Don’t Serve Your Customers, Transform Them

Q1 Experience to Transformation Transition

ContraMinds Podcast (00:29.002)

So Joe, one of the things that has always inspired me is I’ve been a fan of your Mass Customization book, The Experience Economy and now authenticity and now The Transformation Economy. 

So I see that, you you’ve kind of gone through multiple phases and, you know, approaches in context to how, you know, how you build value and how companies need to build value with customers. So it’s phenomenal and the books are legendary, I must say. And Transformation Economy is something that I really enjoyed reading. And one question that I wanted to start with is, what’s the most important transition from experience to transformation and why is it important for companies?

Joe Pine (01:26.518)

Well, the one of the biggest things it takes is a mindset change that whether you’re coming from an experienced stager or even a service provider, even a goods manufacturer, it’s a mindset change to think about transformations as a distinct economic offering, which they are as distinct from experiences, experiences are from services, services are from goods. And then it requires this different mindset to focus on the customer, on what you do for them with transformations. It is about helping customers achieve their aspirations, guiding them to become who they want to become. And it’s very different. It’s very tightly intertwined with experiences because we only ever change through the experiences that we have as the old saying goes we’re all the product of our experiences and so you do still have to stage experiences we have to do them in a way that yields that transformative outcome. You know with transformations the customer is the product, that it’s their outcome, their achievement of their aspirations, becoming who they want to become. So inputs don’t matter. All the experiences that you stage don’t matter unless they get their outcome. The services that you deliver, the goods you make don’t matter unless the customer gets the outcome that they’re looking for. So that’s the key thing that needs to change.

Q2 Experiences Being Memories | Transformation Changes Identity

ContraMinds Podcast (02:47.476)

You make a very interesting point in the book and I’m going to quote that, Joe, you talk about experiences being memories and transformation is about changing identity. Can you explain that a bit because it’s got a lot of deep meaning in that one statement. So can you tell me a little bit about that?

Joe Pine (02:57.355)

Mm.

Joe Pine (03:01.025)

No.

Joe Pine (03:09.965)

Well, all transformation is identity change.

You’re either enhancing the current level of identity or expanding it, or you are adding an element of identity. Again, the customers is doing that. You’re just guiding them to do it. They have to change themselves. And so it’s a very lasting thing. And it has to be sustained through time. Whereas memories, which are the hallmark of experiences, they tend to dissipate through time. And so you have to ensure that you keep it going, that you integrate this transformation, help customers integrate into their lives and to make it something that lasts. If I go on a diet and I lose 20 pounds, but then six months later, I get it back. I wasn’t really transformed. So how do you sustain it through time so that it lasts is the key thing.

Q3

ContraMinds Podcast (04:04.352)

One of the things that was coming back to me, Joe was some of your past books have left such an impression on me. For example, mass customization was itself phenomenal. And then you have experience economy, which is really what I think you wrote about it far, far ahead before customer experience was a trend.

Joe Pine (04:31.341)

Right.

ContraMinds Podcast (04:34.228)

Given that you’re talking about transformation now, how does it change the business model of companies? Because many companies today charge for outcomes anyway. So if I’m McKinsey, McKinsey saying, you know what, hey, I’m not going to charge you for outcomes. So how does the business model change and how do you really charge for outcomes?

Joe Pine (04:52.429)

Yeah, so all of it is part of the same universe of thought. Mass customization, 33 years ago, I came out with that, right… Is the DNA of everything. It’s the progression of economic values, how he discovered experiences and transformations is a distinct economic offering.

ContraMinds Podcast (05:01.822)

Yeah.

Joe Pine (05:13.803)

…by recognizing that customizing goods turns them into services. What does it turn services to? Experiences. And asking it one more time, what happens when you customize an experience? You design an experience that’s so important and appropriate for this individual person or company right now, then you can’t help but change it into a life-changing experience. And so as I talked about…

the big distinction between memories and then lasting outcomes means that you need to charge for outcomes. With experiences, you charge for time. The time customers spend with you with an admission fee, a membership fee or some other form of doing that. With transformations, what’s crucial is that you charge for the demonstrated outcomes that your customers achieve.

