On Purpose Read online

  Pain is good

  Sampson Lee published a brilliant book in 2015 called PIG (Pain Is Good) Strategy, in which he explores this concept in some depth and even takes it a step further, arguing that the greater the distance between the pleasure peaks and the pain troughs, the more memorable the experience becomes. So, for example, Ryanair dramatized their very low prices (pleasure) by some very unfriendly customer policies such as charging large amounts for forgetting to print your boarding card, for example (pain). There is no doubt that customers who were subjected to this policy had a very clear memory of their experience and what the brand stands for. We do not go quite as far as Sampson; we believe that satisfaction has to be at a base level in order to avoid irritating customers, but we certainly subscribe to the view that you have to be remarkable at some things and it is perfectly all right to be just okay at others.

  So how do you determine which touchpoints to over-index?

  Where do you over-index?

  It depends on your brand purpose and promise. Understanding what your customers truly value and what you stand for as a brand becomes the lens through which to design the experience. For example, some years ago we did some research for O2, the mobile phone company. We identified that their most profitable customers were worth several times more than the average customer but received exactly the same service and were not valued in any formal way. As a result, the brand took the bold decision to significantly reduce marketing budget in order to free up the funds to invest in putting more staff into the retail stores and building a dedicated contact centre for high-value customers. They also launched their highly successful ‘Priority Moments’ proposition, which values loyal customers. O2 chose to over-index in the retail, contact centre and customer engagement touchpoints because this was consistent with their brand purpose and what customers said they valued. They under-indexed against their competitors’ spend on marketing and head office functions, but this was something that the customers didn’t notice.

  Felim Mackle, the UK sales and service director for Telefonica UK, explains by saying:

  ‘Being in business and doing well means you have to invest. And that’s a very big management decision because, when times get tough or when you’re actually carrying out financial reviews, it would be oh so easy to cut the things that you can’t absolutely, explicitly link back to a financial return. One of the things I think O2 has done very well is to take those big decisions and make them in a very holistic way. We said, actually, that this is part of the O2 experience that we need to keep investing in.’

  There is not space here to go deeply into the psychology of the customer experience, but for those who are interested we recommend reading Daniel Kahneman’s behavioural research into the ‘peak–end’ experience, where he discovered that our memory of an event is highly influenced by the peak of pleasure or pain and how the experience ended.

  http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory?language=en

  Kahneman draws the comparison between the ‘experiencing self’ and the ‘remembering self’ and makes the point that what we remember can be very different to what we actually experienced. Our memory is coloured by the highs and lows and the most recent events. This suggests that the experience we design should intentionally create some hallmark moments associated with our brand purpose and promise, avoid undermining our brand promise by having hassle associated with it, and ensure that we finish strong (most organizations do the opposite: they typically start strong with marketing and sales activity and finish weak at the point of purchase or problem resolution).

  We use this principle when designing a new experience for our clients. For example, we found that one of our software clients delivered a good sales experience but a very poor technical support experience. They also failed to communicate with enterprise customers after the sale to check on how satisfied they were with the product’s performance. No surprise, therefore, that the advocacy of customers was poor as measured by NPS, and their renewal rates were low.

  We designed a new experience to over-index the web experience to make it easier for customers to get information about the product. More importantly the ‘Get Help’ touchpoint was emphasized, so that when business customers called for technical support it was fast and effective, because when business customers have a technical issue they want it resolved immediately. We also engineered a new touchpoint called ‘Product Value’, where an account executive would contact the client on a quarterly basis to find out if the product was performing to the customer’s requirements and what else could be done to create value for the client. The result was a ‘peak–end’ experience that increased the perception of value of the product, improved satisfaction with the account relationship and led to higher renewal rates (Figure 4.1).

  Figure 4.1 B2B experience curve

  Behavioural scientists Richard Chase and Sriram Dasu identified five simple rules to ensure that you design an experience that maximizes the pleasure and minimizes the pain.3 We have listed these in the box below. For the sake of illustration and simplicity we have focused on the hotel industry – with a bit of creative, bold thinking, the same principles can be applied effectively to any sector.

  Five simple rules to create a memorable customer experience

  Finish strong

  Finish on a high – do something unexpected at the end of the experience, for example, a small gift given at the point of checkout. This helps to create a positive moment at the very point you are asking the customer to part with their cash.

  Get bad experiences over with early

  If customers have to do something onerous, get it out of the way as quickly as possible. In the case of hotels, pre-register guests online so that their first experience of the hotel is not one of lining up at the front desk and filling in a registration form with exactly the same information they provided when they booked or stayed last time.

