Archive for February, 2010

Timeshare Tensions

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Stamford Hilton participates in Hilton's Timeshare program

The Hilton hotel chain is most closely associated with short term stays for either business professionals or leisure travelers intent on using the hotel for visiting the local area near the hotel.  Generally, the traveling public views a hotel stay as a single transaction and is shopped for based on only one or two variables:

  • Closeness to a desired location (business meeting or leisure/vacation destination)
  • Cost compared to other properties that meet the location citerion

However, the Hilton chain also appeals to those vacationers seeking to choose a property with the ambience and amenities more commonly associated with living at home – albeit a rather plush and luxurious home.  The hotel chain offers a timeshare option that allows travelers to purchase time annually to be used or applied in any of the Hilton properties (which include both their Grand Vacation Properties
properties as well as their more conventional hotels and even affilaited properties not directly owned by the Hilton company.).

How It Is Sold

Unfortunately, while the idea is a good one for a number of reasons in that it:

  • Permits the timeshare owner to visit various properties in any number of locations, both domestically and internationally
  • Provides the timeshare owner with an asset that has a value to be sold, traded, or allowed to appreciate
  • Is a cost-effective way to vacation or have extended stays in destinations without having to incur additional costs very typically associated with travel (kitchen areas provide opportunity for cooking in the units rather than having to dine out)
  • Makes economic sense for the traveler or vacationer who finds themselves otherwise having to “rent” a hotel or other lodging without receiving any value for the transaction over 10-15 nights a year;

the sales techniques employed by the chain’s agents do not align with how people tend to want to purchase high ticket items.  In this age of internet research and price comparison across options when the shopper is better armed with data, and is less likely to be bullied into making a decision with less than complete understanding, a recent experience with a timeshare salesperson included the following:

  • An assumption that two people viewing the property together must be married to each other (a dangerous assumption in this age, especially when the registration form listed two different last names), and even after it had been corrected; the salesperson continued to refer to us as husband and wife and ask how many children we had, how long we had been married, where we like to vacation together, etc.  Even though I was accompanied by a friend and not a spouse.
  • High pressure to act immediately or lose the option to purchase (again, upon initial contact, I had explained that I was doing research on options and was NOT a buyer on this trip).
  • When I reiterated my position as only a shopper collecting data and not as a buyer; I was passed off to a “supervisor” whose job appeared to be to browbeat me for not “thinking correctly” about the deal (the “deal” was spending $40,000 or more – something few people will do on a single  initial contact).
  • When I did not change my mind, I was then passed off to someone else who spoke softly, was less confrontational than the supervisor and suddenly started dropping the initial investment cost to less than $1500 to trial the service and sharing with me conspiratorially that it could be applied to the investment, so there was “no lose” in accepting the deal.
  • After all of the three hour ordeal, I did not purchase a timeshare and while the idea appealed to me, the sales approach of a “hard sell” and not sharing the complete range of options left me feeling that there was still a better deal that would be offered if I stalled, waited, or negotiated more strongly.

The tension did not galvanize me, or most of the prospective buyers around me to make a purchase and most left in an angry huff at what they felt was a less than honest portrayal of costs.  In this current economic environment, not selling in a way that allows the buyer to feel comfortable with the process is just bad business.  The dynamic has changed – and relying on tactics of 1950′s selling will not work in converting prospects to sales – especially in high-ticket purchases when the shopper is likely to put an even greater emphasis on being well informed.

 

 

Branding Vegas Style

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Las Vegas

One of the largest trade shows in the country is orchestrated by a Newtown, CT based organization, the National Shooting Sports Foundation. Each year, they put together an industry conference that attracts over 60,000 attendees from backgrounds as diverse as military, law enforcement, people interested in self defense and protection, hunters, and competitive shooters. Their stated mission is to promote, protect, and preserve and they do that in a large way by reserving two floors of the Sands Hotel Conference Facility in Las Vegas right on the strip.
Of course, any time people congregate in Las Vegas, there is ample opportunity to observe human behavior and the impact of marketing, merchandising, and how companies can attract people to spend their money. The lessons to be learned are illuminating for any business person.

