Circos Brand Karma

Last week, the Wall Street Journal published an in-depth article about the doping controversy surrounding Lance Armstrong.  In the article, Armstrong’s former teammate, Floyd Landis, described the doping that was done in the 2004 Tour de France (which Armstrong won) as being “…part of the sport and, if he joined a top team, would be part of his job.”  Landis subsequently won the Tour in 2006 but was stripped of his win when he failed the doping test after the race.

In response, Armstrong, as he has always done in the past, denied the allegations and instead focused on supporting his cancer foundation, Livestrong.

Today’s Wall Street Journal article is full of false accusations and more of the same old news from Floyd Landis, a person with zero credibility and an established pattern of recanting tomorrow what he swears to today… For years, sensational stories based on the allegations of ax-grinders — have surfaced on the eve of the Tour for publicity reasons, and this article is simply no different.  Lastly, I have too much work to do during this, my final Tour, and then after my retirement in my continued fight against cancer, to add any attention to this predictable pre-Tour sensationalism.

Steven Levitt, author of one of my favorite books, Freakonomics, had this interesting observation on his blog in The New York Times:

I’ve never studied lying versus truth-telling academically, but I have thought a lot about creativity.  And one thing that I have come to believe is that people – virtually all people, including me – are really bad at coming up with new ideas and insights.

That is why I find the Floyd Landis allegations so compelling.  He describes in great specificity and detail scenarios involving refrigerators hidden in closets, and the precise temperature at which the blood stored in those refrigerators had to be kept; and faked bus breakdowns during which Lance received blood transfusions while lying on the floor of the bus, etc.  To make up stories of this kind, with that sort of detail, strikes me as a difficult task.

If indeed the stories Landis tells are not true, my guess would be that these incidents actually happened, just with a different set of players, and then Landis switched the names.

Levitt has a point: sometimes truth is stranger than fiction, however unbelievable it might be.

In the social media world, the equivalent of doping is fraudulent engagement.  “Engagement” includes reviews, fans, posts, likes, views, etc.; basically any activity that elevates a brand’s rank unnaturally.  Recently, someone told me that you can hire villages in China to enhance a brand’s reputation and attack a brand’s competitors.  These activities then lead to fierce exchanges on Chinese BBSs that cause more confusion for consumers.

I don’t know if fraudulent engagement in travel is as systemic as Landis alleges for cycling, but I do know that many of my friends and colleagues think that it is — particularly those whose businesses have been impacted by hacked social media rankings.  While cycling has a governing body that conducts random tests for doping, there is no governing body in travel to evaluate the truthfulness of user generated content.  This responsibility falls largely on the social media site operators and their users.  Truthful or not, whatever is posted becomes a part of the brand image mosaic, which is further consumed by prospects and the general internet population.

However unethical, these opportunities exist, and travel executives often ask me how to combat such practices. The most basic thing is to not engage fraudulently; two wrongs don’t make a right.  A brand must have a corporate policy that prohibits employees from artificially enhancing the brand’s reputation or harming that of a brand’s competitors, even if you know competitors are doing it. Eventually, the Floyd Landises of the world get found out, and the fallout is most certainly not worth the possible short-term gains.

In addition, brand owners should have a plan that develops an army of customer evangelists who are passionate about their brand and who will defend the brand if it comes under attack.  Apple has been good at achieving this in the past.  Apple’s customer evangelists incorporate Apple products into their identity, and are constantly selling Apple products to their friends, family, and colleagues without receiving any commission from Apple.  They will also defend Apple when people attack their products – both online and offline.  As a result, Apple has been virtually bulletproof against attacks against its products.  Its market value has increased over 1000% in the last 10 years, surpassing Microsoft as the largest publicly traded technology company in May.

However, recently some of Apple’s evangelists have turned against Apple, over what they consider to be deceptive explanations about iPhone 4’s reception bars and Steve Jobs’ response to a customer complaint.  Now there’s a class-action lawsuit filed against Apple in the United States, where it sold over 1.7M units in the first 3 days.

Why?  Because the ex-evangelists felt Apple broke their trust.  And once trust is broken, the thin line between love and hate disappears.

So while having customer evangelists is important, what’s even more important is delivering on your brand promise consistently and truthfully.  If you do, customers will follow, and they, along with you, will breathe continuous life into the evangelization of your brand.

Whether Lance Armstrong will be exonerated or go the way of many famous athletes/role models/celebrities/politicians/brands and fall from grace remains to be seen.  But one thing is for certain though: in this era of hyper transparency, brand integrity must never be compromised.

(this post was original written as a feature post for Web In Travel)

Most social media stories nowadays are about customer engagement.  This post is about employee relations in the 21st century, and what happens when social media enters the mix.

A few weeks ago, a video called Don’t Get Caught in a Bad Hotel was posted on YouTube.  It was a flash mob covering Lady Gaga’s “Bad Romance” music video which is currently the most video of all time on YouTube with 214M views.  The video was created by workers fighting to get affordable healthcare and a fair contract at a number of hotels in San Francisco.  In the 3 weeks it’s been posted, the video has garnered over 175,000 views and been covered by a number of news outlets, including the Huffington Post.  In fact, when one currently searches the hotel on YouTube the video is the first to come up.  The 10th result in organic search when Googling the hotel leads you to this story about the flash mob.

We see a lot of things about social media and customers.  But brand managers should look internally first; any brand that doesn’t have a social media policy for their employees may be at risk of an intractable PR crisis, particularly one who treats their employees poorly.  Workplace rants by employees are becoming major headaches for companies.

