194: The Value Paradox: Lessons in High-Stakes Hospitality

Speaker A: Welcome to Customer Service Academy Radio with author and customer experience expert Tony Johnson. Tony will share his vision for successful customer service, leadership and business excellence and speak to some of the most impactful leaders in business today. And now, here's Tony Johnson.

Speaker B: Hello, everybody. Customer Service Academy is on the air. I'm Tony Johnson, your customer experience speaker, consultant, trainer and. And today's episode is coming to you courtesy of Ignite youe Service Training and Consulting and 4xi Global Consulting and Solutions. Truly Better Together. Folks, we are going to be hosting some amazing classes over the summer, into the fall and winter. Go on over to igniteyourservice.com summits and sign up today to be notified when those dates land. You are not going to want to miss these destination trainings in places like Lakeland, Florida, Tampa, Orlando, Las Vegas. You are not going to want to miss these. Also, my six cans of customer service program is available on TheTonyJohnson. Uh, Teachable.com. head on over and buy your copy for you and your organization today. But folks, I got a couple of things I want to talk about today. There is so much going on out there. So right here in my own backyard. I think I've told you I live here in Lakeland, Florida, and I will tell you, they'll have to bury me here. I absolutely love it. And this is one of those communities where you can really get out of it what you put into it. It's true of many things in life. And I know that's one of those trite phrases you hear everybody. And usually it's when people are lazy, right? And they're, uh, like, if you don't put anything into it, you won't get anything out of it. But, you know, it's not very good anyway. Not the case here. Not the case here at all. I have felt so welcomed in this community. And I'm going on eight and a half, nine years of having lived here. And I will tell you, never have I felt as welcomed as I have in a community. And so I think it comes back in a lot of ways to the fact that that was the intent when we moved here. I've moved around a lot. I know you know this from having listened to the show, but, you know, I spent a lot of years food and beverage and hospitality and I traveled a lot, I moved around a lot, never got a chance to put roots down. And so this has been a great place. When I moved here, you know, stepped out from the CXO job and started my own company and started Doing the speaking, training, consulting full time. This was where I wanted to be. And you know, I always make the joke that they're going to bury me here, right? I'm not going anywhere. And so this is where we want to be. And so we really put the effort in. We knew we wanted to put down roots, we knew we wanted to become part of the community. And beyond, just joining the chamber and getting to know our neighbors, showing up to ribbon cuttings, all the things. And you know, this is one of those times here when the growth of this area, this is a juggernaut of growth here in Lakeland and there is a new hospital opening up around the corner with me. I know, right? Long preamble to get to the point. But when we think about healthcare in America, there's so much going on and there's so much opportunity and so much change and there are concentrations of folks who need more healthcare than others. And Florida is one of those areas. And in this area, tremendous growth in Lakeland and in Polk County. And so one of the things that's happened here recently is there is a local chain of healthcare here. One of the, uh, healthcare groups called Watson Clinic here in Lakeland and they are outstanding. They're my healthcare group. They're who I go to, my primary care doctor when I had surgery a few years ago. They are the folks that take care of me every single day when I need something. And so Watson Clinic, the other part about Watson Clinic that's very cool is it's doctor, so it is doctor owned. They're not, uh, a large conglomerate, they're not a national chain. I think they probably fought off being bought many, many times because they do a really, really good job. And so they're a staple in this community of healthcare. Now the Orlando Health Group is based obviously in Orlando. It's in the name. And so they are an amazing healthcare organization as well. They are a central Florida based healthcare group. They very much have a service mindset and they are deep blue into the experience. And how could you not be right? Being in Mickey Mouse's backyard, influenced by the Disney bubble. How could you not? And that's where they grew up. So they've come together, Watson Clinic and Orlando Health to build the Watson Clinic, Orlando Health, Lakeland Highlands Hospital. Right. And I get it, that is a mouthful. It is a lot to say. There's no, there's no pretty acronym. It is just a mouthful of stuff. But the whole idea was they were going to be forward thinking, they were going to think into the future. And they weren't going to be building for today, they were going to be building for tomorrow. So they've created this 300 bed hospital. It's not, not trauma, but it's one of those hospitals where there is an emergency department, there's 300 beds, and it is a large juggernaut of a hospital. It's beautiful. And also there is an outperson surgery center and there is another healthcare facility there where they're having like orthopedics and podiatry and some other specialties there as well. So it's a pretty large campus and they built room for them to grow into it. So they have plenty of land, they have very far parking garage if they need it, so on and so forth. So they can expand if they need to. Now it was a very, very thoughtful approach. And that's really where I'm coming to here is this was a thoughtfully driven, patient, experience focused facility as they built it. So I was lucky enough. I sit on the Lakeland Chamber of Commerce