The Guided Transformation Business
Do you know what the end goal of people who go to fitness centres is?
I am sure you do.
According to the HBR article “The NEW YOU Business” (published in the January-February 2022 edition of the magazine), “The end goal of people who go to fitness centres isn’t access to the equipment or the trainers; it is to get in shape. The overriding reason people go to doctors or check into a hospital is not to obtain drug prescriptions, a medical examination or therapeutic procedures; it is to get well. And students’ primary motive for going to college is not to buy a lot of books, have their papers and exams graded by their professors, or even have the classroom and all-round college experience; it is to gain skills or expertise and pursue a career.”
Likewise, the end goal of people who come to you isn’t to access commodities (stocks or bonds), or to access products (mutual funds) or even you; it is their financial well-being – to live the life they have imagined with their money (a happy and secure present and future for themselves); it is to ensure that they never ever have to worry about money and that they always have money when they need it.
The authors (of this article) add further “But all too often fitness centres, medical providers, colleges, and organizations in many other industries seek to distinguish themselves only on the quality, convenience and experience of what they sell. It’s not that those things are not important. But they matter only as a means to the ends people seek. Too many organizations lose sight of this truth.”
“Even though we are all filled with hopes, aims and ambitions, significant change is incredibly hard to accomplish on our own. Enterprises should recognize the economic opportunity offered by the transformation business, in which they partner with consumers to improve some fundamental aspect of their lives – to achieve a “new you (customer).”
This is exactly what I have been personally harping about for a long time. I have covered this extensively in my book “The HappyRich Advisor” in the context of our industry. I reproduce 2 sketches from my book to illustrate some key points.
The first sketch highlights the evolution of our profession over the last 50+ years. Many people are still stuck at the Commodity and Product stage. Confused by what this line means?
The sketch below should clear the confusion.
Like I mentioned above, many people and firms (including some of the biggest) are still stuck at the Commodity and Product Level. They still talk about stocks, mutual funds, returns, markets and economy. Some have graduated to a Service called Financial Planning. Few have gone to the next level focused on Financial Experiences and Guided Transformations. There is a clear early mover advantage for you not to mention an amazing growth opportunity in adopting the Guided Transformation way of doing business. But first let’s understand Experiences and Transformations.
According to authors of the book “The Experience Economy”, B Joseph Pine II and James H Gilmore, one of the key points to understand when it comes to experiences is that “Time” is the Currency of Experiences.
They differentiate it beautifully by saying “When it’s a Service, it’s “Time Saved” whereas when it’s Client Experience it is “Time Well Spent”. The next level of Experience is Transformative Experience, which we call as Guided Transformation (as given in the sketch). This is what the authors say is “Time Well Invested”.
Transformative Experiences/Guided Transformations are personalized experiences delivered by engaging the prospect/client in an immersive experience in which she is an active participant. The objective is to transform your prospect/client’s financial life.
Dennis Mosseley Williams, a Client Experience Expert says, “Commodities are Extracted, Products are Made, Services are Delivered, Experiences are Staged, and Transformations are Guided”.
It is however super important to understand the difference between Experiences and Transformations.
Author Pine and Gilmore further add “Transformations are a distinct economic offering, as distinct from experiences as experiences are from services”. Transformations are outcomes derived from guiding customers to achieve their personal or corporate aspirations. Companies build them atop experiences just as experiences are built atop services, for we only ever change through the experiences we have. Individual customers must be committed to achieving their own aspirations under the guidance of the company (this is so important that I will cover this point again).
To ensure this, a company must do 3 things –
- Diagnose where customers are today and what they want to become (what’s their New Version looks like)
- Design and stage the set of transformative experiences that will help each customer achieve their particular aspirations
- Follow through to ensure the transformation sustains through time.
For transformations are not ephemeral like experiences; they are effectual, enduring in the changed customer. With Transformations, the CUSTOMER is the PRODUCT.”
This is absolute gold as our work is not limited to getting someone started on their investment journey but to ensure that the person continues on this journey through time and lives the life he has imagined with his money.
The word to remember here is Co-Creation. Transformations aren’t mass produced in a factory (including Happyness Factory); they are achieved in partnership with the person whose life is being transformed.
The HBR article ends with these lines – “Transformation Business Models will be much harder to imitate than those that offer goods, services, or experiences. And they promise to generate handsome rewards – not only profits but also the knowledge that the company has truly made a profound difference in its customers’ lives.”
What’s stopping you from getting into the Guided Transformation Business then?