A "Talk Story" Session on Strategic Planning ...

Hawaii Public Radio ... Business of the Arts, September 5, 2010.

Customer Service

On vacation recently, we were taking a train from Brussels to Paris. The train was delayed for about 40 minutes. While en route, staff came through the train asking passengers if they would like a taxi reserved for them upon arrival ... and handing out forms to request a 20% discount on the price of the ticket.

I wonder why the SNCF - the French train service - can do this ... and airlines can't. Or won't.

Managing Expectations

I seem to be picking on airlines again when it comes to discussing customer service. I recently returned from a multi-leg itinerary for which I used reward miles to get an upgrade. Each time I checked in, the airlines dutifully added a priority tag to the baggage tag. And each time I picked up my bag (on all four segments), the bag came off the conveyor in random order - often near the end. It wasn't just my bag. I was watching the other bags come down the belt and found that there were "priority" bags peppered throughout the distribution.

Now I'm not saying that getting my bag early is a big deal for me. But what I am saying is that if the airline has created a service plan that promises priority delivery - and doesn't deliver - that's a customer service problem. In studying customer service, there's a concept called SERVQUAL that helps companies identify potential lapses in service delivery. This one is a classic: good intentions gone wrong.

Really excellent companies take a different approach. Disney theme parks famously overstate the estimated waiting time in lines. When you stand in a line that suggests a thirty minute wait time - and the time is actually twenty minutes, you feel pretty good. When an airline promises priority bag handling and you don't get it, you feel pretty bad.

Customer service is really pretty simple. You just have to do it.

Race to the Bottom in Customer Service

I recently was on a long international airline flight during which I listened in on some flight attendants discussing upcoming changes in the airline's onboard service offerings. Listening to them - and watching the service attitude on the flight - it struck me that employee attitude and service delivery is directly affected by the service culture of the company. If the company starts to "nickle and dime" the customer, there is a very clear message that the customer is not, indeed, king. Not even royalty. And that attitude gets reflected in the "soft" side of things. Employee smiles and attitude.

Connecting to another carrier (an international carrier), and I had a completely different experience. The service offering was customer-focused. And, guess what? The employee attitude was customer centric. Coincidence?

Focus in a 500 Channel World

I've just been grading papers at the end of the spring semester. I've spent the whole semester (it seems) reinforcing the idea that marketing at its best is all about focus - identifying your best prospects and tailoring products, promotions, pricing and distribution systems so that they are ideally suite to your best prospects. As I've been grading papers, alas, I find that students fall into the trap that so many companies fall into. "Let's try to have something for everyone."

The principles of marketing are really not rocket science. Why is it so difficult to see what is so simple in our field?

Here are some remarks that I made at the AMA Hawaii Marketer of the Year Awards. They sum up my views on marketing in this post-economic-meltdown world:

I’ve recently joined the academic world and so, on this occasion, I feel compelled to deliver a fifty minute lecture on the principles of marketing … but I won’t.
We’re here today to celebrate those companies and individuals who know those principles and apply them every day.

It’s always a pleasure to recognize marketing excellence, but perhaps this year’s celebration is more noteworthy than usual. The economy is still reeling … and I hope recovering … from what seems to be a lapse in common sense. Excellent marketers, like the ones we’re recognizing today, understand that wealth, success and prosperity are really the result of innovation and creating real value for customers. That’s my principles of marketing lecture in one sentence.

But there were those who believed that the foundation of wealth could be built … upon a foundation of sand. Like all false promises, the world of default swaps and sub-prime loans came crashing down. Unfortunately, the result mya be a shaken confidence in American business.

That’s why it’s so important to celebrate the success of great marketers who understand the core values of our profession … and do it right.

In the face of a tough economic environment, Marriott Resorts Hawai‘i didn’t give up. They took action … and they took to the road to control their destiny and deliver business results.

Bank of Hawai‘i was wise enough to understand that there’s more to technology … than technology. And they built a very successful web business based on a fundamental understanding of their customers and their customers’ needs.

Aloha Air Cargo used a variety of marketing techniques, including branding and product development, to successfully recast and reposition their business.

And Outrigger Duke Kahanamoku Foundation applied great state-of-the-art for-profit marketing techniques to the world of non-profits.

