The Fourth Sector
Learn about the experience stage of the
economy -- and how to use it to maximize your practice and profits.
Jerry Hayes, O.D.
Government analysts traditionally categorize the
U.S. economy into three sectors:
materials, known as commodities
Manufactured products, known as goods
Economists are now
acknowledging the emergence of a fourth, harder to quantify sector, known as
Like coffee, four sectors
their book The Experience Economy, B. Joseph Pine II and James H. Gilmore use
coffee to illustrate the sectors:
stage. When purchased in commodity form, the average cost of the raw
beans needed to make one cup of coffee is about two cents.
stage. Manufacturers sort, roast and package raw beans into a finished
product. At this point, the cost of beans in a cup of coffee rises to about 25
Service stage. Because
nobody wants to drink beans, the manufacturer has to ground, brew and serve them
in liquid form. Prices for a basic cup of coffee vary widely -- anywhere from 50
cents to $2.
High-end shops such as Starbucks not only provide coffee as a finished product,
but they also deliver a unique experience. As a result, customers stand in long
lines to pay $3 to $5 for exotic-sounding drinks with the same basic ingredients
that they can purchase for far less in numerous competing coffee shops nearby.
ILLUSTRATION BY JOHN
A willingness to pay
even the most expensive cup of Starbucks is something anyone can afford, we see
examples of consumer willingness to pay high prices for "unique
experiences" at all levels of the economy. The idea of spending $60,000 on
a car, $300 on a luxury hotel room, $200 on a concert ticket and $100 on a
gourmet meal isn't only acceptable, these products are in demand by people
looking for an upscale experience.
question then becomes, "Does this proven willingness on the part of
consumers to pay top dollar for an experience in any way translate to the
services and products we provide to our patients?" It can, depending on how
you choose to compete.
Deliver a unique
Consumers aren't going to
pay you $30 for a box of disposable contact lenses they can buy on the Internet
for $20. But they will pay you $100 -- and more -- for an exam if you can
somehow make the leap from providing a commodity service to delivering a unique
The only way to provide a
unique experience is to make a commitment to be noticeably different (in terms
of having a professional environment, a truly friendly and people-oriented staff
and a doctor who's not only clinically competent, but is focused on patient
The design, d�cor and
location of your office speaks volumes. But a stunning facility doesn't matter
if the personal service you and your staff deliver is lacking. It's anything but
a unique experience to deal with rude receptionists, unreturned phone calls and
long waits in a doctor's waiting room.
your practice stand out
from the crowd takes creativity, which we didn't learn in optometry school. But
if Starbucks can do it with an everyday commodity, then surely O.D.s can do it
at some level with a complex service such as eye care.
A frequent writer and speaker on practice
management issues, Dr. Hayes is the founder and director of Hayes Consulting.
You can reach him at (800) 588-9636 or JHAYES@HAYESCONSULTING.NET.
Optometric Management, Issue: July 2004