Mike Hohnen

Coaching for personal growth, change and development

Marketing

What the future holds for hospitality?

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From : The Future of Tourism | Envisaging a 2011 scenario | By Chris Luebkeman
Read the full post here

While the fundamentals of hospitality remain steadfast, the
context wrapping around the offer of hospitality services has
changed tremendously, and it will continue to change. In looking
to the year ahead, there are any number of possible, and even
a few probable, futures that we should consider. As we do this,
it is vital that we do not ignore the forces of change around us
that are constantly molding our story of tomorrow as we write it.

In the article Chris Luebkeman asks some poignant questions that are suitable for your next future scenarios planning session :

• What if energy were free ? What if it were rationed ? Or each
individual had a personal resource account ?
• What would happen if oil hit US$ 200 per barrel ? What will
happen when carbon is taxed ?
• What if wealth continues to flow East and South ? What if
disposable income continues to disappear in the US
and Europe ?
• What will the new wave of tourists bring ? What will the
growing middle-class Indians or Chinese expect in a hotel ?
• What does a property look like that is fit for Korean
teenagers ?
• What if the « staycation » replaces the global grand tour ?

As you answer each of these questions, consider how our industry will not just survive, but thrive

About The Hotel Yearbook: The Hotel Yearbook is a uniquely forward-looking annual publication. Each year, dozens of CEOs and other senior executives from the hotel industry worldwide, as well as leading analysts and observers, use this platform to share their expectations for the coming twelve months. Each of the 70+ contributors looks specifically at his or her area of expertise, describing the likely developments for the year ahead. As a whole, The Hotel Yearbook thus offers readers a comprehensive overview of the trends and factors that will have an impact on the performance of the hotel business in the year to come – as perceived by the industry’s leaders themselves. For more information visit www.hotel-yearbook.com.

Has your hotel hired an Anthropologist

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If not you should maybe consider it. Because the feed back you are getting from you customer surveys is not giving you the info that you need to make serious product developments that will set you apart from the competition.

In today’s world of networked individuals, new behaviors are emerging. Some are creating new rules and systems of behavior, even within face-to-face experiences. Some are defying old patterns of beliefs.

Here are some of the questions you should be asking our house anthropologist to consider:

* What patterns of attendee behavior are you observing?
* Where are attendees congregating?
* Where are they not congregating?
* What venue and environmental pressures are shaping the attendee experience?
* What parts of your venue are attendees avoiding?
* What are attendees carrying with them to sessions?
* How are attendees communicating with each other?
* How are attendees reacting to the flow of the conference experience?
* What are attendees feeling about this experience?
* How are attendees behaving in education sessions?

This idea is further elaborated in a great post from Velvet Chainsaw Consulting here

Wishfull thinking…

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The quote below, is from the 4Hoteliers site – you can read the full post here

In spite of the popularity of new electronic media, we expect the face-to-face meetings industry to continue to grow and to continue to contribute more to the US GDP. We also believe that were the studies available for other parts of the world, we would see similar, if not greater, increases.

It just reminded me of a few other famous quotes in history:

“I think there is a world market for as many as 5 computers.” – Thomas Watson, head of IBM,1943.

“The horse is here to stay, but the automobile is only a novelty.” – President of Michigan Savings Bank, 1903, advising Henry Ford’s lawyer not to invest in the Ford Motor Company.

“Television won’t be able to hold onto any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” – Darryl F Zanuck, 1946.

As we all know there are many more like this.

My point is, yes we would all love to see f2f meetings grow, but the reality is that most of the professionals that I talk too are experiencing exactly the opposite. That be people in the meetting industry or their clients. Big corporations are talking about ‘travel avoidance’ as a way to cut costs. IKEA has an internal slogan ‘Meet more travel less’ – encouraging employees to use the electronic media for instead of traveling.

Personally I have never ever received so many offers of webinars and other online forms of ‘meeting’ that I do at the moment.

