Revenue? Profits? No! It’s about the Guests – Part 2

This post is a quick follow up to a post from a couple weeks ago. Long story short, after submitting a question to Mr. Fuerstman via Montage Hotels and Resorts web site (www.MontageLagunaBeach.com) I received a phone call from the Director of Communication on behalf of Mr. Fuerstman. Yes that’s right, someone in management there picked up the phone and called! And I wasn’t even a current or former guest!! How sweet is that?

My original question was basically, what books and/or other sources of inspiration that embrace the ideal of “the guest” does Montage recommend? Per the phone call, “Speed of Trust” by Stephen Covey comes highly recommended. As does the Jim Collins’ classic “Good to Great.”

Kudos to Montage Hotels and Resorts for talking the talk and walking the walk.

The real e-proof is in the real e-details

“Web Sales with a Human Touch” by Edward H Baker is in the latest issue of Strategy+Business (www.Strategy-Business.com) talks about Sales Next, a product/service from 24/7 Customer (www.247Customer.com) that aims to make a science out of customer support & sales web chat.

Very interesting stuff, eh? However, as one would expect, there are some questions for Mr. Baker and 24/7. After poking around the 24/7 site the best strategy seemed to be to just take these insights right to the horse’s mouth.

Hi Edward,

Thanks for the article. Interesting. But being an internet kinda guy a couple things came to mind. Hopefully you have some time to comment. So if you don’t mind…

1 – While all the algorithms certainly sound impressive I was a bit disappointed that there was no mention of a control group. We’ve all heard the “argument” about monkeys being better stock pickers than most
stockbrokers and I couldn’t help but wonder what the improvement of this technology was over just randomly selecting customer to chat with.

2 – Is it really the technology or just the chat itself that increases sales? I’m no pop psychologists but it would seem to me that maybe just the presence of the human touch is enough to nudge enough people into buying? While I don’t have time to search around for more info I bet 10-15% of the population just has a hard time saying no to another human being (virtual or not).

3 – What is the rate of product being return for these sales vs. the non-assisted sales? I believe the article said the overall level of satisfaction was higher but how many of that 15% sticks? (See point #2 about buying just because they can’t say no.)

4 – My impression from the article was this was strictly for the B reaching out to the C, correct? What if the chat button is offered to all C’s so they can reach to the B when they want? How does that effect
conversion? Or what if the technology is used to only offer select  C’s the option to choose to reach, how does that effect conversion?

5 – Assuming that the intelligence gathered from these engagements is used to improved the site, in theory would we not see a decline in the effectiveness of the chat? In other words, there must be at least some
common bottlenecks and show stoppers that the chat is able to overcome but as those are removed (read: the site is enhanced) the chat should actually be less effective since it’s not really helping. Is this what Adobe found? If not, then doesn’t that challenge the validity of the claims of this product?

6 – What is the long term retention rate of the chatted with customer vs. the non-chats? And again, algorithm selected vs. random? If we’re going to play by the numbers then it only makes sense we be thorough about this evaluation, no?

7 – The example given was Adobe, so I assume the product was software, and probably “expensive”. Well, how effective is SalesNext with services? Or less expensive items – say below $100? Just because
SalesNext worked for Adobe does not mean it will be as effective for others. Yes, you’re right, it could also be more effective. But let’s do some thorough number crunching before we drawn any such conclusions.

I realize it’s a short article and not every detail can be mentioned but I would hope that if some of these pro-SalesNet facts existed then S+B would have been supplied with them. As it is, with all due respect,
I felt like I was reading a press release for a product that claimed to result in an improvement (over doing nothing at all) – and it does – but it’s actually not the best solution available to the client, just
the one that’s most profitable to be sold by the vendor. Maybe I’m better off with a monkey?

Regards

Mark Simchock
Chief Alchemist
Alchemy United
Princeton NJ

Obama says, “Another one bites the dust”

At this point, we’re all fairly familiar with the fact that Mr Obama’s campaign announced the selection of his running mate via mobile phone text messaging. Another historical first. Sure, there were some technical glitches but for the most part the event, as covered in the mainstream press, went as planned.

However, the real story that the mainstream media has (conveniently?) failed to mention is this… By using this relatively new medium Obama & Biden are able to speak directly to their constituency. Who needs CNN, NBC, WSJ, NTY, etc. and the associated traditional press release when the message can go spin free from sender directly to receiver? Who really listens to all those full-of-hot-air “analysts” anyway? And why do we assume they are “authorities” just because they’re on the screen?

