Selling Outcomes Instead of Services

John Jantsch (00:03.394)

Most businesses today are still trying to sell better features or even better experiences. Joe Pine says the real premium, maybe the only premium left is helping customers become someone new. Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Joe Pine. He’s a bestselling author, keynote speaker and management advisor who co-founded Strategic Horizons. He’s best known for coining the term the experience economy. I wrote a book.

by that name was on this show as well. We’re going to talk today about his new book, The Transformation Economy, Guiding Customers to Achieve Their Aspirations. So Joe, welcome back to the show.

Joe Pine (00:45.659)

Thanks, John. It’s a pleasure to be with you again.

John Jantsch (00:47.976)

So let’s just get the terminology out of the way. You’ve developed, you’ve defined, should say, helped to find some economic arrows before. If somebody said, Joe, what’s this transformation economy? You got 60 seconds. What would you say?

Joe Pine (01:04.827)

Well, would say that it’s the transformations are the next level of value that beyond experiences, we’ve gone from a grand economy based off commodities to industrial economy based off goods to a service economy. Then we shifted into an experience economy. And now we’re in a transformation economy where companies can use experiences as the raw material to guide people to change, to help them achieve their aspirations to become who they want to become.

John Jantsch (01:30.542)

So this is more than just new marketing language. This is not like messaging. mean, you actually have to have something to transform somebody,

Joe Pine (01:37.991)

Yes, yes, it’s not marketing language at all. If it is, then you’re overhyping what you have. No, it’s about your economic offerings. It’s about what you, what you offer, what you sell, and then what you do for your customers.

John Jantsch (01:41.578)

Hahaha.

Yep.

John Jantsch (01:53.518)

So what would be a simple way for a company to test the difference between a memorable experience, which you talked about earlier, and real transformation?

Joe Pine (02:03.399)

Well, the basic issue is does it last? Right? Does it last with an experience? What you’re providing is time well spent. When people value the time they spend with you and it ends up in a memory and write in that memory needs to last over time. But of course it tends to dissipate over time with transformations. What you’re providing is time well invested. The people are investing their time with you in a way that’s going to yield compound dividends in the future, uh, by becoming a better person in, in some way. So that’s the.

lasting part that it’s about the outcome, the aspiration that you do achieve through generally not one life changing experience, generally a series of experiences.

John Jantsch (02:44.066)

Yeah, stages, almost. So while we kind of kidded that this is not just marketing speak, I mean, there probably is some new language a company, especially if they realize, hey, we do cause transformations. I mean, do we need to describe our company in different terms?

Joe Pine (03:02.405)

Well, yes, but some of the terms are big and scary. know, transformation is a big and scary term. I talk about four different types of transformation. One of them is metamorphosis because there’s no other word for it. And it’s a big and scary term, but there are lot of other kinds of aspirations that on a smaller scale than just changing core levels of identity. So you do need to figure out what are the best ways to talk about it for you. one is on like aspiration isn’t as big.

John Jantsch (03:07.032)

Yeah.

John Jantsch (03:13.494)

Yeah.

Joe Pine (03:32.329)

And then people say, okay, I get that as sort of a progression of bigger and bigger that you’re doing. You can talk about about change, obviously, and, and, and outcomes, right? I think that’s the big thing. It’s like, it’s like, what are your aspirations? What’s the outcome you want out of us working together? And how can we help you achieve that outcome? And another word is guide, you know, the, economic function you,

John Jantsch (03:35.021)

Yeah, yeah.

Joe Pine (04:02.259)

you extract commodities, you make goods, you deliver services, you stage experiences, but you guide transformations. You’re their guide, their coach, their expert, their counselor, their navigator, their advocate, whatever the right term is for you, I figured that out. What is our function? What are we doing for you that guides them?

John Jantsch (04:09.836)

Yeah, yeah.

John Jantsch (04:24.098)

So this doesn’t really discriminate between B2B and B2C, right? mean, somebody could easily say, well, I’m a weight loss coach. It’s clear the transformation I cause, right? But what about a B2B company? Are there B2B companies that can of stake that claim as well?

Joe Pine (04:32.133)

Right? Obviously transformation. Right.