These companies are noteworthy, but they’re not unique. Every day in the marketing profession there are those who apply innovation, customer understanding and effective marketing techniques to build business and create wealth the old-fashioned way … by creating customer value.
The role of the American Marketing Association is to support these professional marketers through continuing professional development. The chapter was founded forty years ago, and marketing has certainly changed in those forty years. What hasn’t changed is our commitment to professionalism.
If your organization believes in perpetuating those core values that lead to sustainable business success, we hope you’ll join us in applying them to our businesses every day.

Rising Expectations

I've just returned from a trip to the Middle East where I witnessed first hand some of the new resorts that are in development there. There are certainly some spectacular examples of the finest fixtures and materials that money can buy(and there is no shortage of money in this region).

Not all of the "wow" factors cost tons of money, though. In my guest room, by my desk the hotel provided a little business amenity kit with tape, binder clips, a mini stapler, an eraser along with other little business essentials. I haven't seen this in a US hotel ... and it made a big impression on me. Sometimes it really is the little things that make a difference. And finding the little things that matter require thinking like the customer.

Marketing Awards

The Hawaii Chapter of the American Marketing Association is about to celebrate its Marketer of the Year Awards. By every measure, this last year was a tough year. Yet, there are some companies that not only weathered the storm, but prospered. They did it by taking action and managing their own destiny while other less successful companies retrenched in the face of adversity.

I'm reminded of an old saying. There are those that make things happen. And there are those who watch things happen. And, finally, there are those poor souls who wonder what happened.

The winning companies are those who made things happen, despite long odds.

Congratulations to ...
Marriott Resorts Hawaii
Bank of Hawaii
Aloha Air Cargo
Outrigger Duke Kahanamoku Foundation.

What a Waste

Our family has planned a European vacation this year including a few days in Brussels. Since we've never been to Brussels, I went to their website and requested a travel guide that they offered. A few weeks later, the printed guide came by mail. The Belgian tourism office spent quite a sum sending the material by post.

I spent a leisurely evening browsing through the material ... and suddenly realized that the calendar of events and site information that they had sent were for 2009. And this is March, 2010.

It's a shame that Belgium tourism wasted the money on postage. It's frustrating that I spent a little time reviewing events that are in the past before realizing the error. Overall, what a waste. They would have saved a lot of money ... and been more customer friendly if they had just included a simple 2010 calendar of events with a url for a current website.

You have to wonder if anyone in these bureaucratic offices are reviewing what gets sent to customers. Maybe they had a large stock of 2009 materials that they wanted to deplete before cracking open the 2010 stuff?

The New Communications Reality

Hawaii just had a tsunami scare. The massive earthquake in Chile created a potentially devastating tsunami. Fortunately, the tsunami, when it arrived, was not destructive. The event pointed out some other fundamental issues, however.

As the islands were preparing for a potential disaster, I checked some websites to see what they were saying about the tsunami threat. ETurboNews proactively sent out an email blast to its list of travel professionals early in the event, advising them of links and offering an email address that they could use to get immediate answers. Hawaii Visitors and Convention Bureau put up a box on its regular marketing site with an update on the event. The Hawaii Tourism Authority site never got around to acknowledging the event. So if you wanted to find out about upcoming meetings ... or their latest research, that would be on the site. But nothing to reassure travel agents, worried relatives, or others about a potentially catastrophic event.

The new reality is that people turn to new media for information. They go to websites. They check out Twitter. They still use the old media, but increasingly the new media are important elements of the communications mix. If you're not there, you're not communicating fully.

Seeds of Destruction

If you're in the business of marketing destinations, Stanley Plog's Leisure Marketing is a must read. There's a particularly poignant chapter about how destinations decline and fall. The irony is that the "seeds of destruction," as he describes them, are sown in the growth stage of the product life cycle. Those who don't manage the brand properly in the growth stage often find themselves rolling into a decline and, ultimately, a death spiral. Here's the sequence:

The destination is discovered and tourism grows. Everybody's happy. With growth comes an increase in land values. With higher land costs, developments become ever more dense to get "highest and best use" out of the property. With density, the destination gradually loses its charm and the very best visitors are lured away by more attractive destinations. To compensate, hotels and transportation companies increase their discounting ... which brings a discount oriented visitor (the "cheap charlies" of the world). Lower revenues mean less money available for investment and renovation, so the product suffers, creating a downward spiral.

