How can Apple expect to get upwards of $500 for its new iPhone (and I suspect they will)?
Use this strategy (except the Treo part) when opening a new hotel, adding to your room rate, adding a new service, etc.,...and you have the best chance to win. Stray off-course...and it gets iffy.
Repeat from October 8, 2006...
When you hear that you "can't" do something, or that you "don't stand a chance", consider that it might be precisely the right time to figure out a way to do it anyway....
Just ask any Gator...especially a guy named Chris Leak. Oh, and Boise State will take your calls about this too.
Congratulations on doing what most said wouldn't be done. Here's to passion, perseverance, stamina...and not ever giving up.
We've been working on our travel schedules for 2007 with particular study of conferences and trade shows. We've found that some of these programs are fairly guarded of their attendee list. One show in particular wouldn't even release last year's list.
Considering that the primary reason most of us go to these conferences (especially B2B's) is to meet people, i.e., turn strangers into friends, and hopefully into customers, what's the point of going if I don't know who's going to be there? I understand that some companies have been around long enough to have loads of contacts and that some go just for the social aspects. But, what about the rest of us...the ones who choose the event based on the probability to build our business?
If you're putting on one of these events, why not have a website with real-time information about who's registered? Don't just show us a description of the work sessions and sponsor logo's...that's old school and frankly not that important. Why not show prospective attendees the best reason to come...the chance to hold a conversation with someone with similar interests and perhaps someone that they would have a hard time meeting otherwise?
When you go to a trade show, especially for the first time, you look over the list of who's on the floor...presumably to see if there's anything that interests you. You might even make a list of the "must see's". Why would it be any different for a trade conference?
Unless you're someone like Marriott, you are not in the market domination business...rather, you're in the minority business. Here's a quick example of what I mean.
And, if you figure in average length of stay and repeat visitation factors, you only need to attract or talk with about 20,000 of the 1 million people who come to town for the first time.
Even though more than 90% don't care about what you have to say, and don't want what you're offering, the old way of doing things has you sending messages to the 1 million, hoping to capture your 20,000. Now, let's say your marketing budget for the year is $300K. Simplified...yes, but that's 30 cents each to reach the 1 million...not much of a message. So, trying to capturing your share of the market is a waste of time, mainly because you don't have the resources to effectively get your point across to 1 million people. Anytime you see yourself starting to cast the net, it's time to stop, step back and think.
The new way is to focus all your efforts to connect with the 20,000...the minority. Your job is to get engaged with the right audience, hold a conversation and build a relationship with them. Take the same $300K annual marketing budget...now you have $15 (or, 50 times as much) per person to spend. That's a lot per message or per person by almost anyone's standards. And, it's guaranteed to be a much more effective campaign.
The temptation is to do it the old way because it's easier. You just co-op with the CVB, buy a mailing list, put up a billboard or buy a magazine ad...and keep your fingers crossed. And, in the old days, if you were creative enough, it worked. It worked because there weren't as many choices and not nearly as many messages. Now, unless you're Trump, you don't have enough to spend to rise above the clutter to capture you share.
The good news is that there's a new opportunity, a new and smarter way to spend your money and your time. But, the new way is much harder at first because it requires you to find the 2%. It requires you to dig, try new ways (start a blog, a guest advisory board, etc.), shake hands, talk to current guests, buy lunches, go to trade shows...to care how you communicate with people and to resist the temptation to waste people's time. But, once you're there...it's a gold mine. Everyone's glad to be there.
Connecting is more cost effective than capturing. But, it requires skill, passion and a strong committment to what you're doing...instead of relying on the game of chance.
Neighborliness...that's the one word definition of hospitality from Roget's Thesaurus. Sums it up pretty well I think.
And, just to add flavor...
Synonyms:
accommodation, affability, amiability, cheer, companionship, comradeship, consideration, conviviality, cordiality, entertainment, friendliness, generosity, geniality, good cheer, good fellowship, heartiness, hospitableness, obligingness, reception, sociability, warmth, welcome
Antonym:
If you infuse as much of the above (sans the antonym) into the functions of your day-to-day business...the SOP's, transactions, conversations and interactions, you'll be ahead in the game, probably way ahead.
