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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. (>>Tweet this<<) For example, the subgroups included both main and starters displayed together and were based upon ingredients.

This meant going up and down each subgroup until one had an idea of what were the choices for starter or the main dish. As if that wasn’t confusing enough, there were also daily specials listed on a separate tab!

One of the advantages of using a digital menu is that it can be changed with the click of a button. There is therefore, no reason for this complex system – unless it was designed to ensure every client saw every dish.

From our perspective, it just made for a frustrating waste of time. Lunches are generally pretty time sensitive and we only have a limited window to eat out and return to work on time.

Our meal presentation

Customer satisfaction is primeAfter the mishap over the water, we were not really surprised when the wrong main course dishes were presented to us. Or rather mine was correct but my friend’s was not what she ordered. Instead of removing the two dishes, mine was left in the sun – a salad! – while hers was sent back to the kitchen. Ten minutes later her dish arrived and again was not what she had ordered!

By this time we had finished our starters and my salad was getting warm. So my friend pointed out the mistake but again graciously accepted the dish. (I should mention that she is a lovely lady and far more forgiving than I would have been!)

 

Our bill and payment

As the meal had taken rather longer than we had planned, we were keen to leave as soon as we had finished. We asked for the bill, twice, only to be presented ten minutes later with what looked like a credit card, but no explanation. Five minutes of h and-waving finally got someone to explain what to do with it.

Customers queueing to payThey apparently have a shop associated with the restaurant and therefore encourage people to visit it before paying. Thus no bill for just the meal! The idea of offering for sale everything we had just eaten might be a good one, time will tell, but it did not facilitate our departure.

Luckily one of the more experienced waitresses offered to show us where to pay – in the shop! This was neither expected nor obvious as it is hidden from the view of those in the restaurant.

I can only imagine the joy of queueing up behind shoppers after a meal! I certainly don’t want to st and in a queue to pay; I want someone to come to my table for this.

 

Our discussion with the owner

Listen to your customersAs I previously mentioned, we were lucky enough to get the chance to share all our experiences with the owner. He was most apologetic and gave us a hefty discount.

However, what I appreciated even more, was the chance to share our experiences, to help this new restaurant to quickly improve. He is a true professional and asked many questions about what had happened, to better identify where improvements could be made.

 

Underst anding the problem

The hospitality industry is both simple and complex for customer centricity improvements. Simple because you get direct feedback from your clients through their choices and comments. Complex because it is like a show and different people have differing perspectives and preferences. That is why restaurants have menus. But they need to be laid out for ease of choice rather than for ease of cooking or stock taking.

Where every business is similar, is in the fact that the customer has expectations which must be met to satisfy, and surpassed to delight. (>> Tweet this<<) Which do you aim to do?

In the case of this restaurant, I believe the main issue came from the staff who had been hired. They were clearly inexperienced or had not had explained to them the importance of the customer. Perhaps their previous jobs were in a local bistro, which might explain their lack of attention to detail. The restaurant is perhaps in rural  surroundings but the owner is definitely highly experienced and professional. He has a long learning curve to make with his staff for them to be at his level. He’d better make it happen sooner rather than later. Customers rarely go back to a restaurant – or br and for that matter – when there is so much choice today.

Richard Branson, founder of the Virgin Group is famously quoted as saying:

“Take care of your employees and they’ll take care of your business”

This is certainly true for the hospitality industry, but less so for many other businesses in my opinion. For many companies, I believe that the customer has to come first. What do you think?

