them out on-line (or more likely, have their parents fill them out for them :^). When it comes time to purchase eyewear, younger patients may not want to do so in person with an optician they don't know... they'd rather view your inventory on-line, and get input from their friends. After all, 72% of Millennials say they are influenced by others when making purchases- vs. only 58% of Gen Xers and 36% of Baby Boomers. Another Millennial fact- 71% say they will spend more with a company that donates part of the profit to charity, and 67% say it is important to them that companies they do business with have a charitable component. These trends may be different than the way you shop, but they represent the way your customer shops (and remember, the customer is always right- especially when it comes to their perception of value).

If you are an older business owner, it would serve you well to conduct a little research regarding what younger customers want. Find some younger people (maybe there are some among your employees) and get them to be brutally honest on what would make your practice or business a better place to visit. Most importantly, be open to their input (because a lot of it may seem "silly" to you)! It's not silly- it is the perceived value of your greatest source of revenue- and if you aren't fostering it, well... Blockbuster. #essilorlife #perceivedvalue