I define hospitality as an art...a blend of flawless service execution and passionate care. Or, in other words, giving people what they want and delivering it in a meaningful way.
Like most remarkable things, the idea is relatively simple. Doing it well...that's the hard part.
Seth used waitering as an example in a recent post about the importance of listening to what customers tell you. A timely follow-up to my last post defining hospitality...you can't give people what they want if you don't listen to them. And, here's the really important part...you can't deliver what they want in a meaningful way if you don't understand why they want it...which is the key point to listening. You can't improvise, exceed expectation or anticipate the next request if you don't listen to understand.
Too often, service providors get caught-up in the process (bringing water to the table in Seth's example) instead of the art of what they are doing (understanding why the person asked for "no ice"). The best chance to be different, to perform beyond expectation and to do something meaningful is when you hear the odd request, a challenge to one of your rules or even a complaint. These moments are the real golden nuggets. But, you have to want to hear them first...
Sometimes, when you get a chance to see a company's play book, you don't find what you expect. That was my take after reading a recent Fast Company article about the inner workings of Toyota. While Ford and GM continue to lay-off workers and close plants, Toyota flourishes. In fact just this week Ford announced that 38,000 hourly employees have accepted buy-outs or early retirement (read the article). Yes, Toyota makes better cars. But, it's deeper than that. And, it's not related to the big three's burden of higher union wages and health benefits. Toyota pays well...without unions. Rather, it's about process and care. Unlike their U.S. counterparts, who are busy setting growth goals (or reduction for that matter) and meeting analyst expectations, Toyota concerns itself with the process of making better cars. Notice, that they aren't focused on making the best cars...rather, how to make them...continuous improvement. They figure if they focus on perfecting the "how", the "what" will come. Seems logical. So, why doesn't everyone do it? My guess is that it's not as fun to talk about saving paint and reducing waste as it is to talk about how good you think you are, or how big you're going to get. In other words, it's an ego thing.
Toyota has figured out that the best way to make the biggest and best wood pile is to keep your head down, and focus on chopping wood. The better they can make each piece, and the less resources they can use to make it, the better the pile will be.
Now, here's where the care part comes in. Sometimes, the result of the improvement process leads to job elimination...machines or related efficiencies replacing humans. Most companies call this a lay-off. However, Toyota seems to call it an opportunity...no, an edge. In Toyota's system of "everyone focuses on how to make the process better", it's very likely that the reduced workforce was the idea of the very workers being eliminated. So, instead of giving these people their walking papers, they reward them...and redeploy them so they can think of more ways to make things better...and so on. This replaces those nasty fear and job security worries with feelings of my employer cares about me, wants me to be a part of the improvement process and I might even get a promotion if I think of something new.
If all this sounds odd, it is...because most companies don't practice either of these things very well. I hope you're not one of them.
Now, I need to go chop some wood...no, really, I live where it's cold and propane costs too darn much. Then, I think I may trade in my Landrover...for a Toyota.
I recently read this quote in a WSJ article..."A good employee or a good sales associate might be worth five or 10 times an average one.". It's a very good article about the value of service...definitely worth the read. But, it's this quote that really garnered my attention. I think a great employee is worth far more than five or ten times that of an average associate...probably a hundred times more, maybe higher. Here's just part of my basis...based on my short twenty-two years in the biz:
Great Employees
They play to win
Average Employees
They play not to lose
You've noticed that my list is based on personality, traits and character...not on job skills. My list is based on raw talent...what a person comes equipped with before you get your hands on them. Raw talent is based on how people see themselves and what they want to accomplish in life...it's the seed for passion and remarkability. And, unfortunately, it can be the foundation for average. Your job is to sniff out what's underneath...before they get on board.
Average people need jobs. Extraordinary people want them.