And consulting companies have dabbled in that, have done it to some degree for a very long time. But in January, I remember McKinsey to your point, in January, McKinsey said that particularly with AI projects, because people are so unsure of the outcomes, says we’re going to charge for that. We’re going to guarantee it in some way. If you don’t get the outcomes, then you’re not going to have to pay that full amount, which is exactly the way it should be done for all consulting projects, because inputs don’t matter.

They charge for input state, charge for time and materials. How much time some junior consultant spends on a project is immaterial to the value of that project. it’s immaterial, right? And so you need to charge for the outcome. Interestingly, that same month in January, I remember noticing this, the CFO of OpenAI also said in a blog post that we’re going to charge, increasingly charge for the outcome…customer gets from the AI. The president of Dartmouth College, one of the Ivy League colleges, says that we’re going to start charging students for the outcomes that they get, right? Which is again the way it should be because inputs don’t matter and you see that more and more. 

I know hundreds of companies to do it but for many it’s a very strange thing to think about well I do all this work and maybe it won’t get paid. Okay well do the work better. But there is a paradox that you can’t actually guarantee the customers will change. Again they change themselves. 

You may have the old saying like we do in English that you can lead a horse to water but you can’t make it drink. That’s the way it is with transformations. But the best way to get that transformation is to guarantee it. Because what that is is… One, as McKinsey was talking about, it gets rid of the excuse not to buy that you have. And two, it is a catalytic mechanism that means you will do whatever it takes to recoup your entire money. You don’t have to do all, it doesn’t have to be 100% transformation guarantee. It could be, most often I see 25% transformation guarantee. You still can get paid for some services, maybe some membership fees as well. But where the profit is, is that last 25% of the fees, is what you want to guarantee. Because then you will figure out what it takes to be able to truly transform this individual client, or rather, I should say aspirant. Services have clients, experiences have guests, transformations have aspirants. And so achieving those aspirations is the only thing that matters.

Q4 Aspirations, Flourishing

ContraMinds Podcast (08:39.754)

So tell me a little bit about aspirations. Because you talk about aspirations, you talk about flourishing. So I want you to kind of explain that as a concept because if I’m a CEO or if I’m a head of customer experience or if I’m actually a board member listening to this conversation, what’s aspiration and why is flourishing and understanding that concept so important for me as a company?

Joe Pine (09:06.551)

So those are two big things that are related, but they’re big things. You should ask two different questions about that. 

So I’ll start with flourishing, is flourishing as underground a renaissance. It’s been around since the Bible and Aristotle with Eudaemonias as he called it in Greek. And it’s about living a good life. It’s about having well-being and prosperity and wisdom and meaning. And it… and basically I define it as flourishing is the extent to which you are who you’re meant to be.

Right. And so a lot of people try and do these measures and that sort of thing. And it just doesn’t seem to work for me. So think of the measure or the extent to which your customers are who they’re meant to be, even if they don’t know who that is. And usually they don’t. But how do you help them flourish? Flourishing is the raison d’etre of business, of capitalism, of the free market economy. 

Why? And why it has given us so much super abundance, as one book is titled.

Super abundance in our in our world today is because of the free market economy where nobody ever gives money out of their their wallet or the purse or their account to you as a company unless they think your offerings going to provide more value to them. It’s going to be better off than the amount of money that they have. It’s going to help them flourish. They don’t always know what that is. They’re often wrong about whether it’s going to help them flourish or not.

But that’s the why, right? Is that. 

And so you’re as a business, as a board member in particular, or as an executive in a company, you need to think about how your purpose is to help your customers flourish. And by extension, your employees, your communities and society overall, you need to be a net positive contributor to the world, not extractive like so many companies are, that extract from the world, trying to dig people to the products, demean them, denigrate them, be deleterious to them instead of edifying them and lifting them up and helping them flourish. 

You can see a couple of recent court cases in the US that that accused some folks and found them guilty basically of addicting people to their products, right? And I’m going to comment on the efficacy of the verdict, but doing so is immoral, right? It’s basically immoral. And so what about profits, right? Are stakeholders supposed to make profits out of this? 