  Segment pleasure, combine the pain

  Spread the pleasure along the touch-line. So provide those little touches of fresh cookies served with coffee, cold face towels on the beach etc. They cost very little but create ‘spikes’ of pleasure. Combine the ‘pain’ by bundling internet and other facility charges into the room rate so that you experience them in one step rather than every time you wish to use them.

  Build customer commitment through choice

  Give guests full information about your charges (such as water sports) on your website so they are transparent and expected. Guests can then make informed choices about the package they need and, most importantly, will not be surprised by them.

  Stick to rituals

  Create on-brand rituals that customers associate with their stay with you. For example, a trait of the Banyan Tree Resorts is to leave a little locally made, handcrafted gift as part of the turn-down service rather than the ubiquitous chocolate. Not only does this create a little moment of surprise but also serves to highlight their support for the local community and the environment.

  Of course all of this is becoming increasingly more complex because the consumer has multiple channels to deal with. They can choose to interact with the brand in store, online, via the contact centre, via social media etc. All of these channels need to convey a consistent tone of voice so that the perceptions of the brand do not change from one channel to the other. Brands such as Burberry have done an amazing job of melding these channels so that they become ‘one pure customer experience’.

  We had the privilege to work with Burberry on their ‘Burberry Experience’. We identified that a common weak area for many luxury fashion brands is the ‘experiencing the product’ touchpoint before purchase. In stores this is generally the fitting-room experience and online it is the ability to really learn about the product and interact with it virtually. Burberry did a fabulous job of bringing ‘online in store’ for their new flagship store in Regent Street in London so that
the experience became seamless. Radio-frequency identification (RFID) devices in the products ‘light up’ plasma screens in the fitting rooms to play videos of the products being made or shown on the catwalk. Sales associates with iPads show the customer complete ‘looks’ and find out exactly what the availability of stock is, bringing items to the fitting room for the customer to try and even ordering items for collection later or home delivery. There is not a cash register or formal point of sale; instead, the sales associates take payment wherever the customer happens to be, sitting on soft couches to do so.

  So the ‘peak–end’ experience is quite different in Burberry’s flagship stores than in those of their competitors. Burberry is now taking this experience even further into the digital domain by creating experiences via social media and smartphones. In the words of Angela Ahrendts, their former CEO, Burberry has now become ‘mobile first’.

  http://youtu.be/LpV8Cd_dKgY

  Ahrendts is now the senior vice president for retail and online sales for Apple, so you should expect some amazing things in the next generation of Apple stores.

  So what are some key considerations when designing the end-to-end multi-channel experience? Tim Wade was formerly the director of marketing and e-commerce at Best Western, the world’s largest hotel brand, and was responsible for driving growth in the brand. Best Western has a great many advantages as a brand but it also has a major disadvantage when compared with corporate hotel brands that own their own properties. Tim used the principles discussed in this chapter to take on the market-leading hotel brand – and win.

  The brand purpose Tim defined was ‘To make life more enjoyable’ and he set about delivering this through a completely new guest experience.

  Image 4.4 Best Western hotel brand

  Best Western – ‘Hotels with personality’

  In 2009 PricewaterhouseCoopers (PwC) published their latest hotels report predicting the future prosperity of the UK hotel market in the forthcoming years. Contained with the report were comments from participants in the research that:

  ‘The budget sector will do well.’

  ‘The luxury sector will see growth.’

  BUT… ‘The mid-market is getting killed.’

  Now imagine yourself as a mid-market hotel brand building your strategy and budget for the coming year. This was Best Western, by number of hotels the largest hotel brand in the world, but firmly planted in the mid-market in Britain with around 280 three- and four-star hotels – and firmly predicted to ‘get killed’ in the toughest economic conditions for decades.

  Best Western is made up of over 4,000 independent hotels around the globe and whilst each hotel has to meet strict quality controls they are free to express themselves and run their business as they see fit. In Britain, Best Western was struggling to have an identity; its brand tracking showed a mediocre and stagnant performance whilst the budget and luxury sectors expanded. In Britain, Best Western was stuck in the middle of the road, undifferentiated and in danger of getting run over by the budget hotel train. People just weren’t talking about Best Western!

  From a brand perspective this is an interesting challenge; brands traditionally have been defined as a promise consistently delivered. With 280 independent hotels, from 12th-century castles to rambling country houses and contemporary city-centre pads, consistency is a challenge. Certainly with such diversity it is not possible to have consistency of the physical aspects of the experience. This is exacerbated further when Best Western doesn’t employ the people that work in the hotels and Best Western doesn’t take the financial decisions about investment in hotel assets.

  So, product inconsistency was perceived as our biggest weakness, but the fact was we couldn’t fix it because of Best Western’s membership model; so we decided to feature it instead.

