When Hospitality is Not Hospitable. 5 Learnings for Every Industry

I had lunch last week with one of my ex-colleagues. We decided to try a new restaurant close to where she works. It’s only been open a month, and it shows. This hospitality outlet certainly has a lot to learn about customer centricity!

I was able to share our “adventure” with the proprietor when his manager (naively?) asked us if we had enjoyed our lunch. I don’t think she expected all the comments we made. However, she quickly called the owner over, who was extremely interested in listening. He heard our detailed description of our time there with patience and encouragement, asking lots of questions as our tale unfolded.

I therefore, thought I’d share our experiences as they are useful lessons for anyone who wants to be more customer centric. Whether you are in hospitality or not, putting the customer first makes good business sense.

 

Restaurant arrival

Welcome your customersThe restaurant is situated in a new shopping precinct and therefore still has to increase its awareness and make a name for itself. This is important, as many of the issues we had should have been sorted out during the first month since they opened.

It was a warm, sunny day and the restaurant had two attractive terraces laid out for lunch. No-one was there to greet us, so we went inside and asked to be seated. I should mention that we were relatively early and only three other tables out of the more than 40 were occupied.

The Maitre d’ showed us to a small table for two, squashed between other larger tables. When I asked if we could have another table on the edge of the terrace, my request was met with disapproval. The restaurant was not full  and they obviously didn’t expect to be on this midweek lunchtime. Only about a half of the tables were laid out for lunch. I therefore, requested again that he accommodate our desire. He grudgingly accepted, adding that we’d have to move if someone else wanted the table! Of course we would!

 

Our order

As we sat down the maitre d’ asked if we would like an aperitive. We said no, but I ordered sparkling water and my friend still water. One of the waiters quickly came back but with a liter bottle of sparkling water. Being thirsty, my friend graciously accepted to drink the sparkling water. In fact, it was poured out before she could say anything.

I hadn’t seen my friend in many months, so we had a lot to discuss and catch up on. Therefore not surprisingly we took time to choose amongst the multitude of dishes, which were all new to us. Our final choice was not facilitated by the menu being on a tablet. It was already difficult to read outdoors. In addition reviewing and deciding amongst the many dishes involved multiple clicks. We had to skip back and forwards to make our choice amongst the many different and somewhat arbitrary subgroups.

Customer choiceIf only someone had thought about their clients’ needs, the menu would have been laid out far more logically. Continue Reading

The Highly Effective Habits of Truly Innovative Companies

A couple of months ago I shared what I consider to be the Ten Mistakes even Great Companies Make when innovating. Whilst it is useful to have these “watch out” lists, I believe it is also beneficial to take a look at how other companies get it right.

This post was prompted by a new client who is one of those already doing innovation extremely well and yet is still looking to improve their thinking. That for me is the sign of a truly innovative company. So read on for some ideas on how you too can become great at innovating.

Set Stretch Launch Targets

Let me start by saying there is a huge difference between the quantity and quality of innovations in almost all companies. In fact I believe there is an inverse relationship between the two. Those that innovate a lot rarely do it well. I think this is because they have the pressure of meeting objectives of numbers of new launches, rather than numbers of successful launches.

What is a successful launch? For me it is meeting or beating carefully thought through and calculated objectives. Not those wishfully high numbers used to get management buy-in for the launch, nor those ridiculously low targets that everyone knows will be met even before the new product is launched. No, I mean objectives that are stretch targets but achievable with the right plan, actions and effort. In other words SMART.

Be Inspired by your Customers

There are a lot of very clever organisations, especially in the technology area, which develop incredibly innovative products. Apple is (was?) obviously one of these and until recently, was admired for its innovations. Now it has been claimed that Steve Jobs didn’t believe in market research. This is untrue. He did believe in market research, but market research done right. He didn’t ask consumers what they wanted, because he said they didn’t know. Instead he asked them what their problems were, what they dreamt about. He then showed them his answers to these and got their reactions. Even when he got his answers, he didn’t immediately start adapting products to meet these stated needs, but rather worked to underst and what consumers meant by what they asked for. As the infamous Ford quote says

“If I’d asked customers what they wanted, they would have told me a faster horse!”

Jobs didn’t build a faster tape player, or a smaller one, or a lighter one. He made “music on the go” more convenient, more accessible and above all, more fun.

Use a Flexible Approach to Idea Generation

Many companies approach innovation as a strict process. They will use something similar to the below funnel, brainstorming for a multitude of ideas that eventually get whittled down to the one or two new launches that are finally chosen.