Joe Pine (04:40.783)

Absolutely. And in many ways, it’s sort of easier to think about with B2B.

because recognize that if you sell to another business, that business doesn’t really want your offering. Sorry to tell you. It’s a means to an end, right? And what’s the end to what you’re offering as a means. And you may have to ask, you know, why do you want this? Why do you have to ask five whys as the old manufacturing slogan was until you get down to some core aspiration. And then now how can we help you achieve that aspiration and ideally subsume our current offerings into into that.

John Jantsch (05:16.078)

All right, but Joe, we’re a commodity business. mean, nobody wants what we sell. We sell insurance. How are we crossing transformation?

Joe Pine (05:21.607)

All right.

Oh, it’s easy. Easy. So, so people do in fact want insurance. mean, if they’re smart, right? It’s like, I’m a full believer in catastrophic insurance, right? I don’t, you know, shouldn’t need to do it for every visit of the doctors. Well, my wife says, man, I had to pay a copay. I’m like, it’s okay. It’s okay. We got the money for that. But if something catastrophic happens, we’re in trouble. So an easy way to think about it, services experiences, transformations, insurer, usher, insurer.

John Jantsch (05:29.473)

Yeah

John Jantsch (05:34.866)

Right.

Joe Pine (05:53.864)

All right, so insure basically means something bad happens, we pay you money. And that’s how most insurance companies view it, right? As a mere service. offshore means something bad happens, we make you feel better about it, we treat your emotions as well as your actual needs, we think of you at least as a whole person, as opposed to a mere claimant.

And then ensure is well, how about we, how about we make the bad things not happen? How about we work with you to make you a better driver, particularly your kids, a better driver as they are learning. People are very, very interested in that. or how do, how about we bring you back to whole? So, so that you, can’t prevent all catastrophes. We can help you and, know, in, and driving, we can help you in looking at your home and finding all the fire hazards and things like that and so forth. but you can’t prevent everything. So, but what we do is that we will ensure.

John Jantsch (06:19.029)

Mm-hmm.

John Jantsch (06:25.282)

Yeah.

Joe Pine (06:43.613)

sure you get back to whole we will ensure that this is not a long lasting devastating trauma in your life. if and many insurance companies are for real, you know, I got cancer, would need insurance, I gave a car accident, I, you know, my total that I’m, it’s a trauma. And one of the things I discovered in my research is that a lot of aspirations actually come from trauma. And trauma tends to be that metamorphosis, where you’re you’re immediately transformed, right? You’re not you’re in your doctor’s office, they

John Jantsch (07:07.623)

Mmm, yes.

Joe Pine (07:13.523)

say, I’ve got bad news, you’ve got cancer. And you don’t hear anything, you don’t hear any other words for the next five, 10 minutes of them talking, because you now identify as a person with cancer, right? And that’s traumatic. So what the doctor needs to do, but not doctors alone, it’s not just about medicine, is to bring you back is to heal you from the cancer, but also to change that identity as someone who has recovered from cancer, or is a person who had cancer in the past.

John Jantsch (07:19.63)

Yeah.

John Jantsch (07:39.406)

Yeah, it’s interesting. think I’ve seen a movie where they did that exact scene, right? The doctor’s telling him that and then goes on and everything becomes muffled after that. Exactly. Yeah. So I think that’s a well-known example.

Why is this showing up now in your view?

Joe Pine (08:01.715)

Well, it’s so all of the economic offerings have always been around, right? They’re not a new offer. It’s just newly identified and where where they become a predominant part of the economy. And so there’s a number of reasons why transformations now

One of my fundamental reasons is surprisingly, it’s because we make so much money now. We have so much abundance now that we want goods and services to be commoditized. We bought the lowest possible price and the greatest possible convenience in order to spend our hard earned money and our hard earned time on the experiences and the transformations that we value. it’s the time because we make so money that our time actually has so much more worth. If you think about it, right? When you, when you know, you’re, you’re a high school student and you’re making, you know,

12 bucks an hour at a part time job.

You know, skipping that to go hang out with the friends or go to a football game, whatever is not that big a deal, right? But you were making hundreds of thousands of dollars and now you want to, have to go to the grocery store. Well, you could measure that as a measure. I’d like hundreds of dollars just to go to the grocery store, right? At some level of income. our time is much more precious than it was in the past. And so we want those experiences to fill that time with time well spent. And then, and then we increasingly recognize that, experiences change us. mean, they’re the only things that ever change us. We’re all.