  As always there are different perspectives and with inconsistency lies a real way to stand out from the monolithic corporate brands. As the growth of budget hotel brands rocketed, the hotel market was becoming a sea of sameness, where it wouldn’t matter which town, city or region you were in, everything was the same. This has the benefits of reassurance and predictability, which for many customers is desirable, but for those frequent travellers – those people staying in hotels week in week out – these hotels can be dull, boring and soulless. Best Western saw a great opportunity to stand out.

  Focused on a core group of customers, the independently minded frequent traveller who is bored with the formulaic experience – Best Western created a new brand position and strapline. As a way to celebrate its own 280 independent hotels and the independent thinking of its customers, Best Western created ‘Hotels with personality’ – three words that were to transform the fortunes of a mid-market brand stuck in the middle of the road. This was more than just a new strapline, it was a whole new way of thinking. It was about celebrating the independence of the hotels and differentiating Best Western from all other hotel brands. It built on the brand heritage, the diversity of the hotels (and the fact that so many are historic), and the characters who choose to work in that particular hotel rather than working for a corporate brand.

  Realizing that ‘Hotels with personality’ had to be more than just a strapline Best Western knew that to truly differentiate it had to be delivered through the customer experience – in fact the brand had to create the ‘personality experience’.

  The customer experience has become omni-channel

  Travel is always one of the key things that customers search for and talk about online and this means that, as with many other sectors, customers are adept at moving between digital, social and physical environments. In fact they do it with such ease that customers pay little attention to channel and just do what is natural and easy at that moment in time.

  For Best Western the challenge of how to bring alive the ‘personality experience’ through the digital, social and physical experiences so that it differentiates was tackled in five key steps.

  1 Bring the story alive

  The benefit of having 280 eclectic and independent hotels is that each has a story to tell. These stories included wonderful history: the oldest purpose-built hotel in England, a hotel where allegedly Henry VIII had built a secret passageway to hide an illicit affair and stories of hotel ghosts that haunted corridors; hotels that make their own craft beer and grow grapes to make wine; and, of course, stories of wonderful characters within the hotels. It is these stories that create the personality, it is these stories that create the anticipation of a great stay and it is these stories that make Best Western stand out. So we employed a team of journalists to go out and capture all these stories from every single hotel. This created a giant storybook, which we used to power the marketing activity, social media and internal communications. Stories were our way of connecting with people no matter what channel they chose to use.

  2 Empower people to tell the story

  As humans the experiences we crave and remember are those human-to-human moments, so the hotel teams needed to be empowered to bring alive the story and experience for guests through their own behaviour. Rather than create robotic service procedures and scripts, we allowed people to celebrate their independence and trained them how to demonstrate this using branded experience training. This equipped them with the skills to bring their personality to work, to find and share the stories in around the hotel and get up front of any issues.

  3 Engage the customer and make them part of the story

  With TripAdvisor being the biggest travel site in the world, hotels cannot ignore the power of the social consumer. By bringing alive the story for guests, and focusing on the customer experience, we brought the customer into the story and encouraged them to share it socially so that they became part of it.

  4 Make it personal

  Travel is a very personal thing and each customer has his or her own story to tell. The key was to use technology to make the journey personal, so we
connected the data and the channels together to create a single view of the customer and create bespoke communications and experiences so that each guest’s journey was unique.

  5 Have some personality

  Having a personality and tone of voice is vital. Humans don’t talk in corporate speak so why do brands? A ‘hotel with personality’ needs to be fun and enjoyable and everything needs to reflect this. Life is too short and busy for boring hotels, boring communication and the usual dreary monologue of marketing messages. So we aligned our marketing, our advertising, our behaviour and our measurement around the ‘personality experience’.

  Best Western created a pilot of the programme in six hotels and achieved impressive results, which featured in a Forrester Case Study in 2014:4

  Net promoter score increased by 7.4 per cent.

  Employee engagement increased by 346 per cent.

  TripAdvisor comments improved.

  And, importantly, financial performance improved.

  In 2014 Best Western rolled out the programme to all its hotels and the brand continues to outperform the market.

  http://www.bestwestern.co.uk

  Notes

  1 Source: IBM/ Ogilvy Loyalty Index/ BrandZ survey.

  2 Sampson Lee (2014) PIG (Pain Is Good) Strategy: Make customer centricity obsolete and start a resource revolution, iMatchPoint, Hong Kong.

  3 Richard B Chase and Sriram Dasu (2001) Want to perfect your company’s service? Use behavioral science, HBR OnPoint © 2001, Harvard Business School Publishing Corporation.

  4 https://www.forrester.com/Case+Study+Best+Western+Great+Britain+Wins+Validation+For+Customer+Experience+Strategy/fulltext/-/E-res116862.