St andard funnel used by companies lacking innovative ideas

There are many companies today offering new processes and ways of innovating, but they all come down to a finite number of alternative levers:

  • Start from your strengths and / or weaknesses
  • Start from the strengths and / or weaknesses of your competitors
  • Extend into adjacent categories
  • Extend into new channels
  • Extend into new presentations (packs, prices, communications)

They also use one of three models to reduce their number of possible choices in their selection process:

  • Start large and reduce down (the st andard “funnel” approach shown above)
  • Start small and exp and before selecting (inverse funnel approach)
  • Repeated executions of the combination of the above expansion and contraction of ideas (sometimes referred to as the accordion approach)

Whichever you decide to use, you eventually get to a decision of the one, or few, launch choices, at least in most cases. Continue Reading

NEVER Succeed at Innovation: 10 Mistakes even Great Companies make

There have been many attempts to dethrone the blond supermodel doll Barbie over her fifty plus years of existence, mostly without much success. The latest endeavour (named Lammilly, after her creator) is different in that Nickolay Lamm is going after co-funding and has already achieved over $350,000 in just a few days according to the website.

This interesting addition to the “Anti-Barbies” story prompted a number of questions in my head:

  • Is it wise to go after a declining segment?
  • What was wrong with Barbie’s customer satisfaction?
  • Who is the target for this new doll? Child, adult, collector?
  • Why now, after so many previous unsuccessful attempts at dethroning Barbie?

Those questions and various discussions on FaceBook then got me thinking more generally about innovation and how companies have adapted their processes (or not) to today’s connected world. So here are my thoughts on how NOT to innovate:

1. Change the colour, perfume or taste of your current product and then charge more.

Pepsi innovation of Crystal PepsiThis is what Pepsi did when launching Pepsi Crystal: it lasted less than a year. Interestingly this is also what Apple just did with its iPhone 5C, except it charged less. Again it is already being discounted at Walmart because of disappointing sales, which might just be a good thing for Apple in the long run. Sales of the 5S remain buoyant and any damage to the corporate image caused by the cheaper 5C should hopefully be significantly reduced.

2. Organise an innovation team and provide them with a separate office, ideally far away from the current business.

If this is how you are set up internally, get the team back into talking distance with the rest of the business. Rather than stimulating creativity as it has been claimed to do, by being separated from everyday business concerns, it actually alienates everyone else to innovation and decreases overall creativity.

3. Make sure R&D heads up innovation so your new products can make use of your technical know-how and skills.

R&D needs to connect with customers for improved innovationWhilst this may result in technically improved products, they are all too often not in line with consumer current needs or future desires. Your research people need to connect with your potential customers regularly so they can be tuned into customers’ wants and current frustrations. Wouldn’t you rather have your R&D developing new products that practically sold themselves? As Peter Drucker said “… know and underst and the customer so well the product or service fits him and sells itself” (>>Tweet this<<). If R&D are in constant contact with your customers, they will always have them in mind when planning their product development.

 

4. Don’t let people from outside the organisation work on innovation; prefer well-established thinkers from within the organisation, preferably with more than ten to twenty years in the company.

This often happens as the result of a naïve manager lacking the required confidence to accept criticism, to challenge the status quo and to get out of their comfort zone. No person, let alone an organisation, can be an expert in every area. Continue Reading

Is Apple’s Latest News, Good or Bad? How to Exceed your Customers’ Expectations

Apple’s news this week made some people excited whilst others were disappointed. Whichever “side” you were on, Apple’s challenge these days seems to be to not only meet, but exceed the extremely high expectations of their customers. Thanks to continuous innovation and their previous exciting launches, people have come to expect great things from them. This is why so many were somewhat disappointed with the “small” innovations announced this week.

This got my thinking about how we condition our customers to expect certain things from us, by the very nature of our actions, promotions and new product launches. This is why it is vital to always surpass these expectations whenever we can. It keeps our br and fresh in our customers’ eyes and renews their confidence in their choice of us.

Are you confident that you are constantly doing everything you can to surprise and delight your customers, to ensure you keep your competitive advantage? If you hesitate, read on; I have some ideas for you.

Hospitality

Dove Creek LodgeLast year, on one of my regular trips to the US, I stayed one night in a small lodge on Key Largo in Florida. If I hadn’t prepared my trip by checking out possible places to stay on Tripadvisor before I left, I wouldn’t have known about it, as it is hidden by greenery, even though it is on the main US 1 highway. I would highly recommend this lodge (Dove Creek Lodge) if you are in the area; not only does it offer great value for money, but they are very customer centric. They couldn’t do enough for me, even though I was only there for one night.