Yes, but… 

…the way to get the most profits is not to focus on profits, it’s to focus on flourishing. And profits then are the measure by which you help your customers flourish and contribute to flourish in the world. 

If you focus on that then the profits will come. Yes, it’s much more of a long-term view. You may hurt profits in the short term. In October the CEO of Humana in the US, insurance healthcare company, announced that they’re going to stop taking on new customers because they’re not doing a good enough job with their current customers.

So they’re foregoing revenue and some level of profits in order to ensure that they help their current customer storage and then once they get that basic job done then they’ll go up. 

So the aspirations then… is all about the why. It’s why are customers buying from you? Why is this product going to help me flourish? And what you need to do is you need to ask that why. In fact, you need to use the old manufacturing technique of asking five whys, which is why, why, why, why until you find that core aspiration. And that’s what your customers are really buying from you. 

Peter Drucker said this and others have said that you’re never selling what your customers are buying. So this is how to figure that out is to ask why they’re buying. 

And even if you don’t get all the way to that core aspiration, you become more transformational the closer you get. If you just take one or two steps beyond what you’re selling today and provide what your customers want then you’ll create more value and you’ll be able to charge more for that even if you don’t get into the full transformation, full guarantee, outcome guarantee, you can charge a premium for what you’re doing by focusing on why people are buying from you, right? 

And an aspiration, excuse me, is basically I want to go from X to Y, right? From two statements. I want to go from flabby to fit. I want to go from… high weight to low weight. I want to go from smoker to non smoker. I want to go from a failing business to a successful business. Whatever it might be and obviously those are very generic. So then you need to get down to each individual aspiration about why this particular person or this particular company is buying from me and how can I help them achieve that.

Q5 Aspirations in CPG Companies

ContraMinds Podcast (14:00.786)

As I read the book and as I hear you speak, Joe, is it applicable to only specific categories or industries of companies? For example, let me take a CPG company, right? You know, I’m buying soap, I’m buying, you know, processed foods, I’m buying, you know, products which are fairly generic.

Joe Pine (14:17.889)

Mm.

ContraMinds Podcast (14:30.528)

And if I want to build transformation for Pepsi or for Coke, how do you really build transformation in an, I understand that say for healthcare or insurance, there is a need for transformation and therefore I’m buying into a certain aspiration. But what, how does it work for CPG companies?

Joe Pine (14:30.796)

Yep.

Joe Pine (14:35.469)

Right.

Joe Pine (14:50.689)

Well, so, so let me preface it by doing a big picture thing first, which is if you think about who are in the transformation business, it’s basically those companies that are in the business helping people be healthy, wealthy and Right? HM, the old English proper healthy, wealthy and wise, but it’s not just about health. It’s about health and wellbeing. Right. And, how do I, people have wellbeing. And basic distinction is that if a government, if a third party insurance or government is paying for it, it’s health care. But if I’m paying out of my own pocket, it’s well-being. And guess what? Every food I buy, every food I eat, every drink I drink is affecting my well-being. Now, may be not just physically. Maybe I want a glass of wine in the evening, which helps slow me down and has some heart benefits and so forth. But maybe I need a snack right now in order to have enough energy to get the work that I get I need to do to get done which pays all the bills and etc. So wealth and health and well-being. 

Wealth is about wealth and prosperity. Health is the means to well-being as the end. Money is the means to which prosperity is the end which is basically having a nice life. How do you help people have a nice life? That’s what prosperity is. And you think of CPG companies also that can do that in terms of living well. I drink tea basically all day long, but I switch in the afternoons to a chai, a latte milk spice tea. I love that. I discovered it at Starbucks. Now I make it at home. And that helps me. It’s like a little joy that I have every day and for somebody else it’s coffee, it’s Pepsi or Coke and so forth. You know, President Trump takes Diet Coke all day long, right? And I mean, since he only gets four hours of sleep, he needs that to keep going. Then, is about knowledge and wisdom, where knowledge is the means to which wisdom is the end. 