Bottom line… The Obama campaign just jammed another stake in the heart of the mainstream media.

Revenue? Profits? No! It’s about The Guests

From the New York Times, “A Hotel’s Secret: Treat the Guests Like Guests” by Perry Garfinkel (Saturday 23 August 2008).

This brief interview of Alan J. Fuerstman, the chief executive of Montage Hotels and Resorts, packs a mountain of insightful punch. In fact, we have all trudged though 200+ pages of a best seller to get half of what Mr. Fuerstman offers in a faction of time. Sounds like a great organization, eh?

The real story?

1 – This isn’t rocket science. There is no reason why other B2Cs and even B2Bs can’t use these concepts. Whether it’s a web site, or a retail store, that person engaging your brand is a guest. Those who accept and embrace this excel. Those who are in denial… Well, we’ve all had too many below average experiences, eh?

2 – Notice that Mr Fuerstman doesn’t even mention revenue, profits, etc. Why should he? He understands that if he and his people focus on the guest the money will come. It’s really that simple.

An open letter to Mr. Michael Phelps

Dear Mr Phelps,

Congratulations on all your hard work paying off. Kudos to you for accomplishing something that no one else has ever done! The feeling must be amazing. Very impressive to say the least. And thank you for sharing those moments with all of us.

On the other hand I think you should know that many of us believe that you’ve also earned a world record in shortsightedness and disappointment. Frosted Flakes? Earn Your Stripes? Since when is a sugar coated nightmare like Frosted Flakes eating right? What kind of example is that for the kids?

Maybe you’re not aware of it but we are coming up on 10 million overweight and obese children in the United States. There are also 70+ million adults in the same condition. Is it any wonder our healthcare system is a mess? And now one of the few people (i.e., you) who is in a position to make a difference – with all due respect – sells out. The brand Michael Phelps aligns itself with a nutritional black hole like Tony the Tiger. That’s the best you could do? Who’s advised you on that deal? What was their cut? Can you say, conflict of interest? Simply put, Michael what are you thinking?

What’s even more tragic is that you probably can’t even respond honestly to this letter. You or one of your people will have to spin it so Kellogg is happy. So much for freedom of speech, eh? And please spare me the, “But I’ll be able to…”. No way! I’m absolutely certain that whatever it is could have been done without getting into bed with Tony the Tiger. After all, YOU ARE CURRENTLY THE GREATEST ATHLETE IN THE WORLD. I wonder how the other brands you endorse feel now? Moi? I’d feel ill.

I understand your window of opportunity (for endorsements) is brief but that is all the more reason to defend and define the integrity of your brand. You could be a spokesperson for so many things and you’re about to be pimped on YouTube saying, “They’re greaaattttt!” 10 million kids Michael, 10 million kids.

Shame on Kellogg! And shame on you!! I apologize if I sound like a cynic but I honestly don’t think we’re expecting too much from a gold medal winner such as yourself.

Feel free to give me a shout if you want some objective third party feedback on how things like this can damage your brand and tarnish your legacy for many years to come. Bill Gates is “saving the world” and the Olympic Games superstar Michael Phelps is endorsing a sugar coated cereal targeted to kids. You’ve got to be kidding me.

Totally disappointed,
Mark Simchock
Chief Alchemist
Alchemy United
Princeton NJ

Is Google a Media Company?

From the New York Times, “Is Google a Media Company?” by Miguel Helft” (11 August 2008).

This is easy. Two quick things…

1 – First and foremost Google is a publicly traded company. It’s #1 job is to maximize shareholder value. It can say what it wants but that is going to drive it is its actions. Google understands that the playing field is in constant flux. It is constantly repositioning its efforts with a view that is beyond one quarter to the next.

2 – In the print edition this article was on the front page of the biz section. What continues to be more amazing than Google’s share price is their PR machine. They get so much free press that one has to wonder if they even have an ad budget. It’s Google this. And Google that. Yes, it’s a great and powerful company but sometimes the depth of the coverage seems out of proportion to the matter at hand.

A simple lesson from the world’s fastest man

One of the most insightful lessons behind Usain Bolt’s world record time (“Bolt of World’s Fastest – by a Mile” by Lynn Zinser, New York Times, 16 August 2008).

Just year ago Mr. Bolt’s event was the 200 meter dash. After begging his coach Bolt put some time into the 100 meters and look where he is today. Bolt was considered an “expert” at 200 meter but he decided to step beyond that constraint and apply his talents at a higher broader level. In addition, in order to do that Bolt had to convince his coach (i.e., obviously also an “expert”) to let him try. But shouldn’t it had been the other way around?

