The Power of a Pillow

"I am sorry, we don't have any other pillows. Is there anything else I can help you with?"

The person behind the counter was friendly enough but  I walked towards the elevator with a feeling of disappointment. I turned my stiff neck to take in the full scene of the lobby around me. The hotel markets itself as a perfect destination of the business traveler. A place to come home to when the business leads the traveler back to this town. It sure does look nice. But somehow the appeal of the nice surroundings don't alleviate the stiffness in my neck.

unsplash.com/@niklanus

unsplash.com/@niklanus

I understand pillow preference is a very personal thing. Some, like me, like their pillows to be firm and relatively thick. Others like them so big and fluffy that when you rest your head on them, the pillow will swallow you. They would feel right at home in this hotel. This kind of fluffy pillow was the standard at the hotel I was staying at and after one night of giving it a go, my neck said 'no more'. So I made my way to the front desk and I got a big fat NO on my ask for another type of pillow. Someone decided that this hotel would not carry any other kind of pillow, most likely under the guise of standardization and cost optimization. And that is understandable to a point. If you want to run a business at scale and serve many customers, you need some kind of standardization. And the degree of standardization varies on the experience or product you sell. But then again, if I can get forty kinds of toothbrushes from one single manufacturer at the supermarket, why can I only get one pillow in a hotel? Unless you make tailor made solutions like a suit or a portrait painting for a single customer, you are going to make trade offs to ensure you can deliver one solution that fits the needs of many. I get that.

But you can get close to 100%. Getting to 80% is all about designing your product or experience well. It's the product that needs to be designed to cater to the combined 80% of the needs of your target group. And sure, you optimize for costs within servicing your target group. But what about the remaining 20%? The answer is, among other things, offering a choice in pillows.

A mass product that is tailored to feel like a personal one is possible. Ask every premium smartphone owner and they will tell you that. The device is unmistakably theirs, with their apps, their ringtone, their choice of color, their protective case. And yet, the device itself rolls off the factory conveyor belt looking like every other one out there. The personalization comes from the ability to adjust what is at the core a similar product. Cars are another example, people tailor this to their own preferences as well. With the rise of new production techniques, this is now relatively mainstream in sneakers as well. Both Nike and Adidas offer models that consist of a base model but can be extensively personalized with color and choice of fabric.

And it's not like I haven't been to hotels where they had a variety of pillows available, after asking the front desk. Is it a bit more expensive for these hotels to have an extra set of pillow behind the counter in case someone asks? It probably is. But put the extra cost against the potential lifetime customer value and I am sure the math works positively for these hotels.

Guess where I won't stay when I return to this town? Exactly. 

What wine-tasting can teach you for your business

Wine. Who doesn't like a good glass of wine? The definition of 'good' being quite important here. Much research has been done on the art or science of wine tasting and wine classification. It turns out, we humans aren't particularly good at it, experts or not. Nor are we very consistent. But that does not stop us from experiencing a good glass of wine. And while we aren't very good in blind wine tasting, we are even worse when there is more information to deal with. Label design, clarity of the font, the description of the grape, the shape of the bottle, none of that goes into our mouth but it influences our taste buds dramatically. But by far the most important element is of course… price.

Hard to judge without the label

Hard to judge without the label

Research shows that if people are being told they are going to taste two different wines with a significant price difference but in reality are actually tasting one and the same bottle of wine, they will enjoy the 'more expensive' wine significantly. Because we believe the more expensive wine is of more value, we also place more value on the experience of drinking that particular wine versus a cheaper one. We actually enjoy it more. It really is a case of 'getting what you paid for'. Does that mean every business can just slap a 50% price increase on their products and their customers will automatically be more satisfied with it? Of course not, but it does teach us another lesson.

 It shows that while wine is the main ingredient in a tasting wine, the real value comes together when all elements like label design, price and so on, line up and match or exceed the customers expectation. The story of the wine trading startup Vinetrade is telling. Aimed at bringing transparency to wine trading and removing the middle men by offering an online wine trading platform, it removed some of the things people enjoy when it comes to buying wine. The cloak that hangs over the understanding of wine and its value, the opportunity to present yourself as a connoisseur, these are thing that bring value to the wine experience and by removing it, Vinetrade made wine buying less exciting. The site was shut down in 2013.

So it turns out that wine cannot be judged on just what is inside the bottle. Everything around it matters. It's worthwhile looking at what makes up the whole experience for your product or service. What elements are a core part of the perception of value? The best way to find out is to observe people with your products. Watch them use it, hear them talk about it. Just like with wine, you can find out what elements are a crucial part of determining the value of the experience. It only works if everything is aligned. This is where design thinking comes in. There are many different tried and tested ways to put together the full view on what makes an experience work and what does not. Head over to servicedesigntools.org site for very useful templates and how-to instructions.