Mine is just a partial list. I would love to see yours. I'll be spending more time on this subject in an upcoming podcast...and will be happy to highlight your add-ons.
Just how important is traffic? In some cases, it's real important. I heard it was extremely important to John Q Hammonds...for years (maybe he still does) he developed hotels by following interstate highways and building where traffic peaked...or was about to. A pretty good strategy judging by his portfolio.
In the end, the importance of existing traffic depends on the type of experience you create and whether you're trying to reach the masses, or a niche. An average product relies more on chance to be successful. Hence adding a flag affiliation to improve your odds...but, that's a subject for another post. So, the more traffic that comes by your front door, the greater the chance someone stops in to buy. Most fruit stands survive on this premise. Now, choose a location with lots of traffic and a place that people actually want to be...then you dramatically increase your odds. I think that's what JQH does so well. And, that's what most of the chains work so hard to do...find cheap land in a location with lots and lots of traffic...bingo, they collect 5%-10% of every room sold.
There are generally two paths to development. You create the reason people come...and your own stream of traffic. Or, you ride the coat tails of another...whether it's an interstate, Mt. Rushmore or a beach. The more "reasons" you create for yourself, the more insulated you are from someone else's peaks and valleys. Biltmore Estate is the primary reason people visit Asheville, North Carolina. And, as long as they remain interesting, they'll generate visitation...and the town benefits. On the other hand, you probably don't need to look very far to see examples of the opposite end of the coat tails spectrum. Most roadside hotels and convention center properties fit into this category...relying on the destination someone else has created and their location to be exposed to the most traffic. Of course, there are hybrids...unique and interesting properties that also rely on some outside factors. Some of the JQH propeties are. In fact, you could argue that a remarkable hybrid is the best of all scenarios...a good strategy, but it does require some luck.
So, on the surface, it seems easier to go the coat tails route. It's cheaper, quicker and requires far less imagination to get started. But, in the end, your destiny relies heavily on another...that's risky.
Consider some additional thoughts...
So, I ask myself everyday....what category do I want to be in? And, what am I doing to get there?
This article, Preferred Hotel Group’s 5:1 ROI Guarantee Yields 100% Success Ratio for 2006 Co-op Marketing Programs, illustrates the illusion I continue to see put forth about the effectiveness of traditional advertising programs. Essentially, Preferred is guaranteeing a 5:1 return on your advertising investment. But, are they? The example in the article refers to revenue dollars as the "return". Conversely, most ROI measurements are based on profit or net income, not top line revenue. And, that's how I suggest we look at advertising, or any marketing investment for that matter. So, the 5:1 probably returns a break-even scenario if you consider a 20% profitablity margin. That's not necessarily bad....but not as healthy as it may seem on the surface.
I've seen the effectiveness of many ad campaigns measured solely via revenue, incremental roomnights generated, etc. Unfortunately, that's a bit short-sighted. While more business is the obvious goal, don't lose sight of the real objective...to put more money in the bank?
I recently ran across these conversation starters while skimming ehotelier forums:
"Dear Hospitality Professionals, Can anybody provide me with information what it is like to work for the Concorde El Salaam hotel in Cairo, Egypt?"
"Currently Negotiating salary for a GM role in Asia. Can you please advise what the salaries are like or I should expect for a 61 room 5 star resort/hotel with 2 F&B outlets?"
This got me thinking about how technology has changed the way conversations occur, and more importantly, how fast information is exchanged. Consider the amount of time it takes for a stranger (prospective guest, employee, vendor, etc.) to know almost everything about your company. Consider who these people are talking to, who they're listening to and how they're doing it. Whether the information they gather is true, half true, or completely false doesn't matter. What matters is that now more than ever, they're basing their decision to buy, donate or sell based on outsider information...the stuff you don't initiate. You might call this process a reality check...information they gather from others is stacked up against what you say. If it jives, you're okay. If not, well...you might not get the call.
