Commodity-to-Experience Transformation
Wrap a common product in a distinctive journey customers want to join
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 6
- Confidence
- 98%
Scaramucci argues that Apple, Starbucks, and Virgin differentiated products that many competitors could supply by turning the purchase into a broader customer experience. Apple connected devices to stores and digital ecosystems; Starbucks combined coffee with a recognizable environment and ordering language; Virgin changed the feel of air travel. SkyBridge sought a similar effect by linking investment management with the SALT conference and Wall Street Week. The mechanism begins by identifying what is commoditized, then defining the experience customers should associate with the brand. The company maps touchpoints, makes environment and service coherent, and connects adjacent offerings that deepen the relationship. Customers then compare not only the core product but the complete journey and identity around it. The approach works only when the experience supports a credible underlying product rather than decorating poor performance.
Origin
Extracted from Masters in Business through Scaramucci's comparison of Apple, Starbucks, Virgin, and SkyBridge.
Core principles
- 01A common product can become distinctive through the experience surrounding it.
- 02Environment, language, service, and connected offerings shape perceived value together.
- 03An ecosystem extends the relationship beyond the core transaction.
- 04Experience must reinforce the customer's desired identity or outcome.
- 05The underlying product still has to perform.
How to run it
- 1
Name the commodity
Identify the functional product and the features competitors can easily match. Establish where price or convenience currently dominates comparison.
Pro tip Ask customers which alternatives they consider interchangeable.
Watch out Do not claim uniqueness for a feature every competitor offers.
- 2
Define the desired experience
Specify how customers should feel and what broader progress they should associate with the brand. Tie that experience to a real customer need.
Pro tip Express the desired experience as an observable customer outcome, not an adjective list.
Watch out An experience designed only to look fashionable will decay quickly.
- 3
Map the touchpoints
Trace discovery, purchase, use, support, and return visits. Find where environment, language, service, or friction currently contradicts the intended experience.
Pro tip Include digital and physical interactions in the same map.
Watch out One polished touchpoint cannot compensate for a fragmented journey.
- 4
Build coherent signals
Align design, service behavior, vocabulary, and delivery around the chosen experience. Make each signal reinforce the same promise.
Pro tip Remove elements that are memorable but inconsistent with the desired outcome.
Watch out Distinctive language can become friction if customers cannot understand it.
- 5
Connect adjacent value
Add useful services, content, events, or tools that extend the relationship beyond the initial transaction. Ensure each addition helps the customer use or appreciate the core offer.
Pro tip Prefer adjacent experiences that increase learning, convenience, or continuity.
Watch out An unrelated extension adds complexity without strengthening the ecosystem.
- 6
Measure the difference
Test whether customers recognize the experience and whether it improves retention, referrals, or willingness to pay. Refine the journey from behavioral evidence.
Pro tip Compare experience metrics with core product satisfaction.
Watch out Brand attention without customer value is not durable differentiation.
In the wild
Scaramucci notes that many companies make smartphones, tablets, laptops, and related products. He argues that Apple became exceptionally valuable by surrounding those products with stores, an App Store, an iBooks store, iTunes, and an identity customers wanted to join.
→ The products were experienced as an ecosystem rather than compared only as commodity hardware.
Scaramucci contrasts inexpensive diner coffee with Starbucks' earth tones, green aprons, ordering language, music, and higher price. The drink remained coffee, but the setting and ritual changed what the customer believed was being purchased.
→ A commodity transaction became a branded experience customers willingly paid more to repeat.
SkyBridge sought to combine investment performance with the SALT conference and Wall Street Week. Clients could invest, learn from prominent speakers at an event, and receive a shorter version of that educational experience through television.
→ The firm aimed to make the relationship broader than fund-of-funds management alone.
Common mistakes
Decorating a weak product
A memorable setting cannot sustainably compensate for poor underlying performance or service.
Adding disconnected extensions
Extra channels or events create an ecosystem only when they reinforce the same customer outcome.
Is it for you?
Best for
It is best for consumer products and services in crowded categories with multiple customer touchpoints.
Not ideal for
It is not ideal for a weak core product whose basic performance, safety, or reliability remains unresolved.
From the transcript
“Apple Computer has turned itself into the largest market capitalized company because they understood how to take a commodity and turn it into an experience.”
“Howard Schultz, he turned a commodity coffee that you and I went to the Landmark Diner room Manhasset and bought for twenty five cents in…”
“Sky Bridge, we are trying to turn our investment thesis and our performance into an experience for the customer.”
From the episode
SkyBridge Anthony Scaramucci: Masters in Business (Audio)
Anthony Scaramucci