What touched me in particular, was the way they appeared to search for ways to surprise and delight their clients in everything they did; far beyond what you would expect, even from a star-rated hotel. For example, instead of plates of fruit, meats and vegetables for breakfast as is usual, they presented the same foods, but as sweet and savoury kebabs. Rather than serving a large bowl of yoghurt for everyone to dip into, they presented delicate glass cups filled with Greek yoghurt, fruit and granola, or graham biscuits with key lime cream. The whole stay was perfect but there is every chance that I will remember it longer than other places in which I have stayed, because I was surprised and delighted by that original breakfast presentation.

Replacement Products

OK so you think that you have satisfied your customer when sending a replacement for a (perceived) faulty product? How about sending it express delivery, so they get it in record time? This will amplify your already good customer service and your customers will be delighted. Many companies add coupons as an extra, especially in the US, but those don’t delight or surprise any more.

You could offer samples of new products as well, but just make sure they are relvant to the customer- I recently received a “normal” version of a “hypo-allergenic” product I had returned due to an allergy! Continue Reading

What Martin Luther King & Apple have in Common: Inspiration & Excitement

The world’s press is full of references to Martin Luther King’s famous “I have a dream” speech this week. This is because Wednesday was the 50th anniversary of one of the key moments in American civil rights history, even if these days the 28th August 1963 is better remembered for King’s speech than the March on Washington itself.

Some claim that the speech was in fact something of an afterthought and came about because one of his supporters supposedly whispered in his ear to “Tell them about your dream.” His speech inspired thous ands of people then and continues to do so even fifty years on. It also inspired me to write this post, although I need to paraphrase it slightly:

“I have a dream that one day this world will rise up and live out the true meaning of its creed. We hold these truths to be self-evident, that all products are created equal”

Even altered they remain inspiring words indeed, but unfortunately, when it comes to innovation, successful new products are rarely created equal. Why then did I find my inspiration for this post in them? Because I believe that the main reason many new products don’t sell as expected, is because they are sold as such – as just new products!

Today’s consumer has so much choice that product benefits on their own rarely sell. Consumers dem and so much more. They ask that they are in fact sold a dream! An inspiration to believe in a better world for them and their families.

Does Apple sell just a computer, an MP3 player, a mobile phone? No, they sell creativity, excitement and individualism. I am not criticising their products, they are of course fantastic, but rather highlighting that even if their products are sometimes said to be better than their competitors, Apple is selling each one emotionally. They have found a way to build excitement, longing and love into each one of them. Who else has people camping out overnight to be amongst the first proud owners of their latest product? Apple has enabled each and every consumer to feel unique, special, privileged, an individual. And in this mass market world that we live in, this is certainly something that we all desire, dare I say crave?

So what can we learn from Martin Luther King and Apple in launching new products that will sell? Many things I am sure, but here are the first three that came to me:

  1. Inspire a dream – why will your customer’s life be better with your product or service, and I mean emotionally not just rationally? Describe and picture their future with your product or service in it, and make them crave it even before it is launched.
  2. Build emotion – make consumers excited by the launch; build anticipation, make the wait an integral  part of the sell, so that they will be lining up to buy it. Use tease campaigns, get press coverage, talk about it in interviews and on the TV weeks, even months before launch if you can.
Continue Reading

Where’s Home? Using Br and Source as a Competitive Advantage

Thanks to sc andals in many countries in the last few years, the global Food and Beverage industry has been forced to recognise that consumers want to know where products are made and from where their ingredients come.

Most US retail food stores are now required to inform consumers about the country of origin of fresh fruits, vegetables, fish and meat. The final rule to implement country-of-origin labeling (COOL) took effect on March 16, 2009 there. Sales of prepared dishes containing beef dropped significantly in Europe earlier this year and this resulted in lower prices for wholesalers and eventually also for the farmers. According to Reuters, a recent poll run by Consumer Intelligence in the UK, showed that more than 65% of respondents said they trusted food labels less as a result of recent incidents, so in fact the whole food industry has been impacted.

This interest in sourcing is happening in other industries too, but rather than seeing these dem anding consumers as a challenge, you can answer their thirst for information and turn it into a competitive advantage.  To illustrate how you can do this for your br ands, here are a few br ands, including some of the global heavyweights,  that have done exactly this.

