The great wild card in the entertainment economy is the creative element.

 This is a little scary for businesspeople who are used to making their decisions on the basis of exhaustive spreadsheet analyses. There is no spreadsheet that can fully predict what the public will prefer.

When Steve Jobs, CEO of Apple Computers, enters the stage to introduce new MacBooks or iPods during the annual Apple Keynote, thousands of customers applaud him cheerfully before he has even said a word. Ten thousands watch him online until servers crash because of bandwidth limitations, and hundred thousands read live web logs that have been set up by customers in the audience. The company’s most loyal customers bought pricey tickets to witness Mr Jobs introduce new gadgets during a two-hour commercial that also features special guests. During this year’s (2006) Keynote, applause peaked when Intel’s CEO, wearing a white space suit, stepped out of a cloud of smoke to deliver the message that Intel is ready for Apple. It seems that Mr Job played the right card.  By introducing entertainment to his products, he is selling a lot more than just a computer: a creative lifestyle.

By following an entertainment approach, companies have managed to differentiate themselves from rivals in an increasingly competitive world. Apple is not the only company that saw its sales go through the roof as a result of what is also referred to as the introduction of the “e-factor”. The “e” allows high profit margins, attracts new customers looking for a highly entertaining pastime, and - sometimes – attracts tourists. This is often achieved not through the product itself, but by arousing a customer’s emotions. Once a potential customer has become emotionally bonded to a product, the product’s characteristics are not the only criteria for the decision. Thus, fun associated with the purchase or special treatment during the act of purchasing has become a critical factor.

To sex up a product or service with the e-factor is by no means the only strategy pursued by companies today. However, entertaining the customer has been successful in many cases. For a company to be entertaining, it must manage to be perceived as creative. The processes that lead to this result, however, will involve only few creative tasks: research about customers, their needs and their perceptions. Panels have to be administered, surveys have to be conducted. Detailed, careful planning and consulting are essential. These usually involve risk modelling and extensive spreadsheet analysis, which are essential for the company in this transforming process. There is evidence to believe that often the most successful companies with the e-factor are also companies that have embraced the merits of the digital revolution and used it in its decision making processes. While a spreadsheet will never replace a creative idea, it might be a well suited tool to pave the way for a creative idea.

Also, a company that wants to attach an “e” to itself must have raised sources of funds to undergo major changes to its products, its products and its strategy for becoming a company with the e-factor. It seems unlikely that these major changes to a company’s image or profile can be financed without the funding by outside sources. Changes may affect the product or its presentation and may therefore involve capital intensive stores in prime locations or huge redesigns of existing locations. Banks and investors will not be persuaded of supplying their capital for these changes on the basis of mere creativity. Promising business plans based on plausible facts are of interest to them. Again, a spreadsheet will be of great help to quantify the direction the company is pursuing.

It seems that companies that used in-depth spreadsheet analyses have successfully introduced creative and entertaining elements to their products. They have therefore become tremendously successful and gained competitive advantage over rival companies. This success can be attributed to extensive planning and the careful monitoring of customers and staff. Entertainment companies must have calculated keenly and, with those calculations, convinced investors to supply them with sources of funds for such intangible things as selling its products by offering entertainment. Although Mr Jobs might have the most suited computers to do all these dull (spreadsheet) tasks for him, he still devotes three full days intensively to prepare every word and every move during his oh so “creative” keynote event.

{easycomments}