In the past, what happened inside companies were kept behind closed doors.  In this age of self-expression, what happens inside make headline news on a fairly regular basis.  Take for example, Hon Hai Precision Technology, the world’s largest contract manufacturer of electronics with customers like Apple, HP, and Dell.  Its Foxconn Technology Group employs more than 400,000 people in Shenzhen.  Since the beginning of this year, 13 employees have attempted suicide, with one leaping to his death hours after the Chairman had visited the factory promising to increase safety.  The blog world either condemns Foxconn’s working condition or point to the stress of trying to make it in China today as the main reasons why these suicides occurred, but that’s all speculation; no one really knows why.  Though ZDNet points out that the suicide rate is low in comparison to the China population average, Foxconn is still in the process of training more than 100 mental health workers, as well as making changes to improve its employee relations.  But will it be done fast enough to save lives?  And when will this impact Foxconn’s customers directly?  For example, hurting Apple (which just recently overtook Microsoft in market value) in the same way charges of sweatshops and child labor violations continue to tarnish Nike?

Part of the measurement for brand value is employee morale.  As every employee contribute to the brand experience, high morale should equate to a better brand experience, and leading to higher customer satisfaction and both customer and employee loyalty.  Social media about employee relations and working conditions therefore affect not only your current employees, future recruits, but also, your customers today and prospects tomorrow.

Paul Hogarth of the Huffington Post asked his Facebook fans whether they, upon seeing the “Don’t Get Caught in a Bad Hotel,” would boycott the hotels listed, and here’s a very revealing response:

“It will be seen by a lot more people than your average – ‘what do we want and when do we want it’ protest – because as much as I am pro union and will support boycotts, I don’t forward info on every single boycott because seriously, nobody would read my reports if I did. I saw the YouTube video and then saw that the Palace Hotel was part of the boycott list and canceled my reservations for tea at the Garden Room. I probably would not have found out about the boycott if it wasn’t entertaining enough to go viral, and I definitely wouldn’t have posted it in my [Facebook] status and then five of my friends probably wouldn’t have posted in theirs …”

Last year employees at a Domino’s Pizza were fired and faced criminal charges for improper food handling as a result of their prank video post on YouTube.  Though Domino’s didn’t do anything to provoke this, it was humiliated and eventually had to respond via YouTube to do damage control; and their brand suffered in the immediate aftermath.

Assuming brands treat their employees fairly, it’s still much better for them to have a communications plan in place already, as opposed to having to scramble on the fly to come up with a plan when something unexpected erupts.  As was the case with Domino’s, it only took 2 thoughtless workers, a lack of social media guidelines for employees, and a slight hesitation in response time to tarnish the brand.  Since then, social media has only gotten bigger and employees… more expressive.  Take the time to craft a plan and talk to your employees if you haven’t already.  You don’t want to get caught in a social media storm without a plan.

Hoteliers: suppose Justin Bieber, the fastest rising international pop star, comes knocking on your door in the following way, what would you do?  (see video below — it’s only 46 seconds)

You would:

1. Do nothing
2. Respond privately to Bieber and invite him to come back
3. Apologize to Bieber publicly
4. Respond with humor to Bieber publicly
5. Fix the revolving door then assure the public what happened was a one-off

Justin Bieber currently has over 4M “likes” on Facebook, over 2.6M followers on Twitter, and has 2 videos on YouTube with over 100M views, one of which, “Baby features Ludacris” is currently the 3rd most viewed video of all time on YouTube.

The correct answer? Any of them, but more importantly, before you chose your answer, did you:

• Click on the link to see Bieber’s Wikipedia entry?
• Check out his Facebook fan page?
• Look at what his most recent tweets were about?
• See if he tweeted about running into the door?
• Watch all or part of his video?
• Google Justin Bieber to see if you can find out anything else about him?

If you did, you’d find, among other things, that Justin Bieber regularly creates mobs with his appearances.  In New Zealand the crowd of teenage girls knocked down his mom at the airport upon his arrival.  He is sad because Twitter changed its algorithm so that he’s no longer a trending topic which he has been for a long time.  And also, several articles have already covered his unfortunate head kiss with the revolving door.

Although Bieber is only 16 years-old, his entire life is digitized in an accessible way that allows someone to easily understand his personality, fan base, actions, aspirations, and why he’s become such a phenomenon.  Some of the content come from Bieber himself, and some are collaborative content from people who either know him or think they know him.  Nonetheless, the Radisson Blu in Frankfurt can get to know Justin Bieber quickly with the aggregate information that exists.

To summarize, Justin seems to be a wonderful and talented human being, one with passionate fans.  He was discovered on the internet as a result of his mom uploading him singing onto YouTube.  He has been praised as being down-to-earth and homemade, not manufactured like so many other pop stars.  His wipeout was covered by the Associated Press, HotelChatter.com, and was on the front page of MSN.

Justin was very gracious about his own unfortunate encounter with the door.  In his own words:

i think my head still hurts from running into that door…haha. only thing u can do in times like that is laugh at yourself…and laugh hard    3:07 PM May 20th via web

In the age of social media, the question isn’t which customer do I have is a “Justin Bieber.”  The real question is, what is my brand doing to get to know every customer as though s/he were Justin Bieber and actively incorporating his/her public social profile to provide better service in a non-exploitative way?

Justin Bieber may share a lot in his social profile, but not a lot is needed to gain a better understanding of a customer.  Every service provider in the travel industry should incorporate looking into public social profiles as a standard part of their operating procedure for customer service (and for that matter, employment as well!)