For instance, the price category of the bottle that you take as a gift to your in-laws is a totally different decision from what you buy to drink at home or with your friends on the beach. One company played with that to label their wines accordingly.

Which one to take to the in-laws?

Which one to take to the in-laws?

And most importantly as the new year is almost amongst us, enjoy your wine!

Drills, holes, or both? Walking the tight-rope of diversification

Earlier this month I attended a Design Thinking Bootcamp by the Designthinkers Academy in Amsterdam. One of the speakers was Ralf Beuker, the Dean of the Design Faculty at University of Applied Sciences in Muenster. He talked about how to stay on-strategy when applying design thinking. The danger lies in the phase after doing the proper work, stepping in the shoes of the persona you are trying to serve, map out their journey and then come up with a genuinely solid approach that works. If you've done all that, most likely you will end up with a great solution that is lovely by many. And then the following happens… Inspired by the success of your solution you start to focus on optimizing it, rather than continuing to pay attention to the unmet needs to the people you try to serve. An oft used example is the temptation to diversify what you've made. In line with the original article on mixing up the need for holes rather than drills, Prof. Beuker gave the example of Bosch (or any other tools manufacturer), coming up with one additional add-on for their hand drills after the other.

bosch.png

 

Looking for a wine-opener? Bosch has got you covered. The point Prof. Beuker was making was that optimizing and diversifying a productline is not aligned with continuous observation of unmet needs of your customers. The short-term revenue impact is more important. Or is it? Because while it is a very careful balance, you can do both. You can continue to truly put your customers needs frontand center and further develop an existing solution. The wine-lover who also happens to own a Bosch hand-drill is perfectly fine as a persona to build on. It is all about balance of course and as long as you keep your customer, and not the product, in the center of your attention - you should be ok.

Although, there are other ways in which diversification helps server your core customers. Ferrari is an interesting example here. There is very little that you cannot but that does not come with a Ferrari logo on it. Underwear, bed-sheets, pens, watches, and yes, even a Ferrari blowdryer, the logo with the horse is slapped on everything. And they are making a good profit by doing so as Ferrari is one of the world's strongest and most loved brands. But it is again a tricky balance to keep. In Ferrari's case, their message to their customers is that without this branding and diversification extravaganza, they would not be able to invest in R&D as much to develop the cutting edge cars that their core customer base loves so much. As long as Ferrari is transparent about that to their car-buying customer base, they can explain that strategy and it works. But you can't push it too far. Diversification and branding aimed at your core-customer base is even harder. Leica, the photography company with perhaps the most loyal customer base, is also walking the tight-rope of diversification and when it announced, amongst others, a 175 US Dollar key-chain. Even Leica fans were not rushing to defend the brand on the internet's comments pages.

Diversification can work - as long as you can make a genuine connection between the core product you developed to meet that clear need of your core customer base and the extension you developed. Either in the form of utility for the actual core customer base or as a way to drive revenue which in the end, delivers a better product for your core customer base.

 

Customers deserve a happy ending

We humans are a bit obsessed with 'endings'. We want movies to end well otherwise it may ruin the whole experience. Why is that? Memory is like looking out of a window in a moving train. What you saw last is most likely what you will remember. This is what the Peak-End rule is all about. The theory that was put together by Nobel winning economic scientist Daniel Kahneman (of the wonderful book 'Thinking, Fast and Slow'), who says that people tend to appreciate an experience more if the ending is better than the part in the middle or the beginning. So much so that this still works in cases where the overall experience may be worse but as long as there is a happy ending, people will prefer that over a better average experience with a less happy ending.

In a famous experiment, Kahneman and his colleagues had people place their hand in water that was 14 degrees Celsius for 60 seconds. That is pretty cold and not comfortable at all. A second trial had them submerge their hand in 14 degree cold water for the same 60 seconds but added a 30 seconds where the water has heated to 15 degrees. Now, let's be clear here; 15 degrees is still very cold and unpleasant. But, when asked which trial the participants preferred, they all chose the second one which had a longer duration of unpleasantness but ended on a higher note. Since then the experiment has been tried and tested many times and proven correct every time.

What does that mean for you? It means that you should think about the different experiences your customers are having with your products or services. Or maybe just the interactions with your people, how can you design the experience so that it ends on a high note? This is especially true for situations that are less pleasant like in case of a broken product or service. Make sure you give that customer a happy ending, not matter how painful the process was, because they will remember the bit at the end the most. And if that hits a high - they'll be much happier with you.