The Strip

When one takes a step back and honestly assesses what is happening along the Las Vegas Strip, it becomes clear that there is little difference between properties.. They all (or nearly all):

  • Offer gaming tables of different sorts.
  • Provide shopping opportunities from retailers familiar to hotel guests from their home state – often aspirational retailers selling luxury items that most guests would not ordinarily consider purchasing if they were not currently “on vacation.”
  • Have a plethora of dining options from the ubiqutous buffets to restaurants serving ethnic foods all the way to the more elegant and regal dining options.
  • Schedule shows from family entertainment and the latest headliners to burlesque options.
  • Maintain pools, health clubs/spas and opportunities for further pampering.<BR><BR>

Difference Makers

To better attract consumers, shoppers, and guests to spend their money with one hotel over another; the Las Vegas hotels offer various themes.  From the pseudo French architecture of a hotel named Paris , to the opulence of hotels that approximate riding gondolas in Italy or staying among Egyptian ruins.  Just as the hotels invest enormous sums in their hotels to differentiate themselves from each other, so too must local businesses work hard to create a point of difference from their competitors.<BR>
Whether it is the local pizzeria in your town trying to gain a greater share of the delivery business, or if it is the florist on the corner trying to ascertain how to compete against the supermarkets in town that can buy in bulk and get volume discounts from the suppliers; every business must confront what they offer the prospective customer that is not currently available elsewhere form competitors.<BR>

While competing on price or cost is one possibility, and providing a better product or service is often a useful and successful way to compete;  the hotels and casinos in Las Vegas do offer another option that is worth considering – the experience of the customer as the brand.  Playing the slots is possible in all of the hotels. However, being within earshot a replica roller coaster from Coney Island is only available at one property.  Seeing the water fountain show is possible only if one is staying at, or wanders by the Bellagio.  So, what is your brand’s point of difference versus your competition?  What is memorable to your customers about doing business with your company?  To not have an answer that truly distinguishes your business from others is to play roulette with your future!

Customer Complaint Handling

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The average business owner has a love/hate relationship with their customers. On the one hand, they recognize how vital the customer is to the sustaining, growing, and building of the business (or at least if the business owner is sane, that is self evident!). On the other hand, customers often want to receive the product or service in non-standard way that when not delivered as requested or demanded, can lead to a customer complaining. How to handle a complaining customer is a skill that few business owners have been taught; and therefore, causes many of them to feel less confident in their approach.

Complaint As Request

Attend any random collection of sales training sessions that take place in hotel ballrooms every day of the year in nearly every city; and you will likely hear that any customer complaint is actually a good thing. The thinking goes that the customer:

• Feels invested enough to share what they prefer, want, desire, will refuse, etc. with the company in the hope that the company will provide that customer with the additional reason to continue patronage (or remove a reason to shop elsewhere).
• Is making a request that they sincerely want the company to meet or fulfill.
• Is motivated enough to express or share that with the company and is therefore asking to be given a reason to be a loyal repeat customer.

Further, the pundits will share that it is the customer that becomes annoyed or feels dissatisfied and chooses NOT to share that with the company that is the more dangerous customer to the business. That person goes away and may not only refuse to frequent a business, but may also poison it for people in her or his network of contacts by sharing their perceived negative experience with those others. At least the customer voicing a complaint provides the business with a chance to make it right – and the business can hopefully convert the complaining customer into a staunch zealot for the business who will now share their enthusiasm for the business and how the business responded positively to the request with all of her or his network and thereby increase future business (or at least the potential for future business) with those in the network.

Donuts to Dollars

This issue around handling customer complaints recently received national attention when a customer of the Tim Horton’s chain of donut shops was barred from stores for having complained too many times about how the coffee tasted. While the details released may not be complete, and the PR efforts of both the chain and the customer may have skewed the accuracy of the reported facts to cast each in the best light, it did serve to bring the issue to the fore.

