There’s No Business That’s Not Show Business: Marketing in an Experience Culture Bernd H. Schmitt David L. Rogers Karen Vrotsos PEARSON EDUCATION, INC. Praise for There’s No Business That’s Not Show Business “There’s No Business That’s Not Show Business candidly looks at the realities of business. It offers great business tools not just for trendy consumer products, but for B2B companies as well. This immensely practical book shows marketing direc- tors how to differentiate their brand, attract and retain loyal customers, and make a real impact on their bottom line.” —MARTIN HOMLISH Executive Vice President and Global Chief Marketing Officer, SAP “If you’re looking for ideas to differentiate your offering, you’ll find over a hundred in this delightful new book by Bernd Schmitt, David Rogers, and Karen Vrotsos.” —PHILIP KOTLER Northwestern Kellogg School of Business and author of Marketing Management, 11th edition “This is the book that every CEO will be forcing their marketing department to read. Don’t get caught with your pants down.” —DAVID ADLER CEO, BiZBash.com Co-Chair, Event Marketing Council “This book cleverly and insightfully makes explicit a clear (if upsetting to some) trend, i.e., ‘all the world’s a stage.’ ... Using a variety of well-known (e.g. Victoria’s Secret, Intel) and less obvious (e.g. the Guggenheim) examples, the book explores the implications of a focus on the show/experience... [T]he book also provides an eight-step procedure for moving from identification of a desired image to the quantitative mea- surement of performance. This raises the book above the level of identifying a phenomenon to the position of suggesting something useful to do about it.” —DON LEHMANN George E. Warren Professor of Business Columbia University Graduate School of Business “Bernd Schmitt is unquestionably one of the most creative and original minds in marketing. Well worth the price of admission, his new book with David Rogers and Karen Vrotsos provides sharp, witty insights and engaging case studies that brilliantly illuminate how entertaining experiences can build strong brands.” —KEVIN LANE KELLER E.B. Osborn Professor of Marketing Amos Tuck School of Business, Dartmouth College “This will be one of the most important business books you’ll ever read! It will convince you you’re really in show business and that if you’re not, you’d better be. Implement the star-studded findings [the authors] reveal, and you’ll have a huge competitive advantage over your competition. Let the show begin.” —JASON JENNINGS worldwide bestselling author of It’s Not the Big That Eat the Small—It’s the Fast That Eat the Slow and Less Is More “The authors practice what they preach by presenting a book that is both entertaining and thought-provoking. This book is an important contribution to our deeper understand- ing of the complex experiences surrounding the consumption of goods and services.” —GERALD ZALTMAN Professor, Harvard Business School and author of How Customers Think “There’s No Business That’s Not Show Business raises the curtain higher on understanding the role that show business holds in creating distinctive experiences. This book is a significant tool in the new arena of leveraging the value of experience.” —LOU CARBONE President and Chief Experience Officer ExperienceEngineering®, Inc. Minneapolis, MN. There’s No Business That’s Not Show Business Marketing in an Experience Culture This page intentionally left blank There’s No Business That’s Not Show Business Marketing in an Experience Culture Bernd H. Schmitt David L. Rogers Karen Vrotsos Library of Congress Cataloging-in-Publication Data Schmitt, Bernd. There’s no business that’s not show business: marketing in an experience culture / Bernd H. Schmitt, David L. Rogers, and Karen Vrotsos. p. cm. -- (Financial Times Prentice Hall books) Includes index. ISBN 0-13-047119-4 1. Brand name products--Marketing. 2. Corporate image. 3. Customer relations. I. Rogers, David L. II. Vrotsos, Karen. III. Title. IV. Series. HF5415.13.S344 2003 659.1'52--dc21 2003050877 Editorial/Production Supervision: Techne Group VP, Editor-in-Chief: Tim Moore Editorial Assistant: Rick Winkler Marketing Manager: John Pierce Manufacturing Manager: Alexis Heydt-Long Manufacturing Buyer: Maura Zaldivar Cover Design: Anthony Gemmellaro Cover Design Director: Jerry Votta Series Design: Gail Cocker-Bogusz Full-Service Project Manager: Anne Garcia © 2004 Pearson Education, Inc. Publishing as Financial Times Prentice Hall Upper Saddle River, New Jersey 07458 Prentice Hall books are widely used by corporations and government agencies for training, marketing, and resale. Prentice Hall PTR offers excellent discounts on this book when ordered in quantity for bulk purchases or special sales. For more information, please contact: U.S. Corporate and Government Sales, 1-800-382-3419, [email protected]. For sales outside of the U.S., please contact: International Sales, 1-317-581-3793, [email protected]. Company