Beverages

Wine, alcohol and coffee have always been sold primarily on origin, because it has a significant impact on taste and consumers’ enjoyment of the products. However the br ands in these categories have usually been built upon their blending expertise or regional knowledge.

SOURCE: Nestle.com

Although tea has also used sourcing to differentiate itself, it is only recently, with the launch of Nestlé’s Special T that a br and has built itself based upon the country of origin of its ingredients. Special T offers teas from five regions of the world, Japan, China, India, Ceylon and South Africa and claims to propose to tea-lovers the same quality and ease of preparation as the very successfulNespresso system.

 

Electronics

Apple.com

This post was prompted in part by the latest, rather indulgent campaign of Apple. The company has been running a cross-media ad campaign with the sign-off “Our Signature“, to state and reinforce its core values. Whilst it cannot claim American sourcing, it has cleverly made an association with the US through their claim “Designed by Apple in California”.

Some, dare I say many, consumers will “hear” American and attribute a better image to the br and than they would with the reality of Asian sourcing (no criticism intended). The ad is also, at least in my opinion, a covert attack on Samsung’s iPhone-threatening Galaxy range whilst also responding to the growing dem and in many countries to repatriate labour from Asia.

Apple has responded to their customers’ need for information by turning a possible perceived negative (Asian sourcing) into a positive (Californian design). Very clever.

 

Cars

Renault logo

Certain industries have perceived best-in-class country associations; take French perfume, Egyptian cotton or Italian fashion. German cars have also been seen as the most robust and well made, at least in Europe, even if they are not always the most attractive in terms of design. Continue Reading

How to Innovate better than Apple

Last week I gave a lecture to a group of Executive MBA students at Miami University. It was a fabulous new experience for me, having only done lecturing in European Business Schools until now. There were lots of great questions and many comments about why organisations do what they do when looking to innovate.

It’s always easier to identify the sub-optimal processes a company uses when you’re on the outside and even easier to suggest possible changes that are needed, but when you are in the heat of the action, it is not so obvious.

I therefore thought it would be useful to list some of the ideas we came up with, in the hope that it will help all those challenged to improve the status quo within their own organisations and to provide some new ways to look at innovating outside the box.

 

#1 What business are you in?

When you are looking to innovate, instead of starting with your own current technology and skills, or products and services, how about taking a step back and thinking about what business you are really in. Lego is a great example; they realised that they were not selling (just) toys; they understood that they were in the imagination business. Which business are you in? Do you have an opportunity to redefine it? Here are some ideas to get you started:

  • Food: Family Time, Neutraceuticals – offer family sized portions, children’s play areas, partner with another industry as Nestlé did with L’Oreal when creating Inneov
  • Cigarettes: Personal Pleasure – tobacco companies should be going far beyond their current simplified expansion into electronic cigarette offerings
  • Alcohol / Beverages: Fun / Relaxation: br and lounges, music, video or internet services
  • Pharmaceuticals: Wellness – instead of curing or treating, offer prevention

 

#2. Can you add something new to an existing product?

Professor Steenkamp Knox Massey Distinguished Professor of Marketing and Area Chair of Marketing at Kenan-Flagler, proved back in 2007 that at least for Fast Moving Consumer Goods, small innovations (which are often referred to as renovations) can be just as successful as large step-changing breakthrough innovations. His research came to the conclusion that it was the ones that fall in the middle of “newness” that don’t meet with significant customer success. So what small changes can you make to your current offer to make it more appealing?

How about adding sound to a food, as Kellogg’s did with their Rice Crispies or Nestlé did by adding a layer of chocolate to the top of their cream deserts in France? Or what about adding smell to your outlet, as bakers and coffee houses already do these days, or Singapore Airlines did many years ago? A small change can have a big impact, especially if tapping into a different sensory perception from those customers are used to having stimulated.

 

#3. Can you add a service to the product?

Some products are actually designed to work with services, which are quite often the more expensive part of the sales equation (e.g. Continue Reading

Successful Innovation comes from answering Desires not Needs

What is the difference between a need and a desire? Emotion, that’s what. A need is something for which someone has a necessity; a desire is something they want or crave, whether they know it or not.

There are the three main types of products or services that companies offer; it is important that you underst and the difference between them as well as what you are offering or planning to innovate, if you are to be successful.

Some organisations speak about articulated, unarticulated and unimagined needs, but they miss the power of emotions if they are considering all three as simply needs to be addressed. Unless there is an emotional connection between what you are selling and what your customer perceives he is buying, you are likely to remain at the level of a commodity, or at best are restricted in the price you can charge. Only emotional connection brings passion into the equation, when customers desire or crave your product or service and are willing to pay (almost) anything to have it.

