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Inside The Ritz-Calrton Customer Experience Model

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Original post date July 29, 2010

Ritz-Carlton has long been know and recognized for its ability to delight customers.  Although I’ve used them frequently as a best in class example for clients, I never truly experienced what makes them so good…until now.

My family and I just returned for our summer vacation where we had the good fortune of staying at the Ritz-Carlton on Grand Cayman for the week.  While we originally booked the Marriott, but a special off-season promotion through America Express and the loss of our family pet led to a change of plans.

The experience was memorable, even though the weather wasn’t…we now understand why it’s called the off-season.  Nonetheless, during our stay we were continually delighted by the service we received.

The Ritz-Carlton has created a perception of exceptional quality and service, and the staff delivers on it.  They are in the hospitality industry, and as a result it’s “people” business. But their model is not just as simple as ‘serve the customer.” They add interact, engage, and listen.  So simple and intuitive that it makes you wonder why other companies can’t do the same. 

Examples of how they bring this to life:

  • The Customer Experience – not only do they understand how you might want to spend your time on vacation, they anticipate it.   For example, in the mornings by the front door they had a jogging trail map, cold towels, bottled water, and a sign welcoming back joggers.  They also set up a water cooler at the water sport station anticipating that guests want water given the amount of salt water inhaled while snorkeling…maybe that was just me.
  • The Little Things – If you preferred to run indoors, they had a full service health club complete with trainers.   The most interesting thing in the gym was a 2-inch piece of a foam noodle, commonly used to float in a pool, in the cup holder of the treadmills.   It served as shock absorber, and it elevated your bottle making it easier to reach while running.  I’ve been in a lot of gyms in my life and none of them have had this…only the Ritz.  Most likely this insightful and accommodating amenity came from listening to customer feedback.
  • Going Beyond the Role –The doorman was our personal tour guide.  He told taxis were to take us for dinner, marked up maps on top snorkeling spots when we rented a car, and gave me directions on where I should run in the morning.  And of course, he inquired about our experiences each time we returned.  Similarly, our waitress at breakfast was also our personal shopper.  She told us the shops with the best deals, the best places for kids, etc.  Despite their title and/or their role, these employees played an essential part in defining our customer experience by going above and beyond the call of duty.
  • It’s about the BRAND – They understand and maintain the brand like few others.  The tennis courts by Nick Bollettieri, the golf course designed by Greg Norman golf, the world famous Silver Rain spa from Sweden, and for good measure a Tiffany’s onsite.   Brand was everywhere, on water bottles, towels, the morning newsletter, etc.   A premier brand that only associates with other premier brands.
  • Creating the Perception of Value – This gets back to understanding what guests want to do during their vacation.   The Ritz charged a $35 a day resort fee.  That fee included the use of water sport equipment like snorkeling gear, kayaks, and paddleboards, but then they charged for other items like Hobie Cat sailboats, etc.  The nearby Marriott on the other hand had outsourced their water sports to a local vendor that charged $15 a day for snorkeling gear, and $25 dollars an hour for Kayaks.  With a reef just in front of both hotels, guests at both snorkeled almost every day and/or used the gear to snorkel at other locations around the island.  For a family of four we paid $35 a day for 4 snorkel sets plus the use of the other items listed above.  Marriott guests paid $60 a day simply for the snorkeling gear.  Anticipating that guests would use snorkeling gear daily, The Ritz built it into a daily fee which we learned about at the beginning of our stay, instead of feeling like we were being “nickeled and dimed” to death each time by renting daily.  Packaging “solutions” is a constant challenge for most organizations.   The Ritz teaches us that to be effective organizations must understand how customers want to use their products.
  • Technology – the staff on the beach and at the front door wore headsets and microphones.   As I mentioned earlier the staff took the time to personalize your visit and get to know you and your name.  As you went from one location to another they would alert their counterpart that you were on your way.  This provided them time to greet you by name and to anticipate what you might want…towels for the beach, a taxi, etc.  Simple CRM, applied in a very effective manner.
  • Constant Collection and Use of Customer Information – Regardless of where their staff came from (France, Bali, England, etc.) they all took an interest in their guest’s stay.  They collected information about what they liked, disliked, and then preserved it to pass along to other guests.  In a sense, staff members built their own internal Trip Advisor based on guest feedback.  For example, one night we wanted to go to a Mexican restaurant for dinner.  I searched in a local restaurant guide and found one.  When I asked the Concierge about it, she said she never heard of it, and recommended another restaurant.  Finally I found a person at the front desk that knew where it was, but he proceeded to recommend the same restaurant as the Concierge.  Deciding that the other restaurant was too far, we went with the one I found. It was terrible.  No one knew of it for a reason.  Even the Taxi couldn’t find it despite having been on the island for 20 years, and it turned out to be only 2.5 miles from the hotel.