Here's the point...You no longer have control of the information or the conversations about you. Your website, advertising and PR plan are quickly becoming a sideshow as people find new ways of learning the truth. Customer evangelism is no longer limited to backyard BBQ's and to the office watercooler. Rants and raves are now being amplified to all corners of the planet...and at lightening speed. As a result, you only have two choices...do nothing and hope things go in your favor...or, become an active participant, learn and educate.
So, are you part of the "new" conversation? Have you conducted a Google search on your firm or hotel to see who's linking to you? Better yet, do you have one automatically delivered to your in-box each morning? Do you regularly monitor sites like epinions and trip advisor? Do you watch the blogosphere via Technorati? Does your website have an RSS feed? If some of this sounds like a a foreign language, I understand. Most people don't read blogs, let alone write one. And, most people don't check multiple on-line forums before deciding to talk with you. But...some people do. And, those people talk to other people. And, as each day passes, the minority gets closer to being the majority. You get the picture. I'm not suggesting you become a computer hack. I'm challenging you to embrace the fact that conversations happen...with or without you, and now, in places you may never have imagined. Your task is to somehow get tuned-in, jump-in when it's appropriate, or better yet, start a new discussion altogether.
The bad news is that technology has made the conversation game much more complicated. The good news is that technology has leveled the playing field, giving everyone an equal opportunity to spread the word about their product, and engage their audience...it's cheaper and easier than ever. Now, you just need to acknowledge the power, and make use of the tools available.
From Rayna Katz over at Meetings Industry Soap Box...one of her two peeves about luxury hotels and how a new hotel in North Carolina plans to solve it.
Peeve #1: guest corridors serving as the eternal resting place of used room-service trays. Nothing welcomes a meeting attendee back to the guest room at the end of a long day quite like discarded food and dirty plates in the hall. The solution: A micro chip in the trays that will alert the private dining department when the tray has been put in the hall and is ready for of the exact time and location of a tray’s migration from holder of a meal being eaten to unsightly remnant in need of collection. Genius, right?
Well, not so fast on the genius part. Might I suggest that the problem with those nasty room service trays is not so much knowing that they're there as it is making it a priority to go pick them up. This tech solution proposes that someone will go up each time the tray is pushed out the door...not practical, especially when you're busy. Or, maybe they'll go fetch them when there's critical mass (not much better than the current situation). The root cause of the problem is motivating the staff (not just room service, but all staff) to care...care about unsightly and sometimes hazardous junk in the corridor. Get people to make this a priority...and I think you can live without the micro chip...although, I must admit, it's a cool idea.
I just read this interesting post by Seth Godin about a dialogue he had with a resort marketer. She had asked him to help convince her bosses to lower room prices to facilitate company growth. He, of course, countered with the why don't you raise prices and be remarkable approach. It sounds like she didn't take that too well.
As you know by now, I'm not a proponent of the cheap route either. In fact, in almost every case, I'm adamently opposed. Discounting implies that you get less. So, unless you're actually offering less or something inferior to other choices, don't reduce the price. It's a long, slippery slope...in the wrong direction. On the other hand, like Seth points out, if you're "built" for cheap, that's different. Marriott, Hampton Inn, Motel 6 to name a few...are built on the premise of lowest price for the product in their respective segments. And, they've done well with it. Do you really think you can compete with engines like these when bringing your new "lowest price" hotel to their markets? Most probably not.
I actually took away another point from Seth and Anna's conversation. You can't convince someone to change their mind about something if they don't want to believe that there may be a different way to do it. From what I can gather, Anna and her bosses didn't want a different idea, they didn't want a remarkable consultant's honest viewpoint...they wanted someone else (preferrably someone credible) to tell them exactly what they wanted to hear...to rubber stamp their solution.
Consultants face this issue time and time again...and are faced with a brand defining choice. Do you play along and collect a fee? Or, do you take the risk of upsetting the apple cart, and stand for what you believe...to tell people the truth and what you think will solve their problem. The choice made will determine who you are and who you end up serving in the long run.
