Interview of Domenick Celentano - The Third Place from Toilet Paper on Vimeo.
When Howard Schultz, CEO of Starbucks started the company in 1987 he realized that he was selling more than coffee… it was an experience that people gladly pay $3 plus for Latte’s and Cappuccinos’. He borrowed the concept of the “Third Place”.
Per WikiPedi, “The third place is a term used in the concept of community building to refer to social surroundings separate from the two usual social environments of home and the workplace”. As Schultz told the New York Times “…he wants Starbucks to become a “third place” in people’s lives - a sort of link between home and work where you can read the paper, download some tunes, buy a book or two, and either prepare for the day or wind down from it”
When you develop your business primarily around something tangible, you invite comparisons many times related to price. This begins the process of commoditizing your business, making it difficult to compete, particularly with larger companies that can offer price as their Unique Selling Proposition. To avoid this problem, you need to turn your business into the Third Place:
• Borrow, Adapt, Adopt!. That’s what Schultz did in selling the Third Place vs. just Coffee. He borrowed the Third Place concept of a building a community separate and apart from home and work; He was not selling coffee first… but selling a “Living Room” where coffee was served. He focused on the environment to enjoy coffee along with a social engagement or just having alone time. Does Dunkin Donuts or McDonalds sell you a “living room”? Look to other successful business that create a fun, exciting, unique place, whether it be a real place, such as in retail, or place that exists in the consumers mind.
• Turn your Customer Service into Customer Delight! We all want to satisfy the customer, but satisfaction, in the marketing sense is really the lack of dissatisfaction; it is neutral. Who wants to be neutral! Create a place in the consumer’s mind that is a place where they feel delighted. Remember you have to do this not just once… but all of the time!
• Think of your business as a tree. What? Yes... a tree. Create an “Opportunity” Branch. Think of Opportunities as branches on a tree. Branches are Divergent… they just shoot out from nowhere and overtime become real, strong and an integral part of the tree. Each branch is unique. If you create a branch, you own it. You own 100% of that “branch” market. That branch is your creation of the Third Place so to speak. Wouldn’t you rather own a branch versus fighting a piece of someone else’s branch?
Starbucks borrowed the concept of the Third Place; the consumer need for a bridge between home and work. They took this concept to create their own branch of the coffee house market that no one else owned and Delighted their customers the first time and repeatedly thereafter.
Success leaves clues everywhere; you just have to develop the mindset to look for them.
By Domenick Celentano
Domenick is a business consultant serving the food business and family run businesses. He is also and Adjunct Professor at Farleigh Dickinson University, Rothman Institute of Entrepreneurial Studies. You can visit his web site at www.thefoodpreneur.com or http://inside.fdu.edu/pt/domenick_celentano.html.