At the core of the issue is how to best handle a complaint received by a business. The worst thing for a business to do is to dismiss it out of hand. Using the Tim Horton’s example; it would be advisable for the chain to examine the following:

• What is the complaint (product, service, environment, etc.)?
• Is it only heard by one lone person, or has it been expressed before by others?
• Can it be resolved?
o easily
o At all
• Will additional training influence how the product is made/served/etc.?

The news reports maintain that the customer complained about the taste of the coffee. It is possible that the coffee has been allowed to sit in the pot for too long of a time that it has developed a bad taste due to evaporation (too strong), poor cleaning of the pots (so there may be a change to the taste based on residual product still being left in the pot, or perhaps it is not made according to the recommended standards or ratio of water to product. Lastly, the product just may have a taste that is not to the liking of the particular customer no matter what.

The news reports further stated that the same customer would return frequently to voice the same complaint over and over again and ask for some kind of recompense for having been served a product that was below expectations.

Customer Is Always Right?

Norwalk’s Stew Leonard’s store has a huge rock at the entryway that proudly exclaims two rules:

1. that the customer is always right
2. And if the customer is not right, refer to rule # 1.

While renowned for customer service and having a reputation for exemplarily training their employees; should the sign be taken as gospel? Surely, Stew Leonard’s can show proof that their taking it to heart has been successful.

However, a customer that repeatedly complains, even after attempts have been made to satisfy him or her just may not be a customer a business wishes to keep. While attempts to please should be made, and providing attention to the complainer in an effort to satisfy are appropriate – there are times when it is best to part ways.

If the time devoted to that customer negatively impacts the bottom line by becoming a time drain, too costly, or uses up too much of the human resources’ energy; then it is feasible that it is time to in essence “fire” the customer. At times, the customer may cease being worth attracting and may actually become a deficit for the business that should be removed from being allowed to continue to do that to the business.

There are also customers that will look to take advantage of efforts by certain businesses to retain customers and will try to leverage that to their benefit in ways that may call into question the sincerity of the original complaint. For example, complaining that a product failed to perform the intended purpose, but then asking for a replacement one – even though the product was not damaged or broken; just did not perform as expected; or claiming that one received food poisoning from a purchased box of food at a store, and then demanding that additional boxes be sent as compensation for getting the person sick cause one to question just how “right” the customer really is. If it does not pass the “sniff test” of what a reasonable person would do, it may require further consideration before handling the complaint as worthy of a company’s best efforts to please that customer. A dissatisfied customer who claims a product failed or caused them to become ill would not ordinarily want MORE of the same. In that instance, the issue is more likely an attempt by the customer to get something for nothing and should be treated with suspicion.

Handling customer complaints does require walking a fine line for business owners as they balance keeping customers happy and maintaining good will and at the same time preserving their bottom line and preventing others from taking advantage of them in an effort to essentially extort them. The Tim Horton example put a spotlight in the issue, but it is one that business owners have wrestled with for years.

Results or Activities?

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One of the mantras that many business executives, consultants, coaches, and academics use when trying to motivate clients, executives and employees is, “Only results count.” What they are intending to communicate is the importance of focusing on the outputs of efforts and that outcomes are what determines success or failure of a business. At first blush, it seems to be relatively intuitive to think that rather than focus on procedural steps and actions; it is the generation of a sale, collection of revenue, creation of profit, etc. that allows a business to thrive. However, that may not in fact be the recommended approach to managing one’s business. As counter-intuitive as it seems, focusing on the results may lead to less success than one might have presumed.
You Can’t Manage Results
Business results are the scorecard used to determine how well a business is functioning and how well it is meeting obligations. While the metrics or measurements applied to assessing business performance make sense in determining how well the business is performing; results are beyond our ability to manage. What a manager can; direct, lead, model, evaluate, train, etc. are the activities, procedures, and tactics or techniques applied. If the activities are performed as needed, the results will occur as expected.
Holding someone accountable for a result is really beyond their ability to completely control and may not at all be a reflection of how well they perform the job. It introduces a layer of frustration in that simply telling an employee to:
• Sell more
• Gain more customers
• Generate better profit
• Be more creative

Without providing the “how-to” aspect or activities required and then measuring how well those things are performed, it is no more likely to occur than the impact of random chance. Results are the goals, but no one can work on results directly. Only the behaviors and actions required to generate those results.

