WELCOME TO OUR BLOG!

The posts here represent the opinions of CMB employees and guests—not necessarily the company as a whole. 

Subscribe to Email Updates

Judy Melanson

Recent Posts

Competition is fierce:  How to innovate to drive value

Posted by Judy Melanson

Wed, Mar 22, 2017

McDonalds.jpg

In April, fast food giant McDonald’s will run a promotion to drive more foot traffic to their restaurants: customers will pay $1 for any size soda and $2 for any McCafe specialty drinks. While this short-term promotion may help reverse or at least slow the decline in visitors and boost short-term sales, McDonald’s still faces a long-term problem that a temporary price promotion can’t fix: how to drive more visitors and encourage those visitors to spend more money at their outlets. 

Increased competition and changing market needs are making it increasingly challenging for brands like McDonald's to acquire new customers while retaining existing ones. And this challenge isn’t confined to the food and beverage industry; marketers across all industries are rolling up their sleeves, putting on their thinking caps, and developing innovative strategies to stay relevant and competitive.

Here are a few stories to inspire you:

Evolution or Revolution: Opportunities to strengthen the core 

As the tourism industry evolves, heritage brands need to get creative to compete with new marketplace entrants. We’ve been working with a leading travel brand to identify opportunities to boost sales among its past travelers. First, we ran a database segmentation to identify groups of travelers with similar demographics and behaviors.  We then conducted product development research to uncover trip attributes and types of trips that would most motivate these past travelers to return.

Because of this collaboration, our client has a prioritized list of product features to consider offering to its most valued and engaged guest segments. Some preferred options are evolutionary, requiring only minor operational tweaks, others would require significant operational changes. In the short-term, they can use this information in their marketing efforts and develop tailored messaging that highlights elements that motivate each segment to travel.  When thinking long-term, the client can use this valuable information to make strategic decisions about the future of their company.                  

Engage and Grow: Offer benefits to acquire and incentivize the next generation of customers

Travelers today have more lodging options than ever before. As Millennials and Gen Y grow into “tomorrow’s best guests”, traditional hotel brands are looking to foster loyalty.  We partnered with a leading hotel loyalty program to redesign its pricing model so that members can now pay for rooms by combining earned hotel points and cash.  This change is engaging "future best guests" by allowing loyalty program members to get value from earned points in smaller increments.  Guests can redeem points earlier in their engagement cycle, incentivizing them to choose one of the hotel’s dozen brands now and in the future.

Build solutions to solve pain points

Customers and prospects may have difficulty articulating their needs (particularly when it comes to technology) but they have no trouble articulating what causes problems or pains.  Companies can take advantage of this by proactively identifying and solving for customers’ pain points. We worked with a leader in personal computers, servers, and networking products to identify, size, and target specific pain points with traditional data center infrastructure projects. With this knowledge, we designed and tested different form factors to see which type of disruptive product would be most attractive to target buyers, and how many would actually switch over in specific buying scenarios.

Strengthen foundational insight about today’s path to ‘purchase’

We’re a far cry from the traditional broadcast days. Not only are new players entering the market and pushing out original content, but now consumers can access this content when, where, and how they want.  This increased competition and increasingly complex distribution and consumption model is making it more challenging for broadcasters to connect and engage with viewers. To help understand this evolution, we collaborated with a leading broadcast network on a foundational study in the content discovery path to viewership and successfully identified specific actions and high impact segments to connect with and engage. 

The fact is, solutions like McDonald’s temporary price promotion may alleviate short-term sales slumps, but brands need to be thinking “bigger picture” to develop innovative, sustained solutions to address long-term challenges like increased competition and evolving customer needs.

 Judy Melanson leads CMBs Travel & Entertainment practice and enjoys working with clients on innovative strategies to stand out from competition, remain relevant, and break through the clutter.  She’s an aspiring painter, a yogi and a slow long-distance runner. 

Topics: customer experience and loyalty, growth and innovation

What Winning Really Means in the Corporate World

Posted by Judy Melanson

Wed, Mar 09, 2016

photo by lincolnblues on FlickrWhen I watched this year’s Academy Awards, I celebrated with the rest of Hollywood when—after six previous losses—Leonardo DiCaprio won his first Oscar. USA Today reported: “It was an arduous journey for DiCaprio himself getting to the Oscars stage and taking a winning lap, but he got there. And for now at least, undoubtedly, he is king of the world.” King of the World. The Winner. 

All this talk about “winning” (given the Oscars and the political primary season) has me thinking about what it takes to be a winner in the corporate world. To win in a crowded field, you must:

  • Be excellent: Winners consistently perform better than competitors. They understand the importance of skill, practice, training. . .and maybe a little bit of luck!
  • Be different: Winners capitalize on their unique strengths to propel themselves forward and stand out from competitors.
  • Take risks: Living a life of safety and conformity may be really comfortable, but winners push the envelope, try different things, and take paths that others don’t.
  • Surround themselves with a high-performing team: In every category—sports, entertainment, business, etc.—winners are supported by a group of committed, talented colleagues.
  • Project confidence: Winners expect to win. They project confidence in their body language, posture, tone, and words. 

For those of us executives and managers without a golden statue, medal, or election, how can we tell if we’re winning?  

In business, we frequently use sports—and war—metaphors to describe our activities and accomplishments. We hit a home run with a new ad campaign. We battle for market share. But, the definition of winning varies by industry and company. For some, it can be measured by stock price/performance; for others, it’s measured by market share. But the focus on market share, in a rapidly changing environment, can mean that you’re the winner in a market that’s shrinking or disappearing altogether. 

Unlike a single metric, a balanced scorecard—aligned with the future success of your organization and considering multiple metrics (financial, customer, employee, and operational)—may provide a better assessment of organizational “winning.” 

ralph waldo emerson success quoteFor most of us, there is no finish line. Because of this, we all have to individually define what success means to us in our current job. From my perspective, in addition to executing on the core requirements of our jobs, success means that we are continually:

  • Improving: Always developing, learning, and evolving our skills
  • Contributing: Supporting the financial success of our firms
  • Purposeful: Acting with passion, genuine interest, and excitement   

On my bureau, I have a framed copy of Ralph Waldo Emerson’s definition of success. I will never win an Academy Award or Gold Medal, but I will be successful, and I will be a winner.    

Shall I start writing my acceptance speech? 

Judy leads the Travel and Entertainment Practice and has a red carpet dress picked out just in case she gets nominated in the future.   

Our new Consumer Pulse study explores Millennial attitudes and behaviors toward banking and finance.

Download the full report here!

Topics: consumer insights

What's the Emotional Impact of Your Ancillary Revenue Strategy?

Posted by Judy Melanson

Tue, Oct 13, 2015

The CarTrawler Yearbook of Ancillary Revenue reports that airlines generated $38 Billion in ancillary revenue in 2014, up 20% year over year. The report highlights the brands generating the most ancillary revenue–in terms of total revenue generated ($5.86 billion for United Airlines), the percent of revenue it represents (38.7% of Spirit Airline’s revenue) and discloses top revenue sources (e.g., frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals).

Clearly, ancillary revenue is not confined solely to airlines; theme parks, cruises, car rentals, hotels all boost revenues from selling additional products, services and measure.jpgmerchandise. And it’s easy to see why. In addition to driving incremental revenue, ancillary products and services enable a supplier to (1) offer a competitive base price - essential (particularly in some segments like cruising) to enter into a traveler’s consideration set; and (2) meet the needs of their guests by merchandising – and conveniently delivering – what customers crave and where they’re willing to spend extra.

But there are potential costs as well. A quick read of the Cruise Critic blog points to ‘high-pressure’ sales tactics employed by ship employees and the negative impact it has on the guest experience. Eavesdrop on airline rent-a-car counters and you’ll hear the ‘fear, uncertainty and doubt’ in the voice of infrequent car renters. And hop onto a Spirit airlines to get an earful of complaints (“$3 for a water bottle?!”). Suppliers—particularly in the Hospitality industry—need to think about their brand position and why their customers buy from them as they consider the revenue and cost of this incremental revenue stream.