So you can think about how do you help people in CPG understand how what they eat is affecting them. What things are good, how much is enough versus how much is too much, for example. You can incorporate that knowledge of your products into what they’re doing. And then finally, there’s a fourth sphere of transformation, I call these, not industrial sector, but sphere of morphous overlapping, all that. And the fourth one is purpose and meaning. Right, that is part of that one. And so think of this, your purpose is the means to which meaning is the end. As human beings, we all need meaning in our lives. One of the things that gives us meaning, of course, is our family relationships. Right. 

Think about a parent, a mom or a dad and how often they imbue what they what they cook for their family. What they serve to their family is part of that all relationship gives them life meaning how as a CPG company, can you affect that? You bet you can’t. I think of a particular Kraft macaroni and cheese, right? Craft macaroni and cheese is what… is I mean it’s sort of a staple of many families in that but what it almost always is is the first meal a kid makes by himself right? Right? Mom finally says, OK, as you know, you can make it. What a moment that is. What a great mom I have that lets me cook dinner, you know, and do this. I learned all this. There is a moment there that craft could be celebrating and could help happen and help imbue with meaning. Right. If they thought about it in those terms. And then that’s and that’s why I’m convinced that’s why people drink macaroni and cheese as adults is because that they may not realize the connection to when they were kid and their mom served it to them and and it meant love right it meant love and that’s part of that purpose and meaning and cpg companies can absolutely affect that even if they don’t offer the full transformation again it’s just about being transformational.

Q6

ContraMinds Podcast (19:11.378)

Yeah, so it’s almost like saying that if you add an envelope of a service to a product, then you then start actually looking at it as an experience. But then when you add an envelope of say, why you’re doing what you’re doing, and therefore does it help you achieve your aspiration, then that becomes transformation, right?

Joe Pine (19:36.59)

Yes. Yes. And think think about how many brands have opened up cafes. I always say that the the easiest way to get in the experience business and open a cafe right engages all five senses as well gets people to come in slow down. Partake in that experience and then buy more offerings of whatever they are. So you’ve got all these goods manufacturers that have cafes. Why not CPG Cafe? I mean, there’s banking cafes. Who’s at the ING direct?

ContraMinds Podcast (20:15.892)

Yeah, ING direct, correct. Yeah.

Joe Pine (20:17.813)

Right, right. Capital One bought them, right? So the Capital One cafes, banking cafes, right? Why? Because people don’t want to spend time in banks. Let’s give them an excuse to do that and bring them in. Why aren’t there CPG cafes? Why isn’t there a craft cafe with a K? Cafe with a K, right? That people can spend time with their kids and get them off their phones and get them to…

ContraMinds Podcast (20:20.317)

Exactly.

Joe Pine (20:40.513)

to have macaroni and cheese made just the way that they did when they were a kid and so forth and bring all of these different meals and foods and drinks together in a way. Coca-Cola has the world of Coca-Cola. Why doesn’t it have houses of Coca-Cola? They’ve got the flagship experience. Why don’t they have these… these houses of Coca-Cola around. Pepsi’s done a few pop-ups and things like that in Miami, I remember, in New York, I think. But it’s something to consider is to create an experience where people get to experience who you are. That’s an authenticity point. But also, Swami, what these can become is invitational transformations. Right? 

So an invitational transformation is like the world of Coca-Cola, where I’m going to invite you into the brand. I’m going to immerse you in it. You’re going to pay an admission fee, by the way, because this is going to be a great experience. You’re going to pay me to sell to you. But I want you to become a Coca-Cola aficionado.

In other categories, may be obviously almost everybody’s had had Coke, but you know, there’s the Guinness Storehouse in Dublin and the Johnny Walker experience at Edinburgh and the Heineken experience in Amsterdam. They invite people in, pay an admission fee, give them a great experience, but then also expose them to to a category like maybe you’ve never had whiskey before or you only dabbled in it. But now, well, at the Johnny Walker, Princess Street experience, they they they draw you into the the world of whiskey making, the the art of into the particular heritage of Johnny Walker and now you’ve been exposed to it and finally you get three or four drinks as part of your experience, customize your flavor profile and you may say wow I love this whiskey I’m a whiskey drinker. I see that identity. 

