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Observations from the trip

October 20, 2007

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Travel often rekindles our passions and unblocks stalled creativity by affording us different scenery, context, and experiences.   This helps our mind jump the tracks of habit behavior, forming new associations not otherwise possible within the confines of our normal routines.   

It’s a simple and unconscious process – observe and reflect.  For each observation,  extract the concept behind it and then consider how that concept might be implemented within a different context – perhaps your business or profession.

Here are some things which occurred to me while on the trip…

How do you provide an outstanding customer experience, while operating profitably and efficiently?  

Normal hotels provide the basics, compete on cost, and try to boost profitability with the extras.   Have you taken note of the prices of things in your typical mini bar?  What if the mini bar – were not only fully stocked, complete with full size liquor bottles, soft drinks and beer, but it was all free?   How much do do you pay for the average hotel room on a typical trip?  $100 night?  $150 night?

 cancun2007-015.jpg

Suppose you could have this room,  all you care to eat or drink at four restaurants, and a half dozen bars, plus unlimited room service 24 X 7, and full use of all resort amenities for less than $100 per day?  So how do you do this?  

Control expenses by eliminating things that don’t create value for the business or the customer.  

Too often, expense controls wind up being customer take aways.  To really win, one needs to get creative and consider how technology can help.  For example – this resort used mag stripe room key cards, and they added a second card reader and holder on a wall as you entered the room.  In order for the lights, and even the air conditioning to work, a room key had to be inserted.  The sliding glass doors to the balcony were equipped with an interlock to shut down the AC if the doors were left open.  Lights and AC use when the guest is not in the room are a cost drain and provide no benefit.  In this manner, the resort saves money on energy, that can be freed up to invest in the customer experience.

Develop a customer experience budget as part of your core financial operating model.  

Unlimited food and drink in the room – not a profit builder, but a differentiator.  While the guest may be drinking in the room, they are not at the bars, and not drawing upon the labor resources of the bar tenders and wait staff.  The materials are consumed either way, so that’s a wash.  The resort offered free excursions to many site seeing locations.  Transportation, admission and lunch were all provided.  To the guest, this is value that is viewed as additive to the experience, but to the resort, it simply reflects a different expense draw on the same budget.  While out on the trip, the guest is neither eating the food at the resort, nor drawing on the bars or other resources.  The budget is neutral. 

Develop lucrative networks to tap more of the total money flow. 

The tour stopped at an outdoor market, and the guide explained that all the items were backed by the resort – if you didn’t like them subsequently, you could get your money back at the front desk.  Customer perception, was that the resort was really looking out for them.  Reality, the resort had a close relationship with the souvenir shops and probably got a sizable cut for delivering customers.  

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Visible service details often differentiate the experience.  

The expectation is that a room will be cleaned and restocked daily.  It either is, or it isn’t.   For many businesses, this is a trap – the best that one can do is meet expectation, and internal performance objectives get set along those lines with 90%-95% achievement targets.   Maybe the opportunity lies in finding ways to visually demonstrate the service.   Here, we were greeted with not only a clean, stocked and orderly room, but with extras that made visible, the otherwise invisible attentions of the staff.  The bed was turned down while we were out for the evenings, drink glasses and chocolates placed on bedside tables, towel art awaited us on the bed or around the tub area.

Find ways to further amortize your fixed expenses and unlock revenue in adjacent spaces. 

While reclining in one of the infinity pools depicted in the first picture above,  the blue sky view was periodically interrupted by a storm cloud, or an advertising plane towing a banner urging beach goers to frequent a bar or restaurant in town.   I expected to see this.  What I didn’t expect to see was a para-sail boat unfurl a competing banner along the tow rope leading up to the sail.   The boat has a lower fixed cost of operation than does the plane, and the boat can now make revenue, through advertising, whether or not it has customers for it’s core business.   Further, the deployment of the sail and banner not only advertises the client on the banner, but the colorful sail advertises the para-sail business itself.  Brilliant.   These guys just found a way to have their clients pay for their own advertising and operations. 

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4 Comments leave one →
  1. October 21, 2007 5:25 pm

    Looks like someone was spoiled during their vacation!!

    Great post and insights. An overall excellent principles on how to transform “just” customer satisfaction into something else.

  2. sweetlybroken permalink
    October 22, 2007 11:06 pm

    Welcome back, sounds like you’ve returned recharged!
    I personally really liked the towel art. The easiest way to win over a customer is to do some small unexpected thing that makes their day/life easier.

  3. Kristasphere permalink
    January 9, 2008 7:20 pm

    What hotel is this? Inbox me if you don’t wish to post it. I’ve been to Cancun a couple of times and this looks heavenly.

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