As for Radisson Blu in Frankfurt, given what we know about Bieber, any of the responses listed above would have been fine.  Because Radisson Blu Frankfurt has a Twitter page, a Facebook fan page, and is already active in social media, at least from a guest perspective, I think a public response would be great and appropriate given Bieber’s (and his fans’) preferences for this medium.

As I noted at the Web-in-Travel Conference last October, Facebook was already the most visited website in many Asian countries, and according to Hitwise, for the first time ever more people visited Facebook than Google in the week ending March 13 in the US.

Hitwise also noted a consolidation of web traffic as the 2 sites accounted for 14% of all US internet traffic.  Further Facebook’s growth YOY vs the same week in 2009 is 185% vs Google’s 9%, showing that Facebook still has a lot of upsides.

For brand marketers, the major takeaway is this: if your 2010 marketing plan is essentially the same as your 2008 plan, your emarketing strategy is operating in 2^nd gear in today’s world.  Your brand has likely fallen behind, or soon will, in its ability to effectively engage with customers.

Also, with the online landscape consolidating, the longer you wait, the more resources you will need to invest just to catch up and stay relevant.

Furthermore, it’s time to have a conversation with the owners about how social media is shaping consumer expectations more quickly and forcefully than industry or brand communications.  For owners that are building new properties, social media can be especially illuminating to help developers build a product for tomorrow as opposed to yesterday.

Finally, please don’t hire a junior person to run your social strategy.  Facebook is a powerful communication platform with over 400M members worldwide.  Senior brand marketers are needed to understand how your brand should be represented.

The good news is that there is still time, particularly because social media favors creativity.  Due to its viral nature, your brand can go from unknown to superstar quickly (think Susan Boyle).

But your brand has to be good, authentic, and different.

Will social media go from a cultural phenomenon to a commercial force?  Yes, I believe so.  If last decade’s new new thing for marketers was SEM, I believe this decade’s new new thing will be SMM (social media marketing).

However, for SMM to become legitimate its efficacy must be measurable, otherwise it’s tough to justify devoting any resources to it, particularly because in the last decade marketers learned how to calculate ROI by looking at conversion revenue from CPC traffic referred by their Google (and subsequently, other online) campaigns.  Not only did ad budgets shift, discipline was instilled.

We advise our clients to think about ROI of SMM in 4 major categories:

Brand satisfaction – how do operational improvements and investments increase your overall guest satisfaction over time?  In Brand Karma it’s the Guest Satisfaction Index, which is a composite index of your perception from various public sources, but if you don’t have Brand Karma you can also use something simple like your ranking or ratings on a review site.  When your guests post reviews about you, they’re giving you feedback on their stay.  Because their reviews are public, their words also shape how favorably viewed your brand will be for consumers researching your property.

Brand loyalty – related to overall brand satisfaction, the loyalty measurement lets you know if the guest stay experience is compelling enough that it moves your guests to recommend your brand.  Like satisfaction, this is a measurement that needs to be trended over time as well.  In Brand Karma it’s the Loyalty Index, but again, if you don’t have Brand Karma you can look at the “recommendation” rate on reviews that are written about your brand.  Different sites do this differently, but most have a way for their reviewers to recommend a property.  This index and the Guest Satisfaction Index gives you a good idea of how favorably the public perceives your brand.

Many internal guest surveys also measure satisfaction and loyalty.  Just keep in mind that the surveys guests 1) give you solicited feedback — i.e. questions you ask, not necessarily what the guests want to evaluate, and 2) aren’t viewable by the general public — so they don’t give you insights into how public perceptions may be impacted.

Guest Satisfaction Analysis in Brand Karma

Brand awareness – how do sites with social media increase the awareness of your brand?  In the social media world, in addition to the traditional metrics having to do with volume, awareness metrics must take into account the idea of relative frequency.  Relative frequency lets you know how recent is the content about your brand vs. your competitors.  This is important because if people haven’t been talking about your brand recently, then either you’re not interesting or your competitors are more interesting than you, neither of which is good.

Campaign performance – the ultimate metric that measures ROI.  Suppose you run an ad on Facebook, you’ll want to see what is your ROI for every dollar spent.  This means that you must have a way to measure what you’re advertising.  For example, to execute you can set up a landing page on your ecommerce site so that you can track the referrals and conversion rate from that specific campaign.  Use the traditional ROI formula to calculate what your return is (should be no different than your calculation for search engine marketing).  As you get more advanced, try to establish a link between your brand satisfaction, loyalty, and awareness to your campaign performance.  For instance, how much better does your campaign perform after your brand satisfaction has increased by 10 points?  If you have lower brand awareness than before, do you have fewer click-throughs?  Is there a correlation between guest loyalty to your campaign responses?

In a way, the above points are the fundamentals of marketing, and that’s precisely the point.  Brands wanting to leverage social media for marketing should measure what they’re getting out of their investments in it.  However, like traditional and other online marketing tactics, SMM takes a bit of trial and error to perfect into a strategy, particularly because the ability to micro-target is superb, and so brand owners should consider developing an expertise over a few marketing campaigns.

Some progressive brands are considering hiring a marketing manager to focus on social media in 2010.  Once again, this person’s salary minimally should be considered an investment to improve brand satisfaction, loyalty, and awareness.  List the activities that your social media manager engages in with your fans, followers, and friends, and see how much time they take.  From there, you can calculate the dollar investment (percent of time to salary).  Over time, see what activities lead to gains in satisfaction, loyalty, or awareness, and what activities don’t make a difference.  If you’ve established a link between increases in satisfaction, loyalty, and awareness to increased campaign ROI, then you’ll know how much your social media manager can help you improve your bottom line and guide him/her to engage in activities that increases your key metrics.