Manager Expectations
Most managers were expert and excellent at performing the roles and tasks that they are now asked to manage in others. Those managers are rarely given any training on how to perform the role of manager (versus super-performer). Therefore, their expertise at performing the task actually prohibits them from doing their job as a manager as well. By virtue of having risen to the rank of executive, manager, or supervisor, the assumption is that they need to create replicas of themselves within their direct reports. But the reality is that the role of super-performer and manager are two very distinctly different assignments. Being able to do something well is not an indicator of how well one can teach another to do it. Unfortunately, when one is especially good at doing something, it is often at least in part because they are a “natural” at it or do things unconsciously. Because they cannot articulate what they do and how they do it, it makes it hard for them to then help others to perform at their level. In essence, they are like the baseball hitting coach that counsels batters to do as he did, “I see the ball, I hit the ball.” Most managers are capable of defining what their peoples need to do better, improve upon, or stop doing; but there is a wide chasm between knowing what needs to be done and being able to train or teach others how to perform without your intervention.
Few managers and nearly all employees would think it is a worthwhile developmental exercise to tell an employee that they need to improve their prospecting skills, or should focus on their handling objections abilities, if they are not then shown how. Without a demonstration, an example of an approved technique, or some other way to recognize the desired performance, the employee is ill equipped to change their behavior and certainly will struggle to change results in a positive manner.
What often happens is that the manager is called upon to step in and solve the most complex problems or issues, often under a time pressure or when there are other hurdles or obstacles to be overcome that are beyond the current ability of the employees. However, rather than devoting the time to developing the skills of their employees so that those employees could perform at a higher level in the future; the manager acts more like the technician of last resort or the salesperson to close the deal that eludes the other employees.
Role of Manager
Using the Sales Manager role as an example, it quickly becomes evident that there is a tension in the job title. Sales is a specific function within a company that is tasked with prospecting, lead conversion, turning prospects into customers, and existing customers into repeat customers. The measurement for a sales effort is likely to be: number of accounts, size of orders, profitability of sales, etc. However, the role of a manager is to guide or intervene in a positive way to ensure that a process is followed to allow for the mission of the function to occur (in this case, for sales to occur so that prospects are sourced, converted to customers, and repeat purchases all at profitable margins). It is therefore the role of the manager to be evaluated on how well direct reports perform their activities or tasks in pursuit of a result. If the activities are well chosen and proven to lead to the desired results, the function will perform admirably. However, to merely demand that results be achieved without offering assistance in the skills or behaviors leading to that result will fall short of desired performance. It is akin to focusing on the scoreboard and not the game. You can’t influence the score without playing the game itself. The skills required to play the game are what leads to a better performance. The result cannot be managed – only the activities needed to drive results.
So, the sales manager is best served by performing his or her role to allow employees or direct reports to learn, experience, and demonstrate their competencies at performing the sales role and not by jumping in to close the business or assist in the prospecting calls to raise the likelihood of success. Surely, there are many business roles where the manager’s expertise can be directly applied and she or he can be integrally involved in the execution of the task – but in the role as manager; it is incumbent to maintain focus on the development of others’ to perform the actions necessary to complete the task and not solely measuring some result or output.

Ask yourself:
1. Does your company have a specific, documented process that you teach and review, and practice, on a regular basis?
2. Do you have a specific set of behaviors and activities that your team is expected to perform in a consistent manner?
3. Do you measure the effectiveness and the efficiency of those activities?
4. Are there core competencies that each member of your team is taught and held accountable for maintaining?
5. Do you review with your sales people activity performance (not outputs or results) and jointly create a remedial plan of action into place?