I went from not a whiskey drinker to a whiskey drinker. I changed my identity and for some people it’s like well who’s the one introducing me to whiskey? It’s Johnny Walker and I love this whiskey so much that’s what I’m gonna drink. Now I’m a Johnny Walker branded whiskey guy right and so it’s a way that’s a transformation you invite people in it’s not a nefarious thing where you’re trying to to to capture them trying to grab them. But you provide the great experience you provide the value for the emission fee and then they they they may very often turn to say hey You know, I love this brand.

Q7 Agrarian to Industrial to Service to Experience – Disruption

ContraMinds Podcast (23:01.824)

You also write in the book… a couple of important transformational shifts that have happened, right? From agrarian to industrial, then it becomes industrial to service and then to experience. And there are some companies which saw it first, took advantage of it and then started being leaders, right? Who are the companies that you believe, if they don’t see the shift, are going to get disrupted. What kind of industries and what kind of companies are for sure going to get disrupted if they don’t see this transformation concept happening?

Joe Pine (23:40.877)

Yeah, I think the two most likely to get instructed are financial services firms and institutes of higher education.

ContraMinds Podcast (23:50.997)

Mm.

Joe Pine (23:51.591)

And financial services are facing commoditization with robo advisors with AI coming in with the ability to say, hey, I can do all this myself. You know, there’s a lot of day traders and things that do that. But now you bring AI into it and you just increase by an order or three of magnitude of how many people can take over their own finances. That’s something I want to spend my time on. But you can’t. And so I think that’s one that very much needs to understand that money is a means to an end. And with all that, they’re not still focusing on their ends and how can you provide the true ends understand the aspirations of why one company I highlight in the book, Simpliny is a B2B2C company provides a transformation platform to advisors that allows them to work with customers. I love what they do is they focus on two things, which is their life and their legacy.

Like how do you have a nice life, prosperity and well-being? And what’s the legacy that you want to leave on to your kids, to your church, your charities, your causes? And, you know, there’s a lot of advisors out there say, hey, if you just cut out your Starbucks bill, you’ll have a million more dollars when you retire. I said, yeah, but I want to have a nice life now. Why do I want to only have a nice life when I’m old and wrinkled? I want to live my life. And you need to understand that. And so that sort of focus on life and legacy is what financial advisors need to do. 

And higher education, I really think we can come to a point, it’s like what Ernest Hemingway wrote about bankruptcy. Like, how did you go bankrupt? Very slowly and then all at once… because we can learn so much in it, because there’s so many companies out there that are providing certificates and information, because you really don’t have to go to college to do well and to create businesses. The ability to create a business today with things like AWS to be able to access everything, the cost of it is so much lower than it is in the past. And the fact that colleges so often don’t do a good job, right? They don’t do what they need to do to make sure people have successful lives and thrive in their lives and flourish. Right. So so I think that’s one that’s in a big danger. And that’s why I very pleased that Dartmouth’s president said, hey, we’re to start charging for outcomes because then, OK, Dartmouth is going to do things differently. 

One of the books, one of the companies I highlight in both the first chapter and the last chapter is Texas State Technical College. Right. So it’s not a four year university, a two year one. And the state of Texas basically said, hey, we’re tired of paying for based off credit hours, right? That a student goes to, he signs up for a class and we pay you whether they ever go to the class, whether they ever learn anything from it, whatever grade they get, whether they graduate or not, and whether they pay taxes, right? That’s a productive citizen. So Texas State Technical College said, okay, we’ll put 100% of our funding, imagine that, 100% of our funding at risk based on how well we teach. And so, and what did that do? It caused them to do things very differently. They got rid of some programs, they added some more programs, some professor who didn’t like to be measured on their outcomes left and they said that’s fine because what matters is outcomes and other professors knew coming in that you’re going to be measured on the outcomes that you create. They started working with employers before they graduate to bring them into the process. They provided navigators and things for students to do better when they start failing. They would they would do things to up them. And and it’s been this has been like 15 years now in the first six years where I had data there there there their income from the state went up by 35% per year on average. That’s how good they did. 