Ultimately the secret to their success is simple…they understand, personify, and cherish the brand, and they engage and listen to the customer.

Customer Engagement and the MINI-Cooper

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Original post date January 27, 2011

Owners of the MINI-Cooper have long been known to be one of the most fanatical and loyal of all call owners.  They are likely to custom design their cars online, actively participate in local motoring clubs, and are in general, a passionate and faithful community.

A new project took me to the mid-west and I finally got a taste of the MINI-Cooper, courtesy of Budget rental cars.   Initially, I was excited by the opportunity to find out what the buzz was about, but after getting in the little red car with white racing stripes, I quickly found myself totally discombobulated.  It was like the car was designed by aliens, nothing was where it is should of been, and the layout, among other things still remain a mystery to me.

I couldn’t operate the windows the first half of the day, drove around with my blinker on for the other half.  The radio settings were in the speedometer, and the tachometer was where the speedometer should have been.  Even the gas gauge wasn’t a gauge at all, but rather a circle of lights.
The “Coop” had all the same instruments any other car has, but they were in different locations and/or in different forms.  I’m still not convinced if the lay out of the dashboard is better, but one thing is true — I was fully engaged, I had to be.  Even though I’ve been driving for almost 30 years I was a stranger in a strange land.  Suddenly, driving was fun again.
It got me thinking about how we engage customers.  There is a bunch of noise being made about customer engagement; the question for most of us is how to make it happen.  Intuitively it makes sense, but from an execution standpoint, it’s still a bit of a mystery.
We have seen traditional response rates drop, and have begun experimenting with Social Media with little, to no, payoff.  Although the true upside of customer engagement may still yet to be defined, a Gallup research report points to it as a leading indicator for customer attrition.  In some ways we’re searching for the Holy Grail, but maybe new isn’t the answer, maybe we have what we need.
As I sat at a stoplight and stared at the dashboard trying to make sense out of it, it hit me: It was if the MINI engineers intentional redesigned and/or rethought everything, most likely with the intent of keeping the Coop customer base happy and engaged with it’s quirkiness.
It showed me that you could create an engaging experience by leveraging what you already have.  Granted, had I been on a tight schedule, I may not of enjoyed having to “get up to speed.”  I was in a city that I had never visited and driving to see a client I’ve never met.  I had my hands full directing the GPS, a stick shift, and a conference call.
I am not suggesting rearranging mission critical assets for key customers but what I am offering is this…maybe we need to rethink how customers engage and interact with our sales people, customer service reps, and the web.  Like the engineers at MINI, we need apply our creative thinking skills to reordering our assets to provide customers with what they want, but delivered in new and intriguing ways.
At the end of the day the MINI still provides basic transportation – I got from point A to point B, but getting there was uncomfortable, scary, exciting and fun.   Much of what we provide customers is basic “transportation,” and “mixing it up” can be scary, but it also may be the key to getting customers’ attention again.