John Jantsch (09:20.194)

Mm-hmm.

Joe Pine (09:21.531)

the product of our experiences. so, and so recognizing what are these experiences doing to me? And how might it even become better at the things that I want to spend my time at, whether that’s family relationships, whether that’s golfing, whether you know, and at work as well, a of those coaches we hire for work and so forth, right? All of that matters much more than it did in the past.

John Jantsch (09:45.304)

So talk to me a little bit about customers who are experiencing this. Do you see people actually seeking companies that are going to be more transformative, or do you actually see some resistance as well? Because it’s like, wait a minute, I’m in my lawn mode. I don’t want to metamorphosis.

Joe Pine (10:04.367)

Right, right. There is some resistance. But there’s all, you if you know the hero’s journey, you heard of that, right? There’s this stage, which is the refusal of the call. Right. And it may be, well, I don’t have enough time to do it. And like you said, maybe I don’t, this isn’t the right company for it, right? They may be offering it, but it’s not the right company for me. And so you need to find out who that is. You need to be present when they, when they’re ready to go on, on that adventure and, and, and, and be with them to be their guide.

John Jantsch (10:11.893)

Right, right, sure, sure, of course.

Right, right, right, right.

John Jantsch (10:30.285)

Mm-hmm.

John Jantsch (10:37.134)

And I’m sure that this is going to be one of those, depends on the company or what they’re doing. do you see people, mean, this feels like transformation feels like you, especially in a service means that you have this totally bespoke white glove approach that is different for everyone. But I want to productize transformation. Is that possible?

Joe Pine (10:58.383)

Yes, it is possible. And I’ll tell you what’s going to make it possible. And that’s AI. Right.

John Jantsch (11:02.964)

I was gonna, that’s on the list. Okay.

Joe Pine (11:05.059)

Well, I’m going to take it back. Yes, you use the word productize. I say you can’t commoditize transformations, but you can productize them. So I’m doing that myself. Right. So I just came out with the Transformation Economy, Guiding Customers to Achieve Their Aspirations book. Right. You can hire me to speak. You can hire me to do a workshop. You actually hire me to work with you to create, to transform your business, to help you transform your customers. But I productize it into a book for $32. Right. Why? Because I want to reach a lot of people.

John Jantsch (11:11.213)

Yeah.

John Jantsch (11:21.368)

Mm-hmm.

John Jantsch (11:32.77)

Yeah, yeah, yeah.

Joe Pine (11:34.953)

and have them do things even without my involvement. But then also we just came out with the transformation toolkit. We’ll take the ideas and frameworks in there and be able to work on them even without my help. It’s a $495 offering, but it’s a lot cheaper than hiring me personally to be there. And so that’s productization. then again, AI will be particularly unique. I think of transformations as three stages. Diagnosis, who is this customer, where do want to become? Then you design the set of experiences, not

John Jantsch (11:51.308)

Mm-hmm.

Joe Pine (12:04.973)

that monotonically increase, always regress as well as progress, you have to sense and respond to what’s going on. And then you achieve your aspiration, you have to have follow through, which is ensure again, ensure that transformation takes hold that is sustained through time. What a lot of companies do is say, okay, you got it, you lost your 30 pounds, bye, you know, no, no, no, no, no, right, because then they, they go back, right. So that follow through is most important. That’s where AI can help a lot because one of things that turns out that AI is really good at is counseling.

John Jantsch (12:22.188)

Yeah. Yeah.

Joe Pine (12:34.759)

is coaching right and and it’s just really good at that and i mean yes there’s reason a lot of reason to have a human connection and everything and i’m a big believer in human connection but in between you can have ai providing tips and inspiration and counseling as you go in between your your human visits or virtual calls with with a coach a counselor a guide again right i think it’s going be very good at that to customize into your needs at the moment

John Jantsch (12:35.192)

Yeah. Yeah.

John Jantsch (13:01.452)

What happens to stuff like pricing models, guarantees, risk sharing? If we’re promising something that’s an outcome for somebody that’s unique to them, what does that do to all the normal kind of models of business?