There are plenty of Anna's out there, enough to make a rather fine living. But, from my experience, working for them is frustrating and certainly more boring than for someone who actually wants to hear what you have to say.
Each time I'm faced with this "rubber stamping" scenario I ask myself these questions...Do I want to be known as someone who seeks alternatives, proposes non-traditional solutions and is willing to take some risks? Do I want to share the risk with my client to take some chances, and to create something really different? Or, do I want to spend hours creating justification for a solution I really don't believe in just to get a paycheck. Right now, I can still afford to do the former...I hope that never changes.
A record 1,200 people attended the Lodging Conference in Phoenix last month...and, for good reason. There's lots of good news, and it's an exciting time for our industry. Jim Butler's post on his Hotel Law Blog gives you all the details and STR slides...well done. Here are my key takeaways about the future...
No matter how you dissect it, this is good news...we continue to move along a path of "recovery" from the doldrums of 2001/2002. Unfortunately, as Jim also points out, there are mitigating factors in play for the foreseeable future...high cost of construction, steep price of land and a more restrictive financing climate. And, this is where the set-up usually begins...a robust performance climate, under supply in many markets and high cost barriers to entry. The result...not necessarily an overbuilding situation. But, I think, even worse...a flood of average product. Here's a likely scenario, especially for those new to our game...
The result is predictable...an influx of unremarkable properties, built to take advantage of the short-term cycle...which might do very well while the weather remains this nice. But, what happens when things change (and, they always do)? How will the average property stack-up against those that were willing to take some risk, to be different, to spend a little more up front to give people what they want?
If you're getting into the business for the long-term, how can you afford not to build something extraordinary...something that will last?
I've never liked using "new" and "first" as my primary stories because they don't last. The new part I've covered before. The first strategy only works as long as there isn't a second, or if you can somehow preserve and own the original idea. Being first demonstrates originality and the willingness to try something new. And that has value...people like that. But, what happens when the second one comes along, and it's better, modified to give people even more of what they want? Then, being first doesn't matter anymore. Here's a list of firsts by Kimpton Hotels (yes, they actually have a list). How important is it (now) that they were the first at any of these things? I suspect that in the case of free internet access, it was pretty important for about a week.
A better approach might be to be "the only". Of course, that's a lot harder...making something that isn't likely to be duplicated, or made better, or cheaper. But, once you do it, you've got marketing built-in, up front, that's going to last...way beyond being first.
There's a lot of talk and writing going on about "small". Here's a partial list:
Seth Godin's new book, Small Is The New Big
Tom Peters' "Wallop Wal*Mart16" presentation
Michael Shuman's The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition.
Bo Burlingham's Small Giants: Companies that Choose to Be Great Instead of Big
And, yes, even I wrote about it in my manifesto, Vanished.
So, a lot of smart people (even if you don't include me) are telling you to stop worrying about how big you're going to get, and refocus on how to act small...even if you're already big.
I further the theme with this idea...you've got to be fast. In fact, it's one of the greatest advantages of being small...and I think the primary reason small companies do so much better. Being fast means you can adapt to change quickly, improvise on a dime and simply outflank the big guys. Being fast means you can change an idea, a product or service to meet the desires of your customer...while you still have their attention. If you're slow, they're long gone before you figure it out...if you ever get it at all.
If you have a big company, break it down into small, manageable pieces...and get out of the way. If you're small, try to stay that way.
Consider this…everyone is smarter than you at something. And, you can get more things done, and get them done much better when you do things collectively with others. In other words, the best ideas, products, companies, etc., aren’t the result of one. The key is to find the right people, who aren’t afraid to think, even differently than you…and to find people you can trust. Groups of people who don’t trust each other focus too much on what’s not getting done, who’s to blame and who gets credit instead of the matter at hand…moving the project, organization or idea forward. Trust allows people to focus on the goal and enjoy the ride. The lack thereof is a major distraction, and leads to a lot of second guessing.
