How has Santa survived for so long and what does it tell us about customer experience (CX)?
Santa is freeParent’s may disagree, but Santa offers a service and charges nothing. Marketers obsessed with sales can mock Santa’s poor business model, but they’d be missing the point. Price is part of every person’s consideration of a brand’s customer experience, and many of the great CX success stories of recent years have come with price tags that are smaller, not larger.
Facebook, Snapchat, CNN.com, and Spotify are free to users. Netflix has grown by permitting account sharing. Uber offers better on-demand transportation experiences at a lower price than traditional offerings.
And those inclined to laugh at Santa’s bottom line might want to take note of Amazon. The retailer accounted for almost one in three dollars spent over 2016’s “cyber weekend,” more than four times the next top-selling online retailer, a commanding market share that the company achieved, in part, because of pricing that results in minimal profit. Since 2000, Amazon’s revenues have steadily increased from less than $3B to more than $100B, but the company has been unprofitable five of those 16 years (including two of the last four years) and earned net income of more than $1B only once–six years ago. Retail brands that have made more profit quake in fear of what Amazon is doing and will do to their industry and companies. Ho ho ho, who’s laughing now?