The one-to-many branding paradigm favored and perfected by advertising agencies utilizing traditional media changed irreversibly in 2009 with social media going mainstream.  Hundreds of millions of people shared their brand experiences in social networks, generating exabytes (EB) of raw content about brands in text, photos, and videos in all languages (1 EB = 1 billion GB, or 1,000,000,000,000,000,000 bytes).  The world economy also accelerated business changes: giants had to be nimble or fell, small players had to differentiate to survive.  Everyone, including all of us at Circos Brand Karma, had to do a lot more with less.  Though recovery is widely forecasted to begin sometime in 2010, we all know that the twists and turns aren’t over.  As we close 2009, here are our parting thoughts on what to expect in 2010 based on what we saw this year.

Relevant Engagement is the new paradigm in branding — for too long brands have talked at consumers, with social media going mainstream, now customers are talking back.  The amount of time people spend on social networks like Facebook and Twitter make them places where brands should interact with consumers.  These interactions can not be forced; like dating, brands must be attractive to the consumers they want.  Authenticity is one of the most attractive quality a brand can have with its online fans and friends.  See my post on Taming the Social Media Beast for what to do, and what not to do.

Don’t bore me: commoditization is your enemy, and you can no longer afford to be just like everyone else.  People look for reasons to spend their dollars on your brand.  In other words, what defines “value” for consumers includes what your brand does that no other brand can do.  I wrote about this recently in my post about Finding Your Brand Differentiators.  And a word of caution for those who have relied on price as their primary differentiator: whereas in an economy with ample demands you can do that to attract business, in this economy where there’s an overabundance of availability and supply, using pricing as your primary competitive strategy might actually kill your business or prevent you from recovering because you can’t raise your price back up.

The demise of traditional retail travel agents is greatly exaggerated; the savvy travel agents will find a new niche and be even more relevant.  All the information available on the web can become an info-glut problem for travelers doing research.  According to Forrester Research the satisfaction level of online booking has gone down in the last 2 years.  This presents an opportunity for the traditional retail travel agents to filter out the noise and serve as a friendly and trusted voice to frustrated customers.  Further, while booking point-to-point travel is fairly efficient online, complex itineraries that include multiple stops or special needs are still difficult, if not impossible, to book online.  Robert Cole recently wrote an excellent post How Smart Travel Agents and Agencies Rise from the Ashes which is a must read for every traditional retail travel agent AND suppliers, who should explore what they can do to foster an even more intimate relationship with traditional retail travel agents to give their shared customers an easy way to have a holistic travel experience.

Who will come out on top in the battle between Brand vs. Search? Search has become an integral part of the discovery strategy, with billions of dollars being spent yearly on SEM, mostly benefiting Google, the dominant player in this space.  Getting a higher search result placement organically is also a vexing issue confronting brand marketers who don’t have the traffic of say… Expedia.  Executives in the Board Room are already questioning whether 1) it’s wise to rely on search as the primary driver of brand discovery and website traffic, 2) is the industry overall feeding the G beast to become ever more powerful by training consumers to always go to Google first, and 3) if all competitors are optimizing for search, has Search marketing become “tax” and therefore, non-differentiated?  To which we answer 1) No, 2) Yes, and 3) Yes.  To wean themselves off Search, some brand owners have already moved budgets away from SEM/SEO to develop favorable awareness the old-fashioned way: by creating exceptional experiences for customers who then positively recommend the brand to their friends.  Except this time around, by leveraging social networks, the word-of-mouth takes minutes not months, and the page on the other side of the click is not Google or another OTA, but their own branded site.  Bravo to them, and to all who do this in 2010!

Say hi to Facebook, your new Frenemy. Much as Google has helped your business in the last few years, Facebook will help in the years ahead.  Yes — it’s still run by a 25 year-old, but the team that surrounds him is also serious about making money now… which means that there are lots of opportunities for you to benefit from their focus to monetize the online attention of over 350 million users worldwide.  Facebook will become the new titan in distribution (you can check out Facebook’s impressive current stats and think of the possibilities).  So if you haven’t done it already, it’s time to set up a fan page on Facebook for your brand and start engaging with your fans.  At a minimum treat Facebook as an extension of your CRM.  For some extra credit, you might want to consider Twitter as well, though if you could only focus on 1 social network, start with Facebook.

Have you thought of HR lately? The new branding paradigm, where social media is a fundamental pillar alongside well-crafted agency/brand communications, requires an update to your corporate policies  For example, how, if ever, do you expect your employees to participate?  If you’re a hotel management company, how do you ensure brand integrity when a property goes rogue locally?  Who in the organization should be responsible for brand perception in social media?  Where do you find the talent that can understand and bridge how you think v. how the social network thinks?  Because social media has become mainstream, 2010 will present scenarios that will put your HR and corporate policies to the test.  You must be proactive about setting expectations and diligent about learning from your own and other people’s best practices or epic fails.

And last but not least, Cloud Computing isn’t just for startups anymore.  The amount of computing power and storage that is now available at bargain basement prices has helped startups like us keep operating costs down.  But now that most of the security and reliability issues have been ironed out, cloud computing is a game changer enabling technologists everywhere to innovate cheaply.  This means that there will be more disruptive technologies coming faster on the landscape.  But it also means that your IT departments might need to migrate its technology from the client/server model of the last 10 years to the new, more powerful AND cost-effective distributed computing model to stay current.  Since technology is the backbone to most businesses, it behooves brand owners to have at least 1 person in the IT department whose head is “in the clouds” to ensure that backbone isn’t becoming quickly obsolete and more expensive to maintain.  Ouch.  But consider this: legacy technology systems have a way of sucking budget away from other departments when its migration is not carefully and proactively planned.