As we prepare to launch a new and improved Memorable Solutions network, most of my time over the last few weeks has been spent on this very subject…putting things into place to allow a trustworthy group of professionals to flourish. And, just about the time I think I have it figured out, I meet someone who outthinks me…which leads to a rework of the plan. Some would complain…I think it’s perfect, exactly what I envisioned, great people all around me, spending more time thinking about how to create something amazing instead of worrying about who’s trying to get the biggest share of the pie.
One of the fastest ways to lose the trust of your customer is to make a mistake and be average at fixing it.
A quick illustration…
We recently bought some furniture for our new home… a relatively painless process, at least the buying part. One of the reasons we selected what we bought is that all of the pieces were in stock and could be delivered on the date requested. Without that assurance, we would be sleeping on the floor and eating on TV trays…not a good situation after a month out of the country and moving the week you get back…even though camping in Colorado is nice this time of year. Well, you probably can guess the outcome…the delivery truck came…but without some of our furniture. The delivery folks had no clue, “we just deliver what they put on the truck, we don’t sell it”. A call to our sales person determined he had forgotten to notify us that the pieces were on back-order, this even after he assured us everything would be delivered to our satisfaction. I, of course, diplomatically and calmly voiced my displeasure (honest, I was nice). So, here was the salesperson’s big chance, right?...an opportunity to really show me what he and his company were capable of. Instead, here’s what he said, “what would you like me to do?” and “we’ll get it to you next week…guaranteed” A broken promise, you have my money and I don’t have my furniture…not good.
Mistakes are bound to happen…in any business…we all know that. We also know that the correction of those mistakes is paramount to a successful future for any organization. But, just “fixing the problem” isn’t enough any more. A simple “I’m sorry” and a discount doesn’t make much of an impression when there are so many other products and services to choose from. And, while this seems likes it’s leading to a customer service lesson, it’s not…it’s a marketing lesson. Every mistake, every service screw-up, every fly in the soup is a wonderful marketing opportunity…it’s the most likely place for you to beat the competition and gain lifelong customers…for three reasons. 1. you have their undivided attention…this happens very rarely; 2. the customer expectation is that you will fail…or at a minimum that you will be average (offer the proverbial 10% and apologize). In their minds, you’ve already let them down. Now, it’s just a matter of getting out the door before you can cause any more damage; and 3. your competition isn’t likely to do much better…the odds are that disgruntled customers are leaving your competitors at least as often…and for many of the same reasons. In other words, screwing up is actually a pretty good place to be…if you’re up for the challenge.
Again, simply recovering from a mistake is not the opportunity…that’s expected. Your best chance to act remarkably and regain the trust of your customer lies in how you recover. At the end of the experience, two things need to happen: 1. the customer must feel special; and, 2. they need to shake their heads in disbelief at the lengths you took to earn their faith. The only way to accomplish these two goals is to act with sincerity, empathy and honesty…tell the truth, try really hard and be remarkable.
Marketing takes many forms, and it often happens behind the scenes or after the initial sales transaction, like when there are issues. So, the next time there’s a problem, don’t just fix it, make their heads spin!
Yesterday was an exciting day for Charlotte, North Carolina…they won…they won the right to spend over $100 million on a new building…the NASCAR Hall of Fame. Congratulations.
This is huge for the city of Charlotte, as it would have been for any of the other candidate cities, like Atlanta or Daytona Beach. And, not because this new venture creates jobs, improves land value or streams millions in taxes…but because it fuels a story.
NASCAR is a very powerful story, almost a religion…especially in the South. Millions of people watch the races, buy the myriad of logo stuff, watch the ads on TV and revere the drivers…past celebrity status. They believe…because they want to, because of how it makes them feel.
People won’t visit the NASCAR Hall of fame because it cost over $100M to build. They won’t visit because of ample parking, a fancy lobby or clean restrooms. They’ll come because they’ll have a chance to be a part of the story…to get closer to the dream.
So, if you’re in the market to develop a hotel, build a story first, and a building second. Stories are more interesting, last longer and pay much bigger returns...just ask Charlotte.