Our recommendation: to develop a customer-centric ancillary revenue strategy you need to consider the ‘emotional impact’ it will have on your key customer segments and the emotional fingerprint your brand wants to leave on its customers. Is your brand in the business of making key customers feel delighted? Secure? Valued? If so, the Ancillary Revenue offers should avoid making customers feel angry and frustrated! First step is to identify the top emotional drivers of your brand and investigate whether the Ancillary Revenue products are aligned; consider whether the revenue strategy reinforces, or conflicts with, the desired emotional end-benefit. Watch our recent webinar to learn about our approach: EMPACT℠: Measuring Your Brand's Emotional Impact

There are plenty of positive examples of ancillary revenue opportunities aligned with the desired emotional impact. Here are a few:

Disney: There is no FastPass on rides for younger kids at Disney – and the wait time can easily surpass the patience of kids… and their parents. On a recent trip to Disneyworld, a colleague spent over $100 buying buzzing, spinning, bubble-blowing toys from push-carts surrounding the rides. The toys kept her son happy and occupied. She felt delighted; turning waiting in line into a fun instead of a frustrating experience.

Disney mastery in this area is evident. It successfully offers many products and services that drive ancillary revenue that reinforce the desired emotional outcomes – during and after the trip: the MemoryMaker photo package, the pins/guest books/signatures and stamped pennies, the character breakfasts.

Tigerair, serving Asia-Pacific destinations, offers a fee-based service to travelers waiting for a flight connection of at least eight hours where they can visit the city-center and go sightseeing. As a traveler, I’d feel productive, happy and secure (knowing that I’d be back in time for my flight!)

Hilton Worldwide: When traveling, for business and pleasure, most travelers describe Wi-Fi as an essential service. For years, most major full service hotel brands provided access for a daily fee. Slowly, but surely, major brands like Hilton Worldwide have moved to a position of providing basic access to all loyalty program members. Doing so removes a highly charged negative emotion and reinforces a feeling of ‘being valued.’ Ancillary revenue will be created through sales of the premium internet service with the negative emotional blowback of ‘nickel and diming’ for a basic requirement.

The key take-away: The quest for ancillary revenue will only heat up. Ensure your strategy aligns with – and supports – the reasons customers buy from you and the emotional benefit they’re looking to achieve.

Learn More About EMPACT℠

Topics: travel and hospitality research, EMPACT, emotional measurement, customer experience and loyalty

CMB Researcher in Residence: A Chat with Avis Budget Group's Eric Smuda

Posted by Judy Melanson

Thu, Apr 16, 2015

researchers in residence, avis budget group, eric smudaAvis Budget Group’s VP of Customer Insights and Experience, Eric Smuda, sat down with CMB’s Judy Melanson to talk about Customer Experience, suppliers, and his work as a corporate insights executive.

Eric, it’s always fun to listen and learn from you. I’d like to start by asking a broad question: why is managing the customer experience important for Avis?

Managing the experience is critical for us—and critical for the car rental industry as a whole—because it’s the only way we can differentiate ourselves. The products we offer are identical to the products our competitors offer. We don’t have a location advantage because our competitors are immediately next door. There aren’t no-show fees, so customers are free to choose any company. It’s solely customer experience that differentiates us from our competitors and that drives growth.

Tell me a little bit about your job.

My role is to identify customer pain points and to design improvements in our customer experience. My team gathers and shares customer experience measurement data and marries that data with our operational, reservation, and financial data to really understand what, why, when, and where something is happening. This helps ABG define improvement priorities and get executive sponsorship, funding, and resources for those priorities.

How does your team interact with your end-users—both corporate and on-site?  

We want to drive macro change at a corporate level and location-specific change at a local level. One of our newer initiatives is the customer experience governance council, which includes all of North America’s senior management as well as key customer touchpoint owners.

My analytics team shares their findings with the council on a monthly basis. That way, the council can prioritize the projects we want to invest in. We then align executive sponsors, resources, and funding with those initiatives. This monthly meeting also gives us the opportunity to report back on progress made on previous initiatives.  We’ll share those insights with the marketing organization and communicate any changes we make with the customer base.

As you reflect back on the years that you’ve been at Avis, what are some of the changes you’ve made that have had the greatest impact on the customer experience?

One change that stands out is in rental rate price consistency (RRPC). We learned that when customers made reservations on our website, the site wasn’t accurately taking the daily rate, combining it with any add-ons he/she might have (insurance, car seats, GPS, XM radio, etc.), and then correctly calculating the taxes. So customers weren’t getting an accurate final bill. Now they do with the RRPC project, and we’ve seen a significant decrease in our pricing and billing complaints.

Price and cost are such important considerations in the purchase decision because they can be dissatisfiers, so that’s great.

Absolutely. We now know from our text analytics program that billing complaints are the biggest driver of negative Net Promoter Scores. The RRPC project has been one way we’re reducing those pain points and the number of calls going into our call center, and it’s had a large impact for our customers.

Another thing I’d like to mention is the rollout of the Select & Go experience to our top 50 locations. Some customers want to have the option of selecting another car if they don’t like the one we assign to them. This program was born out of that customer feedback. Customers can now receive a notification on their phone about which spot their assigned car is in, come see the car, and either take the assigned car or go to the Select & Go exchange lot where they can exchange the car for free. We also have an upgrade lot where they can decide whether they’re willing to pay $20 or $25 more to upgrade to another car class. This has been a customer experience improvement, and it’s also actually driven $3 million to $4 million in incremental revenue for the company.

That’s fantastic!

It’s a win for customers and a win for ABG. Another thing we know is that speed of service is of the utmost importance. We get more comments about speed of service in our text analytics engine than we do about anything else, so we’ve been taking a look at the entire rental process. We looked at over 100,000 customer verbatims and broke them down based on where they sit in the rental process or in the customer experience. We identified 20 projects we can complete to impact the customer speed of service at different stages of the rental experience. About half of those projects are active now, and customers should definitely look for significant upgrades over the next year or two in our ability to serve them more quickly.

I love that you’re addressing the customer needs more globally. You’re not making a touchpoint-by-touchpoint improvement, but rather an improvement about the customer’s need for speed across his/her entire engagement and experience.

I think that's the biggest philosophical change we've made over the last couple years as it relates to our customer experience program. Rather than looking at it as location-specific and driving change at the individual level, we’re now evaluating customer experience much more comprehensively. We look at macro issues at a division level that impact customers everywhere, and we start to fund and drive change in those identified areas.

What’s going to be different in customer experience at Avis in the next two years?

We’re working on a flight disruption service, which is relevant given the winter we’ve had in the Northeast. This service proactively reaches out to customers whose flights have been canceled and asks them whether they’d like to keep the car another day, turn it into a one-way rental and just drive home, and more. We want customers to know we can get them home or wherever they need to be.

Great! Let’s move a little bit more into research, tell me: what insights get you most excited?

Our program is constantly evolving as we bring in new brands and continue to evaluate our business. CMB was with us at the beginning of this journey, and you guys know that our customer experience program started with roughly 150 to 200 of our top airports.

We’ve also expanded it globally through our partners EMEA and Asia Pacific. The bigger growth challenge for us from a learning standpoint is adding the relationship view of the customer to the evaluations of the transactions they have with us. That will let us know not only how we did in Phoenix yesterday, but also how we’re doing across all of the interactions customers have with our various brands. So all of this growth we’re making in our customer experience measurement program is absolutely something I’m excited about.

As far as things that excite me, it’s really when we can dive down and understand specific customer pain points that affect specific types of customers in specific types of situations. For example, we know customer satisfaction is lower for certain types of trips vs. others, so when we can start to dig and combine that knowledge with other information like pricing strategies, billing strategies, and other policies, you start to understand why. Then, we can begin to have conversations with business decision makers and explain to them what things are getting in the way of the customer experience so they can reconsider and change those practices and policies. My passion is always trying to make things easier and better for customers, so what’s most exciting for me is the possibility of accomplishing that through those conversations.

You’re the customer advocate. There might be pricing or revenue objectives, but you can speak for groups of customers, which needs to be done in order to build engagement with the brand.

That’s always the big challenge: trying to balance customer needs against revenue and profit goals.

What would you tell market research vendors about how they can best support the decisions you need to make?

What an age old question! I feel like the supplier side has always struggled with understanding our business at a level at which they can help us drive business decisions and not just simply provide information. We want suppliers to provide context, combine the findings and the context with our financial drivers, and use all of that to help us make a more informed business decision. That’s a true partnership. That’s where I’ve had the most challenges with suppliers in the past. It’s also why I value working with your CMB team.

Can you talk a little bit about your relationship and partnership with CMB?

