Why People Pay More

Iphone

How can Apple expect to get upwards of $500 for its new iPhone (and I suspect they will)?

  • Align yourself and focus on a smidgeon of the market
  • Build exactly what they want
  • Deliver it in a meaningful way
  • Tell everyone else to go buy a Treo

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.

Not A Chance

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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.

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Networking

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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?

Gathering and Organizing

Gathering
I noticed my wife deleting photos from our desktop computer...I asked her why. Her answer...to free-up space. Logical...or, at least it used to be.

For a long time, the value of data/information has been closely tied to the cost of storage. Marketers in particular would gather as much information as they could store...and, then throw out the old in order to make room for new. But now, it's different. Storage is cheap...and getting cheaper every day. You can buy hard drives for your computer for less than a dollar a gig, Google gives us more on-line capacity than most of us could possible use...for free. And, the list goes on.

Now, the value of the data lies in the ability to gather and organize it...to find what you're looking for without spending a lot of time doing it. Consider that the more information you have about your past and prospective customers, the better your chance of connecting, relating, anticipating and satisfying...at precisely the right moment. Having a record of Mr. Johnson and the fact that he likes cashews, west facing rooms and that he makes business calls from his room on Tuesday's can be really good info to have...if you can get it and then find it.

In the past, we weren't very good at collecting information because we didn't need to be...we didn't have the space to keep it. And, it took way too long to organize it. Now, problem #1 is solved. And, with the tremendous progress being made in software, database technology, Web 2.0, tagging and the like, #2 is on it's way out too.

So, your job is to pick-up the pace in gathering the useful nuggets...translation, spend more time and money on having conversations with your guests. And then, make it super easy for everyone in your organization to access the information...in a flash.

The Cost of Connecting vs. Capturing

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.

  • Your hotel has 150 rooms
  • Let's say you're in a mid-size market with 8,000 total rooms.
  • The market is doing well at 70% which generates 2,044,000 roomnights.
  • You, your bosses and the owner would be happy with 75% occupancy, or 41,063 roomnights annually.
  • That's only 2% of all the roomnights generated by the market.

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.

Five Excellent Suggestions To Improve The Customer Service Experience

Excellent article by John Fareed about what we need to do to improve our industry...mirrors what I riff, rant and rave about almost constantly...getting people to think differently about hospitality marketing and to commit some serious resources, passion and energy into developing what guests want, unique and memorable experiences...centered around them, not us.

Oh, I noticed John has a blog too...check it out.

Innovation or Spin

Type in the word "innovation" at dictionary.com and you'll see these results:

  • "The act of introducing something new"
  • "The act of starting something for the first time; introducing something new"
  • "A creation (a new device or process) resulting from study and experimentation"

Ask Hampton Inn's Phil Cordell, and he'll tell you that changing out all of the beds in their hotels is part of their committment to innovation and 100% guest satisfaction. You can read the article here.

Yes, they spent $100 million on 210,000 beds. Yes, they changed them out in a year. Yes, I bet the beds are better. But, that doesn't make this innovative. In fact, the last time I checked, a good night's sleep on a decent mattress is expected at any hotel.

In my opinion, you need to add "inventive" to the definition. Once you do that, it has a chance of being remarkable. At roughly $476 each, Hampton's new beds probably aren't worth all the hype (what's remarkable about 200 thread count sheets?).

The iPod was innovative. The introduction of the motor inn by the likes of Howard Johnson was innovative. Hotels without front desks are innovative. Changing the beds to something slightly better isn't.

My advice...do something truly remarkable...then, send out the press release.

More Thoughts on Hospitality

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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:

unfriendliness

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.


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Art of Listening

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Listening

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... 

T&L Top 500 Analysis

Travel and Leisure released its annual top 500 hotels of the world list in the January issue. As with many magazine lists, the scoring system can be hard to figure out. Nevertheless, it's a positive PR step if you make the cut. Here's some bonus analysis of this year's list of US hotels (using the composite scores):

There are 188 US hotels on the list (38%)

Independent vs. Chain

  • 70% of the top 10 are independent
  • 60% of the top 20 are independent
  • 64% of the top 100 are independent
  • 62% of all US hotels are independent

Location

  • 38 (20%) of the US hotels are in California
  • 17 (9%) are located in Florida

Size

  • 8 of the top 10 (80%) have less than 150 rooms
  • 5 of the top 10 (50%) have less than 50 rooms
  • 19 of the top 30 hotels (63%) have less than 150 rooms
  • 16 of the top 30 (53%) have less than 100 rooms
  • 11 of the top 30 (37%) have 50 rooms or less

Small independents consistently dominate this and other lists...because they're the best at delivering a unique and highly personalized guest experience. And, that's what people want. Yes, I love to prove a point.

By the way, the Four Seasons Resort Hualalai received the highest score of 91.71...congratulations.

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Why Do We Get Bad Service?

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Cvs

This photo (of a CVS worker taking a personal call) accompanies Seth's post related to customer service...or, the lack of it.

The best reason I can give as to why people don't provide great customer service is because they don't want to. The roots are of course much deeper than that. You can find those here. But, on the surface, it's really simple...you either want to care for someone and are interested in how they feel...or, you're not.

Trial and Trust

I finally had some time to look through a big city newspaper this morning (I just don't see the need most other days. Plus, the hometown rag is only published weekly). I saw a lot of ads for restaurants and hotels...most of them offering discounts to get you in the door. The problem is most people aren't likely to try something new  just for a few bucks off. Especially not in hospitality where there's a significant investment of something very precious...time. It's just too risky.