Yes we all prefer the quality of a a face to face meeting, the same way we prefer a delicious home cooked meal to industrialized fast food – but if what we prefer was equal to what we do there would be no fast food business…

New survey: Customer Experience Management

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New research shows that organisations can differentiate themselves especially in terms of the emotional element of the experience. Up to 60% of customer loyalty is created by the customer’s emotional experience, according to Professor Lars Grønholt, CBS.

The study’s main conclusions are:

  • Strong relationship between Customer Experience Management ability and financial performance Customer Experience Management generates increased differentiation. High differentiation improves the companies? ability to create high market performance and financial performance.
  • Customer Experience Management contribute to create significant financial performance If Customer Experience Management is improved by 10% differentiation capabilities will increase by 9%, that subsequently will improve financial performance by 5%.
  • ?Top management involvement and implementation of customer focus in all customer touch points are the most important Customer Experience Management dimensions The two dimensions account for more than 40% of the companies? ability to differentiate from competitors and are the starting point for better market performance and financial performance.
  • A balanced emotional and rational customer experience creates better results
    Overall, top performing companies balance rational and emotional elements when creating customer experiences.

You can request the full study from Stig Jorgensen & Partners here

This all fits very well with our own experience working with The Service Profit Chain

Read more about our approach to the Service Profit Chain here

The value of consistency

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Consistency (or lack of ) is one of my pet rants.

Ask any newly hired hospitality employee what the name of the game is and they will tell you that happy customers is all about exceeding expectations. And it is.

But that also means that if I had this fantastic experience last week in your restaurant (or your: insert your business here ) and I tell my friends at the office about it and we all decide to go for a friday after work dinner – then that experience MUST at least match then one i had on my first visit – if not it is a huge flop and you have lost me for ever.

If I take a client out or book them a hotel or what ever I need to know that this will be not just OK but excellent – And I will pay more to be sure

Seth Godin in his blog asks:

“…how much extra would you pay for a plane that was guaranteed to be always on time, or a surgery that was always guaranteed to work? …. That’s because we’re often willing to pay a significant premium to avoid risk”

And he has a point.

In David Rock’s latest book your Brain at Work ( which i highly recommend ) Rock writes :

.. The one thing that is certain is that people will always pay lots of money to feel less uncertain. That is because uncertainty feels to the brain like a threat to your life..”

Excellent, is useless if is not consistent.

There is a fortune to be made in consistency.

Travel Avoidance

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I learned a new word the other day – a word that sent shivers down my spine. Not that i have not suspected that this development was inevitable but still, seeing it in print was a jolt. The word is ” Travel Avoidance”. A conscious policy by large companies to reduced travel and f2f meeting wherever they can.

In a report published by the Center for Hospitality Research at Cornell University with the title ‘Hospitality Business Models confront the future of meetings‘ Cisco outline how they have chalked up $400 million in direct savings and $150 million in productivity gains by switching as much of their travel/meeting actives as possible to ‘TelePresence’.

The report also mentions research by Gartner Inc. that video conferencing will replace 2,1 Million airline seats by 2012 representing a revenue decline of $3,5 Billion for the travel and Hospitality industries.

And Meeting review wrote this :

2010 has been the year that everyone suddenly started to take virtual meetings and events seriously, indeed the mainstream industry is even starting to see them no longer as a threat but instead as a way of extending the reach, the audience and, importantly, the revenues for their events.

See the full article here

So what to do?

The article suggest that Hotels should invest in video conference equipment so that they can offer this service to clients. I am not so sure that is the way to go. If we look back some years ago LCD projectors where very expensive and as a consequence only the largest companies had them – in the beginning.
Smaller companies would go to hotels and rent one. But soon the price of LCD’s came tumbling down and suddenly they where not so special anymore. Today we all have our own. And the fact that a hotel can provide one does not exactly constitute a competitive advantage

My prediction is that the same will happen with video conferencing – companies will get their own kits and virtual conference room in hotels will become obsolete.

A better plan might be to leap frog past that and take a look at the structure of the meeting market as it is emerging.

One way to do that could be to map it on a 2×2 matrix with number of participants on the one axis and the degree of interaction from monologue to deep dialog on the other axis .

