by Freddy J. Nager, Founder of Atomic Tango + Guy Who Consumes Both Digital Media And Coffee In Vast Quantities Usually At The Same Time…
It’s epidemic. Everywhere you look, you’ll find someone displaying — nay, flaunting the symptoms. I’m talking about the rash of silly price comparisons: specifically, marketers trying to justify their pricing strategy by invoking the price of a Starbucks latte.
You’ll see this frequently in digital media, where marketers will tell you their app, their music download, or their video streaming subscription costs the same as a Starbucks — and you’ll get so much more for your money! They lament your paying so much for a fleeting cup of coffee instead of enjoying their awesome digital pleasures for hours and hours and hours…
You see the problem here: what’s a digital product got to do with a caffeinated liquid?
It’s a classic case of comparing apples with oranges. Or, as we academics say to feign sophistication, a “false equivalence.” In other words, the two products are too different to be compared.
The stubborn marketers will respond by saying that, of course, digital media and coffee aren’t exactly the same on a molecular level, but both offer stimulation and, thus, serve the same need.
These marketers misinterpret the VALUE of a Starbucks coffee. It’s much more than the caffeine kick. In fact, many consumers who can make equally good coffee at home or the office will go to a Starbucks for the privilege of standing in line to pay more for the same thing.
That’s because the true value of Starbucks is not the coffee — it’s the trip itself.
I see it every day at the office, which has both a traditional coffee brewer (free) and a Keurig single-cup machine (bring your own pod). [Note: I do not run this office, otherwise all coffee would flow freely and directly to everyone’s desks.] Getting coffee in the office would be cheaper and faster, but at least once per day, several parties trek down to the first-floor Starbucks to queue up with the building’s other denizens. These aren’t execs with money to burn; they’re support staff for whom this daily Starbucks fix adds up to a sizable annual expense.
So why do it?
One word: escape.
The Starbucks run serves as the cigarette break for a generation that mostly doesn’t smoke but still needs to alleviate the duress and drudgery of the daily grind. Starbucks CEO Howard Schultz created a “third place” for these people besides home and work, but that’s turned out to be a haven for freeloaders. Rather, these office workers do a grab and go — they visit, line up, issue overly complex orders (“half-decaf extra hot with steamed soy and a shot of espresso”), wait, pay, sugar up, and return to their desks.
But during those magical moments they have temporarily escaped the pressure cooker. What’s more, the physical visit to caffeine nirvana psychosomatically increases the overall stimulative effect — the coffee just seems stronger and tastier. Above all, these runs enable people to make it to the end of their workdays. It’s not just pleasure — it’s survival and sanity.
That might sound like an overstatement, but until you’ve done the same 8-hour routine 5 days in a row 50 weeks per year (which most academics and marketers rarely experience), you can’t appreciate the total impact.
What digital media provides all that?
A video game or a movie might offer an escape — if you work for a company that allows entertainment during non-break periods. Even if that were the case, both still require staring at a screen, and we 21st Century office dwellers already spend too many hours staring at screens.
Music certainly helps hours flow by, but unless you can get up and bust a few moves between cubicles, mere sounds won’t provide much physical relief.
And forget social media, which tends to contribute to mental and eye fatigue, if not complete madness.
So for now, Starbucks is one of the few sources of physical and mental relief that enables most people to survive their jobs, schools, families, and life in general. And that’s why they’re more likely to fork out $5/day for their Starbucks rather than $5/month for some digital media service.
You’ll see other examples of unspoken value in America:
- Young people who cheap out on groceries (“instant ramen is one of the four food groups, right?”) will find hundreds of dollars to attend a music fest out of town. That trip makes the rest of their day-to-day struggles worthwhile.
- Older adults forgo trips to the movie theater (“$15 a ticket? Outrageous!”) but willingly spend the same amount on a single drink at a bar (“I need my social life”).
- Middle-aged, middle-class guys plunge into debt to buy their dream car when they could pay less for a much more practical vehicle. That’s because a midlife crisis must be resolved somehow, and a Toyota won’t do it.
- Professionals will spend hundreds, even thousands of dollars on classes to enhance their skills, though they could derive the same knowledge from a few books. The need for structure and a human guide make it worthwhile.
The key takeaway here is to avoid making assumptions about customer “needs.” Before comparing any two products, we marketers must really dive into WHY people buy them. It’s usually not what we think at first glance. Or sip.