Dealing with what you do or do not know

Journalists were quick to start making jokes when former United States Secretary of Defense Donald Rumsfeld talked about known knowns, known unknowns and unknown unknowns. It may not have been the most eloquent way of making a point but a good point he did make. Rumsfeld talked about the evidence (or lack of) for weapons of mass destruction under Saddam Hussein in Iraq. The Secretary tried to clarify that when you make a decision you know that you don't know the full story and that there will also be surprises.

It turns out, the breakdown as Mr. Rumsfeld introduced it, is also very good way of looking at your customers, how they engage with you and what you think you know about that. Because of direct customer contact or surveys for instance there are quite a few things you know about your customers' appreciation or lack thereof for what you are delivering, whether it be a service or goods. You also know there are things that you do not know about how your customers really see you and the service or good you provide. As Peter Drucker famously noted, 'a customer rarely buys what a company is selling him'. In other words, your customers may have quite a different view on what you offer than what you think you do. Finally, there are things about your customers that will surprise you as there are things that you don’t know you don't know.

One worthwhile exercise is to get a few people from your team together and note the differences between the things you think you know about your customers and how they see you and what you may notice when observing them. Try listing all the things you think your customers appreciate but also don’t like so much about you and your brand. Next, refresh that view by asking your customers for feedback in a way that is very, very different from the regular way you ask for feedback. The framing of a question can already have a dramatic effect on the answer and what you can learn from it, sometimes in ways you are not even aware of. So reverse it, flip it around, approach it from a completely different angle. Have your customers describe you using a picture for instance. By using a picture, your customers may tell you something even they don’t fully realize. A technique that can be helpful in this exercise if the ZMET technique as formulated by Gerald Zaltman of the Harvard Business School. Even if you go about this in your own, light way without using the full ZMET process - you may be surprised by the output.

Quite possibly, an exercise like this will get you more insights into the 4th piece of the 'Rumsfeld's Knowns and Unknowns'. Added later by Slovenian philosopher Slavoj Žižek, the 4th category is the unknown known. In other words, the things that we kind of know but don't really want to accept or acknowledge. Sometimes enforced by other processes like group think, it happens more than we'd like that something everybody knows kind of knows gets ignored in a group of people. Often this is because that piece of knowledge may challenge the prevailing view within the team or organization and people are afraid to voice that, something that may be strengthened in a culture of fear and retribution. Even though looking back is always easy, research has shown that ignoring unknown knowns is one of the reasons why organizations fail.

The remedy for this is to regularly check if what you think you know is still valid. Is what was true 5 years ago still true? How about 1 year ago? If not, in what way is this reflected in how your process work? How you deal with your customers? Only by regular checking and updating what you think you know can you make sure that your box of knowns is much bigger than the other boxes in Rumsfeld's frame. Doing this well keeps you connected to your customers in ways that are relevant for them.

The customer is always right. Again.

Opel (Vauxhall in the UK) has a challenge with it's perception amongst potential customers. After being one of the leading German car manufacturers for decades, a series of bad decisions and quality issues with the cars made Opel the laughing stock of the German car makers. Jokes with Opel cars in it are plentiful, especially in Germany. The effect of years of mismanagement and not taking their customers seriously turned Opel into a brand nobody wanted to be associated with. Selling cars to people who will never even consider your brand is rather difficult. You won't stand a chance.

So, how do you change that?

In the case of Opel, they decided not to ignore the sentiment in the market towards their cars and their brand any longer. In fact, they dove right in and really immersed themselves in it. Painful as it was, it gave them the foundation to work on changing the perception so they could at least get considered again by potential buyers.

They started changing perception by playing with their image. By being blatantly honest about it. And then bending it. This commercial featuring former Borussia Dortmund trainer Jűrgen Klopp is one example. It shows a flight attendant finding an Opel car key right underneath the curtain dividing economy from business class. Without thinking about it, she immediately assumes that an Opel car key can only belong to someone in the economy section, and she asks the crowd if someone lost their key. Enter Jűrgen Klopp, opening the curtain from the business class section and claiming his Opel key. The flight attendant says 'Oh, I never would have assumed....' and Klopp responds 'Most never do, until they drive it'.

It's a great example of a company being realistic about how customers look at them and working with that instead of pretending to be something they are not. It shows that Opel does understand what people think of it and that means that they take people seriously. There are too many examples of companies not taking their customers serious at all* so this approach by Opel is very welcome.

The question is of course, is it working for them?

It turns out it does. Opel has sold more cars in the last 6 out of 7 months compared to that same month a year before, resulting in it's highest market share in Europe since 2011.

The strategy of taking what your customers think of you seriously seems to be working for Opel. What could it do for you?