The lesson… To get unpredicted world class results very often requires not being constrained by the opinions of “experts” who are too over-focused, risk adverse, and typically are more concerned about their reputation than they are about reaching new heights. Kudos to Bolt for having the chutzpah to cast aside the cliches, step beyond the norm and have the passion to become a world champion.

We love print (books, magazines, newspapers, etc.) as much as anyone but… – Part 2

While we don’t want to be accused of beating a dead horse, here are three more nails in print’s coffin:

ListenNJ.com – Free audiobook downloads from your library.

NetLibrary.com – Similar offering.

DigitalBookMobile.com – “Download books and more” is there motto. This is the experience of the next generations.

Just out of curiosity I did a drive-by look at Amazon’s Kindle as well as Sony’s Reader. Conclusion: Skip this generation and wait for the next. But for what one would pay for the “easy of use” of the print version of the NY Times one could actual buy the Kindle *and* get a one year subscription to The Times *and* not kill as many trees.

Rolling Stone mag: “Downsizing” to the Jones to keep in sync with The Guest Experience

Another goody from Monday’s New York Times, “The Classic Rock Magazine Is Swithing to a Smaller, Rack-Friendly Size” by Richard Perez-Pena.

First, kudos to Mr. Jann Wenner, chairman of Wenner Media (owner of the magazine), for having the vision to fix something that by many arguments wasn’t even broken. Sure, their new stand sales are off, but who’s aren’t?

Aside from all the talk about saving money and increasing news stand sales one of the key insights comes from the next to last paragraph of all places:

“In the large format, long articles often turn up as daunting expanses of almost uninterrupted type. With the revision, such pages are smaller and less intimidating, and more likely to be broken up with photographs. Sections filled with shorter items look less cluttered with fewer of them on a page. Smaller design changes give the pages a slightly airier, cleaner look.”

Translation: Rolling Stones readership is becoming more and more accustomed to internet based reading. This is not only a shift in format but in reality a step back towards the center of guest expectations and their experience with the magazine.

Bottom line: Be as creative and inventive with the IA / UX / UI as you want but if you miss the expectations “sweet spot” you’re going to have a site that looks great but discourages engagement. Save the energy of those innovative thoughts and feelings for other kinks in your biz model.

Targeting Search Engine Rankings

“Targeting Search Engine Rankings” by Jonathon Love from Internet Retailer (www.InternetRetailer.com) not only aims to shine some light on the stepchild of search (i.e., organic search,not paid search) but it actually stumbles upon something very interesting that inspired a letter from AU to Jon and IR.

Good morning Jon

Interesting article. Thanks.

However, the other important story here seems to be… How ineffective search engines are at delivering the expected results (i.e., Wikipedia would looks to be the #1 “retailer” based on this study). At the very least a side bar article discussing this “shocking” find would have been nice. Also, to round out the topic some insight in how to adjusting marketing and other efforts to get to customers before they resort to what appears to be random searching.

Finally, how about some talk on the coming decline of search as the first step in the shopping process? As soc-nets grow it would seem only natural that we humans do what we used to do, ask our “friends” for recommendations. So unless the search engines can make major improvements, answers to questions such as “Where can I buy…” are going to best answered in the crowd-cloud. (Yeah,  crowd-cloud, I said it first!)

Yes, there have been attempts at this (e.g., Yahoo! Answers) but none, that I know of, within the context of a MySpace, Facebook, Twitter, etc. Who needs Google when one’s Twitter followers can return the right answer faster?

Regards,

Mark Simchock
Chief Alchemist
Alchemy United
Princeton NJ

Nintendo Eyes Top Console Slot

From the consumer electronics trade mag TWICE (www.TWICE.com): “Nintendo Eyes Top Console Slot” by Peter Suciu (21 July 2008 print issue).

Bottom line… In less than 2 years Nintendo went from “Are they crazy?” and “They don’t have a chance against Sony and Microsoft” to the killer of not just one giant but two. More than anything Nintendo had vision from the bottom all the way up to C level – and created a whole new market targeting a whole new kind of video game user. In retrospect it almost looks obvious.

The moral of the story: Never underestimate passion and a willingness to take chances and innovate. A classic case study for sure.