And… that’s a wrap for 2009.

From all of us at Circos Brand Karma, we wish you happy holidays and a prosperous new year.  See you in 2010!

Thanks to an invitation from Giancarlo Carniani, I recently had the pleasure of presenting social media for hoteliers with Laura Valerio at the Buy Tourism Online Conference in Florence.  Laura, who is Expedia’s Director of Market Management for Northern Italy, is highly knowledgeable about the Italian travel market.  This post is an epilogue to our presentation, and given that the great majority of Italian hotels are independents, this post is dedicated especially to them.

Independent hoteliers need to truly understand their differentiators, because it’s the differentiators that will enable hotels to attract the right guests who are willing to pay a premium for what you offer.  Differentiators must meet the following 2 criteria:

1. It’s absolutely good by your own standards (however measured, either through internal guest satisfaction surveys, word-of-mouth feedback on the web, or because your guests tell you when they check out)
2. It’s relatively better when compared with your competitors (from looking at social media feedback and editorial reviews)

Given this framework, location is rarely a differentiator if your competitors all face the same piazza.  While it may satisfy criteria 1 (the location is absolutely good), it fails criteria 2 (it isn’t relatively better — at least not discernible to most guests evaluating where to stay when all hotels are in the same piazza).

Design, however, can be a differentiator.  For example, let’s say you’ve recently renovated, “modern rooms in a classic building” could be a differentiator, and an especially strong one if other hotels in the piazza haven’t renovated in the last 10 years.  Service can also be a differentiator.  For example, “fresh-picked fruit from own garden” or “regional cooking lessons” can all be differentiators.

And herein lies the absolute beauty as it comes to the Italian hotels: it’s easy to spot the differentiators in independent hotels once you move away from the “obvious” criteria that often appear on guest satisfaction surveys.  In most cases, you can find the answer in social media about your hotel.

Spotting Design as Potential Differentiators

According to the Italian State Tourism Board, Italy is consistently one of the of the world’s top 5 destinations (the other four being USA, France, Spain, and China).  In 2007, for example, 42.8M visitors contributed to 163.5M bednights, with cities of historical and artistic interests contributing to nearly 1/3 of the bednights.  The rest is primarily made up by visits to sea, mountain, and lake locations.

This information suggests that travelers to Italy are naturally inclined to seek out picturesque things (artistic, sea, mountain, and lake).  To find out what are the picturesque things that guests find exciting about your hotel (and want to share with their friends and strangers), go to Google (or Flickr and Picasa), type your hotel name in, and look at the “Image” search results to see the pictures that are available about you.  And then follow the pictorial links to sites that have user-generated content to see what pictures your guests are sharing and how they are describing your property.

You might find pictures of your amenities, rooms, certain design elements, or you might find pictures of nearby attractions, or you might find pictures of the outside of the hotel, or the view from the balcony at sunset.  Whatever it is that you find will tell you precisely what guests found to be interesting about your hotel — and took the time to download the pictures from their camera into their computer, uploaded it from their computer to their account on the social media site (assuming that they’ve already created an account), and then told their friends that they’ve uploaded these wonderful photos about you.  These photos give you a pretty good idea for what in the design of your property (either internal or external) could be differentiators.

Leveraging History as a Potential Differentiator

Secondly, travelers to Italy who are interested in historical cities might also be interested in the history of your property.  For example, what did the building used to be?  How did it become a hotel?  Is it a family business?  Did anything interesting happen on premise?  Hotels in Italy (and many other countries around the world) have built-in stories that make the stay experience even more special.  Why not share them?

Even though it may be more relevant if the property’s history is connected to the historical attraction in the city, sometimes it’s the people that own the building or run the property who have the interesting history.  For inspiration from a familiar source, think of the wineries that are all over Italy.  Many of them are run by families who have owned the same winery for generations.  Behind each of these wineries are stories of colorful characters overcoming (or facing!) problems.  Even most wine labels have a story behind them.  Can you relate this to your hotel?

The great thing about the history of your hotel is that it’s always unique to your property.  If you share your history and your guests begin to write about it in their reviews about your property, then that history might very well be a differentiator — one that you don’t have to spend any more money on improving.

However, you won’t know until you share and see how your guests respond.

Getting People to Talk About Your Service

I have a third tip on differentiators.  In the past 12 months I’ve sat on more planes crisscrossing the globe than I can remember.  On a recent KLM flight the safety video projection was not working, so the flight attendants had to demonstrate in person.  I saw that most people actually stopped what they were doing to watch the flight attendants demonstrate how to buckle and fasten a seat belt.

This is because people pay attention to people.  Extended to hotels, especially good service will not be ignored, and can become a differentiator that is not easily replicable by your competitors.  Whether it’s in the way of a welcoming attitude, or thoughtful anticipation, or speed to solution, or personal recognition, or something else quirky but wonderful, what you and your staff create in terms of the human experience can often be your strongest differentiator if you construct the experience with empathy in mind.  For Italian hoteliers, empathy can solve guests’ language obstacles, dietary needs, lack of familiarity with local culture, attractions and customs, bad/long transportation experience, etc. and win your guests’ loyalty.  If they are so moved as to recommend you to their friends, they also become your best marketers.