 

Learnings for everyone

  1. Hospitality needs to be hospitable, but so does any customer facing business. Everyone feels self-conscious when entering into a new environment. Make it easy for them to feel at home. Welcome your customer as a good friend or even family. (>>Tweet this>>) Apple and Walmart are outst anding in this, and both Samsung and Staples announced new ways of welcoming more people into their stores.
  2. When your customers speak, listen (>>Tweet this<<). In our restaurant experience, none of the staff really listened, let alone tried to underst and our situation. Putting yourself in your customers’ shoes – literally – is a great way to better underst and them.
  3. Make it as easy as possible for your customer to choose you. (>>Tweet this<<) Are your different line extensions easy to recognise? Can your customer quickly choose between the different variants? Do you have too many br and names and sub-br and differentiators? I know of some br ands that have five to seven on one pack! Three should be the absolute maximum. Brogan & Partners wrote a great piece on sub-br anding you can read HERE.
  4. Make it as easy to pay. Once a customer has made the choice to buy what you have to offer, payment shouldn’t be a further pain point. According to a Business Intelligence report over 70% of online carts are ab andoned. While you can’t walk out of a store without paying, you can leave without buying! (>>Tweet this<<)
  5. Welcome criticism and comments as the gifts they are. (>>Tweet this<<) The only way to learn and correct your mistakes is by knowing about them! Don’t manipulate satisfaction levels to meet your objectives. Attain them by truly satisfying and delighting your customers.

These are all obvious steps to being customer centric but sometimes we get so caught up in our br and that we forget about the customer. Which of these five is your weakest point and what are you doing about it?

Do Your Shoppers Face a Purchasing Dilemma? How to Give the Right Customer Choice Every Time

I’ve just come back from a week’s course in Spain organised by the European Monroe Institute. The course was on consciousness, a thing all good marketers need to develop, especially when it comes to their customers’ choices.

The reason I am referring to this course, besides the fact that it was led by the brilliant consciousness expert Arkaitz, is because we spoke about a subject that is very relevant for shopper marketing. I did in fact already touch on something similar in last week’s post. I’m speaking about decision making and the difference between Polarity, Duality, Dilemmas and Trilemmas. For clarification, these terms refer to:

Polaritythe state of having or expressing two directly opposite tendencies, opinions, etc

Dualitythe state or quality of being two or in two parts; dichotomy, the division into two parts, kinds, etc

Dilemmaa situation requiring a choice between (equally undesirable) alternatives.

Trilemmaa situation, analogous to a dilemma, in which there are three (almost equally undesirable) alternatives.

Last week I spoke about the Trilemma as it relates to project work; in this post I want to review the different situations in which we oblige our shoppers to make customer choices and how we can make it a lot easier for them.

 

Customer Decision-making

Mark ZHow many decisions do you make in an average day? Tens, hundreds, thous ands, even more? It has been estimated that an adult makes in excess of 30,000 decisions each and every day. (>>Tweet this<<) From what to have for breakfast, to what to wear and the route we take to work, we are constantly making decisions. However, have you noticed that when you need to make a decision, having more choices is not always better? More choice can in fact make decision-making all the more difficult.

In a recent article about Mark Zuckerberg, it was mentioned that he, as did Steve Jobs, wears the same clothes every day. A sort of uniform that enables him to make one less decision that he considers to be less relevant and unimportant to the success of his business. In the post he reveals that he wears the same clothes over and over again, because he wants to limit the time he spends making “frivolous” decisions, so he can concentrate on real work. As he says:

“I really want to clear my life so that I have to make as few decisions as possible about anything except how to best serve this community. I feel like I’m not doing my job if I spend any of my energy on things that are silly or frivolous about my life, so that way I can dedicate all of my energy towards just building the best products and services.”

Retail Decision-making

It has been proven that shoppers can end up leaving a retail outlet or online e-shop without making a purchase, when faced with too much choice. (>>Tweet this<<) This so-called “choice overload” was first mentioned in the book  The Paradox of Choice, by Swarthmore College professor Barry Schwartz.

Schwartz co-authored a study that supported his theory in the context of Web search  and other research has documented choice overload in contexts as wide ranging as gourmet chocolates  and retirement plans.

Choice overload is also one of the major reasons, besides price, for the success of hard discounters. They take away those “frivolous” but hard decisions we usually have to make whilst out shopping, by offering just one or at most two br ands or sizes of each article. We then have to make the choice between buying one of the two on offer, or purchasing neither (a trilemma). If you have the time, you might then go elsewhere to buy what you were looking for, but if the choice is of lesser importance or we are lacking the time, we will accept the limited choice and buy one of the two on offer (a dilemma).