An Old Rocker Gets Digital

Pulled from an article about Peter Gabriel “An Old Rocker Gets Digital” by Fred Goodman (New York Times, 10 August 2008):

“More recently, outside services like Apple’s iTunes, Amazon.com, eMusic and Rhapsody have succeeded to the point that paid digital downloads — which also include ring tones — now account for nearly 25 percent of record industry revenue, according to the RIAA. That’s hardly enough to make up for the drop in CD sales. Moreover, the International Federation of the Phonographic Industry, a trade group, says that freely traded music downloads still outnumber paid tracks by 20 to 1.”

Do the math, something doesn’t quite jive here:

– 25% of the music industry’s revenue comes from music downloads and ring tones.

– The International Federation of the Phonographic Industry says illegal downloads/trades outnumbers legal 20 to 1.

Even if one where to presume downloads and ring tones is a 50/50 split. And that the International Federation’s estimate in the USA is reduced to 10 to 1. That still means that the illegal industry is larger than the legal one, no? Or put yet another way, in less than 10 years the internet has at least doubled the size of the music business. True, not all that growth is bringing in money but most other industries would kill for that level of growth. The issue then isn’t loss due to downloads but the music industries ability to capitalize on the growth.

Some would say, the music industry’s issues are do to a drastic loss in margin. They went from selling albums with just one or two good songs for $15-20, to selling just those one or two good songs for $1-$2. Add in all the guest  “anger” for having overpaid for so much crap for so long and it’s no wonder that industry struggles. What’s most surprising is that they’re surprised their gravy train has been smashed with a digital hammer. It’s not rocket science to figure out that if you treat your guests that badly for that long that eventually those same guests will figure out a way to get revenge.

A tall, cool drink of… sewage?

“A Tall, Cool Drink of…. Sewage?” by Elizabeth Royte (Sunday Times Magazine, 10 August 2008).

Orange County’s vision is impressive and inspiring. As was Ms. Royte’s portrayal of the OC until, “The stuff that’s removed is washed back to a pipe that discharges into the ocean.” That was it. Nothing more? While this approach probably saves money it’s hard to believe that – in California of all places – Sisyphus would be part of the inspiration for this solution.

There’s got to be a better way. But for now at least it sounds like a step in the right direction.

Search? No, find

“The road to finding is paved with data: Web analytics and user experience” by Louis Rosenfeld (Adobe.com, Think Tank section) is a brilliant blend of Information Consumption and The Guest Experience. So good that the AU value add on this one is simple… Read it!

It’s The Excellence and The Guest Experience, Stupid! – Part 2

With regards to the previous post about my letter published in CRM Magazine, I forgot to mention a couple NY Times (www.NYTimes.com) articles that seem to help to answer my, “Why?” question. They are both by Janet Rae-Dupree.

“Bright Ideas: Innovative Minds Don’t Think Alike” (30 December 2007).

“Unboxed: If You’re Open To Growth, You Tend To Grow” (6 July 2008).

The original intention was to do a post on the “Unboxed” article but then bumped into the “Innovative” one as well.  Good stuff, right?
If you factor in the adage, “Birds of a feather flock together” into a hiring situation, an organization could very often take on the characteristics of those minding the hiring gate. Add in that the less adventurous (read: those not really open to growth) can be intimidated by those who embrace growth and eventually that stagnation can become a cancer that can cripple a company from the inside out. One bad apple might not spoil the whole bunch but over time it can fill the bowl with more bad apples.

It’s The Excellence and The Guest Experience, Stupid! – Part 1

It’s so nice to be appreciated and acknowledged by those in your field/area of interest, isn’t it? After reading a couple great articles in CRM Magazine (www.DestinationCRM.com) I wrote in to provide some additional AU insights. The editors in turn decided to merge the two letters and publish them in their print version (July/August 2008 issue), as well as post on their web site.

To read the letter in, as well as links to the articles what inspired them (both of which are highly recommended), please click here.

Mr. Lior Arussy’s reply is also on point. His ability to pick up the lead and fill in the blank that my “straight guy” routine left off was flawless. It’s sad that too many hiring managers, decision makers, etc. overlook the fact that history is filled with countless examples where passion, belief and determination defeated the “superior” enemy (e.g., Giants over the Pats, David over Goliath).

Sure an MBA helps but being over-prepared, overconfident and boxed in by rules (when the market knows no rules) is rarely going to lead a team to reaching it’s full potential. But that’s the difference between organizations who are driven to succeed and those who are just trying to mitigate failure.

Here’s what happens when you admit to eating at McDonald’s

Another goodie from Chief Marketer (www.ChiefMarketer.com). Mr. Tim Parry, their managing editor, not only admits to eating at McDonald’s but decides to stick it to ’em too. To read his quick one page article, please click here.