That could roughly look something like this:

In the bottom half of this matrix there is mainly emphasis on one way info transmission, possibly with a few questions from the floor. This type of meeting is handled brilliantly by various tech solutions and there will be no stopping that trend developing even further. In that sense this type of meeting will slowly disappear from the traditional venues and move to virtual (also because participants are thoroughly tired of attending this type of meeting or conference).

But on the top half of the matrix where the focus is on interaction /participation and deep dialog, high tech solutions do not do the job very well. As Marchall McLuhan said the more complex the message the more complex a medium do you need, and the most complex we have is f2f.

Now if you are providing meeting facilities – go have a look at your breakout room, your standard meeting room set up etc. Are the facilities that you provide conducive to dialog or to monologue?

To me the gray cloud on the drawing represents yesterdays meetings, they will be taken over by high tech solutions and will not require f2f and the yellow cloud represents tomorrows meetings space where we solve the complex and tricky stuff through collaboration and involvement.

The reason i have the number of participant in the matrix is that i see a sweet spot in the 10 to 75 segment ( upper right corner of the matrix) because when you move to very large groups ( upper left of the matrix), and think dialog then tech shows its face aging ( Twiter, FB Etc)

When i presented this to one of my hotelier friends his response was, “but 80% of our meeting business today is Cinema- or U-table set up.” Yes I know i have seen that as well. But if you plot types of meeting on a bell curve then, at the top of the curve (mainstream) you will find the cinema set up and the U-table – fast forward a year or two and where is what was at the top of the top of the bell curve now?
Going down, fast.
At the beginning of the bell curve we now find Dialog, participatory meeting Art of Hosting etc. Where will that be in 2 years time? On its way up, heading for main stream status.

In summary it is going to be increasingly difficult for meeting facility providers to justify that they are providing value when it comes to ‘monologue’ meetings. It can be done better and cheaper with technology – and that type of meeting is a god case for Travel Avoidance”

Where they can make a huge difference and add value is by learning how to provide space and surroundings that are conducive to deep dialog in the broadest sense – and believe me that is not a banqueting room set up cinema style

Purpose goes mainstream…

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There is a certain interesting buzz in the air.

Maybe it is more than a buzz – maybe it is a fundamental shift..

It started out some years back as just a murmur or a slight rumbling from the initiated. But lately is has slowly risen in volume and my prediction is that before too long it will have gathered further momentum to become an unavoidable roar.

The shift is the call for ‘Purpose’

In a world with limited natural resources, huge inequality, and financial scandals galore, it is no longer comme il faut to do stuff just for money. That applies not just to companies that produce goods and services but is increasingly demanded by individuals as well – a job is no longer just for the money.

A new generation is emerging (see the generation M manifesto). They demand that we do stuff for a reason and it better be a good one – and just in case you are in doubt money is an outcome not a purpose.

The first time this was brought to my attention was 4 years a go sitting on a tree stump in the Rocky Mountains with my friend Lothar Friis. We were having a profound talk about life, business, gigs and all that. And Lothar said “you know in the end it all boils down to one thing: Purpose. If you have a clear purpose you will almost always bee successful in what you do.” That chat stayed with me rumbling around in my subconscious and I started becoming more aware of purpose as a concept.

The next time I noticed purpose was reading Fred Kofmans book Conscious Business.

A conscious business seeks to promote the intelligent pursuit of happiness in all its stakeholders. It produces sustainable, exceptional performance through the solidarity of its community and the dignity of each member.

In the book he says: “People do not consider Business an area to demonstrate their values .. Why not?”. Kofman asks you to think about a person you admire. Why do you admire that person? List the traits on a pice of paper (try it now by the way) What are the values on that list – probably words like integrity, honesty, caring, love, selfishness, you go on… Is that how business and work relations are run – probably not in most cases. Why not ?

He has a point why can’t we run our business with the same set of values that we would like to see in our local community. Well, five year ago you would be told that that is not the best way to maximize profits, but now it seem it just may turnout to be the only way to maximize profits – read on.