Therefore choice is not always a good thing. So what can you as a marketer do to help the customer make the “right” decision in favour of your br and?

 

Know your Customers

The 4 Ws of customer underst anding

If you’re a regular here, you will know that everything you do should start with the customer and from the customer’s perspective. Underst anding their needs and desires, both stated and unstated, will enable you to better meet them. A satisfied customer is unlikely to spend time in choice and will automatically go for your product or service. You can read more about getting a deeper underst anding of your customer in another post entitled “How Well do you Know your Customers? Can you Answer these 12 Questions?” here. 

Portfolio Management

Many retailers and some consumer packaged goods companies have noticed that consumers today are suffering from “choice overload”.

Unilever LogoBoth P&G and Unilever have done some radical pruning of their br ands over the years. They have understood that most of their business comes from just a small number of all its products. P&G has around 300 br ands today, a third less than just a decade ago. Unilever has been even more ruthless. Since introducing its “ Path to Growth” initiative almost fifteen years ago, the number of its br ands has been culled from 1,600 down to just 400.

Retail organisations too are no longer willing to offer increased space for ever-exp anding br and portfolios. They often use the “one in, one out” rule and need strong evidence to add a new line from manufacturers. This has been especially true in recent years with the increase in the number of supermarket chains offering smaller, urban outlets, such as Tesco’s Metro and Walmart’s Express. You can read more about current retail trends here.

Walmart LogoWhat both retailers and manufacturers have realised is that Pareto’s Principle is highly relevant to the success of their businesses. The “Pareto Principle” or 80-20 rule, helps a lot in reducing the number of trilemma (or worse) type decisions that shoppers are faced with.

It therefore makes a lot of sense to regularly review your own portfolio and cut the “long tail” of slowest movers. Unless you have recently launched it or have a solid recovery plan in the pipeline, it is better to delete them.

 

Product Display

Another very good reason for reducing the numbers of br ands and variants in portfolios has to do with innovation. Today’s consumers thrive on novelty and constantly dem and new products and services. They quickly become bored or are satisfied for far less time than in the past.

In response to this, many companies have increased their level of innovation and new launches. However, neither retailers nor consumers want an ever increasing choice of products to sell or purchase. Therefore it makes good sense to have a “one in, one out” policy as mentioned above.

Identifying the best products and variants to put on shelf at each retail outlet or at a minimum by region, will enable customers to make those all important choices more quickly and easily. You will make the sale and the retailer will not be faced with stock that sits on their shelves, not moving; a definite win-win-win. (>>Tweet this<<)

Coming back to the issue of polarity, duality, dilemmas and trilemmas, I hope you can see that the situation in which a customer finds him/herself at the point of sale, whether they are facing a dilemma, trilemma or worse, will have a huge impact on whether or not they purchase.

Do you have something to add to this article and the customer choices we offer when they are faced with making a purchase decision? Please add a comment below. And if you enjoyed the post, then please share it with your friends and colleagues, so they too can be inspired.

If you would like support in reviewing your br and portfolio to identify the 20% of br ands and variants that may need to be deleted, contact me here and let’s discuss your situation. I know I can help.

C³Centricity used images from Microsoft, Unilever and Walmart in this post.

Sourcing & Services Matter: Why Price Alone Won’t get your Customers to Stay

Price wars are a st andard challenge of marketers, whether working on the retail or manufacturing side. They have become more frequent in the last couple of years following the recession. Consumers are today even more price sensitive and are searching for great value and even greater deals. However as most retailers are now claiming lower prices, it becomes less of a differentiator. I therefore read with interest that Walmart is moving from its emphasis on low prices to one on sourcing.