You understand our business as well as our management’s priorities. We have a great, trusted relationship—your guidance, partnership, and advice have been wonderful. You’ve transcended from being a vendor to being a very key advisor and trusted partner.

Got a market research question that you're just dying to have answered? Ask our Chief Methodologist, and he might tackle your question in his next blog!

Ask Dr. Jay!

Topics: travel and hospitality research, Researchers in Residence, customer experience and loyalty

Focusing in a World Full of Distractions

Posted by Judy Melanson

Fri, Nov 21, 2014

cmb, focus, communicationOur company’s Internet was down for a few hours earlier this week. While the IT team scrambled to identify and fix the problem, the project staff’s reaction to the news caused many of them (us!) to look like a deer caught in headlights: stunned. But because we, by nature, are problem solvers, the staff quickly sprang into action. The “work-arounds” were identified and shared, and people dispersed. Some, in the quest for free Wi-Fi, temporarily moved into Starbucks or the train station for a few hours. Others took the time to engage with colleagues in-person (!) to brainstorm, strategize, or simply catch up. It wasn’t long before the IT team got the company back online, but the service interruption has caused me to reflect on our work and purpose.Years ago, in my M.B.A. capstone strategy course at Babson College, I competed in a strategy game with other teams in the class. The teams had to use the information available to make decisions and set the strategy for our pretend companies. We had to answer questions like: what markets should we conquer? What should the features and pricing structures be for our products? What investments should we make in research, advertising, and operations?

My team chose a simple strategy: world domination. We decided we could outmaneuver our competitors with a first-to-market strategy. We flew out of the gate, introduced our first generation product in multiple markets, and, over the course of several weeks. . . we failed in a dramatic fashion. The lesson I learned from the course is one I carry with me to this day: focus. The teams that performed best studied the market and adapted their products and pricing structures to reflect market needs. Only then did they proceed with a plan and a goal to execute their plan as well as they could. 

I’m celebrating my 22nd anniversary at Chadwick Martin Bailey this week, and one of the things that I love about what we do is helping our clients make decisions—particularly decisions that are complex and have some level of risk associated with them. The information we provide enables clients to focus on high potential opportunities across a range of areas: market segments, operational improvements, new products, digital marketing, high-value customers, and more. We help our clients determine which alternatives have potential (for growth, for profit, for brand extension) and provide insight into how they can tackle those high potential alternatives. Resources—like time and money—are limited everywhere. Deciding what to do and what to ignore is essential for business success, team focus, execution, and sanity.

The Internet interruption this week forced me to focus on what I had to do without distractions. It also, strangely enough, empowered me to choose how to spend my day instead of feeling like my job is to constantly respond to communications. At this very moment, I can be reached instantly via four phones, three social networks, two email addresses, and one online chat system. . . that’s ten communication channels. At this stage in my career, communication with clients, prospects, and team members is essential to my success, which is why I monitor and quickly respond to all ten communication channels.  But this week’s Internet interruption has caused me to challenge my use of these channels and to consider how I can be more effective and focused in a world of constant interruption. 

Anyone want to guess what my 2015 New Year’s Resolution will be? 

Judy is VP of CMB's Travel and Entertainment practice and loves collaborating with her clients. She's the mom of two college students and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC.

WEBINAR: The New Hotel Path to Purchase: The Mobile, Social, and Online Journey – Listen to Judy in action as she talks about this study we did as part of CMB’s Consumer Pulse program. We asked 2,000 leisure travelers to share their journey from awareness to booking. This webinar will give you insight into the role of mobile, apps, customer reviews, and social media. 

Watch Now!

 

Topics: Chadwick Martin Bailey, strategy consulting, business decisions, consumer insights, market strategy and segmentation

New Consumer Pulse: Mobile Users Upending Hotel Path to Purchase

Posted by Judy Melanson

Tue, Aug 26, 2014

Our latest Consumer Pulse report—a study of 2,000 leisure travelers—found that mobile, social, and online factors influence travelers very differently at separate stages of the hotel booking purchase journey.

We know travelers have a ton of information at their fingertips as they plan and book hotels for their vacations. The challenge for hotels is to decide how to align marketing budgets to best intercept potential travelers—delivering desired content on the appropriate device and through the right channels and partners.

For more information on how technology is changing the path to purchase download the full report here and see an infographic with a few of the findings below:

The New Hotel Booking Path to Purchase

Download the full report.

For more on our mobile stitching methodology, please see CMB's Chris Neal's webinar with Research Now: Watch the Webinar

Judy Melanson is the head of CMB's Travel and Hospitality Practice. She just returned from a very leisurely trip to South Africa and Zimbabwe.

Stephanie Kimball is CMB's Senior Marketing Manager and created the infographic above. She can't wait for her upcoming trip to London, Amsterdam, Munich, and Prague!

Topics: technology research, infographic, mobile, path to purchase, travel and hospitality research, Consumer Pulse, customer journey

When is a Loyalty Program Member More Trouble than He's Worth?

Posted by Judy Melanson

Tue, Jan 07, 2014

ScaleRecently, the US Supreme Court heard an argument from frequent flyer Binyomin Ginsberg, whose membership in Northwest’s WorldPerks program was revoked, after he complained too often. While the practical and legal questions of enforcing contracts under the specialized application of airline deregulation are interesting, the question for us today is: does loyalty run both ways?  Any customer-facing employee of a loyalty program can probably name a handful of customers who regularly call to complain—about the service, the rewards, the benefits. They, like the people at Northwest/Delta, may feel that some of these customers contact them for the sole purpose of obtaining compensation. Should their frustration with these members lead them to take their points away, or cut them off entirely? 

Let’s look at the case of Binyomin Ginsberg:   

  • He was a very frequent flier – 75+ times/year with top Platinum Elite status.  At $350/flight his annual value to NWA is nearly $30k.

  • In 8 months, he complained 24 times about late and lost luggage and long delays. He didn’t complain to the flight attendants, gate personnel or pilots but instead to top managers in the corporate office of the frequent flier program. "I did exactly what they asked you to do," Ginsberg said in an interview with NPR. "If you have a negative experience, they want you to give them feedback."  And so he did — a lot.

  • Ginsberg says he never asked for anything when logging his complaints; the airline reports he repeatedly asked for compensation, and that they tried to soothe the unhappy flier.  In 2007, Ginsberg was awarded nearly $2k in travel vouchers, 78k bonus miles and $491 for a lost bag. 

  • And then he got the call telling him he was no longer a member of the program, that his miles had been confiscated and he’d been black-listed and would never be able to join the program again. 

  • He was told he complained too much about the service and the airline has ‘total discretion’ in such matters. 

The case will be decided in the spring. In the meantime, here are some questions for you to ponder as you consider how loyal you are to your loyal customers: 

Do you solicit feedback from your members on their experience with your product/service? 

If you do, are you:

  • Making improvements based on the feedback

  • Communicating the improvement you’ve made

  • Responding in a timely fashion to individuals who ask to be contacted

  • Sharing results and verbatim customers comments with senior managers 

Take the case of AeroMexico, whose customer feedback surveys revealed the two biggest pain points impacting loyalty were on-time performance and delay management—hardly atypical for an airline, but the survey also revealed customers felt the airline’s staff lacked empathy in communicating delays. To fix this problem, the airline’s customer experience team recruited key executives to personally call customers who have experienced delays—the executives are coached to resolve issues and listen to the customer. And according to AeroMexico’s VP of Customer Experience, Eduardo Piquant, the innovative program has been a success: “We always start with an apology for the delay and then ask for feedback about what we can do better. In the beginning, people don’t believe it is the CEO or CFO or other senior executive calling. But when they realize this is a true company-wide project, the results are remarkable. And what we’ve found is simple: Customers just want to be heard.”  The airline estimates this approach has resulted in a win back of more than 3000 customers. 

Do you have a clear policy in place for compensating members for a bad experience?

For many companies, continuously improving quality standards and keeping customers satisfied are the key goals to maintaining a competitive position in the marketplace. But these intangible goals often can be difficult to achieve in practice and occasionally – for reasons within and outside your control – customers will have a bad experience.  And in the world of Trip Advisor and Facebook, these bad experiences and your corporate reactions to those experiences will be widely shared and will influence the decisions of other prospective guests. 

