March 26, 2017

Allie’s Donuts

This morning, I drove twenty miles to get donuts from Allie’s in North Kingston, RI.

According to Google, there are more than fifty donut places within a ten mile radius of my house. There are three within a mile.

Therefore, I drove twenty times farther than necessary to get donuts.


But wait! There’s more...

I’ve been going to Allie’s pretty much my entire life. I know that once I get there, it’s virtually guaranteed that I’m going to have to wait in a long line.

This morning was no exception. There were probably thirty people in line when I got there. I waited about ten minutes outside in the cold, and another five minutes inside before placing my order.

Based on past experience, I can be in and out of the donut place up the street from me in about three minutes.

Therefore, I waited in line five times longer than necessary to get donuts.


But wait! There’s even more...

Allie’s donuts aren’t crazy expensive, but they’re not the cheapest either. I spent about $20 for a dozen donuts and a coffee. According to their website, I could get same for $13 at the place up the street.

Therefore, I paid fifty percent more than necessary to get donuts.

So here’s the question:

Why do people drive farther, wait longer, and pay more than they need to?

I could list a half dozen reasons why I personally decided to go to Allie’s this morning. But my specific reasons are not important. In fact, they are probably different from the reasons of the other people I waited in line with.

What all of us did have in common, however, was that we each based our decision largely on intangibles.

Things like brand, ambiance, nostalgia, sense of community, and so on.

Feelings, really.

Going to Allie’s creates a very different set of feelings compared to zipping through a Dunkin’ drive thru. Neither is inherently better or worse, but they’re extremely different.

This is not some hand-wavy BS. Intangibles play a big role in people’s buying decisions. It’s not all about increasing the bottom line, or having an ROI measured in dollars and cents.

Don’t believe me? Test it for yourself...

Every time you buy something, ask yourself “Why didn’t I buy the cheaper one?” or “Why did I wait in line for this?” or “Why didn’t go to the closer store?”

You’ll start to notice that your decisions are actually quite a bit more complex than conventional wisdom about consumer behavior dictates.

And of course... this applies to YOUR CLIENTS as well. If you want to stop competing on price, intangibles are a perfectly reasonable way to differentiate yourself.