New York Hospitality by Vijay Dandapani
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Sound track: Using audio to enhance customers' perception

October 22, 2014

The Financial Times has  a review of The Sonic Boom, a book that examines "How sound transforms the way we think, we think, feel and buy. The article points out that "the power of a song to transform emotional texture is what Joel Beckerman, a composer who founded Man Made Music, a sonic branding consultancy, calls a “boom moment”: when the right sound played at the right time creates an emotional connection with the listener".  Beckerman explains how marketers and businesses can use sound to influence consumers’ perceptions and behaviour" while noting that "sound is really the emotional engine for any story.”

How music affects for the better productivity in the work place has been acknowledged for some time. A scholarly examination of that was done nearly a decade ago by a Canadian professor, Dr. Teresa Lesiuk who found that those who listened to music completed their tasks more quickly and came up with better ideas than those who didn’t, because the music improved their mood.

Recently, Fast Company ran a story  headlined "How Music Affects Your Productivity". The article mentions a series of experiments that investigated the relationship between the playing of background music during the performance of repetitive work and efficiency in performing such a task. The results give strong support to the contention that economic benefits can accure from the use of music in industry. Yet, a visit to the core operating of areas of many service industries reveal little if any evidence of the lesson being learnt.  Kitchens, with kitchen stewarding in paticular, and other prep areas frequently have a clamor coming from work and the processes therein that are utterly repetitive. The same holds true for most front office operations of hotels which could benefit at two levels where the front desk associates have a fair number of repetitive actions and for the customer as she/he awaits the check-in process.

A hotel company that is considerably ahead of the curve in tuning into the audio needs of customers is the W chain which has a "Global Music Director" whose job includes the  compilation of a collection of songs that is "extremely upbeat, with a relaxing vibe that transitions from bed time to spa time". As the W chain's website notes the "music playing in the background of hotel lobbies, elevators, spas and gyms contributes in a major way to the ambiance of the entire property". 

Tugging on sentiments: customer acquistion and retention via emotion

October 09, 2014

The latest issue of Colloquy, the leader in eclectic research and ideas on loyalty, leads with a piece headlined "Loyalty is an emotion".  The publication backs up the assertion with examples from three leaders in their respective industries: Kimpton Hotels, Neiman-Marcus and Louis Vuitton.

The article starts off by noting that " while loyalty programs inspire their members primarily through discounts and perks, luxury brands are defined by scarcity and intangible benefits – and sometimes without loyalty programs" 

Colloquy contributor and  luxury expert Steven Dennis  goes on to explore the emotional connections between brands and their core consumers by underscoring that "loyalty has less to do with the size of the wallet as it does the depth of the connection." By way of example Dennis notes how he values his American Advantage program for its seat upgrades but would readily trade it for a better program from another airline but for the fact that his "hub" Dallas has no other offerings.

Kimpton Hotels' delightfully named Karma Rewards programs comes in for high praise as they "not only offer strong economic incentives and tangible perks, but do a better job of tying the features of the program to the overall essence of the brand." Further, they "deliver experiences that are often highly personalized and more consistent with their best customers’ lifestyles."

Another example high up on the emotional loyalty totem pole is car maker Tesla whose car is  both literally and metaphorically electric.  According to a review in an oddly named local California daily the car maker is  "associated with a generation of drivers who want something that appeals to their particular beliefs" one of which is a penchant for alternative energy forms and an abhorrence for fossil fuels. That the latter likely is the case can be inferred from an example from the other end of the environmental scale: riders of the considerably more inefficient and noisier Harley Davidson motorcycle are just as doggedly loyal to their brand as Tesla owners are to theirs.

A major hotel brand that has been on the same or similar emotional wavelengths of its customers is IHG which has used Beyond Philosophy, a leading firm in the customer experience space,  to provide for a better guest experience.

The lure of family business: more customer (and employee) friendly?

September 26, 2014

That family businesses endure longer often stretching into successive generations is received wisdom. But are they also more welcoming to customers, employees and even innovation?  With regard to the last of those, a recent Insead (Europe's leading business school) paper has a somewhat surprising conclusion with regard to innovation. Despite a known reluctance to take on additional debt or other external financing measures fearing the dilution of control, attributes which are thought to hinder innovation, family firms put out more patents than similiarly situated non-family firms.  Among the reasons for their lead in new ideas is a longer time horizon, better governance structure and better availability of traditional capital sources as lenders tend to trust family businesses more so than others.

The outcome for employees, at least during adverse times such as the great recession, also appears to favor those who work for family businesses as they are less inclined to lay off personnel than their more corporate counterparts. That was the conclusion of a couple of Michigan based universities who say that family owned businesses place a premium on being loyal to their workers with some owners claiming that even "during times of belt-tightening the last thing they want to do is let employees go".  Their apparently altruistic behaviour includes reducing distributions to themselves with as many as 58 percent of those surveyed saying that  family members would take a pay cut before the business could consider reducing the workforce.

The foregoing  suggests a more receptive environment for better products and services and therefore a better magnet for customers; particularly more loyal  customers. An academic study in the Journal of Retailing and Consumer Studies points to a mixed bag with the authors noting that "consumers evaluate family businesses better in terms of service, frontline employee benevolence, and problem-solving orientation, and worse in terms of selection and price/value. Results further indicate higher consumer trust in family business management policies and practices, frontline employee trust, and satisfaction but no differences in loyalty. The study goes on to show differential effects in how image elements influence customer loyalty directly as well as indirectly through trust and satisfaction.