Joe Pine (13:16.645)

Yeah, well, it does change things. If you promise an outcome, you need to charge for the outcome. Right. So, so that is what you charge with services, you charge for activities with experiences for time, with transformations, you charge for outcomes. And the paradox of course, is that while you want to charge an outcome and the most prevalent way I’ve seen is with a transformation guarantee.

John Jantsch (13:19.075)

Yeah.

Right.

Joe Pine (13:39.291)

that you get some or all of your fees back if you don’t get to achieve your aspiration. But the paradox is that you can’t actually guarantee it because because customers change themselves. Right. You can’t change customers. As the old saying goes, you can lead a horse to water, but you can’t make a drink. But what a guarantee is is is one, it knows that your customer, what I like to say is your aspirant, you know, services have clients, experiences, gas transformations have aspirants that they know your

John Jantsch (13:39.767)

Mm-hmm.

John Jantsch (13:47.083)

Right,

Yeah, yeah, yeah, sure.

Right, right,

John Jantsch (14:02.786)

Mm-hmm.

Joe Pine (14:09.225)

in it, right? That they know you’re putting your money where your mouth is. They know you’ve got risk in it. And it’s not just a high profit margin thing that you’re doing. But it’s also then a catalytic mechanism that says that, hey, I have to do everything it takes to to transform that customer, or I’m not going to make money, right? Even if you’re only charging for a portion that you that’s all profit that you’re charging for. And so you then start to do things differently, you approach things differently, you have different processes and so forth.

John Jantsch (14:30.422)

Mm-hmm. Yeah.

Joe Pine (14:39.181)

to help ensure that that transformation occurs and then ideally that it sustains through time.

John Jantsch (14:46.51)

So you answered half of what I was going to ask now is, what should leaders measure to know? I mean, first off, have to know, you have to have the signs, right? Yes, transformation is happening to this person or this business. But then you also probably have to have some way to collect data on that, right? I mean, I know it sounds really simple, but a lot of people don’t have that loop.

Joe Pine (14:50.139)

you

Joe Pine (14:57.819)

Right. Yes.

Joe Pine (15:06.032)

Yes.

Joe Pine (15:10.331)

Right. Some guarantees are purely qualitative. Right. It’s like, did we do what we said we do? Did you do? Did you get out of it? You what? Right.

John Jantsch (15:16.066)

Right, right, right. Right.

Joe Pine (15:18.439)

Others are quantitative. Some of them are, but are sort of very easy to measure. For example, I know, you know, Texas State Technical College in Waco, Texas offers a tuition guarantee. If you graduate and don’t get a job within four months or six months, you’re you get your tuition back. Very easy. One thing we got to measure. Others, it’s like, well, to what extent did I did I lower my costs or did I increase my market cap? If you’re a B2B, to what extent have I improved my handicap?

John Jantsch (15:37.774)

Yeah.

John Jantsch (15:46.124)

Mm-hmm. Mm-hmm.

Joe Pine (15:48.573)

that’s easy to measure, but my tennis game, there’s no measurement for tennis, you know, how much you’ve improved. So it can be very difficult in those situations.

John Jantsch (15:52.706)

Yeah.

All right, so I’m going to come back to marketing. know you’re trying to lead me away from it, but I’m coming back to I’m coming back to messaging. So if if before I’ve been saying, here’s what you’re buying, and now I’m going to say, here’s what you’re going to become. Don’t I need another message?

Joe Pine (16:01.121)

Hahaha

Joe Pine (16:11.324)

Right.

Yes. I mean, yes, you do need a mother message. You need to make sure this is true in all cases, but especially to in transformations, you need to make sure that your marketing doesn’t get ahead of the actuality, right? Something we talked about in our book on authenticity. cause because where we say, basically, not basically we say advertising is a phoniness generating machine. Cause you can’t help but, but exaggerate what your, what your offering really is when you advertise. But in terms of the, of the promotion of it, you need to make it sort of clear.

John Jantsch (16:15.278)

Okay.

John Jantsch (16:24.142)

Yes.

John Jantsch (16:36.558)

Sure. Yeah. Yep.