Walmart gives serviceIn 2007 Walmart replaced its “Always Low Prices, Always” slogan by “Save Money Live Better”, so this new push with the message “ Made in the US” is worth noting. This latest announcement is made in conjunction with its promise of an additional $10 million in grants to non-profits focused on “on-shoring” manufacturing efforts.

 

Target gives serviceTarget announced last October its plans to introduce the “ Target Sustainable Product St andard” which was developed to “establish a common language, definition, and process for qualifying what makes a product more sustainable.” Target will ask vendors to complete an assessment that is designed to determine a sustainability score for their products. Products will be assigned a score of between zero and 100 “based on the sustainability of ingredients, ingredient transparency, and overall environmental impact”.

 

Both these initiatives show a move to a more caring retail environment. A study run by the Boston Consulting Group at the end of last year, found that more than half of companies with sales greater than $1 billion are actively planning or considering to bring production back from China to the U.S. This rise from a mere 37% just six months earlier shows a significant shift in American sensitivity.

 

Jumping across the “pond” to the UK, something similar is happening in terms of shifting attention from price to value, or should I say values?

 

Tesco gives serviceTesco recently introduced their “ Price Promise”, a pledge to match the price of a basket of both own-label and br anded products at Sainsbury’s, Asda and Morrisons, or to offer customers a voucher at the till for the difference. Sainsbury’s has appealed to the Advertising St andards Authority, arguing that this claim was misleading customers. However, their wrath was, in part at least, sparked by the fact that this new Tesco pledge came in response to their own highly successful “ Br and Match” scheme, although the latter only compares br anded products.

 

Sainsbury's gives serviceSainsbury’s has now retaliated with the launch of a new campaign with the title “ Same price, Different values”, a possible dig at the fact that although Tesco won the ASA appeal, Sainsbury’s might appeal as they claim that their own-label products cannot be compared since many are locally produced. To support this position, the National Farmers’ Union has now taken a stance, backing Sainsbury’s. In light of last year’s  horse-meat sc andal, the values of retailers and the sourcing of food has become even more crucial, and Sainsbury’s sees this latest row as an opportunity to emphasise the difference between itself and Tesco.

 

If pricing has become (still is?) the entry stakes for retailers today, what else can they do to differentiate themselves and propose a viable alternative that appeals to today’s shoppers? Here are a few I came up with, based upon some of the more interesting initiatives and current trends in societal sensitivities:

  • Individualism: I live alone, as do a large minority of people in the developed world ( 47% in Sweden according to Euromonitor) How about offering smaller packs and individual servings? I would happily pay more for the convenience and the guilt avoidance. (I throw out vast quantities of food that is past its sell-buy date)
  • Localism: the horsemeat and other food sc andals have made people wary of buying from countries where they are unsure of their controls, hygiene or ethics. Identified sourcing and traceability brings trust and reassurance.
  • Fair trade guarantees fairness  and serviceFairness: This helps eliminate the guilt attached to buying (too) cheap products. We now know that products from the East are in general cheaper than products from the West. However, we still want reassurance that workers are being treated fairly. Fair Trade associations and the end to child-labour are causes most shoppers would be will to pay (a little) more for.
  • Sustainability: Recent weather changes have finally convinced everyone of the need to look after and protect our planet from further degradation. Therefore sustainability has become something to fight for. Whether this is reducing the use of palm oil to protect Indonesian rainforests or finding alternatives to bottled water which both wastes resources and pollutes the l and, people are dem anding more of manufacturers.
  • Packaging: Packs are no longer just for protection and shelf-impact, they provide information on ingredients, sourcing and links to apps that provide more about the company who made it or give access to reviews from other buyers.
  • Lowe's offers virtual room designerServices: Some retailers are offering schools for cooking, home repairs, creative pursuits or decorating (see Loew’s virtual room designer as a great example of this). No longer is it sufficient to sell products, people are getting help with making the best use of them and thus getting more value from their purchase.

 

These are just a few of the ways that retailers are building their relationships with their shoppers. They may come for price, but that is an unsustainable competitive advantage in today’s world. Retailers that maintain the loyalty of their customers will be offering more in terms of support and services to keep them coming back.  