4.5 years ago I stayed at Villa La Favorita in Alba which was up in the hills.  I had bought some wine and needed to get to Turin, but this would have required me to get down the hill with a bulky box, take a train from Alba to another town, and then switch trains to get to Turin.  Roberta, the owner, after helping me decipher the train schedule, voluntarily offered to take me to the train station.  At first I thought it was nice of her to take me to the Alba train station, but she ended up driving me right past it and on to the 2nd train station.  To this day, I’m still referring people to her 6 room property, and look forward to going back.  On TripAdvisor, Villa La Favorita has a 100% recommendation rate and is ranked #1 of the B&Bs in Alba.  Roberta is mentioned by name in several reviews.  The most recent one reads:

Last but not least the owner Roberta goes out of her way to make each guest feel special and welcome. She provides for most anything you could ask for and will arrange for special tours or activities in the area if you wish. She will definitely succeed with Villa La Favorita.

An Example from an Independent Hotel in Italy

To summarize, let me use Villa La Favorita as an example.  If you go to the Villa La Favorita website, you’ll see the following description amidst beautiful pictures of the property and Roberta.  My analysis of why this is so effective is in parentheses below each paragraph:

Welcome!  It gives me great pleasure to present my country home.  Dating back to the early 1900′s, it is officially recognized as a historic residence, and has been meticulously refurbished in recent years.  Set amidst a 10,000 m² estate of vineyards and fruit orchards, it is located on a hillside just 1 1/2 kms outside Alba.

(Roberta displays her pride of ownership and introduces the historical significance of her property)

The farm produces fine doc-status wines – Nebbiolo d’Alba and Grignolino Piemonte – which can be tasted free-of-charge, as well as a large variety of organically-grown fruit (cherries, apples, pears, apricots, plums, persimmons, figs, mulberries, peaches and pomegranates), some of which are used to make delicious jams.

(introduces potential differentiators: tasting of fruits, jams, and wines made from on-premise orchard and vineyard)

The villa’s four highly original, en-suite bedrooms are tastefully furnished with period family pieces, and have satellite TV, air-conditioning, bath with shower and hair-dryer.  Each “room with a view” brings guests into close contact with the hills.and the towers and roofs of ALBA‘s old town centre.  A stroll along the path leading through the vineyards to enjoy the picturesque view of the sunset from on high is warmly recommended before the sun disappears behind the rooftops and bell-towers.

(with the pictures available on the site, introduces design as potential differentiators of the guest experience, both internal and external)

Every morning a plentiful breakfast offering a wide choice is served outdoors in the large garden, on the terrace or in the bright lemon-house. I will recommend the best restaurants in the Langhe and Roero, and visits can be arranged during your stay to the countless castles in the area, as well as to wine cellars – famous estates or family-run concerns just waiting to be discovered.

(service as the strong differentiator, addressing convenience and access to local knowledge backed by her personally )

Alba is a lively town, standing at the feet of the celebrated “Langhe” hills. It is famous for its mediaeval towers, “Via Maestra” (the main street, animated by plenty of shops and a busy Saturday morning market), and cultural and food & wine events. It is also the starting point for many interesting outings, on foot or by bicycle, motorbike or car.

(sells Alba.  Note that she isn’t selling her proximity to the town center — those may be strong differentiators for other B&Bs that are competing with her)

What is effective about this simply laid-out page is that the description presents the property’s strong differentiators and sets guest expectations on the location.  The property is exactly where it is, and not only is the description transparent and upfront about it, it moves the value proposition to design, history, and service.  These differentiators are then further backed up by social media.

All in all, a consistently great story, which makes for a great business.

Recently I was trying to buy a ticket online on Tiger Airways, a budget airline that operates out of Singapore and serves Asia.  Though I knew about Tiger, I’ve never flown it.  So I did 2 searches, one on Google, and one on Twitter, both using the keywords “tiger airways.”  Here’s what I found: Google’s first search result page returned 10 results, 6 led to a booking engine, 4 to information (including wikipedia).  Twitter returned 20 results, 0 led to a booking engine, 4 tweets were positive, 3 were neutral, 2 were questions, and a whopping 11 were negative (for math lovers that’s a -35% net favorability if you consider questions to be neutral).  Below are screenshots of the top 5 results from each service (click the image to zoom in).

google v. twitter results for tiger airways, July 2009

As you can see, while Google does a sufficient job at presenting facts, Twitter is much more human with personal pet peeves for all to see.  Also, I had no idea how old the sites Google pointed me to were, but I had a pretty good idea that the tweets about Tiger were all very recent, and therefore, more relevant to me.  Finally, Google abstracts are often an incomplete description of the website, whereas Twitter posts are mostly complete thoughts.  This slight difference is the pivotal one as it relates to brands.  In this example, whereas Google invites travelers to find out more, Twitter users unabashedly present their point of view so travelers don’t have to find out more.

For a traveler deciding, let’s say, between Tiger and Air Asia (another low cost carrier), you don’t have to read a lot of tweets to quickly form an opinion for how they’re regarded by their customers.  As the tweets predicted, I encountered a problem buying my ticket on Tiger’s website, and was instructed to call customer service.  While on hold, I was reminded at least 5 times that Tiger won the Best Low-Cost Airline of the Year in 2008 from CAPA within the on-hold loop music, which ironically made me question the validity of the award.

Why?  Not because I don’t respect CAPA, but because the tweeters’ complaints were entire consistent with each other and with my booking and customer service experience.  Some were further backed by links to news reports that reported on similar incidences.  On the other hand, I had absolutely no idea who at CAPA selected the airline and under what criteria.  The tweets I read made the professional CAPA opinion and award seemingly obsolete and dated, and the award did not lessen my growing doubts about Tiger Airways.

