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Filed under: marketing, online media | Tags: hotwire, service innovation, service marketing, trust
I am a proponent of Hotwire. If you are not familiar with Hotwire, it is an online travel service that makes customers go blindly in booking hotels and renting cars because they offer really good rates. Say you want to stay in Paris and you would like to be in the La Défense area. You simply go to Hotwire, select the region and they give you hotels at various star ratings and prices. Pick the star rating and price that fits you, pay for the booking, and then your reservation is set and the hotel (or car, or airline, etc.) is revealed. In Paris, our hotel was significantly lower than the price that others were paying. For the same car rental in NYC, I would have paid $200 more on a rental that I am paying $220. I believe they can do this because their system accounts for like vendors surplus, and they can offer great deals by combining the surpluses and passing this discount to customers. But this system doesn’t always work out.
One of the most important aspects of services marketing is trust. Because the offering is intangible, consumers therefore must be able to rely on any information that is given in the selling process when making their purchase decision. Hotwire works because they can say, in effect: “You may not know what hotel, or car, or airline you are getting—but be rest assured that it is as good at least as Brand A, and better than Brand B.” So, let’s say that you want a 5 star experience and when making the purchase, they reveal that you just purchased a 3 star. If this happened with any volume, their unique selling proposition is destroyed.
On a smaller scale, that is what happened to me just recently. I simply didn’t want to stay in Hotel A, and their site stated that hotels like Hotel A would be considered such-and-such rating. So, I purchased the next level up, and, to my surprise, I was awarded Hotel A. I went from advocate to what Seth Godin refers to as an “angry person“.
So I called, and the customer service rep said it wasn’t fair to me to have all of Hotel A hotels rated as such-and-such rating, they look at all places separately, and so on. He obviously doesn’t read Seth Godin’s blog. For the most part, I didn’t want a refund or a discount or anything similar. I just wanted them to promise to do something about it. I wanted my trust restored. So I wrote. And wrote. And wrote. And, they wrote back:
[...]
Thank you for contacting us regarding your hotel reservation [...]
I understand you contacted us four days ago about the star rating on your hotel reservation at [Hotel A] I apologize you did not get a response because notes on the account show you had called in to discuss this issue.
Thank you for the feedback you provided us about [Hotel A]. Customer feedback helps us ensure our properties continue to meet the high quality standards we expect from all of our partners. After receiving feedback from you and other guests, we re-evaluated the [Hotel A] and adjusted the star rating.
And then they offered a refund and other steps to address my concerns. Trust restored. Advocate reactivated. The steps taken were minor, but the effect is huge. Services, which represent the future of so many organizations, cannot overlook the sizable need for establishing trust.
Dan Froomkin of the Washington Post commented today about the current farm subsidy bill veto and subsequent process to override:
In Congress, a bill is likely to get a lot of votes if there’s something in it for everyone. While Congress often finds itself caring mostly about the parts, it’s the president’s job to focus on the whole.
So Bush rises above politics to act presidential — and that’s when Congress shows some spine? That’s what it takes for Republicans to leave his side and join forces with Democrats?
In a time of riots because of increasing living costs, not to mention the negative effect that subsidies in domestic agriculture have on developing nations, it is disturbing for our Congress to side with the powerfully popular farming interests. With report after report about rising food prices, it seems that our representatives have not matched what we are willing (as a nation) to sacrifice for the benefit of a few. I agree that a government’s value (and with it legitimacy)* is based on the public policy manager’s ability to satisfy public desires and require sacrifice. As Mark Moore explained,
it is not enough to say that public managers create results that are valued; they must be able to show that the results obtained are worth the cost of private consumption and unrestrained liberty forgone […] Only then can we be sure that some public value has been created.**
Congress has, no doubt, required more sacrifice in the pushing of this subsidy bill, but in doing so, they have not moved far enough away from personal interests to address the sacrificial impact on the nation as a whole. It is a troubling standard to financially benefit the few privileged at the expense of the struggling masses.
*“The legitimacy of government as a whole generally depends on how well it creates value.” Kelly, Gavin; Geoff Mulgan; Stephen Muers; “Creating Public Value: An analytical framework for public service reform,” Strategy Unit, Cabinet Office, United Kingdom, Oct 2002, www.strategy.gov.uk
**Moore, Mark; “Defining Public Value,” Creating Public Value, Harvard University Press, 1995
Filed under: politics | Tags: Gandhi, Political Compass, political parties, Stalin, test
I recently took at test at politicalcompass.org to validate my beliefs about my political leanings. I sometimes enjoy taking these online tests, as long as they agree with my image of myself. It is a lot like branding strategy in a way. It is easiest to market something to someone as long as your characterization agrees with the target audience’s higher image of themselves.
While taking the test, I tried very hard to be honest in my answers (it seems to be in our nature, at least in mine, to answer as we would like to be, not as we are on these self-discovery quizzes). It was hard to be truly unbiased because of some of their characterizations of the different areas in which the test-taker may align politically. I have included their explanation below:
Both an economic dimension and a social dimension are important factors for a proper political analysis. By adding the social dimension you can show that Stalin was an authoritarian leftist (ie the state is more important than the individual) and that Gandhi, believing in the supreme value of each individual, is a liberal leftist.
[ . . . ]
On the non-socialist side you can distinguish someone like Milton Friedman, who is anti-state for fiscal rather than social reasons, from Hitler, who wanted to make the state stronger, even if he wiped out half of humanity in the process.
Great examples. Gandhi or Stalin? Friedman or Hitler? There doesn’t seem to be much saving grace in being above the x-axis on the social dimension. Even the term “authoritarian” is a bit problematic. Libertarians are accepted in society. Authoritarians are to be feared.