If you would like to update your own retail environment and services, why not contact us for an informal chat? We can provide shopper journey mapping, in-store eye-tracking, at shelf facial imaging and many more forward-thinking tools.

C3Centricity used images from Dreamstime and named company websites.

New Year, New Challenges: 3 Helpful Ideas for Innovators

As we ramp up to face the economic, political and societal changes that will surely continue in 2012, many organisations are challenging their R&D and hopefully marketing departments too, to develop and launch new products and services.

With luck, these developments were already in their plans and pipeline for this year, but sometimes businesses are forced into going to market sooner than they would have liked, due to market circumstances or competitive activities.

An article in Marketing Week (read here) at the beginning of last year, mentioned that Unilever said that increased investment, as well as their “Bigger, Better, Faster” innovation initiative was the driving force behind its increased profit and sales in 2010.

As we are all only too aware, today’s customers are highly dem anding of novelty and each period of satisfaction becomes shorter and shorter, as they quickly get accustomed to the latest improvements.

In an earlier post (read here), I spoke of the research carried out by Jan-Benedict Steenkamp, a marketing professor at UNC Kenan-Flagler which showed that CPG / FMCG innovation needed to be one of the two extremes of “innovativeness” to succeed:

  • either a minor improvement, or renovation, such as a new flavour, size, colour, packaging, content …
  • or a radically new product that is significantly different from anything else on the market. These are of course more breakthrough and therefore more difficult to develop. Past examples have included microwave meals, Sony Walkman, Nespresso, iPhone, Ipad,

The interesting and perhaps disturbing thing about breakthrough innovation, is that timing is everything; bring it out too early and people won’t underst and or see the need; too late and competition might beat you. This is one of the reasons that IT companies quite often offer “beta versions” of their products or software before they are 100% ready and then quickly follow with a version 2 with corrected or improved functionalities.

Other br ands such as Nestlé’s Nespresso or even Gillette’s Silkience, the first shampoo with integrated conditioner, launched almost 40 years ago, were introduced ahead of the curve, before their consumers were ready for them. The companies then had to decide to either wait it out (Nespresso waited many years to become profitable) or relaunch at a later date, but then risk being pre-empted by competition, who then have the time to copy the new product.

So how can companies better underst and their consumers’ needs, desires, or even unarticulated and unknown needs, and launch just in time to benefit from them? Here are three ideas that I came up with, but I would welcome your input too:

1. Develop Future Scenarios

Most organisations today are following trends, but as competition is almost certainly following the same ones, there is no competitive advantage and little chance of benefiting from identified tendencies. It is only when the trends are turned into future scenarios that the real competitive advantage appears.

 

2. Identify lead countries

Most industries have markets where the consumers are more dem anding or more open to innovation in certain categories. These are great countries for both market testing, as well as for showing others what is likely to happen in the near future. Such examples include:

  • fashion in France and Italy
  • technology in Japan and the USA
  • retailing in the USA

 

3. Collaborate with neighbouring industries

Several companies have formed alliances with others to either prepare first level ingredients for their own product preparation or to develop manufacturing technologies or retailing opportunities with cross-over possibilities. Examples that come to mind include:

  • Sony-Ericsson: a joint venture by Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones
  • The retail giant Walmart formed a joint venture with Bharti Enterprises, Inc., one of India’s leading business groups, which led to their opening business there in 2009.
  • Nestlé and Coca-Cola formed a joint venture for Ice Tea (just ended)

 

Today’s consumers are highly dem anding of bigger, better and faster innovations, so companies must build speed and flexibility into their new product development processes and tools to answer these needs. Being better prepared is half the battle.

How are you preparing for the constant dem ands of your own customers and consumers? Please share your ideas and stories below.

For more ideas on new product and service development, please check out innovation on our website: https://www.c3centricity.com/home/vision/

C³Centricity sources images from Dreamstime.com

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