Then I read Peter Block’s “The answer to how is Yes” This opened my eyes to the need to ask ‘why’ before we ask ‘how’. The penny dropped. When we ask ‘Why’ we are looking at purpose (If you have not read it please do – it is a very important book.)

“We too often ask “How?” which focuses too closely on the practical way of getting something done and is actually a subconscious expression of society’s emphasis on control of people, time, and cost. Instead, our concentration should be focused on “Why?”. In other words, we need to pay attention to what really matters to us personally, from heart-felt commitments in our private lives to the creation of projects in the workplace. To be able to act on what matters, explains Block, we must reclaim specific qualities, such as intimacy and idealism. Then we can tackle purposeful work as if we were social architects seeking engagement and change.” (Amazon.com)

In 2006 Nikos Mourkogiannis published the book ‘Purpose – the starting point of great companies’ – a book that according to himself influenced John Mackey in his thinking and contributed to the creation of a new ‘movement’ called Conscious Capitalism that now holds thoughtful, exclusive by-invitation-only gatherings (Introduction to Conscious Capitalism).

FOLLOW YOUR HEART – John Mackey

In 2007 the book Firms of Endearment: How World-Class Companies Profit from Passion and Purpose is published – a book that was later adopted as the foundation for The Conscious Capitalism Institute (CCI)

“Conscious Capitalism is defined to have three elements; that companies should have a purpose transcending profit maximization, are managed for the benefit of all stakeholders and led by evolved, conscious servant leaders.”

By and by purpose has come out of the shadows of idealism and is going mainstream – obviously the financial meltdown of 2007/2008 has help this thinking a lot and contributed to more people have asking the crucial question: Why do we do what we do?

At TED 2010 Simon Sinek presented his ‘Golden Circle’ and showed that the way to the consumers heart starts with ‘why’ and not ‘how’.- Not as new a concept as he would like us to think but he deliveries the message in a very elegant and convincing way. Sinek has also written a great book on this called ‘Start With WHY’ that I can highly recommend.

SIMON SINEK

Then this spring Umair Haque made the case on his Harvard Business Review blog that doing good is not just good per see – it is just better business. The better Business Manifesto and Why Betterness Is Good Business

Clayton M. Christensen, the Author of The Innovators Dilemma, (also on a HBR blog) then shows us all how important purpose is on a personal level. How Will You Measure Your Life?

“Don’t worry about the level of individual prominence you have achieved; worry about the individuals you have helped become better people. This is my final recommendation: Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success”

And finally this summer Dave Ulrich – not exactly a tree hugger – is out with a new book: The why of Work. Arguing in essence that if your employees don’t understand what you greater purpose is and how they can contribute to that they will be less motivated.

This morning in Fast Company we can read : Alex Bogusky Tells All: He Left the World’s Hottest Agency to Find His Soul

“Alex Bogusky, advertising Dadaist, postmodern media manipulator, pop-culture Houdini, daddy of 21st-century advertising, and now a seeker of meaning on the dirt path of life “ .. “ I guess I just don’t aspire to corporate legacy. I’m convinced that the greatness that matters more is the greatness people achieve through helping each other, through collaborating, more than the greatness that’s achieved by grabbing all you can or getting all you can or building all you can”

If you haven’t heard the cry for purpose – you are not listening – and very soon your customers (and your potential employees) are going to be asking you: “What is your purpose by the way?”. And if you don’t have a compelling answer, they will find someone else who does…

Gratitude is a profitable emotion to inspire

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A coming paper in the Journal of Marketing addresses that very subject. Building on past research on the role of gratitude in human relationships, it argues that a customer who is made to feel grateful most likely becomes enduringly loyal as a result. Gratitude, as the paper bluntly puts it, can “increase purchase intentions, sales growth and share of wallet.” Robert Palmatier, an associate professor of marketing at the University of Washington and an author of the paper, says that making a customer feel truly grateful toward a business is harder than it might sound. And the hard-wired feelings of reciprocity that can trigger gratitude can just as easily trigger the sense that you’re being treated unfairly.

Read the full article in the NYT