Assuming the corporate decision on compensation has been made and is appropriate, the actions associated with dealing with disappointed members (whether you compensate them or not) are the same:  

  • Express gratefulness for their business

  • Listen to complaints with empathy

  • Clearly and consistently present the information on compensation policy

  • Track the behavior of guests “post-interaction”– do they continue to spend (as they did prior to the problem)?  Or has the problem (and your recovery efforts) caused them to take their business elsewhere?

A compensation policy doesn’t get much clearer than Hampton Inn hotel’s 100% Satisfaction Guarantee. While the idea of a “No questions asked 100% guarantee” might sound outlandish, the policy has been a success since it was implemented nearly 25 years ago.  Years ago, Phil Cordell, the senior VP of Brand Management at the hotel chain described the success of the program: “...Compared to the more than $6 million in free rooms we’ve given away over the past decade due to invoking the Guarantee, we have been able to track more than $41 million in repeat business, a nearly seven-fold return. But more than just dollars and cents, we’ve converted unhappy guests into satisfied customers across the country, loyal to the Hampton Inn brand.”

Are you doing all you can to take care of your highest value customers?

One of the primary benefits of a loyalty program is the ability to track each customer’s spend so you can identify your most valuable customers. Calculating the percent of corporate revenue obtained from each membership tier puts their value in perspective. While every customer is important, from a revenue perspective, some customers are clearly more important.

If your loyalty program has tiers:

  • Ensure your compensation policy recognizes and reflects the unique value associated with your top tier guests. Create an elite group of customer service reps to deal with your top tier guests and their challenges. 

  • Conduct research to determine the share of wallet you get from members, and how much they spend with competitors. Ask questions to examine which competitors they use–for which occasions and why–to set strategies to concentrate their spend, and further build their value with your firm. 

  • Closely examine the behavior of your top tier members to see if it’s time to develop a super-elite level. You may find a sizable group of customers who max out on your program, and then move their business to your competitor. 

Caesars Entertainments’ Total Rewards program, the largest casino rewards program in the world, has 4 distinct tiers. The value of a member at each tier is carefully calculated, and rewards and service aligned with value, this insight leads to smoother operations, better front-line service, and differentiated pricing. Joshua Kanter, Senior Vice President, Revenue Acceleration and Total Rewards, reports: “We have a ‘differentiated service model’ that’s keyed off of Total Rewards tiers. We strive to provide a great experience to every guest, including our entry-level Gold members but we also have special hotel check-in areas, shorter lines and exclusive lounges for our Diamond and Seven Stars members. And our VIP-focused organization engages with our most high-value customers individually. When a guest presents their card, every member of our front-line staff responds immediately with the level of service appropriate to the tier.”

So, can I imagine a customer who was so much trouble that he or she needed to be kicked out of their loyalty program? Sure, but the crimes committed would have to be much more egregious than too many complaints. Your loyal customers have made a commitment to you, they’ve shared their information with you, they’ve chosen you when it might have been easier to go with a competitor, and many have advocated for you with their colleagues, friends and family: doesn’t that deserve some loyalty in return?

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with her clients. She's the mom of two college students and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

Topics: travel and hospitality research, customer experience and loyalty

Do You Need a Loyalty Program to Drive Customer Loyalty?

Posted by Judy Melanson

Tue, Sep 17, 2013

Originally posted in Loyalty360

Loyalty CardsIn early July, shoppers at Shaw’s, Albertsons, Acme, Jewel-Osco and Star were greeted at the door and asked to hand in their store loyalty cards. These chains, recently acquired by Cerberus Capital Management LP, all shut down their loyalty programs, focusing instead on everyday low prices and storewide sales.The move left some industry analysts scratching their heads, questioning why the brands would kill off decades old programs with millions of members. They pointed to the vast quantities of information that can be harnessed improve merchandising and marketing, and to customize products and messages. They hypothesized that the stores hadn’t invested in the data mining activities needed to extract insights. Perhaps…

Or perhaps the financial experts at Cerberus had done the calculation and determined that in today’s marketplace, the loyalty program – and its strategy and value– was standing in the way of profitable growth.

Think about it. What impact do the grocery store loyalty program cards you carry on your key chain have on your behavior?  Can you point to any benefit you’ve received beyond the ‘loyalty member price’ and coupons at check-out? Can you point to any special benefits you receive from your primary grocery store?  Or do you get the same level of benefits whether you spend $1 or $1000 per trip?

I think there are 3 compelling reasons these grocery stores don’t need a loyalty program to drive customer loyalty:

1. They need to compete with Wal-mart: These brands have to compete with Wal-mart and other warehouse stores offering EDLP (everyday low prices). To grocery and drug store shoppers, price matters!  And to sustain a business and drive profits at low prices, the brands need to focus on operational efficiency – not customer intimacy promised by a loyalty program.

2. They can take a local approach: The executives at these brands promise that analysis will be done at the store – not the customer – level.  Mining the data at the individual store level will, they theorize, provide plenty of data on what merchandise is important to shoppers and the impact of marketing decisions on spend. They also believe that taking a local approach – where store managers can make marketing and merchandising decisions – will enable stores to better meet customer needs.

3. They can focus on what matters to shoppers: Most customers are applauding the move to consistently lower priced products.  In addition, they suggest the brands focus on the basics – the features that drive their shopping decisions, including: (1) clean the store; (2) stock the shelves; (3) keep sufficient registers open to reduce check out time; (4) mark sale items clearly; (5) create a customer-focused culture.

In most locations, shoppers have many choices and in the absence of consistent delivery on these core elements, customers won’t shop at the stores, loyalty points or not.

“Sun setting” a loyalty program is not a low-risk decision. But program managers in every industry must be prepared to defend their programs by answering the following questions:How do you recognize and reward your most loyal and valuable customers?  How do you make participating in the program worth their while…and something they would miss if it were not present.

  • If you ran a grocery store program, how would you treat the person who spent $1000 per trip? Would your first check-out register be for those with 10 or fewer items?  Wouldn’t you help the shopper get the items into their car?  Into the house?  Into the pantry? Do you really have to make them come to the store and shop? Do these customers get any special recognition in store?  Could they visit customer service to get a free cup of coffee or a piece of a new signature pastry when they enter the store?

What mechanisms are in place to grow the share of wallet from light shoppers?  What incentives and processes are in place to support your shopper’s goals and encourage them to spend a higher share of wallet with you?

  • Could you look in my basket and make recommendations for recipes that my family might like?  Or like Amazon and Netflix, develop a recommendation engine (people who buy xyz also buy abc)?  Would you price match on identical items to prevent shoppers from fragmenting their baskets?

What has your organization learned from the data collected from the program?  Think about the tactical (e.g., merchandising, marketing) and strategic (e.g., location selection, branding, pricing) decisions supported and how you can get more value from the data you collect.

  • Have you shared insights with store managers?  Your media partners/ad agency?  If not, schedule some meetings and connect data you have with what’s relevant to them. Today.

Consider what would happen if your loyalty program “went away?” Are you prepared to answer the question “Do you need a loyalty program to drive customer loyalty?” in a way that would satisfy your CFO?

  • Get and communicate data on the value of your program, and how to drive additional value.  

It will be interesting to see the impact of Cerberus’ decision on the industry as a whole.  Will other grocers, to compete with Wal-mart, follow suit and disband their programs?  Or will we start to see some retailers ‘break away’ from the pack and to drive incremental behavior and true loyalty?

Where would you place your bet?

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with her clients. She's the mom of two college students and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

TMRE discount code

Headed to TMRE next month? Use our code CMB2013, and get 25% off of your registration.

In early July, shoppers at Shaw’s, Albertsons, Acme, Jewel-Osco and Star were greeted at the door and asked to hand in their store loyalty cards.  These chains, recently acquired by Cerberus Capital Management LP, all shut down their loyalty programs, focusing instead on everyday low prices and storewide sales. 

The move left some industry analysts scratching their heads, questioning why the brands would kill off decades old programs with millions of members.  They pointed to the vast quantities of information that can be harnessed improve merchandising and marketing, and to customize products and messages.  They hypothesized that the stores hadn’t invested in the data mining activities needed to extract insights.  Perhaps…

Or perhaps the financial experts at Cerberus had done the calculation and determined that in today’s marketplace, the loyalty program – and its strategy and value– was standing in the way of profitable growth. 

Think about it.  What impact do the grocery store loyalty program cards you carry on your key chain have on your behavior?  Can you point to any benefit you’ve received beyond the ‘loyalty member price’ and coupons at check-out?  Can you point to any special benefits you receive from your primary grocery store?  Or do you get the same level of benefits whether you spend $1 or $1000 per trip? 