And they’re so good now, they offered their students a tuition guarantee that if you graduate from here and you don’t get a job in your major within six months, we’re giving you your entire tuition back. Right? So you know, they’re working to help them get a job, right? And that which they didn’t do before. They don’t view that as their outcome. say, hey, what’s up to them? We did our job. No, you didn’t do your job. Right? That’s not your job is for them graduate. It’s to help them get a job and be productive citizens.

Q8

ContraMinds Podcast (28:01.748)

No, I really loved that example, Joe. fact, made me think about the connected parts of the business model, right? Because Texas State University actually got funding from the government, but the government earns money because of taxes. And therefore, if I’m able to really measure the outcome of the number of people who are graduating from my university who are actually paying more taxes than give me more funding for my college is an extremely beautifully threaded, you know, argument of actually looking at outcomes and then saying how do I then charge an outcomes? But how do you really connect the if you really ask me the thread of money which you can earn back because the government is actually funding you? Many businesses don’t have this connection of the business model, right? 

Say for example, I’m a car company, right? And I’m really looking at it and saying, so what’s the aspiration? Why do people buy cars? And today, if you then start looking at aspirations of why people buy cars, say an SUV, and then go back and then say, what’s the amount of time that you actually are investing in enjoying or in actually helping your aspirations become real… and then you charge for it, that’s a very different model, right? And that’s exactly what you are talking which is time invested versus time spent. Is that the difference that you are talking about?

Joe Pine (29:39.659)

Yeah, yeah, yeah. know…

… so Commodity’s Good Services, provide time well saved. Do something for me so I don’t have to do it. And people, in fact, want goods and services to be commoditized, to be bought at the lowest possible price and the greatest possible convenience in order to spend their hard-earned money and their hard-earned time on the experiences that they value, which provide time well spent. And then transformations up that, right? Time well invested. I’m investing my time in each one of these experiences. Generally not one life changing experience. Generally it’s a series of experiences taking from where I was to what I want to become. And they’re investing that time to pay compound interest and dividends now and into the future. That’s fundamentally what economic progress is about.

ContraMinds Podcast (30:26.208)

Fantastic.

Joe Pine (30:26.281)

And I’ll mention too Swami today, the most precious resource in the planet is the time of individual human beings. We got abundance in so many things but we can’t create more time. So it’s how do you invest in that resource, in the most precious resource rather than waste customer times, which is what so many companies do, right? That’s the worst thing you do.

ContraMinds Podcast (30:32.894)

Yeah, no, in fact

ContraMinds Podcast (30:37.94)

Yeah.

Joe Pine (30:51.625)

waste that most precious resource on the planet. Turn that wasted time into either time well saved or time well spent within the opportunities for time well invested.

Q9

ContraMinds Podcast (31:02.464)

so what do you think is the bottleneck or the challenge of moving to this model, right? Because I’m used to actually doing what I call as cost plus pricing, right? Hey, you know what? This is really what it costs me to manufacture and here is my overhead and this is really my price. And therefore here is my price or MRP as you call it.

Joe Pine (31:18.572)

Yeah, yeah.

ContraMinds Podcast (31:31.622)

and this is really what you give to the customer. Suddenly the way you need to price has to be very different and therefore it requires a new pricing mental model that me as a professional or as an executive or as a CEO, I have to start looking at it very differently, right?

Joe Pine (31:42.701)

Yeah.

Joe Pine (31:48.833)

Yes, yes, and it’s basically it’s just price for value. It’s price for the value create, not the cost that you incur. Again, costs are immaterial to the value you create. And what economics are about is value, that people view the value of your offering more than the money in their account. And so how do you price for that value? And guess what? It’s a very individual thing. It’s hard to price. I mean, you may be able to create a bell curve of how much people are willing to pay, particularly if you have a standard product. But it’s very difficult to understand that the economic discrimination of when people are willing to pay less, when they’re willing to pay more. But here’s what you do with that bell curve. Just recognize the more you shift from goods and services to experiences and transformation, you’re shifting that bell curve to the right. And that means that the average price you’re going to be able to pay and irrespective of cost, it’s off the value that you create inside of each individual customer.