 

*If you want to see brands that are completely disconnected with their customers, have a look at this facebook page called 'Condescending Corporate Brand Page' which has dozens of, social media related, examples of companies really not taking what their customers think or do seriously. At all.

Open your kitchen

A recent article in the Harvard Business Review discussed an experiment to see if seeing the chefs in a restaurant work on preparing your food would increase the dining experience satisfaction. It also looked at whether seeing the guests from the chefs perspective would result in higher work satisfaction. It turns out that guests and kitchen staff seeing each other has a significant impact on the satisfaction on both ends. For the chefs, seeing the guests eat and getting direct feedback by understanding what guests like and what not helps them feel more connected to the work they put in the kitchen and the guests. Guests like the fact they can see the people that made their food and it increased their appreciation of the food they got served.

 

The article is part of a bigger study on 'operational transparency' - does seeing the customer motivate you to do a better job? I'll be watching for the results of the study to see whether this is indeed the case.  I guess that intuitively we all would expect that to be true. Purely judging from personal experience, having worked in a helpdesk environment both as a 'first-line' support agent where you are in direct contact with customers experiencing an issue and comparing that to my time in 'second-line support' where this issue reaches you in the form of an incident ticket, the direct connection makes a lot of difference. An incident ticket is basically a note describing the issue the customer is experiencing as it was captured by the first-line support agent. I can tell you that the sense of impact and urgency conveyed by a live human on the other end of the line is dramatically different from reading an issue description without any direct contact with the customer. While direct customer contact is needed to really feel what the customer is looking for, it is also impractical to organize work around that direct contact. As a customer, you don't want to have to repeat your story to everyone in a firm working on your case.

 

To everyone working in a large company with different organizational layers, this sounds very familiar. There have been many good intentioned efforts to make organizations more customer centric and try to convey that direct contact in other ways. But, without feeling the emotions of a customer, angry, happy, bored or whatever, I think it is safe to say that very few organizations truly manage to do things in a way that really has a sense of direct customer impact hovering over them to keep them on track - direct customer contact or not. As customers, it should not come as a surprise that a recent study showed 80% of interviewed executives of 362 firms believing they were delivering a 'superior experience' to their customers, but only 8% of those actual customers agreed.

 

The reality is, especially when things don't always go well, everyone will avoid having to be in touch with unsatisfied customers. It's simple human behavior. So the challenge is to be ahead of that moment, to build in feedback at every stage. Amazon has tried to do this by keeping an empty chair at meetings, this is the chair of the customer who is the most important participant in meetings. The story goes that during every meeting this will help people to think about what the customer may think of whatever topic was discussed in that meeting. Putting the customer first is very logical but it is far from easy. Easy or not, there is clear consensus on what the most important thing is though, and that is to listen. Not listening for the things you want to hear, the things that will align with the choices you made, but listening to the hard parts, the things you need to improve on. Many firms have customers satisfaction surveys in place and with social media around, the possibilities to listen to your customers are endless. But for some companies, having that customer survey is just a checkbox exercise. Or that social media thing is just another way to show management they are having engagement with their customers instead of truly listening.

 

The key to listening is the intent to do something about what you hear from your customers. Just like those chefs that can take the direct feedback of their guests and improve their experience when they can actually see them. Start with that and then work towards an honest assessment of what you can do address whatever you heard. It may take a lot of work and time in the beginning but once you start, customers will reward you in the long run.

The best blogpost ever

Yes, we've done it! We have worked so hard at this and now we are ready to share it with the world! This is it, it's the best work we've ever done and we are so proud to tell you it is here, the best >insert product release 2-3-4-5-6-….<. It's the best version of >insert product name XYZ< yet. That's right. The best yet!

The best one we've ever made. Look at any webpage, emailing or other marketing outing connected to the release of a new version of an existing product or service. It does not matter whether it is a new version of an app or a new version of a car model. You'll see the same thing over and over again. This is our best version yet!

Well, what else could we have expected? Do these marketeers really think that we'd think there would be a new version that would be worse than its predecessor? Granted, these things happen every once in a while but that is never the expectation. So great, you built a new version. Now just cut the nonsense and tell us what you think makes it worthwhile instead of telling us how happy you are it is better than the last version. I mean, seriously, would we expect you telling us your new version is worse than the previous one?

We worked very hard, and we don't really know how to put it but ehmm, our new version just isn't as good as the last one. It's more expensive, and well, it's just not as great as the version you use today. But hey, we'd still like you to buy it? Please?

So, dear marketeers, stop telling us your new version is better than the last. That is the least we expect. Tell us why it's different than anything else. Tell us what you were thinking when you made it. Tell us what you think we will appreciate in it because you went to the end of the world to figure that out.

And then WE will tell you this version is better than the previous one.