I think there are 3 compelling reasons these grocery stores don’t need a loyalty program to drive customer loyalty:

1)     They need to compete with Walmart:  These brands have to compete with Walmart and other warehouse stores offering EDLP (everyday low prices).  To grocery and drug store shoppers, price matters!  And to sustain a business and drive profits at low prices, the brands need to focus on operational efficiency – not customer intimacy promised by a loyalty program. 

2)     They can take a local approach:  The executives at these brands promise that analysis will be done at the store – not the customer – level.  Mining the data at the individual store level will, they theorize, provide plenty of data on what merchandise is important to shoppers and the impact of marketing decisions on spend.  They also believe that taking a local approach – where store managers can make marketing and merchandising decisions – will enable stores to better meet customer needs. 

3)     They can focus on what matters to shoppers:  Most customers are applauding the move to consistently lower priced products.  In addition, they suggest the brands focus on the basics – the features that drive their shopping decisions, including: (1) clean the store; (2) stock the shelves; (3) keep sufficient registers open to reduce check out time; (4) mark sale items clearly; (5) create a customer-focused culture. 

In most locations, shoppers have many choices and in the absence of consistent delivery on these core elements, customers won’t shop at the stores, loyalty points or not. 

“Sunsetting” a loyalty program is not a low-risk decision.  But program managers in every industry must be prepared to defend their programs by answering the following questions: 

1)     How do you recognize and reward your most loyal and valuable customers?  How do you make participating in the program worth their while…and something they would miss if it were not present.

·       If you ran a grocery store program, how would you treat the person who spent $1000 per trip?  Would your first check-out register be for those with 10 or fewer items?  Wouldn’t you help the shopper get the items into their car?  Into the house?  Into the pantry? Do you really have to make them come to the store and shop?  Do these customers get any special recognition in store?  Could they visit customer service to get a free cup of coffee or a piece of a new signature pastry when they enter the store? 
 

2)     What mechanisms are in place to grow the share of wallet from light shoppers?  What incentives and processes are in place to support your shopper’s goals and encourage them to spend a higher share of wallet with you? 

·        Could you look in my basket and make recommendations for recipes that my family might like?  Or like Amazon and Netflix, develop a recommendation engine (people who buy xyz also buy abc)?  Would you price match on identical items to prevent shoppers from fragmenting their baskets?
 

3)     What has your organization learned from the data collected from the program?  Think about the tactical (e.g., merchandising, marketing) and strategic (e.g., location selection, branding, pricing) decisions supported and how you can get more value from the data you collect.

·       Have you shared insights with store managers?  Your media partners/ad agency?  If not, schedule some meetings and connect data you have with what’s relevant to them. Today. 
 

4)     Consider:  what would happen if your loyalty program “went away?” Are you prepared to answer the question “Do you need a loyalty program to drive customer loyalty?” in a way that would satisfy your CFO? 

·       Get and communicate data on the value of your program.  And how to drive additional value.   

 

It will be interesting to see the impact of Cerberus’ decision on the industry as a whole.  Will other grocers, to compete with Walmart, follow suit and disband their programs?  Or will we start to see some retailers ‘break away’ from the pack and to drive incremental behavior and true loyalty? 

Where would you place your bet? 

- See more at: http://loyalty360.org/loyalty-management/september-2013-online-issue/do-you-need-a-loyalty-program-to-drive-customer-loyalty#sthash.gK29hlJu.dpuf

Topics: customer experience and loyalty, retail research

Tauck Creates a New Type of Travel Experience

Posted by Judy Melanson

Wed, Jul 17, 2013

Originally published in Loyalty360

CMB Focused InnovationInnovating and successfully launching new products, be they loyalty programs or sneakers, is a difficult job requiring significant investment and navigating initiative-sinking risks.  Compounding the problem, for many firms, the innovation process itself is poorly-defined and unfocused—a great idea can morph into a poorly conceived solution or fail at execution.mproving your chance of success requires a focused innovation process—a structured process where you apply the “right method” to the “right questions;” pursuing innovation within constraints, and focusing on untapped market opportunities.

We recently presented a case study of focused innovation in action at the Front End of Innovation conference.  The case study highlights a project with Tauck Worldwide; in partnership with our sister company at the South Street Strategy Group.

Tauck is a travel industry leader; for nearly 100 years, it has focused on providing high value guided tours for its highly satisfied customers. But Tauck recognized some challenges to their future success—the erosion of the guided travel industry and an aging of customer base. They needed to create a new kind of travel experience to meet the needs of affluent Baby Boomers, a population extremely comfortable with researching, planning, and traveling on their own.  In partnership with South Street Strategy Group, our Focused Innovation process involved:

1. Identifying the primary goal, opportunity or business challenge, and constraints: We started by exploring the business context through internal ideation, interviews, and workshops with executives and senior managers. This step helped us answer questions and identify constraints, including the need to:

·       Leverage Tauck’s core competencies

·       Design a new product, addressing unmet needs

·       Hit sales goal of $M in X time period by attracting new customers

2. Investigating the opportunity using multiple methods:  We collected insights from different people (e.g., travel agents, call center reps, potential customers) and information sources to uncover customer needs and preferences. We segmented the Boomer market by travel preferences and conducted in-depth qualitative research to identify the target market and flesh out the desired experience for different types of vacations. The key output was a ranking of travel concepts on key criteria, and an initial read on the market opportunity.

3. Validate and optimize:  So we had some great ideas for new trips and a new market to tackle, but we needed more detail to actually build out the product. We used a Discrete Choice model, to simulate market demand for various product alternatives and prices. This information guided product design and pricing. A critical piece of this stage is emulating real world choices—a trip can sound appealing, but at this stage we want to know who would buy, if they are really interested, and how their interest changes by price.

4. Implementation and go to market: With the concept validated, the Tauck team needed to build out the trips, contract with hotels, and identify top events and attractions for multiple locations. The comprehensive understanding of their target market also guided their decisions, including how to brand the products, establish relevant partnerships, and reach out to potential customers using traditional channels as well as online and social media. Although it’s often glossed over, this critical go-to-market planning stage can mean the difference between success and failure.

culturiousThe result of this focused approach? Tauck launched the Culturious brand as a totally new product line, on time and with unanimous board approval. The new brand meets customer needs by offering small-group tours geared toward active Baby Boomers with an interest in physically challenging, culturally engaging travel. Culturious has consistently received “exceptional” guest satisfaction scores and won the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

Focusing innovation on the end-goal and working within constraints enabled Tauck to quickly launch a successful innovative product. Leveraging their existing competencies to address unmet needs in the Affluent Boomer marketplace enabled them to hit sales goals in Year 1.   

So, what are you waiting for?  Consider your challenge, identify your constraints, and get focused on your Focused Innovation process!

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with her clients. She's the mom of two teens and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC 

Innovating and successfully launching new products –be they loyalty programs or sneakers – is a difficult job requiring significant investment and navigating initiative-sinking risks.  Compounding the problem, for many firms, the innovation process itself is poorly -defined and unfocused—a great idea can morph into a poorly conceived solution or fails at execution.

Improving your chance of success requires a focused innovation process—a structured process where you apply the “right method” to the “right questions”; pursuing innovation within constraints, and focusing on untapped market opportunities.

We recently presented a case study of focused innovation in action at the Front End of Innovation conference.  The case study highlights a project with Tauck Worldwide; in partnership with our sister company the South Street Strategy Group.

Tauck is a travel industry leader; for nearly 100 years, it has focused on providing high value guided tours for its highly satisfied customers. But Tauck recognized some challenges to their future success—the erosion of the guided travel industry and the aging of their customer base.  They needed to create a new kind of travel experience to meet the needs of affluent Baby Boomers – a population extremely comfortable with researching, planning, and traveling on their own.  In partnership with South Street Strategy Group, our Focused Innovation process involved: 

1.     Identifying the primary goal, opportunity or business challenge – and the constraints we had to work within: We started by exploring the business context, through internal ideation, interviews, and workshops with executives and senior managers, leveraging insight and experience in the market, and researching and assessing the competitive landscape. This step helped us answer questions and identify constraints, including a need to:

·       Leverage Tauck’s core competencies

·       Design a new product, addressing unmet needs

·       Hit sales goal of $M in X time period by attracting new customers
 

2.     Investigating the opportunity using multiple methods:  We collected insights from different people (e.g., travel agents, call center reps, potential customers) and information sources to uncover customer needs and preferences.  We segmented the Boomer market by travel preferences and conducted in-depth qualitative research to identify the target market and flesh out the desired experience for different types of vacations. The key output was a ranking of travel concepts on key criteria, and an initial read on the market opportunity.
 