Q10

ContraMinds Podcast (32:54.272)

See, one of the challenges of this whole concept of transformation economy, I’m going to be a little, you know, I’m going to have a contrarian view on this. And I would like to listen to your viewpoint on this is, you know, if you look at athletes, if you look at apprentices, if you look at surgeons and, know, and really the way, you know, transformations happen, there is a certain way in which it doesn’t come from formal training, right?

So therefore, you know, I tend to learn it myself and then I then start getting better and then I get a, I become a better athlete with some training, but then I start to, you know, I have an aspiration to be the best athlete in the world. Okay. But when I’m working for a company, okay, the challenge is if I don’t have that aspiration, or if I’m actually buying goods, if I don’t have that aspiration, how will you apply this to a

Joe Pine (33:27.084)

Mm.

Joe Pine (33:38.486)

Mm-hmm.

ContraMinds Podcast (33:52.512)

to a consumer or to a customer who is not able to define what the aspiration is.

Joe Pine (33:59.831)

Well, it’s important. Well, one.

You don’t have to sell transformations to everybody, right? So it’s fine to at some, you can sell at all these levels that we’re talking about. Two, one of the keys that you want is to uncover that aspiration. I talk about three phases of transformation. You’ve got diagnosis upfront, a series of experiences, call them encapsulated experiences, and then follow through, which is sustaining, right? Ensure it’s sustained through time. And so diagnosis is in part, not just,

ContraMinds Podcast (34:14.559)

Mmm.

Joe Pine (34:32.367)

I used to think that when we first talked about transformations, I used to think that you would just, you know, the bluebird of happiness would light on your shoulder and you say, I got an aspiration. No, that’s not the case. You need to help them uncover like the Johnny Walker Princess Street experience that I’ve mentioned. Right. People go in there. Maybe they’re interested. Maybe some of you I’ve been always meaning to learn more about whiskey. This is a perfect time. Right. So then they come there. But most people, hey, let’s go spend an afternoon at Johnny Walker Princess Street and see what’s going on. And so but with there, you can help uncover that aspiration to become a whiskey drinker.

And whatever in financial services again, you can work with your individual client to uncover what do you want out of life? What do you want out of legacy? What do you want as you grow older? What do you want to be able to do? Where do you want to be able to go? What do you want to be able to experience? And so it’s a matter of that discovery and uncovering, if that’s a word, of what those aspirations are that enable you then to go on and fulfill them.

Q11

ContraMinds Podcast (35:34.401)

So if I’m a leader and I’m actually looking at how do I imbibe the skill, right? Which is very, very different from how I probably used to operate in the, if I were to call it in the pre-transformation era, if I were to call it. How do I improve my skills to start thinking transformation?

And what do you think are the key tenets of how should I start building those skills in the way I start thinking about my product, about my process, about my pricing, about my distribution. So what are the things, you know, I should start looking at? Okay. And how do I build this? If you ask me a new muscle in me.

Joe Pine (36:26.253)

Yeah, so I mean, there are so many things that you can think about. So, you know, one is as you move up the progression, need more and more of a focus on individual customers, whether individual living, breathing human beings or individual active corporeal enterprises, you need to focus on the individual gets back to that mass customization being the core. The whole progression economic value is really about individualization. You know, commodities, good services exist outside of us, experiences happen.

ContraMinds Podcast (36:45.664)

Mm.

ContraMinds Podcast (36:49.706)

Cut it.

Exactly.

Joe Pine (36:56.297)

inside of us and transformations change us from the inside out. So that focus on individuals is really one of the core things. You need to understand human connections. You need to understand empathy. I’m working with Dan Hill who wrote the great book Emotionomics about how important emotions are as you move up this progression of economic value and in particular transformations you need empathy. You put yourself in their shoes. Help them realize who they are, what they to become also particularly because when you look at going from two it’s generally not one monotonically increasing line there’s regress as well as progress right it’s  going up and down so you need to be attuned to those places where things are regressing that empathy there to be able to do that to be able to sense and respond differently than you would if things are going well to be able to get them back on track to be able to achieve their aspirations

ContraMinds Podcast (37:53.067)

Beautiful, sense and respond and empathy and human connections. I picked up four key tenets that…

Joe Pine (37:58.953)

I always think of sense and respond as one, but okay.