Innovation, reinvestment, and attention to the brand are the antidotes.

Waikiki is now dealing with a crop of problems that grew from the "seeds of destruction" that were sown in the go-go years. Here's hoping that we've got the will to bring back the visitors that contribute to a healthy brand!

The Little Details that Make Great Brands

When I talk about brands, I often tell a story about Disney that (I hope) illustrates the power of attention to detail in creating a strong brand. The story goes back to the time when I was national chairman of the American Marketing Association. The AMA was having a meeting in a Disney hotel in Orlando and Disney hosted a cocktail reception for our group (so they could make a sales pitch for future meetings bookings). As part of the reception they had Mickey Mouse make an appearance for photo opportunities with the guests. Three people came into the room. Mickey Mouse, a photographer, and a third person. I asked what the third person was doing there. His job was to hold your cocktail when your picture was being taken with Mickey - because the Disney brand doesn't associate its characters with alcohol. Small little detail ... that means so much when building a big and powerful brand.

The Softer Side of Brand Hawaii

Hawaii as a visitor destination is at an important crossroads. There are two proposals, in particular, that can change the character of Brand Hawaii forever: rail and gaming.

I am certain that a great majority of Hawaii residents are in favor of rail. Traffic is a mess. We need to become greener with our transportation. But HOW we develop rail is going to affect the character of this place. The current proposal to build a system that is entirely elevated will result in viaducts and stations that are as much as thirty or forty feet high. If we put that kind of system in front of the buildings and communities that create the special ambiance that define Hawaii as a special place, we will have changed our character. The planners argue for the proposed system on the basis of improved ridership and safety. Those points are debatable. What's not debatable is the visual and aesthetic impact it would have on Hawaii. I would argue that, in a place like Hawaii, those softer elements of a plan are equally - or more - important. Alternatives such as an "at grade" system can provide a transportation solution that has less impact on our character.

Then there's gambling. Or "gaming" if you want to sound less sinister. This issue comes up whenever there's a budget crunch in the belief that it will produce the revenues that will save our budgets. That case hasn't been proven. And, like elevated rail, it can have a profound effect on our character ... and the Hawaii tourism brand. One needs to be careful about making decisions that have long term impacts based upon short term conditions. Putting the genie back in the bottle is impossible. If we want the genie out, we'd better be absolutely certain that she works for good in the long term ... and that there are no horrible "unforeseen circumstances." Imagine casinos flashing neon "Aloha Slots" signs. It could happen. What does that do for the character of the Hawaii brand? What does it say about aloha?

Then there are the social aspects of gambling. I had a speaker in one of my classes that had managed a resort in Lake Tahoe ... and told the story of the hotels/casinos issuing $25 in chips in pay envelopes as a "bonus" for their employees. You can imagine that the employees ended up putting more than $25 on the table. (And he went on to say that spouses were calling him asking that pay be sent directly to them rather than the employee to keep them from gambling). I'm not saying things like that will happen .... but things like that COULD happen. I'm even more concerned about the changes to the ambiance of the guest experience in Hawaii. We have something here that's pretty mellow (even in Waikiki) which could be changed forever with a casino.

Planning and Performance

I'm back to update my blog after a long hiatus. I guess nothing really moved me to make a blog entry ... until last week. I received a notice from a public agency that they had completed a long overdue strategic plan. In case you haven't noticed, there's a recession raging out there - and I thought every organization, including government agencies, would be motivated to get a move on. Well, I thought, at least it was done. Then I read it. Not a lot of depth, but directionally right on. Short term: need to react to the economic crisis with hard hitting marketing programs. Longer term: get back to more traditional branding and positioning. Sounds right.

Except that on the very same day I got the plan, I saw some of the marketing programs that the plan ostensibly is driving. My reaction: huh? It's like nobody read the plan. No hard hitting offers or message. More fluff than a Northeastern snowstorm.

I guess no one figured out that there's supposed to be a connection between what's in a plan ... and what hits the streets. At the end of the day, marketing will be judged on the effectiveness of programs, not the elegance of plans.