3.     Validate and optimize:  So we had some great ideas for new trips and a new market to tackle, but more detail was required to actually build out the product.  We used a Discrete Choice model, to simulate market demand for various product alternatives and prices.  This information guided product’s design, pricing, and enabled us to focus on those who are most interested in actually purchasing the product. A critical piece of this stage is emulating real world choices—a trip can sound appealing, but at this stage we want to know who and if they are really interested – and how interest changes by price.
 

4.     Implementation and go to market: With the concept validated, the Tauck team needed to build out the trips –contract with hotels and identify top events and attractions for multiple locations. The comprehensive understanding of their target market also guided their decisions, including how to brand the products, establish relevant partnerships, and reach out to potential customers using traditional channels as well as online and social media. Although it’s often glossed over, this critical go-to-market planning stage can mean the difference between success and failure.

The result of this focused approach? Tauck launched the Culturious brand as a totally new product line, on time and with unanimous board approval. The new brand meets customer needs by offering small-group tours geared toward active Baby Boomers with an interest in physically challenging, culturally engaging travel. Culturious has consistently received “exceptional” guest satisfaction scores and won the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

Focusing innovation on the end-goal and working within constraints enabled Tauck to quickly launch a successful innovative product. Leveraging their existing competencies to address unmet needs in the Affluent Boomer marketplace enabled them to hit sales goals in Year 1.     

Top 10 benefits of a focused innovation approach:

1.     Aligns solution/ideation with strategy

2.     Solution is customer centric

3.     Focused on growth markets

4.     Provides flexible framework to drive from insight to action

5.     Enables deep conversations, by function, on goals and insights learned

6.     Adapts to handle “big problems” as well as “ready to test” concepts/ideas

7.     Creates Center of Excellence to facilitate and support efforts in agile manner

8.     Captures learning from each initiative

9.     Facilitates and supports with framework, expert resource and best practices

10.   Provides a governance structure to focus resources, including harnessing power of ideas within the organization

So, what are you waiting for?  Consider your challenge – identify your constraints – and get focused on your focused Innovation process!

- See more at: http://loyalty360.org/loyalty-management/july-2013-online-issue/tauck-creates-a-new-type-of-travel-experience#sthash.gMf5DUVE.dpuf

Innovating and successfully launching new products –be they loyalty programs or sneakers – is a difficult job requiring significant investment and navigating initiative-sinking risks.  Compounding the problem, for many firms, the innovation process itself is poorly -defined and unfocused—a great idea can morph into a poorly conceived solution or fails at execution.

Improving your chance of success requires a focused innovation process—a structured process where you apply the “right method” to the “right questions”; pursuing innovation within constraints, and focusing on untapped market opportunities.

We recently presented a case study of focused innovation in action at the Front End of Innovation conference.  The case study highlights a project with Tauck Worldwide; in partnership with our sister company the South Street Strategy Group.

Tauck is a travel industry leader; for nearly 100 years, it has focused on providing high value guided tours for its highly satisfied customers. But Tauck recognized some challenges to their future success—the erosion of the guided travel industry and the aging of their customer base.  They needed to create a new kind of travel experience to meet the needs of affluent Baby Boomers – a population extremely comfortable with researching, planning, and traveling on their own.  In partnership with South Street Strategy Group, our Focused Innovation process involved: 

1.     Identifying the primary goal, opportunity or business challenge – and the constraints we had to work within: We started by exploring the business context, through internal ideation, interviews, and workshops with executives and senior managers, leveraging insight and experience in the market, and researching and assessing the competitive landscape. This step helped us answer questions and identify constraints, including a need to:

·       Leverage Tauck’s core competencies

·       Design a new product, addressing unmet needs

·       Hit sales goal of $M in X time period by attracting new customers
 

2.     Investigating the opportunity using multiple methods:  We collected insights from different people (e.g., travel agents, call center reps, potential customers) and information sources to uncover customer needs and preferences.  We segmented the Boomer market by travel preferences and conducted in-depth qualitative research to identify the target market and flesh out the desired experience for different types of vacations. The key output was a ranking of travel concepts on key criteria, and an initial read on the market opportunity.
 

3.     Validate and optimize:  So we had some great ideas for new trips and a new market to tackle, but more detail was required to actually build out the product.  We used a Discrete Choice model, to simulate market demand for various product alternatives and prices.  This information guided product’s design, pricing, and enabled us to focus on those who are most interested in actually purchasing the product. A critical piece of this stage is emulating real world choices—a trip can sound appealing, but at this stage we want to know who and if they are really interested – and how interest changes by price.
 

4.     Implementation and go to market: With the concept validated, the Tauck team needed to build out the trips –contract with hotels and identify top events and attractions for multiple locations. The comprehensive understanding of their target market also guided their decisions, including how to brand the products, establish relevant partnerships, and reach out to potential customers using traditional channels as well as online and social media. Although it’s often glossed over, this critical go-to-market planning stage can mean the difference between success and failure.

The result of this focused approach? Tauck launched the Culturious brand as a totally new product line, on time and with unanimous board approval. The new brand meets customer needs by offering small-group tours geared toward active Baby Boomers with an interest in physically challenging, culturally engaging travel. Culturious has consistently received “exceptional” guest satisfaction scores and won the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

Focusing innovation on the end-goal and working within constraints enabled Tauck to quickly launch a successful innovative product. Leveraging their existing competencies to address unmet needs in the Affluent Boomer marketplace enabled them to hit sales goals in Year 1.     

Top 10 benefits of a focused innovation approach:

1.     Aligns solution/ideation with strategy

2.     Solution is customer centric

3.     Focused on growth markets

4.     Provides flexible framework to drive from insight to action

5.     Enables deep conversations, by function, on goals and insights learned

6.     Adapts to handle “big problems” as well as “ready to test” concepts/ideas

7.     Creates Center of Excellence to facilitate and support efforts in agile manner

8.     Captures learning from each initiative

9.     Facilitates and supports with framework, expert resource and best practices

10.   Provides a governance structure to focus resources, including harnessing power of ideas within the organization

So, what are you waiting for?  Consider your challenge – identify your constraints – and get focused on your focused Innovation process!

- See more at: http://loyalty360.org/loyalty-management/july-2013-online-issue/tauck-creates-a-new-type-of-travel-experience#sthash.gMf5DUVE.dpuf

Innovating and successfully launching new products –be they loyalty programs or sneakers – is a difficult job requiring significant investment and navigating initiative-sinking risks.  Compounding the problem, for many firms, the innovation process itself is poorly -defined and unfocused—a great idea can morph into a poorly conceived solution or fails at execution.

Improving your chance of success requires a focused innovation process—a structured process where you apply the “right method” to the “right questions”; pursuing innovation within constraints, and focusing on untapped market opportunities.

We recently presented a case study of focused innovation in action at the Front End of Innovation conference.  The case study highlights a project with Tauck Worldwide; in partnership with our sister company the South Street Strategy Group.

Tauck is a travel industry leader; for nearly 100 years, it has focused on providing high value guided tours for its highly satisfied customers. But Tauck recognized some challenges to their future success—the erosion of the guided travel industry and the aging of their customer base.  They needed to create a new kind of travel experience to meet the needs of affluent Baby Boomers – a population extremely comfortable with researching, planning, and traveling on their own.  In partnership with South Street Strategy Group, our Focused Innovation process involved: 

1.     Identifying the primary goal, opportunity or business challenge – and the constraints we had to work within: We started by exploring the business context, through internal ideation, interviews, and workshops with executives and senior managers, leveraging insight and experience in the market, and researching and assessing the competitive landscape. This step helped us answer questions and identify constraints, including a need to:

·       Leverage Tauck’s core competencies

·       Design a new product, addressing unmet needs

·       Hit sales goal of $M in X time period by attracting new customers
 

2.     Investigating the opportunity using multiple methods:  We collected insights from different people (e.g., travel agents, call center reps, potential customers) and information sources to uncover customer needs and preferences.  We segmented the Boomer market by travel preferences and conducted in-depth qualitative research to identify the target market and flesh out the desired experience for different types of vacations. The key output was a ranking of travel concepts on key criteria, and an initial read on the market opportunity.
 