How Process Can Impact the Customer Experience

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Original post September 9, 2008

Pick up any book on Customer Service and the first tip on how to improve or provide a good customer service experience is to “listen to the customer.”  This advice is so incredibly obvious and intuitive that you shouldn’t need a book to tell you. Yet putting it into practice is incredibly hard to deliver. Why? 

Recently, a transportation company set out to answer that question.  Our task was to discovery the key to delivering a “good customer service experience.”  We surveyed over 500 customers, conducted multiple focus groups and held one-on-one interviews.  And after all that data collection, what did the customers say they wanted?

They wanted the company…are you ready for this…”to know them.” Know them personally and their business.  Defined by having an understanding of their business so that you can anticipate their needs, and as a result, be a valuable partner. Doesn’t sound too difficult to deliver, right?

In this case, it was. The company had no customer service standards, and no rules to govern customer interactions.  They also lacked a centralized customer database to capture and archive customer conversation and data. To make matters worse they delivered customer service in a decentralize environment with over 100 centers, all operating independently.

Given that scenario you would think that this company could implement some simple fixes that would have a big impact—some simple fixes. But first you must understand how the company got into this situation in the first place.

At its core, this is an operations driven company, and customers can sometimes get in the way of efficiency. Their culture and core operating model was to move a box as quickly as possible from point A to B without damaging it.

Customers who have special needs and/or require assistance slow down the process. In this environment, delivering good customer service can be too costly and/or too inconvenient. The insight was that the (logistics) process was found to be more important than the customer.  Internal systems (or lack of), compensations, key performance indicators were all designed to move freight, not to measure customer satisfaction.

The feeling was that if a package made it to it’s final destination on time, and in reasonable shape, customers would be happy, and for the most part they were.   It’s when that process broke down that customers wanted more.  They wanted the customer service rep to know them, their company, their issue and have a solution.

And with that, the company had its answer.  The challenge that remained was to change the corporate culture.  Unfortunately, that turned out to not be as easy as going from point A to B.

How US Air Killed the Customer Experience

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Original post date October 27, 2008

Last week I took a flight to Orlando.  I fly a good bit and have reached a preferred status (whatever that means) on USAir, so I got bumped up to first class.  Big deal!  No meal, a 30-year-old plane, a terminal and jet port that looked out of a third-world country. I know I sound like a whiner, but hang on, I have a point.

The industry that led the way on defining the customer experience in the glory days of “jetting” and customer loyalty with reward cards has lost its way. In particular, the U.S. carriers are lost in a forest of bankruptcy. As the rest of the world moves towards enhancing customer experiences and building customer advocacy, the airline industry seems to be doing everything it can to move in the opposite direction.

For example, the airline I mentioned above now charges $15 dollars for the first (yes, the first) bag checked. As a result of that brilliant money making idea, we now have flights delayed because everyone is trying to jam their bag into an overhead. Or how about charging for water, tea or coffee?  Yes, on this same airline coffee and sodas will now cost you two dollars. On the flight down the price of beer and wine was $6; two days later on the return it was $7. It’s probably close to $10 by now.

Maybe you’re saying that they have to do that because of fuel cost, labor cost, etc. Well then, how is it that Virgin Airlines, in particular Virgin Atlantic in the States is able to make money in this industry despite its new planes, expansion of routes, etc. Because Sir Richard knows it’s about the Customer Experience!

Southwest Airlines has turned this into a whole campaign. The strong, well managed will make the weak pay for this approach. The bottom line is that “nickel and diming” your passengers/customers isn’t going to make the airline profitable again. In fact, it will probably do the opposite.

What will help restore profitability to the airlines?  Well I’ve a got a few ideas: how about we start with Innovation…then good management practices…and a decent labor contracts, etc.!  BusinessWeek ran an piece on the performance of innovative companies in its September 22, 2008 edition. Companies known for delivering innovative customer experiences have an average stock return of 2.5% and revenue growth of 5.1% from 2004-07. Those with innovative business models were more impressive with a 16.6% return and 7.2% growth.

