American Girl has been a profitable part of Mattel for years, unlike its iconic Barbie line. If you look at the first quarter of 2013, you see that while Barbie sales continued their decline, by an additional two percent, American Girl was the second fastest-growing division of Mattel, with a 32 percent increase in revenue. You know why? Because American Girl is an experience for a little girl, not a "thing that you buy."
When you purchase an American Girl doll (and the book that accompanies it), which will set you back roughly $110, you are just starting. You can buy accessories associated with the doll and DVDs, not to mention services from the American Girl hospital if you need doll repairs. American Girl hospital also sells services like ear piercing for the dolls, among other things.
But that's not even where it starts getting interesting. These aren't just dolls; they are an experience and designed that way.
Each doll has a story associated with its pricey little self. So, for example, the story of Kaya:
"Discover the adventurous story of Kaya, a member of the Nez Perce. Her people depend on one another for survival, so after putting her little brothers in danger, Kaya is given an insulting nickname. When enemy raiders invade her camp, Kaya learns from her mistakes by drawing strength from the stories and lessons of her elders."
What's associated with that story are clothing, books (a whole series), furniture, and accessories including Kaya's food. The food alone carries a price tag of $28.
There is one other facet to this that's even bigger. American Girl has 15 retail stores. What makes these different from normal brick-and-mortar shops is that they are designed around customer experience too. If you go to the store, not only can you buy the items associated with your daughter's American Girl doll, but you can also eat lunch with the doll, get the doll's hair styled, go to the theater with the doll and watch a movie or play about the doll's character, and a myriad of other experiences. An average trip to the store sets mom or dad back around $400.
And there isn't a single mom or dad who wouldn't do it again, because of the delight on the face of their daughter.
American Girl revenues have reflected this. They were more than $100 million in the first quarter of 2013.
Okay, all this is well and good, but what does it have to do with the long tail of customer experience?
The answer is...everything.
All of the American Girl experiences that I've discussed so far are the momentary aspects designed to delight the little girl with the doll, who is the end user in this discussion. But the end user and the customer in this case are different. The customer is the parent, not the little girl, because the parent (or grandparent) is paying for the doll—and all that goes with it.
What the doll, the story, the accoutrements, and the retail store activities reflect are what I call consumable experiences. They are momentary, they are designed to delight in the short term, and they have a tactical purpose—which is to get you to spend money on them. But by themselves, they aren't really creating a sustainable relationship between the customer and the company. For example, what if the child gets bored with the doll? All of the consumable experiences available around that doll become null and void—and no longer a revenue stream for the company.
However, if that happens, and the parents' experience over a long time with the company has been good to excellent, the likelihood of them encouraging the little girl to get a different American Girl doll rather than another company's product increases. Given the vagaries of little-kid interest, there is certainly no guarantee that the child will go for a different American Girl doll and not something else entirely, but the parents' encouragement will certainly increase the possibility that she sticks with Mattel.
How do you get beyond that consumable experience?
The first and foremost principle of designing and executing programs and strategies that take into account the long term is that the experience is more of a feeling than it is an object. That means that if I'm thinking about American Girl, I feel good about whatever it is that I'm thinking. While that sounds somewhat vague, it isn't. To make that happen, not only does it involve the consumable experiences that delight the little girl, but also a number of other facets that involve processes and relationships and policies, etc., plus interactions in varying channels.
In the case of American Girl, a customer experience that goes beyond a doll purchase and store visit would include (this is not a complete list):
1. the American Girl retail store experience (as outlined above) with your daughter;
2. the storybooks and history and accessories associated with the doll, which you can read about via print or online and/or buy in the store and/or online;
3. the ease of the transaction process for the buyer (i.e., the parent);
4. the type of customer service you get at the store, over the phone, or via the Web;
5. the store-associated interactions with you and your daughter that lead to follow-up activity of some kind—e.g., an invitation to an exclusive event related to the character of your daughter's doll—and the history of your store visits;
6. the Web presence of American Girl;
7. the availability of the products themselves when there is an interest in the acquisition (e.g., would you like to be told, sorry it's out of stock—and available in two months—and have to tell your daughter that?);
8. the ability of the tools to customize the experience (not the customization itself).
There is much more involved, but you get the idea. This is an overall customer experience that in the long run leaves you with a feeling that you want to continue your relationship with the company—meaning buy stuff and do things for a long while to come.
There is this saying (which I have to admit, I've had some responsibility in propagating) that "the customers' experience is only as good as their last memory." While that's somewhat true, there are multiple nuances to this. The most important is that if your customer has had a long-term overall good experience or bad one, it will color the effect of the experience of the last memory. Brush strokes color the pencil lines.
If I've had an ongoing excellent experience with the folks at American Girl and that experience includes seamless success, or nearly that in all the areas mentioned above, and something bad occurs, I'm likely to either forgive the problem or at least make it a lesser offense without much impact on the long term as long as the problem is solved. If it isn't solved, there is a likelihood I'll still be buying from the American Girl franchise.
If I've had an ongoing average experience with the company, the issue is likely to carry more weight with my long-term involvement than if number one was in play. That means the problem had better be solved or it will weaken my resolve to stay with American Girl.
If my ongoing experience has been poor, meaning that even though my daughter is loving the doll, the transaction process has been a real pain, the products I need to buy aren't available as easily as they should be, or I don't have much control over how I interact with the American Girl stores or Web site, the issue is likely to be the breaking point, even if resolved. Even if I stay, if the slightest problem comes up, I'm gone.
If you're going to sustain revenue and you care about customer experience, the one guiding principle that you can never forget, regardless of anything else, is that it is the long-term customer experience that matters and that the momentary experiences are just a part of the strategy, not the end point.
Paul Greenberg (@greenbe on Twitter) is president of consultancy The 56 Group (the56group.typepad.com), cofounder of training company BPT Partners, and director of research for The Bullpen Group. The fourth edition of his book, CRM at the Speed of Light, is available in bookstores and online.