I happily was validated to find out I share the same quadrant as Gandhi, the Dalai Lama, and Nelson Mandela (even if barely). Though this bodes well for my place in history, it also seems inevitable that I will one day be in prison or exiled. I suppose that is the price you pay as a, albeit moderate, liberal leftist.
Filed under: marketing, online media | Tags: communities, Facebook, Internet, marketing, networks, Ridgewater College
On April 30, 2008, three students at Ridgewater College, a small technical school in Minnesota, posted the following on Facebook:
For our final project we need to do a networking experiment. We decided to see how far 3 average college students could reach out to within one week on facebook. We are begging you to join our group and then ask all your friends to join as well. This is only a one week experiment so you can just delete this after a week or so if you wish to.
Exactly one week later, the group had nearly 700,000 members.
I was asked to join from a friend that I had last seen some 8 or 9 years ago, and I did so and invited others. In the end I was asked probably 5 times to join this group. Many businesses would have to pay tens to hundreds of millions of dollars to get a like response from a similar audience. This trio did it with a few hours of work. I could find no news release or other types of promotion. It simply was passed from individual to individual as evidenced with the invitations to me and I would assume others. In the end, this experiment became a powerful example of weak ties in action.
Years ago, Everett Rogers discussed the concept of weak ties when he mentioned,
The informational strength of dyadic communication relationships is inversely related to the degree of homophily (and the strength of attraction) between the source and the receiver [ . . . ] This homophily and close attraction facilitate effective communication, but they act as a barrier preventing new ideas from entering the network.
An innovation is diffused to a larger number of individuals and traverses a greater social distance when passed through weak ties rather than strong.*
Rogers could not have seen the strength and speed of how the networks of our day have influenced the speed of adoption. Of course, many organizations have used viral marketing to some success, but the approach is lacking if it just focuses on this one aspect of networks. The end understanding shouldn’t be surrounding “viral” marketing. It is in understanding the culture within which a product or (more especially) a service exists. As I, and others, have talked before—marketing is not about simply selling “delight” or “solutions”, it is about sitting a product or service within a society as a tool for exchange, expression, and ultimately, identity. Understanding that role is the key to successful branding. We marketers need to understand better that product or service adoption has much to do with an individual’s place in society. Some have got it for some time; over 35 years ago Frank Bass wrote:
Apart from innovators, adopters are influenced in the timing of adoption by the pressures of the social system.**
As we truly understand how demographic groups communicate and how weak ties are connected, then success in marketing will not as much guesswork. Strategy and creativity will be able to truly mesh as we use these insights to access these networks—whether they be 20-something Facebook members or 60-something classic car restorers.
*Rogers, Everett M.; “New Product Adoption and Diffusion,” The Journal of Consumer Research, Mar 1976, Vol. 2, No. 4, p 290 – 301.
**Bass, Frank M.; “A New Product Growth for Model Consumer Durables,” Management Science, Jan 1969, Vol. 15, No. 5, p 215 – 227
Today I did a search on global warming for news articles at news.google.com. Over 35,000 returned. That is 35,000 that they still are indexing as recent news articles. Green is the new black; NPR, local city meetings, large scale projects, former vice presidents (okay, maybe just one), political candidate, news articles, et cetera—we are all so focused on saving the world from getting warm. That’s fine with me. I love to ski and I don’t want my resorts to go away. There is one problem with this whole approach—it seems to not be helpful. Here is why.
Much of the focus thus far has been on proving the cause of this warming trend. Did we (that is, humans) cause or not cause it? That is not really the point; the issue, as debated so well in the Intelligence Squared event, “Is Global Warming a Crisis?” Specifically, if it is happening, can we stop it, if so or if not: what do we do about it. Instead of Senator Obama getting a free ride to say that the food crisis is because of global warming (as he did recently), and we all nod and wring our hands at the scary thought of this unstoppable force, we, and our leaders need to say: “The food crisis is be caused because of X aspect (perhaps relating to global warming); this is what we can’t do—this is what we can do” (and if is Senator Obama, a chorus of “Yes We Can!” will probably follow), “. . . so lets move forward and do it.” We can’t just blame everything on it and hope it doesn’t affect us. There was a great letter to the Economist that rightly called the Economist writers to accountability when they blamed the wet weather at one time and the dry weather another time for the same region on the warming trend. These articles were issued with the proclamation that region will continue to experience similar (ongoing wet OR dry years, depending on the article) weather for the foreseeable future because of global warming.
Second, we need to examine if this is worth our time and money. The economic impact, depending on who you believe, may be minimal when it comes to climate change; particularly when compared to the effects of poverty and illness in developing countries. Though there have been some great pieces explaining this misappropriation of values, we continue to jump on the green bandwagon. Is it no wonder that, in some part (perhaps significant) the present food crisis has been brought about because of the focus on greener fuels. We may be decreasing emissions, be death, starvation, and rioting in poorer countries is a pretty heavy price to pay for our ski resorts. That may be a bit harsh, but there are real needs now that should outweigh much of our future fears—fears that too often are based on multiple assumptions. Our current tragedies are destroying lives today, and that destruction is real; it is not a decades away prediction. It is a sad critique on our society when public sentiment is focused on a crisis 50 years away while ignore the suffering of our neighbors.
Years ago, Silent Spring helped to restrict the use DDT worldwide. Though still in limited use, it has been abandoned in many malaria-ridden areas throughout the world. Though there was much to be lost from the use of DDT, it’s general absence is hard to continue to justify when malaria persists as such a widespread killer. I really am for environmentalism. I don’t like SUVs. I like clean skies and cold winter. I like the polar caps. Clean water is my favorite kind of water. This isn’t the point. The issue is not to say we shouldn’t focus on helping the climate. The issue is with what we don’t do instead. We too often focus on things that are popular before focusing and investing on areas that are right and necessary.