So I say to the airlines, to get flying again…innovate yourself out of this nosedive…and give me back my free coffee!

Web 2.0 Please!

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Original post December 21, 2006
I am soooo over the hype on the “second coming” of the Web. So here’s my Christmas present to you. Do you want to know what Web 2.0 is about?

The media has been hyping it for what seems like an eternity but I still haven’t seen a good simple explanation. Some like BtoB magazine are even calling it a “Revolution”.

Here’s what I think 2.0 is really about …it is about creating an engaging and useful online experience that is designed by your targeted audience…and of course, all the web tools/applications to enable this (Blogs, Podcast, Social Networks, etc.). Yes, that’s it. Creating opportunities within your digital properties to let visitors give you feedback on their experience — and you (Company X) actually paying attention and doing something about it.

The best part is that you don’t have to wait until the hype and new technologies start rolling out to build your own Web 2.0 site right now. In fact, you probably already have pieces of “Web 2.0″ in site right now. A few tips for getting started:

  • Track/Determine Interaction Time and/or Engagement Level- go beyond measuring typically web metrics (traffic, clicks, etc.) to measuring Interaction Times. Determine not only if the visitor is returning to your site but also how much time are they spending on it. You also need to understand where they have come from, your sales process by product, where customers spend their time (in what channel to learn, shop and buy) and finally, how long it takes (on average).  Hi-Tech customers, for example, surf among channels (both online and offline). Complex sales, as you would expect take much longer and consume more Face-to-Face resource time.
  • Build Information “Depots” – if you want customers to give you feedback, give them something to respond to and an opportuntity to do so by giving them vehicles/channels to communicate. HP is experimenting with giving IT professionals new media tools such as Blogs to engage with customers. And Intuit has created a feedback button called “We Hear You” that enables Quickbook users to submit product feedback. Keep in mind, if you want something of value (information) you have to give something of value. If you don’t have an even exchange you will not get the information you want…so get those offers together (white papers, research, etc.).
  • Go beyond Community Building – You’ll hear a lot of hype around “communities” and many of you probably have robust user communities. Get the communities more involved in building, testing and promoting your products, website, campaign,etc. Start measuring “Net Promoters” – a metric of customers who would recommend your products. Word of mouth is still THE most powerful marketing tool, but with recent regulatory changes, be careful on how you motivate customers to sing your praises.
  • Leverage Existing Tools – years ago we started to leverage an Online Training tool called BrainsharkIt allowed us to create On Demand sales and marketing presentations using PowerPoint and a phone…very simple and convenient. But the most valuable part of the tool was the tracking. We were able to see who was viewing the presentation as soon as they opened it, how long they viewed it, how many pages and who they sent it to, etc. We able to measure the interest levels inside a company, decide on who to pursue and predict when we would acquire the account — all by watching how people interacted with us in a “virtual” world. This functionality now resides in most Webcast tools so make sure you are taking advantage of your investments in Webex, Placeware, etc.
  • Before, At and After the Web – think about what information you want to collect at each of those stages. Also, think about what you want the visitor to see and retain in each of those areas. This is the “customer experience”. Organize and integrate your activities by segment (customer, product, etc.) against these three stages to create a seamless experience that reinforces your message. With complex products/solutions, for example, each stage should communicate a portion of the total message, and subsequent stage should reinforce the previous stage. Breaking the message up into pieces and then, hopefully, rebuilding it in the mind of the visitor piece by piece as they go throught the buying process. So a customer may see a TV ad, then visit your website and finally call you contact center to place the order. You must anticipate, plan and, hopefully, direct the customer buying behavior to drive the response, conversion, close and yield rates.

The bottom line is that Web 2.0 is not “revolutionary”. The concept is not new, in fact, if we had to do the first round of the Web all over again we would of done it this way…let your visitors/customers design your website the way they want to use it. But what might be different this time is that I think we are ready to listen to them.

Have a great holiday! Talk to you in the New Year.