Is my brand experience typical?  I think more and more so.  A brand’s story becomes fragmented when there’s dissonance between what it tries to portray vs. the actual customer feedback.  That “promise gap” can shred a brand and render its messaging useless if the feedback is antithetical to the brand portrayal, and the brand either ignores the feedback or insists that the opposing feedback came from outliers.  In the past, customer feedback have been exclusively behind the brand’s firewall or embedded in private conversations and emails.  Message forums led to review sites led to blogging, each made customer feedback more public.  Twitter is all of those combined, with rocket boosters, and equipped with efficient search internally and to be externally discovered (via Google).

While consumers may initially approach Twitter with high skepticism, if they consistently read tweets that mirror their own experiences, they’ll start to accept and believe in the wisdom of the tweeters.  This is why the “follow” function is so powerful.  On Twitter, you can follow anyone you trust, and stop following anyone who gives bs, which is unlike Facebook where the person you want to friend (in order to see what they have to say) has to accept your friend request.

Given the rapid growth of Twitter, learning from travelers who are otherwise inaccessible to you but who happen to know what you need will become even more pervasive in the coming days.  The operative word here being days.  Where else in the world can a traveler go to find the right micro-segment of travelers who have the exact relevant, current, and credible knowledge they need?  Not travel agencies, not brands, not travel books, not travel magazines, not CAPA, and I posit, not even their friends and family.  This, coupled with the speed and reach of Twitter discussed in part 1, are the key ingredients to a paradigm shift for brands in the travel industry.

If you want more context about why Twitter works, you can read Granovetter’s seminal work on the Strength of Weak Ties.  For a non-academic version, Malcolm Gladwell’s The Tipping Point covers the main idea as well.  From Wikipedia, the central premise is,

In marketing or politics, the weak ties enable reaching populations and audiences that are not accessible via strong ties.

That, is exactly what Twitter does with amazing efficiency.

If you’re in the travel industry, or are a traveler, you can not ignore Twitter.

On the surface, Twitter may not be impressive.  You tweet (or broadcast, for the non-Twitteratis) what you want in 140 characters or less.  People who follow you receive your tweet instantly.  You can follow people whose tweets you like.  People who like your tweets can follow you.  You can do a keyword search on all the tweets.  If so inclined, you can re-tweet (RT) someone else’s tweet that you found to be particularly useful (it’s the Twitter version of email forward).  You can also embed a tag with a # in front of the tag name to denote important topics that you think (or hope) other people will follow.  For example #iranelections (vs. a keyword search on “iran elections“) or #followfriday, whose trend was analyzed by Mashable.

Twitter also has a direct message capability which is just like private messaging, but it’s really not the reason you use the service.  When I first began using Twitter, I got the feeling that the service was making public my tweets (which were like SMS or Facebook status).  But it turns out what ingenious Twitter users can do with 140 characters has made Twitter really an incredibly useful tool.

With an URL shortening service like bit.ly, which is very popular among Twitteratis, 140 characters is more than enough to express one’s brief opinion about a web page (very often, blogs).  There’s a further element of mystery added the the tweet because a typical shortened URL does not contain the web site name per se, it’s more like http://bit.ly/188bbf or http://bit.ly/12QgiZ, so the click-through rests solely on the credibility of the tweeter and the copy they used to describe the link.  Yes I used the word “copy” because I believe the tweeter is trying to recommend or sell the link to compel a click-through.  Combined that with the ability to RT, Twitter can have a profound impact quickly and virally.

Recently, an esteemed hotel chain posted agency-made videos that were meant to be viral to promote itself.  The videos were viral, but in an unintentionally negative way.  Within hours both bloggers and tweeters denounced them and the brand.  The combined forces, bloggers tweeting and tweeters retweeting with escalating commentaries quickly spread the bad idea, the impact so great that the chain pulled the videos down within 24 hours and issued an apology.

Also celebrity blogger, Perez Hilton, was assaulted recently in Toronto.  When police did not respond in a timely manner, Hilton tweeted an SOS to his over 1M followers, a good number of whom inundated the police department with calls.  When the police finally arrived Hilton had to tweet out another request asking his followers to stop calling on his behalf.

Those response times are considered to be slow.  Both the NY Times and MSNBC recently published articles about travelers receiving attention via Twitter.  In the case of the NY Times, here’s an excerpt:

Take Tony Wagner, 34, a new-media director for an academic group in Washington. When he found out he wasn’t seated next to his wife and 2-year-old daughter on a JetBlue flight to San Francisco over the Memorial Day weekend, he first called up customer service. But the agent told him to take it up at the gate. So Mr. Wagner indirectly sent JetBlue a message, by posting a plea for help on his Twitter account: “@jetblue Advice to get both parents and 2 yr old seated next to each other on flight later today? Right now only one parent. Full flight.”

Exactly 19 minutes later, JetBlue tweeted back, suggesting they correspond privately, using Twitter’s “direct message” feature: “@tonywagner Please follow us so we may DM!” After a brief exchange, JetBlue flagged his tickets as a priority concern.

And from Chris Elliott of MSNBC Travel:

“Dear Virgin Air,” she wrote. “My children have been on the tarmac for one hour with 90 more minutes to wait. I am at JFK gate b25. Pls RT.” That last request — please “RT” — is shorthand for Gottlieb’s nearly 10,000 followers to “retweet” her message, or rebroadcast it to their followers. And retweet they did. Within minutes, Virgin had phoned Gottlieb to reassure her that her kids would be fine.

“They contacted the gate agent manager and explained to us the entire weather situation,” she says. “Within 20 minutes of that conversation, the plane took off.”