3.     Validate and optimize:  So we had some great ideas for new trips and a new market to tackle, but more detail was required to actually build out the product.  We used a Discrete Choice model, to simulate market demand for various product alternatives and prices.  This information guided product’s design, pricing, and enabled us to focus on those who are most interested in actually purchasing the product. A critical piece of this stage is emulating real world choices—a trip can sound appealing, but at this stage we want to know who and if they are really interested – and how interest changes by price.
 

4.     Implementation and go to market: With the concept validated, the Tauck team needed to build out the trips –contract with hotels and identify top events and attractions for multiple locations. The comprehensive understanding of their target market also guided their decisions, including how to brand the products, establish relevant partnerships, and reach out to potential customers using traditional channels as well as online and social media. Although it’s often glossed over, this critical go-to-market planning stage can mean the difference between success and failure.

The result of this focused approach? Tauck launched the Culturious brand as a totally new product line, on time and with unanimous board approval. The new brand meets customer needs by offering small-group tours geared toward active Baby Boomers with an interest in physically challenging, culturally engaging travel. Culturious has consistently received “exceptional” guest satisfaction scores and won the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

Focusing innovation on the end-goal and working within constraints enabled Tauck to quickly launch a successful innovative product. Leveraging their existing competencies to address unmet needs in the Affluent Boomer marketplace enabled them to hit sales goals in Year 1.     

Top 10 benefits of a focused innovation approach:

1.     Aligns solution/ideation with strategy

2.     Solution is customer centric

3.     Focused on growth markets

4.     Provides flexible framework to drive from insight to action

5.     Enables deep conversations, by function, on goals and insights learned

6.     Adapts to handle “big problems” as well as “ready to test” concepts/ideas

7.     Creates Center of Excellence to facilitate and support efforts in agile manner

8.     Captures learning from each initiative

9.     Facilitates and supports with framework, expert resource and best practices

10.   Provides a governance structure to focus resources, including harnessing power of ideas within the organization

So, what are you waiting for?  Consider your challenge – identify your constraints – and get focused on your focused Innovation process!

- See more at: http://loyalty360.org/loyalty-management/july-2013-online-issue/tauck-creates-a-new-type-of-travel-experience#sthash.gMf5DUVE.dpuf

Innovating and successfully launching new products –be they loyalty programs or sneakers – is a difficult job requiring significant investment and navigating initiative-sinking risks.  Compounding the problem, for many firms, the innovation process itself is poorly -defined and unfocused—a great idea can morph into a poorly conceived solution or fails at execution.

Improving your chance of success requires a focused innovation process—a structured process where you apply the “right method” to the “right questions”; pursuing innovation within constraints, and focusing on untapped market opportunities.

We recently presented a case study of focused innovation in action at the Front End of Innovation conference.  The case study highlights a project with Tauck Worldwide; in partnership with our sister company the South Street Strategy Group.

Tauck is a travel industry leader; for nearly 100 years, it has focused on providing high value guided tours for its highly satisfied customers. But Tauck recognized some challenges to their future success—the erosion of the guided travel industry and the aging of their customer base.  They needed to create a new kind of travel experience to meet the needs of affluent Baby Boomers – a population extremely comfortable with researching, planning, and traveling on their own.  In partnership with South Street Strategy Group, our Focused Innovation process involved: 

1.     Identifying the primary goal, opportunity or business challenge – and the constraints we had to work within: We started by exploring the business context, through internal ideation, interviews, and workshops with executives and senior managers, leveraging insight and experience in the market, and researching and assessing the competitive landscape. This step helped us answer questions and identify constraints, including a need to:

·       Leverage Tauck’s core competencies

·       Design a new product, addressing unmet needs

·       Hit sales goal of $M in X time period by attracting new customers
 

2.     Investigating the opportunity using multiple methods:  We collected insights from different people (e.g., travel agents, call center reps, potential customers) and information sources to uncover customer needs and preferences.  We segmented the Boomer market by travel preferences and conducted in-depth qualitative research to identify the target market and flesh out the desired experience for different types of vacations. The key output was a ranking of travel concepts on key criteria, and an initial read on the market opportunity.
 

3.     Validate and optimize:  So we had some great ideas for new trips and a new market to tackle, but more detail was required to actually build out the product.  We used a Discrete Choice model, to simulate market demand for various product alternatives and prices.  This information guided product’s design, pricing, and enabled us to focus on those who are most interested in actually purchasing the product. A critical piece of this stage is emulating real world choices—a trip can sound appealing, but at this stage we want to know who and if they are really interested – and how interest changes by price.
 

4.     Implementation and go to market: With the concept validated, the Tauck team needed to build out the trips –contract with hotels and identify top events and attractions for multiple locations. The comprehensive understanding of their target market also guided their decisions, including how to brand the products, establish relevant partnerships, and reach out to potential customers using traditional channels as well as online and social media. Although it’s often glossed over, this critical go-to-market planning stage can mean the difference between success and failure.

The result of this focused approach? Tauck launched the Culturious brand as a totally new product line, on time and with unanimous board approval. The new brand meets customer needs by offering small-group tours geared toward active Baby Boomers with an interest in physically challenging, culturally engaging travel. Culturious has consistently received “exceptional” guest satisfaction scores and won the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

Focusing innovation on the end-goal and working within constraints enabled Tauck to quickly launch a successful innovative product. Leveraging their existing competencies to address unmet needs in the Affluent Boomer marketplace enabled them to hit sales goals in Year 1.     

Top 10 benefits of a focused innovation approach:

1.     Aligns solution/ideation with strategy

2.     Solution is customer centric

3.     Focused on growth markets

4.     Provides flexible framework to drive from insight to action

5.     Enables deep conversations, by function, on goals and insights learned

6.     Adapts to handle “big problems” as well as “ready to test” concepts/ideas

7.     Creates Center of Excellence to facilitate and support efforts in agile manner

8.     Captures learning from each initiative

9.     Facilitates and supports with framework, expert resource and best practices

10.   Provides a governance structure to focus resources, including harnessing power of ideas within the organization

So, what are you waiting for?  Consider your challenge – identify your constraints – and get focused on your focused Innovation process!

- See more at: http://loyalty360.org/loyalty-management/july-2013-online-issue/tauck-creates-a-new-type-of-travel-experience#sthash.gMf5DUVE.dpuf

Innovating and successfully launching new products –be they loyalty programs or sneakers – is a difficult job requiring significant investment and navigating initiative-sinking risks.  Compounding the problem, for many firms, the innovation process itself is poorly -defined and unfocused—a great idea can morph into a poorly conceived solution or fails at execution.

Improving your chance of success requires a focused innovation process—a structured process where you apply the “right method” to the “right questions”; pursuing innovation within constraints, and focusing on untapped market opportunities.

We recently presented a case study of focused innovation in action at the Front End of Innovation conference.  The case study highlights a project with Tauck Worldwide; in partnership with our sister company the South Street Strategy Group.

Tauck is a travel industry leader; for nearly 100 years, it has focused on providing high value guided tours for its highly satisfied customers. But Tauck recognized some challenges to their future success—the erosion of the guided travel industry and the aging of their customer base.  They needed to create a new kind of travel experience to meet the needs of affluent Baby Boomers – a population extremely comfortable with researching, planning, and traveling on their own.  In partnership with South Street Strategy Group, our Focused Innovation process involved: 

1.     Identifying the primary goal, opportunity or business challenge – and the constraints we had to work within: We started by exploring the business context, through internal ideation, interviews, and workshops with executives and senior managers, leveraging insight and experience in the market, and researching and assessing the competitive landscape. This step helped us answer questions and identify constraints, including a need to:

·       Leverage Tauck’s core competencies

·       Design a new product, addressing unmet needs

·       Hit sales goal of $M in X time period by attracting new customers
 

2.     Investigating the opportunity using multiple methods:  We collected insights from different people (e.g., travel agents, call center reps, potential customers) and information sources to uncover customer needs and preferences.  We segmented the Boomer market by travel preferences and conducted in-depth qualitative research to identify the target market and flesh out the desired experience for different types of vacations. The key output was a ranking of travel concepts on key criteria, and an initial read on the market opportunity.
 