Consider a different approach...leveraging friends. Instead of shouting at strangers and hoping a few take the bait, why not use the power of a trusted referral to induce trial. Every study (and common sense) will tell you that word of mouth is far more effective than traditional advertising.

So, here's the idea. Make a coupon for that same offer you placed in the paper (on the radio, tv, etc.), hand it  to one of your current guests and tell them they are welcome to pass the gift along to a friend or colleague. A lot of on-line stores do this extremely well, like Netflix and Amazon. But, outside of the electronic world, it doesn't happen as often. Not sure why. Maybe it's because it forces you to do two things...1. be really good at what you do (no one's going to refer the experience to a friend, no matter the incentive, if you're average, or worse), and 2. engage your guests (you've got to do more than stuff a coupon in a dinner check or in the express check-out envelope). In other words, the experience must be good enough to overcome the natural instincts most of us posses to avoid looking like a fool when we make a bad suggestion...and, the staff must be willing to hold a conversation with someone to evaluate the potential for a referral and then to act upon it when it's appropriate.

That's it. Pretty simple really. Be the best at what you do and give your customers an extra reason to spread the word. And, one more thing. Notice that my suggestion doesn't give the coupon giver any paid incentive (the discount or special offer isn't meant for them). It's not necessary. Once you've established that your guest is really happy with you, they're happy to recommend you to others. They really don't need to be paid to do it. The discount or special offer becomes agift they can take credit for...so, the value is in the gift giving, not extra money in their pocket. The act of giving is far more powerful and valuable than a cash bonus.

Trust is an extremely important part of trial. So, leverage the relationships and the trust you've already earned...hire your customers.

Traditions and Stories

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One of the German Christmas traditions in our home is to have stollen. I must admit that as a child I ran (in the opposite direction) when I heard  the loaf was on its way to the table. It's just not a very kid friendly item (I was partial to milk chocolate). As an adult, my mouth begins to water when I have an opportunity to enjoy this holiday treat, especially if it's from overseas.

Getting authentic stollen from Germany is not an inexpensive proposition. And, even though you can make your own and even get your hands on some really good product stateside, it's not the real thing. The real stollen has almost 600 years of history, significant religious overtones and only 150 German bakers make it. And, that my friends, is what you're paying for...how the rich tradition, story and history makes you feel from the time you open the box, until the last bite.

This year, thanks to our close friends, the Thalmans, we received our authentic stollen from the Kreutzkamm bakery in Munich. It was very tasty. But, the real gift was the story and how it brought back so many fond memories of my childhood, my mother and grandmother and my German heritage. It was also nice to see that the baker recognizes the importance of the story. Here's what's on the card that accompanies the very handsome package...

When Stollen was first baked, the ingredients were very different. The Advent season was a time of fasting, and bakers were not allowed to use butter, only oil, so the cake was tasteless and hard. In 1647, Prince Elector ErnstDuke Albrecht decided to remedy this by writing to the then Pope, Pope Innocent X. They explained that Saxon bakers needed to use butter as oil was so expensive and hard to come by, and had to be made from turnips, which was unhealthy. The Pope granted the use of butter without having to pay a fine - but only for the Prince-Elector and his family and household. In 1691 others were also permitted to use butter, but with the condition of having to pay annually 1/20th of a gold Gulden to support the building of the FreibergCathedral. The ban on butter was removed when Saxony became Protestant.

If you take the time to read the card before you partake, I assure you the cake will taste even better...and that's worth a lot more than some raisin bread at your local bakery.

Traditions make great stories...and often, that translates into a lot of sales. Please think about that the next time you meet with your marketing team.

Frohe Weihnachten!

Frohe Weihnachten!

This year's holiday special, music only, indieHotelier show is up. We've put together a very nice compilation of 13 podsafe tunes for the lucky number 13 show.

Click on the podcast button to go directly to the link. Or, click on the indieHotelier logo to go to the website.

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indieHotelier will be back next week with a great discussion about branding with Solutions Squad members, Bridget Hankins and Debbie Harris. Until then, have a wonderful and safe Holiday.

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Branding

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There's been quite a bit written and said about branding recently. Jim Butler and Thomas Engel give us some great insight on Jim's Hotel Law blog, Tom Peters riffs about Time's Person of The Year and his Brand You message, and we batted around the Why Go Independent? subject on last week's indieHotelier...to name a few.

Here are my own key points on the subject of branding:

  1. Like marketing, branding is not something you stick on your product or service after the fact to get people to recognize it.
  2. Rather, it 's everything you do from the the moment the idea surfaces to the point you take it off the shelf...and everything in between.
  3. Branding is not just a name or a logo.
  4. Branding happens to everything and everyone...it's a never ending process.
  5. The person who interacts with you defines your brand in their terms...and owns it.The most common mistake in branding is not understanding my first point.
  6. The power of a brand has very little to do with having a lot of something and advertising the heck out of it.
  7. The power of a brand has everything to do with being different and being the best at something.
  8. Most companies, including almost all of the hotel chains, have no clue what that something is.
  9. And, most don't have the passion or the patience to be the best at any one thing....they try to appeal to everyone. And, they try to do it fast.
  10. The key to successful branding is not growth...or, to focus on growing.
  11. The key to successful branding is to develop something meaningful and remarkable...and to share it with people who want it.

Overall, I think Donald Trump sums it up best (thanks again to Jim Butler for the pointer)...

“I’ve worked hard to make sure the Trump name is found only on buildings of the highest caliber and products of the finest quality. I won’t even consider giving my approval to anything unless I know it’s the top of the line because when people see or hear “Trump,” they expect the best. That’s just basic marketing and good business.”

Please share your thoughts on this important...and highly debatable subject.