Joe Pine (16:43.523)

what they are getting out of it. And they say, you know, all branding is a promise, right? So it’s a promise of an outcome. So yes, make that promise. Be sure you can first operationally do it.

but make that promise. The guarantee makes it then easy to be able to sell that promise. Another marketing thing I’ll give you, John, as I got a little box in there on what I’m now calling after Bob Rogers, a friend that gave the term to me, invitational transformations that we can do with marketing to create an invitational transformation. the biggest way to see it is what I call marketing experiences. Think about things like the, the Guinness storehouse in Dublin, the Heideken experience in Amsterdam.

John Jantsch (16:58.37)

Yeah.

John Jantsch (17:13.422)

Hmm.

John Jantsch (17:24.088)

Yeah, yes.

Joe Pine (17:24.905)

the Johnny Walker Princess Street experience in in Edinburgh and each of those are marketing experience. There is actually I can talk about the world of Coca-Cola to get into non-alcoholic drinks but yeah no it’s all there’s Ferrari World you know Volkswagen, Jadu Stad, there’s there’s all tons of these. But need to be there’s the Tomahawk Experience Center for Case Construction Company in Wisconsin.

John Jantsch (17:30.36)

Seems to be theme there, Joe.

Yeah, yeah, yeah, yeah, yeah.

Harley probably has something. Yeah. Yeah.

Joe Pine (17:49.841)

and, and on the consumer side, all those ones I mentioned are admission fees experiences. They’re actually, turn marketing from a cost center into a profit center because they get, they get customers to pay them to sell to them, to get them to drink more Guinness or Heineken or whiskey or whatever it might be. Right.

John Jantsch (17:58.808)

Mm-hmm.

John Jantsch (18:05.058)

Buy the hat, yeah.

Joe Pine (18:07.036)

But also what Bob Rogers who designed Guinness Storehouse, Heineken Experience and Johnny Walker’s Princess Tree and World of Coca-Cola, think at BRC Imagination Arts. He told me he likes to think of them as invitational transformations. I’m inviting you to come in and immerse yourselves in my brand. Well, first my category, whether it’s whiskey or beer or what. I immerse myself in my cat, yourself in my category, and then in my brand. And I’m going to show you what a wonderful category it is. I’m going show you how wonderful we are as a brand. I’m going to let

you experience my products, right with tasting and so forth, or at case it’s driving all the earth moving equipment. And knowing that the more if you get customers to experience your product, chances they buy it go up. But if they buy it, then they may begin to identify, know, I didn’t like whiskey before, but but I like whiskey. I am a whiskey drinker. Right? That’s a transformation. When you say I am X, I am a whiskey drinker, right? That’s a transformation. They may go further and say, I’m a Johnny

John Jantsch (18:40.888)

Mm-hmm

John Jantsch (19:01.082)

Yes.

Joe Pine (19:06.89)

walker whiskey drinker, right? Now you identify with the brand. And that’s big. That’s where you can become what my friend Eddie, you can call super consumers that that don’t just buy more from you, they tell everybody about it, and they convert other people into consumers. And if you create a great experience, all of that is as possible. Right, exactly. And that’s so that’s what marketing should be thinking about, not a cost center, a profit center by creating experiences where people can identify with your brand.

John Jantsch (19:16.75)

Mm-hmm.

John Jantsch (19:26.284)

Yeah, they get the tattoo, right?

John Jantsch (19:37.006)

All right. So if you’re a small business and you want to take the first step this week, where do get started? What’s a simple, I know you have an audit process, think three, I think it’s three questions. What’s something that they could run on? I thought it was, it was like something about like, what’s the aspiration or what’s the transformation they’re seeking? I thought I read that somewhere, but any rate, how would somebody look into their business and say, what, how can we think about our current offering?

Joe Pine (19:49.736)

I wonder what those three questions are, I’m sorry.

Joe Pine (20:00.978)

Right.

Joe Pine (20:04.678)

Right. So one, think of your current offering as a means to an end and figure out what that end is. Right. So it can be a very generic. I like to think of it as from two statements from where to what you’re from, what to what B2B from who to who B2C what, who are your customers and what do they aspire to become? You get a very generic statement. You need to recognize when you get down to the individual aspirant, that there may be differences that you have to take into account.

John Jantsch (20:08.77)

Mm-hmm. Yeah.

John Jantsch (20:29.208)

Yeah.