Now here’s the quickie that was zipped off to Tim:

Hey Tim,

Just read your article. I hear ya but a couple things came to mind:

1 – Maybe it was just a prototype? A quick & dirty just to gauge reaction to this type of a promotion?

2 – It’s highly possible McD’s actually wanted to make it this easy to pass along (read: viral), no? Maybe under the current economic conditions it make more sense to get people in the door – no matter who they are – then to ask for email addresses or other personal info that they might not want to volunteer?

3 – With regards to point #1, did you notice the same promo in any other McD’s? For all we know it was just that location taking part in a trial?

4 – Or maybe there’s a randomizer – as based on area / IP address? – that presents different visitors with different forms for data to collect? Again, see #2. It very well could be that less is more for them on this one. It’s possible they’re using a number of different forms to see which one drives in the most traffic. Without a comparison it’s also possible that for tracking purposes the coupons might be slight different as well, no? So what looks to be too simple might not actually be so, IMHO of course.

5 – If there’s a complaint about the coupon, it’s the size. It’s excessive to require their infrastructure to push out 1.5meg a shot when something much smaller will do.

6 – And while I hate to accuse McDonald’s of anything sneaky, maybe your lunch wasn’t so free after all? They certainly could have planted a cookie but what if they also planted something more spyware-esque? Maybe they figured that if you just forwarded the link to the pdf they’d be able to track that activity as well? Again, things might not be what they seem.

Let’s be honest, we all like to play marketing critic. Unfortunately, without knowing the intention (and the budget) of the campaign it’s hard to evaluate something like this. I agree with you 100% – they could have done more – but I also see the value in them not doing so and still making out pretty well. It’s not often a company can spend 25 cents (i.e., the approx cost of a medium ice tea) and get a customer in the door. Under current economic conditions this might actually be a stroke of genius.

Regards,

Mark Simchock
Chief Alchemist
Alchemy United
Princeton NJ

More food for marketing thought

The NY Time’s “Restaurant Chains Close as Diners Reduce Speding” by Michael M. Grynbaum is a perfect example of what happens when a brand is built on the cookie cutter me-too approach. In discussing the troubles at Bennigan’s and others in their space there’s a quote:

“Another hurdle facing these restaurants is their copycat nature. Though Bennigan’s modeled itself as an Irish pub, its menu had Black Angus steaks, Southwestern-style appetizers and tempura shrimp, items that would not be unfamiliar to patrons of, say, T.G.I. Friday’s and Ruby Tuesdays.”

Yes, that about sums it up, doesn’t it? Same ol’ same ol’ begets a forgettable Guest Experience. Even Starbucks is suffering from a watered down, middle of the road mentality. (Btw, did they REALLY believe that it was the scent of breakfast sandwiches that was causing some their problems?) For example, Starbucks went from releasing cool obscure music on their record label Hear Music (www.HearMusic.com – what a pathetic UI / UX) to the likes of Ray Charles, Paul McCartney, etc.

While we have nothing but respect for Mr. Charles, Mr. McCartney and other well established legends there’s nothing new, fresh, exciting, etc. about “discovering” them. So Starbucks went from standing out and delivering something special to just another spineless corporate gingerbread man/woman. It almost seems as if these companies eventually take on the lifeless personalities of the MBAs that run them.

It’s All About The Lighting

One more from the WSJ: “It’s All About The Lighting” by Robert Lee Hotz.

1 – Could this be why we seem to be losing our ability to reach for the stars?

2 – Not only does this indicate an increase in lighting but it can also be seen as an increases in power consumption (i.e., more lights,  more power). If we were still able to reach for the stars maybe we could imagine how much energy could be saved if we were able to conserve and cut back just 10% of this figure. It is certainly seems sad that this is the world we are leaving to the next generations. It’s ironic how an innovation like the light bulb might actually be stifling future creativity.

Productive Brainstorms vs. Unproductive articles

Another from the WSJ, “Productive Brainstorms Take The Right Mix of Elements” written by Kelly K. Spors.

It certainly is interesting and we all agree that innovation is important, especially in today’s business environment. However, it seems as if this article might be an infomercial. If you notice there is no reference to success stories. There is no, “We used to do it this other way but now that we do it this way and we able to produce more, better, etc.”

At the risk of sounding like a glass-half-empty critic but there is just too much information here that is presented as “facts” when it’s much closer to opinion, theory and/or random happening.  The truth is, the people involved are more important than the structure of the process. But then again, isn’t that the case of any really successful company, project, campaign, effort, etc.?