In sum, on the customer acquisition and retention front family businesses have been slow to bring out their considerable strengths particularly on the social equity front. That the latter can be a magnet was proven by Hilton in its social media stance that embraced opponents of California's Proposition 8. No hotel chain in the US that is family-owned (and there are a few that are out there) puts its family ownership at the heart of its value proposition than Drury Hotels which proudly states "family ownership makes Drury Hotels distinctly different and assures you of quality and consistency every time you stay". Given their long running success it is a message that other similarly situated firms ought to emulate.

Machine learning and customer attitudes

September 12, 2014

A recent issue of the McKinsey Quarterly touches upon a couple of oft-repeated but still little understood topics: combining big data to get bigger marketing and  bringing artificial intelligence to better understand customers. The former points out how "technology (alone) is not enough;  what’s needed is a practical approach for creating a workable partnership" between the CMOs and CIOs and, in particular, for marketing departments to know what to look for. 

Per the Quarterly, fusing the two areas is perhaps best achieved by creating areas of excellence that span both departments with an emphasis on  transparency with "scorecards" on progress. The establishment of "translators" who can bridge potential gaps in understanding between somewhat divergent specialties. That may call for retaining a "business-information officer" whose role includes translating business strategy on an enterprise-wide basis resulting in a more "effective use of big data and other technologies" thereby setting apart winners from losers.

The other article in the Quarterly's  goes on to herald the coming of the "second" machine age when machines "overcome the limitation of mental power" as opposed to the first machine age when the limitations of muscle power was overcome.  Pointing out that "machine-learning algorithms are actually as good as or better than humans" at many things that are thought of as uniquely human capabilities, the article notes the exponential rather than geometric growth that it brings about as data and computational capability grow exponentially. Further, the results of "previous machine-learning exercises can be fed back into the algorithms resulting in each layer becoming a foundation for the next layer of machine learning with the whole thing scaling in a multiplicative way".

The foregoing when applied to customer behavior data can result in clear pointers as retailer Pier 1 Imports did when they  used advanced predictive data analytics and machine learning to fullfill their goal of   understanding their customers and serve them better with a more personalized experience across all interactions and touch points within their brand.

It is not clear that Gallup  used machine learning to gauge hotel customers' needs  but the polling company earlier this week came up with the results of a survey across all segments of the hotel industry and found that what customers want depends to a considerable degree on the segment with a few elements like value price, reputation, room quality and location spanning all segments. A notable if somewhat obvious finding was that "engaged" customers provide a "financial premium".

Unfortunately, a mere 20% of hotel guests were "fully" engaged with those belonging to higher-priced hotels' being more engaged.  The ability for hotels on the lower end of the price scale to engage customers may not necessarily be limited as more often than not it merely requires offering services such as "nicer" television for which they are prepared to pay. That seems like an opportunity to improve profitablity at more than one level.

The skinny on discount sites: when discounts can sometimes equal a premium

August 28, 2014

Summer travel which is reaching its Labor Day climax continues to bring on a spate of articles on how to get better deals on airlines, hotels and other travel products and services with tech apps leading the charge. Techcrunch has a report on the latest entrant Roomlia which promises to "provide the fastest hotel booking on mobile" while "taking on" established player Hotel Tonight.

Techcrunch notes that Roomlia "offers discounted hotel rooms up to seven days in advance with only a few clicks to complete booking. Unlike Expedia and its counterparts, Roomlia links you directly with your chosen hotel the moment you book, as opposed to negotiating rates and payments through the hotel site and the hotel itself." The seven day horizon is a key distinction that could enable the newbie to muscle its way into a market that Hotel Tonight has virtually owned since its launch some three years ago as both business and leisure travelers who are not quite comfortable with the idea of landing up in a city without a confirmed hotel booking are likely to prefer it.

Others on the do-not-pay-full-price who continue to be on the ascend are YAPTA featured  over six years ago on this blog. The Wall Street Journal's Middle Seat column of August 28th 2014 has a headline "Yapta Alerts You to a Cheaper Airfare in Time to Rebook Your Flight" and notes how "one corporate travel executive saved about $12,000 on a business-class fare to Shanghai, above, from Tampa, Fla., using the Yapta fare-searching tool". Interestingly, the article brings up how some cities are more price inelastic than others as research shows "some cities are a lot more volatile for airline prices than others. Tickets leaving from San Francisco were the most volatile of 15 major airports for business travel, Yapta found, and departures from New York's LaGuardia Airport were the least volatile."  LaGuardia's proximity to Manhattan evidently leave both airlines and the airport authority unbending when it comes to pricing.

The surge in travel intermediary websites that purport to give consumers the upper hand in pricing does not always ensure the consumer comes up trumps.  The UK's Daily Mail notes how some long standing "discount" websites like Cheapoair, eDreams and Ebookers actually end up charging the customer more than what is available on airlines' websites. In one example cited customers paid a whopping 60% more for the same fare on the same day on the airline's (easyjet in this instance) site.

For sheer quirkines few can beat the discount offered by Sounkyo Mount View Hotel in Kamikawa, Hokkaido.  The hotel has recently been offering a 500 yen discount to customers who have either no hair at all or sport buzz cuts.  The Mount View does offer a business rationale for the discount saying that hirsuite customers cause more work for housekeeping by clogging bathroom drains as well as a more thorough cleaning of beds and carpets.

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  • President of Apple Core Hotels, a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city.

    Member of the board of Directors - Hotel Association of New York.



  • The views expressed in this blog are my own and not that of any company, association or organization.