3.     Validate and optimize:  So we had some great ideas for new trips and a new market to tackle, but more detail was required to actually build out the product.  We used a Discrete Choice model, to simulate market demand for various product alternatives and prices.  This information guided product’s design, pricing, and enabled us to focus on those who are most interested in actually purchasing the product. A critical piece of this stage is emulating real world choices—a trip can sound appealing, but at this stage we want to know who and if they are really interested – and how interest changes by price.
 

4.     Implementation and go to market: With the concept validated, the Tauck team needed to build out the trips –contract with hotels and identify top events and attractions for multiple locations. The comprehensive understanding of their target market also guided their decisions, including how to brand the products, establish relevant partnerships, and reach out to potential customers using traditional channels as well as online and social media. Although it’s often glossed over, this critical go-to-market planning stage can mean the difference between success and failure.

The result of this focused approach? Tauck launched the Culturious brand as a totally new product line, on time and with unanimous board approval. The new brand meets customer needs by offering small-group tours geared toward active Baby Boomers with an interest in physically challenging, culturally engaging travel. Culturious has consistently received “exceptional” guest satisfaction scores and won the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

Focusing innovation on the end-goal and working within constraints enabled Tauck to quickly launch a successful innovative product. Leveraging their existing competencies to address unmet needs in the Affluent Boomer marketplace enabled them to hit sales goals in Year 1.     

Top 10 benefits of a focused innovation approach:

1.     Aligns solution/ideation with strategy

2.     Solution is customer centric

3.     Focused on growth markets

4.     Provides flexible framework to drive from insight to action

5.     Enables deep conversations, by function, on goals and insights learned

6.     Adapts to handle “big problems” as well as “ready to test” concepts/ideas

7.     Creates Center of Excellence to facilitate and support efforts in agile manner

8.     Captures learning from each initiative

9.     Facilitates and supports with framework, expert resource and best practices

10.   Provides a governance structure to focus resources, including harnessing power of ideas within the organization

So, what are you waiting for?  Consider your challenge – identify your constraints – and get focused on your focused Innovation process!

- See more at: http://loyalty360.org/loyalty-management/july-2013-online-issue/tauck-creates-a-new-type-of-travel-experience#sthash.gMf5DUVE.

Innovating and successfully launching new products –be they loyalty programs or sneakers – is a difficult job requiring significant investment and navigating initiative-sinking risks.  Compounding the problem, for many firms, the innovation process itself is poorly -defined and unfocused—a great idea can morph into a poorly conceived solution or fails at execution.

Improving your chance of success requires a focused innovation process—a structured process where you apply the “right method” to the “right questions”; pursuing innovation within constraints, and focusing on untapped market opportunities.

We recently presented a case study of focused innovation in action at the Front End of Innovation conference.  The case study highlights a project with Tauck Worldwide; in partnership with our sister company the South Street Strategy Group.

Tauck is a travel industry leader; for nearly 100 years, it has focused on providing high value guided tours for its highly satisfied customers. But Tauck recognized some challenges to their future success—the erosion of the guided travel industry and the aging of their customer base.  They needed to create a new kind of travel experience to meet the needs of affluent Baby Boomers – a population extremely comfortable with researching, planning, and traveling on their own.  In partnership with South Street Strategy Group, our Focused Innovation process involved: 

1.     Identifying the primary goal, opportunity or business challenge – and the constraints we had to work within: We started by exploring the business context, through internal ideation, interviews, and workshops with executives and senior managers, leveraging insight and experience in the market, and researching and assessing the competitive landscape. This step helped us answer questions and identify constraints, including a need to:

·       Leverage Tauck’s core competencies

·       Design a new product, addressing unmet needs

·       Hit sales goal of $M in X time period by attracting new customers
 

2.     Investigating the opportunity using multiple methods:  We collected insights from different people (e.g., travel agents, call center reps, potential customers) and information sources to uncover customer needs and preferences.  We segmented the Boomer market by travel preferences and conducted in-depth qualitative research to identify the target market and flesh out the desired experience for different types of vacations. The key output was a ranking of travel concepts on key criteria, and an initial read on the market opportunity.
 

3.     Validate and optimize:  So we had some great ideas for new trips and a new market to tackle, but more detail was required to actually build out the product.  We used a Discrete Choice model, to simulate market demand for various product alternatives and prices.  This information guided product’s design, pricing, and enabled us to focus on those who are most interested in actually purchasing the product. A critical piece of this stage is emulating real world choices—a trip can sound appealing, but at this stage we want to know who and if they are really interested – and how interest changes by price.
 

4.     Implementation and go to market: With the concept validated, the Tauck team needed to build out the trips –contract with hotels and identify top events and attractions for multiple locations. The comprehensive understanding of their target market also guided their decisions, including how to brand the products, establish relevant partnerships, and reach out to potential customers using traditional channels as well as online and social media. Although it’s often glossed over, this critical go-to-market planning stage can mean the difference between success and failure.

The result of this focused approach? Tauck launched the Culturious brand as a totally new product line, on time and with unanimous board approval. The new brand meets customer needs by offering small-group tours geared toward active Baby Boomers with an interest in physically challenging, culturally engaging travel. Culturious has consistently received “exceptional” guest satisfaction scores and won the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

Focusing innovation on the end-goal and working within constraints enabled Tauck to quickly launch a successful innovative product. Leveraging their existing competencies to address unmet needs in the Affluent Boomer marketplace enabled them to hit sales goals in Year 1.     

Top 10 benefits of a focused innovation approach:

1.     Aligns solution/ideation with strategy

2.     Solution is customer centric

3.     Focused on growth markets

4.     Provides flexible framework to drive from insight to action

5.     Enables deep conversations, by function, on goals and insights learned

6.     Adapts to handle “big problems” as well as “ready to test” concepts/ideas

7.     Creates Center of Excellence to facilitate and support efforts in agile manner

8.     Captures learning from each initiative

9.     Facilitates and supports with framework, expert resource and best practices

10.   Provides a governance structure to focus resources, including harnessing power of ideas within the organization

So, what are you waiting for?  Consider your challenge – identify your constraints – and get focused on your focused Innovation process!

- See more at: http://loyalty360.org/loyalty-management/july-2013-online-issue/tauck-creates-a-new-type-of-travel-experience#sthash.gMf5DUVE.dpuf

Topics: South Street Strategy Group, strategy consulting, travel and hospitality research, growth and innovation

Review Censorship Leaves a Bad Taste in Customers' Mouths

Posted by Judy Melanson

Thu, Jun 06, 2013

empty plateThis week, Michael Bauer, a restaurant reviewer in San Francisco, published a letter from a reader about a curious experience a diner had with OpenTable—the popular restaurant reservation and review platform.  It wasn’t a dropped reservation, or glitch in the site, it was something a lot stranger. The letter writer had written a negative, but altogether balanced and reasonable review about an unhygienic dining experience at a popular restaurant, and OpenTable had censored it—in 2013!I’ll admit I’ve heard a few compelling arguments for a moderated/curated review experience, a practiced “Yelper” knows you have to wade through insanely negative, or inordinately positive, reviews to get a real sense of which reviewers to trust. There’s no doubt some filters have appeal, case in point the new app, Find. Eat. Drink., which features reviews exclusively from chefs, bartenders and others in the food industry, not from lowly civilians. But was OpenTable, who responded to Bauer’s questions by saying the review was inappropriate according to their terms of service, out of line? Immersed in the world of Yelp, Trip Advisor, and other sites where the reviews (much less balanced reviews, might I add) flow free, censoring just feels like an anachronism.

OpenTable certainly has every right to moderate reviews as they see fit, but I’d argue they’ve done no one, the restaurant, the customers, nor themselves any favors. For the restaurant, they’ve taken away an opportunity to address a potentially business-altering problem and make it right for the reviewing-customer, who incidentally said the food was quite good. Beyond the reviewing customer, scrubbing the review doesn’t do much for potential customers who could benefit from that information—most of us have learned to filter out the noise of a lone negative review—maybe OpenTable and its restaurant partners need to have a little more faith. And finally, it’s not good for OpenTable, review sites like Yelp, social media sites like Facebook and Twitter, and countless other platforms let people share their thoughts on businesses with huge audiences. Scrubbing away the negative reviews just negates the experience.

Maybe it’s not just the unnamed restaurant that needs to clean up its act. What do you think?

Judy is VP of CMB's Travel & Entertainment practice and loves collaborating with clients on driving customer loyalty.  She's the mom of two teens and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

Topics: travel and hospitality research, customer experience and loyalty