A couple years back, Wal-Mart decided to sell toys…cheap. Toys R Us knew they couldn’t compete on price, so they decided to compete on experience – thereby increasing their margin.
Experience is a more sustainable advantage than price, selection, or service. It’s much closer tied to your brand reputation than any of the other attributes. Starbucks’ Brand Experience allows it to sell custom CDs in-store. Disney’s Brand Experience allows them to put their name on everything from clothing to cruise ships. By articulating your identity outside of your current product or service offering, opportunities to create a holistic, margin-widening, experience for your customers will present themselves.