Joe Pine (20:30.184)

but you know a fitness center generically we we we we transform people from flabby to fit right now

John Jantsch (20:36.685)

Mm-hmm.

Joe Pine (20:39.016)

think about what you do today, how fit does it actually make them? And how do you ensure that they make their fitness goal? What are their fitness aspiration on an individual basis and so forth? With with healthcare, it might be from sick to well, right? Okay, well, that can differ for everybody and what they want. But generally, you know, it’s not about treating the sickness, it’s about becoming what having well being, right? And how do you create that well being beyond the again, the medical things that you do? If it’s a financial, you’re a financial

advisor or an accountant, right? Recognize that that they’re not buying your services because they want your services. It’s because they want to have a better business and accounting helps them have a better business. Or if you’re a B2C financial advisor, it’s not about the money. It’s a means to an end. It’s about they want to retire well, they want to create a college fund, they want to build a second home in Florida or Arizona or whatever. And so one of the only example in the book that I

John Jantsch (21:19.31)

Mm-hmm.

Joe Pine (21:39.09)

talk about like five times is a company based here in Minnesota, where I live, called Simpliny that provides a transformation platform to wealth advisors.

John Jantsch (21:48.674)

Hmph. Hmph.

Joe Pine (21:49.916)

So the fake and it’s focused on the life and legacy. love that term, the life and legacy of what the, what the end client wants as opposed to just the money and provides a wonderful system for them. Be able to do that. They call it, what do they call it? it’s advice at the, at the speed of conversation because you, you say, well, I’m thinking about this and instantly your plan changes and say, well, this is what it be if you wanted to do that. Right. This increases your chances of having the money you want to retirement and leaving the legacy that you want.

John Jantsch (21:59.8)

Yeah.

John Jantsch (22:10.723)

Mm.

Hmm.

Yeah.

Joe Pine (22:19.86)

when you die or it decreases it by this much. Can I live with that that much? Yeah, I can live with that chance. So let’s go.

John Jantsch (22:27.054)

One of the things that I think is going to be a side effect from people reading your book is if somebody has already decided, yes, I want to do this from two, I think we do this from two, they’re probably going to also then start saying, what’s going to have to happen to make sure that we’re doing that? We need a better onboarding. We need a better check-in system. We need better follow through. So we start improving every bit of the business, don’t

Joe Pine (22:46.172)

Right.

Joe Pine (22:52.648)

Yes, and that’s where that charging for outcomes becomes that Cadillac mechanism. Now, how do we go about doing this and ensuring that they get the aspirations achieved that they want? You need to think also about the customizing aspect of that. All of this relates to my first book on mass customization, about efficiently serving customers uniquely. So you can think about, there transformation platforms out there that I can use? And there are many. I know many in education, for example, Echo360. These are all mentioned in the book.

John Jantsch (22:57.356)

Yeah.

Joe Pine (23:22.602)

in coaching, there’s better up, which is a great transformation platform.

and others that you can use. And how do I modularize my offerings so that I can do different things at different times based on how I’m sensing responding to what my client is feeling right now, what they’re going through right now, where they are on that transformation journey. so design that journey. I have one in the book modeled after the hero’s journey that takes you through all the steps that you need to do. And in particular, have the diagnosis, have the set of experiences, have the follow through. Don’t think you’re

John Jantsch (23:47.256)

Mm-hmm.

Joe Pine (23:56.346)

done once they say I’ve changed right you know how they got to sustain that change

John Jantsch (23:58.823)

Yeah, yeah, yeah. Yeah, yeah, yeah. Awesome. Well, Joe, it was great having you back. Spending a few minutes with you. Where do you want to invite people to connect with you or find out more about the transformation economy and ways that they can apply it?

Joe Pine (24:12.41)

You can always connect with me on LinkedIn at Joe Pine. And then our website is strategic horizons with an S strategic horizons.com. We actually have a page dedicated called slash integration about how you can take these ideas and integrate them into your business and includes all the different offerings we have, including the toolkit and one-on-one coaching and then speeches and workshops and whatnot.

John Jantsch (24:37.418)

Awesome. Again, great visiting with you. Another amazing work and hopefully we’ll run into you one of these days out there on the road.

Joe Pine (24:44.985)

I appreciate that. I’d love to.