Q12

ContraMinds Podcast (38:03.872)

So I want to ask my last question to you. So if I were a business executive listening to this conversation, the biggest fear that I have is if I achieve transformation for a customer, then the customer no longer needs me. So how does that help me in my business?

Joe Pine (38:23.34)

Yeah.

Joe Pine (38:28.033)

Well, your biggest fear is that if you don’t achieve transformation for your customer, your customer no longer wants you. Right? So, yes, there’s that possibility, but recognize that is that once they achieve that aspiration,

ContraMinds Podcast (38:34.014)

Hahaha!

Joe Pine (38:47.445)

you have this follow through, have this sustenance, you need to sustain it through time. That time can last forever in many cases. 

You think about GLP-1s and you take a GLP-1. But if that’s all you do is take that you may lose some weight you stop taking it. Guess what? Your weight goes back. You need to change your behavior. I high in the book one company called Calibrate that subsumes the GLP-1s in a transformation program with diagnosis upfront medical as well as emotional as well as looking at not just eating but your sleeping habits and so forth. And then they’re able to keep that weight off because you’ve changed your behavior and how you and your relationship to food really. So that’s something where one person, the person I highlighted in there, Frances Turner, a friend of mine, one of our certified experience county experts, lost over 150 pounds with this and she’s sustaining it but she’s going weekly, right? So she has these weekly or bi-weekly interactions to keep that sustaining going so they are going to continue to be a relationship forever.

In other cases, even when that transfer may end, well guess what? There’s another aspiration. They may want to go deeper on that. They may want to have some other aspiration in your category, in your bailiwick of what you can do and who they’re to go to is the one who helped them before. So you can think about that you repeat the cycle of helping people flourish over and over and over again, depending on what you are, particularly in things like financial services and healthcare where the needs never go away. You know, become a, a, want to become a great golfer and get down to single digit handicaps is okay. I can sustain that myself. That’s fine. But you know, healthcare things happen as you get older. You’re always going to need somebody to help with finances. You’re always going to need somebody, to help you with your, with your finances, to be able to live the prosperous life that you want.

ContraMinds Podcast (40:37.428)

Yeah.

ContraMinds Podcast (40:47.808)

So it’s almost like, you know, I’m kind of interpreting and I wanted to hear your view on this. I noted this down and so I said, if I’m thinking about pricing, I don’t think about pricing in one, you know, one shot, but I would say, I would actually get you an entry pricing. I would actually create an experience pricing. And then I’ll create something called a trail pricing in terms of how you can sustain the change.

Joe Pine (41:08.684)

Yep.

Joe Pine (41:14.38)

Yes.

ContraMinds Podcast (41:14.474)

So therefore maybe I need to have a new pricing model in the way I need to think of transformation. And therefore don’t think of pricing as one chunk, but think of it in parts or in bundles.

Joe Pine (41:18.381)

Right.

Joe Pine (41:25.525)

Right and price at multiple levels. know even calibrate sells physical goods right to their aspirants that want to lose weight. You can price it all of the levels that you provide. They can even be providing protein powder at the or at the commodities level, I don’t know, but you can sell at all of those levels and it just ups the amount of value you can create and therefore the money you could make by helping people achieve their aspirations and flourish as human beings.

ContraMinds Podcast (41:44.062)

Yeah.

CLOSING

ContraMinds Podcast (41:58.57)

Fantastic. It’s a great conversation and Joe, was something that I really enjoyed reading and listening to you gave me a lot more clarity and I’m sure audiences who are listening to this are going to be extremely enlightened with the concept and I’m sure they’re going to go out and check out because you are somebody who’s written some seminal books in my view. Mass Customization in my view is one of the best books that I’ve ever read and then The Experience Economy and now The Transformation Economy. 

It’s been a pleasure talking to you. Thanks for taking time in the midst of your schedule and vacation and talking to me.

Joe Pine (42:30.263)

Thank you.

Joe Pine (42:40.779)

All right. Thank you, Swami. It’s been a pleasure. I loved how you asked such great questions. It got me very impassioned in providing the answers.