Examples of Great Emotional Connection

Think about Apple as a great example of a company that brings passion into their products, so that potential customers pre-order or spend the night queuing in front of the shop in order to have the privilege to give Apple their money in exchange for the latest gadget.

Now I love Apple as much as most people, but are their products really worth more than their competitors? Was the iPod really that much better for listening to music on the go? Probably not, but it is their customers’ desire to be a part of the Apple “family” that makes them crave their products.

Another example is Marlboro cigarettes. Do they really taste better than other br ands? Maybe, but it is not the taste (alone) that makes smokers remain loyal to the br and; rather a feeling of community and adherence to a desired image.

And speaking of taste, what about colas? The now famous brain imaging study run by Baylor College of Medicine – you can read more about it here – showed that consumers thought Pepsi tasted better that Coke, but there was something very different happening in the brain when consumers thought they were drinking Coke or Pepsi. It was what the consumers were thinking that made the difference, a result of br anding.

So what can you do to make your customers think differently about your br and, so that they remain loyal to it, desire it and even crave your product or service? Bring in and stimulate their emotions; here are four ideas on how this can be done:

#1. Make them feel special, different, privileged

This can be achieved through:

  • higher prices – many premium and luxury products are priced more on image than on cost and their customers are happy to pay more for the associated image that has been created
  • membership to a br and club with special privileges – Nespresso is a great example of this; their clients get to order online and even get asked their opinion or to choose new flavours
  • personalised offers – unlike clubs, these are offered to a wider group of purchasers (on a mailing list for example) but the wording of communication and the offers proposed are personalised to each target group, so they are perceived as more personal

#2.

Continue Reading

Innovation: the First Step to Survival: 3 Steps to Harnessing Innovation for your Future

The first three months of 2012 have proven, once again, the existence of a br and life cycle— and that those who do not re-invent themselves to stay relevant ultimately face demise. 

Kodak—once the darling of Wall Street—files for bankruptcy, while Apple—whose stock was trading at $14.68 USD pre-split in 2001—is now trading at over $600 USD per share, and is considered the most valuable company in the world.

Many say that what led to Kodak’s failure was their lack of innovation.  That may be your perception, particularly in comparison to Apple, considered the gold st andard in developing categories no one knew they needed—MP3 players, smart phones, tablets, the list goes on.  (In reality, Apple was not the first in many of these categories.  But who among us recalls those early br ands??)

Yet, I would argue that what sets these two organizations apart was their DIFFUSION of Innovation – how they gained acceptance of their innovations!

E.M. Rogers, in Diffusion of Innovation defines “Diffusion” as the process by which an innovation is communicated through certain channels over time among members of a social system.

You can’t argue that Kodak wasn’t innovative.  They invented the digital camera.  Today, it is proposing to sell 1,100 of its digital imaging patents, just 10% of those it holds.  What they did not do, however, was take the lead in gaining customer acceptance of those innovations – others did!

Best practice Diffusion of Innovation

Apple on the other h and, followed Rogers’ model almost in text book form.  Take the introduction of the iPod as an example:

  • Rather than focus on the device’s memory in terms of bits and gigs, Apple’s communications highlighted the RELATIVE ADVANTAGE of the iPod to its customers – “1,000 songs in your pocket” was the headline when the iPod was introduced in 2001.
  • As the iPod became available for PCs, it was marketed for its COMPATIBILITY
  • Apple Stores encourage h ands-on TRIALABILITY
  • Celebrity endorsements demonstrate OBSERVABILITY
  • While marketing messages are always SIMPLE

Apple certainly aligned itself with these innovations, going so far as to change its name from Apple Computers to Apple in 2007, freeing itself from the ties that bound it to the computer industry.  One must ask if Kodak ever saw itself as more than a film company.

The 3 Lessons of Innovation

But, the lessons do appear to be clear:

  1. While short term profitability is required to satisfy shareholders, future forward thinking (5, 10, 20 years out) is required.  Where are you going?  Where do you want to be?
  2. Define who you are and what you do in a way that allows for innovations / evolutions as markets and your customers’ needs changes.  Apple redefined itself from a computer company to a broader technology company – literally changing its name.
  3. Certainly don’t believe that if you build it, they will come.  Gaining acceptance and adoption of a category shifting innovation is a science, as outlined above.  There are key steps to take.  Skip them at your own risk.
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