and product names mentioned herein are the trademarks or registered trademarks of their respective owners. All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher. Printed in the United States of America First Printing ISBN 0-13-047119-4 Pearson Education Ltd. Pearson Education Australia PTY, Limited Pearson Education Singapore, Pte. Ltd. Pearson Education North Asia Ltd. Pearson Education Canada, Ltd. Pearson Educación de Mexico, S.A. de C.V. Pearson Education—Japan Pearson Education Malaysia, Pte. Ltd. Contents Foreword ix Acknowledgments xi INTRODUCTION: All Business Is Show Business xiii PART I TYPES OF SHOWS 1 CHAPTER 1 Live Shows 3 CHAPTER 2 Immersionary Show Spaces 21 CHAPTER 3 Shows for Invented (and Reinvented) Media 41 CHAPTER 4 Buzz, Evangelistas, and Customer Shows 57 CHAPTER 5 Integrating Different Types of Shows 73 PART II HOW TO MAKE SHOW BUSINESS A BUSINESS SUCCESS 91 CHAPTER 6 Eight Steps to Keeping Your Show On- Brand 93 CHAPTER 7 Creating Relationships Through Show Business 109 CHAPTER 8 Extending the Impact of Your Show 131 CHAPTER 9 Measurement, Budgets, and ROI 141 vii viii Contents PART III THE SHOW BUSINESS ORGANIZATION 157 CHAPTER 10 Internal Shows for Employees and Partners 159 CHAPTER 11 How to Run Your Own Show: The Three P’s and the IBM Opera 177 CHAPTER 12 Persona, Myth, and Ethos in Leadership 197 CHAPTER 13 The Show Business Leadership Hall of Fame 205 PART IV SHOW BUSINESS IN AN EXPERIENCE CULTURE 225 CHAPTER 14 Las Vegas 227 CHAPTER 15 The Cooking Business 241 CHAPTER 16 The Art Business 249 Notes 269 Index 271 Foreword Smart companies today realize that traditional forms of marketing and communications don’t cut it any more. Custom- ers want more than a smiling face accompanied by a catchy slo- gan and jingle aired on prime-time TV. Instead, customers judge products, brands, and entire organizations based on the experi- ences that they offer. Companies therefore need to provide experiences, and these experiences must be entertaining, engaging, boundary breaking, and at the same time value creat- ing. Show business delivers such experiences, and in a more cost-effective way than any other form of marketing. As a result, there is no business that can’t benefit from show business. But what is the right type of show for your brand? How do you stage and manage a show? How do you instill show busi- ness into the organization as a whole? This book shows you how by providing numerous examples of successful show business practices in today’s organizations. As you will see, we found most cases outside the frame of tradi- tional marketing and traditional media. Customers are getting quite skeptical and cynical about advertising and other tradi- tional media. In response, many of the newest forms of market- ing that we have found echo traditions that predate television. These new forms offer experiences instead of cut-and-dried messages: road shows, jamborees, product play shops, street theater, fairs, and other face-to-face encounters. That’s why the old-fashioned term show business makes sense. The old razzle- dazzle experience mixed with up-to-the-minute technology is bringing marketing into the future. ix x There’s No Business That’s Not Show Business By now, the uses of experience by businesses have multi- plied beyond theater-like performances at theme parks and restaurants to include buzz marketing, product launches, cus- tomer retention, internal communications, and nontraditional advertising. We view these show business experiences as a branding tool and a part of your increasingly diversified mar- keting mix. These experiences are valuable because they are face-to-face, interactive, help you reach and focus on your most valuable customers, and are capable of creating real loy- alty and genuine relationships. They are not just razzle-dazzle, Las Vegas style. They are strategic and value-creating. Our take on the experience aspect of show business is related to two other books (as well as a series of articles) authored by one of us, Bernd Schmitt. Experiential Market- ing, published in 1999, provided an integrated marketing approach that moves beyond the functional features and bene- fits of a product to differentiate a brand. Customer Experience Management, published in 2003, provided a five-step process for connecting with customers through unique brand experi- ences, customer interfaces, and innovations. As a consultant and CEO of The EX Group, Schmitt has used these frameworks and tools with companies in consumer pack- aged goods, automobile, electronics, software, financial services, pharmaceuticals, beauty and cosmetics, hospitality, and media industries. In working with these clients and with David L. Rog- ers and Karen Vrotsos, it became clear that many companies needed not only long-term strategic initiatives to manage cus- tomer experiences, but also concepts and tools for how to use creative, fun experiences to engage their customers and their own employees.