Chris is a tweeter I follow.  He tweeted his article and to see RT in action, you can see how many tweeters have since retweeted his article to tell other travelers how they can use Twitter to improve their travel experience.

So if travelers are using Twitter and also being coached on how to use it (in Chris’ article he recommends 6 ways in which travelers can use social media services like Twitter to improve their travel experience), what are you doing to meet your customers on Twitter?

Like swing voters, swing travelers could hold the key to your hotel beating this economy.

Most hoteliers’ performance is measured not only by absolute revenue, but also market share.  Swing travelers can make all the difference in market share.

Let me use a simple example to illustrate the importance of swing travelers.  Let’s say there are 10 travelers making a reservation today and 2 hotels in your city, yours and your competitor’s, and normally you’d get 5 travelers each.  That means you and your competitor each have 50% market share.

If your hotel wins 1 traveler from the other hotel, then your market share would be 60% and your competitor at 40%.  That’s a 20% difference in your favor.  Now let’s calculate RevPAR.  Assume that both hotels have 10 rooms, all travelers stay 1 night, and the ADR for is $100/night.  Your hotel would achieve a $60 RevPAR vs. your competitor’s $40 RevPAR.  In fact, for your competitor to achieve the same RevPAR as you they would have to increase their ADR by 50% — to $150/night to achieve the same RevPAR as yours just to make up for the loss of 1 swing traveler.

Now, let’s suppose that your competitor manages to attract 1 new customer to the market, the market share would be 6/11 vs. 5/11, which is 55% vs. 45% in your favor.  To achieve the same RevPAR as you they’d still have to raise their ADR to $120/night vs. your $100/night.  In fact, your competitor would have to attract 3 new customers to the 1 that you swung over originally to win market share back.  In other words, in this simple example your competitor would have to grow the market by 30% (increase the number of travelers from 10 to 13) as a result of 1 swing traveler, in order to win against your hotel.

No wonder brands like Holiday Inn and Hyatt are not slowing down to win share despite the downturn.

How many swing travelers are there?  According to loyalty research and consulting firm, Colloquy, the total number of memberships from US travelers in hotel loyalty programs increased 26% to 161.9M memberships from 2007 to 2008.  This increase happened despite a sharp drop in demand in the second half of 2008.  While I believe first-ever loyalty memberships might account for some of that increase, the remainder comes from travelers that registered for their 2nd, 3rd… nth membership, making them swing travelers.  And remember, this is just amongst the segment already considered to be most loyal.

Carroll Rheem, Director of Research at PhoCusWright, recently said,

“The era of transparency ushered in by the Internet evangelizes faith in content, not faith in brands.  Companies need to understand the Long Tail of travelers and how its disloyal constituents make decisions: they don’t care about miles or points, can easily find another flight and don’t need a hotel flag to tell them what their experience is going to be like.”

Swing travelers are looking for stay experiences that fit their personal needs.  Because most hotels are using pricing as a strategy, impressive discounts are now the norm, not the exception.  What swing travelers are looking for then are the differentiators that give them the value they seek within a comparable price range.  Do you know what your differentiators are and are you communicating them loudly and clearly where travelers are researching where to stay?

Just for fun, I pretended to be a swing traveler looking for “hotels san francisco” on Google to see the ads that come up from hotel suppliers (I excluded the OTAs because they all uniformly tout discounts).  Removing identifiable info, below is the text of the first 8 hotelier ads I found:

1. There’s more to enjoy! Book unique offer. Instant Service 800-XXX-XXXX
2. Official Site. Book Now for Great Rates & Our Exclusive Packages!
3. Official Site. [brand name] San Francisco Hotel. Book Online.
4. Stay at [brand name] in San Francisco. Best rates online. Book online now!
5. Boutique [brand name] Hotel in Downtown San Francisco. Book online now!
6. Book a luxury hotel in the heart of San Francisco & enjoy access to all
7. Why pay high prices downtown? Free hot breakfast & airport shuttle!
8. San Francisco. Great locations. Free internet & breakfast bar.

What’s remarkable to me is that half of them (1-4) are virtually indistinguishable because they don’t offer anything meaningful other than to let the consumer know they can book online.  But the fact is these ads come from 3 different hotel suppliers (2 and 3 are different brands from the same hotel management company).  The other half offers some differentiation, but boutique and luxury are much less specific than free breakfast, free internet, and free airport shuttle.  Incidentally, 7 & 8 are actually from the same brand, 7 is an individual property where 8 is the brand ad.

I don’t think swing travelers would be convinced by the non-specific ads.  The way consumers think about the total price isn’t just the room, but all the costs associated with a stay.  Breakfast, internet, and transportation all make the value greater because it means less additional money out of a traveler’s pocket.  In recognizing their short attention span, those ads clearly communicate the differentiations that really matter in a direct and concrete way.

A swing traveler would almost always follow-up by reading reviews about the quality of the breakfast, the speed and reliability of the internet, and the timeliness of the airport shuttle.  Hence communicating the differentiations is only half of it, hoteliers need to make sure they’re backed up by solid reviews from previous guests.  Or alternatively, communicate in these ads what their guests have already complimented them on.

We’ve looked at one channel to win the swing traveler’s attention, and hopefully, their business.  But there are other ways.  The biggest paradigm shift that hoteliers must undergo is to market to and win the swing travelers one at a time by focusing on their specific needs.  Massive blocks of reservations and contracts with corporate clients, both fundamental business drivers in the past, are becoming increasingly rare and don’t deliver like they used to.  Like the swing voters that determined many elections in the past… swing travelers will be the group that determines who wins in many markets.