board and I am, um, by the way, I've never loved anything, I think, as much as being on the board of directors for the Lakeland Chamber. It is a wonderful chamber. They do a fantastic job. The staff there really cares. They're huge into community involvement. And when I got the chance to step on that board, I jumped in with both feet. And I've loved every minute of it because they are so welcomin. But that said, we had the opportunity to have a meeting there and we had a ribbon cutting. We had the chance to tour through the building and I will say, wow, right? Because what they have done is really thought through in a very intentional way what they need for this area. And they put it like this. The COO walked us around and he said, brains, hearts and babies. That's how they described it. So they have this facility knowing that in this area and with this demographic and with what's happening in the community, they have to be able to solve for, you know, for care for folks, for their brains, right? So there's a huge neurology department, you know, CAT scans, the whole bit. They have to be able to think about people's hearts because, you know, all of us of a certain age tend to, tend to have that here, right? In the U.S. especially. And so, you know, they have cath labs that are just crazy huge and these $5 million machines that buildings, you know, usually only have one of, they have two because they know that's going to be a priority, maybe not today, maybe not tomorrow, but looking around the corner, it's going to be a big deal. And then thinking about babies, they have plenty of space for labor and delivery, obgyn, all those kind of things. Because in this area, we are seeing a resurgence of, uh, childbirth. And so in a lot of areas, it's going down. Right? But in this area, it just happens to be going up. It's just the nature of the area and they built for that and they're seeing that again, not just now, but into the future. So I'm just thankful for the whole piece and the way that they're thinking about it because organizations need to think ahead. We need to think about, you know, not just today, not just tomorrow, but what are we going to need into the future? And I know I said that a couple of times, but it bears repeating as many times as you can hear it. Because when you see organizations that really succeed, they are making sure that they're taking care of the needs of the present, but they're not ignoring what they need to be in the future, whether it's laying down infrastructure, thinking about process, whatever it means so that they're future proofed. You know, I've been thinking about this new huge building that Jamie Dimon built in New York City for his workforce. You know, that building was not built for today. It is awesome today, but it's going to be great for many, many years into the future. So with the amount of money they spent on that, I think it was close to a billion dollars or more. This is a building that will serve his workforce well for decades and decades, you know, forever and ever. Right? Because they were very intentional, at least with the pictures I've seen and the folks that I know that have walked through there. It is really, really well designed. So just thinking about that is really important. The other thing that I'm really excited about, and I think, uh, the whole country's taken by storm is in the next couple of days, the World cup kicks off. So as I'm recording this, the FIFA very, very close to starting just within days. And it is, it is going to be a hotspot for the countries that are hosting. This is, you know, Olympics are better caliber performances and crowds that folks really have to think about. So when we think about the whole idea of hosting the World cup, when we think about the whole idea of that, it really is going to be important because there's a real hospitality play involved here. This is one of those moments that set people apart and really, really should be weighing probably heavily on the minds of operators, right now, because the guests are coming, and in this case, as I'm recording it, the guests are already here. So it's really making sure that you're ready for them as an organization. And that's important because these days, travel is hard, it's expensive, it keeps getting costlier, and it's also become more difficult, especially if you're crossing borders these days. So really thinking about planting that flag of hospitality for our, uh, overseas visitors. Really putting the US Back on the map as a hospitality bastion. This is an important piece. So, you know, it's thinking about making sure that everyone has an operational playbook, right? It's making sure you know who's coming through your door. Not everyone who's coming, by the way, to the World cup are going to be soccer fans. Yeah, uh, that's something to think about. Your guests are going to be a mix of far broader and more diverse folks. And I'm talking to you all the host cities, because this is a chance for anybody listening, if you are in hospitality, if you are in a host city for the World cup, this is really a chance to pay attention because some tactical things here that will really help you win. So first, you know, again, remember, your guests are going to be a broader mix. Yes, you're going to have international fans. Yes, you're going to have soccer fans or football fans, right? But you're also going to have, you know, domestic road trippers. You're going to have folks that put in for the lottery of tickets and got them and go. You're going to have social media folks who just want to show up and get the, get the images and videos. You're going to have corporate sponsors, media workers, people just coming to attend free festivals around there and watch parties, tourists who just want to be near the energy. So you have to just understand who your customers are going to be. The Persona that you're going to be serving is way more diverse than just soccer fans, right? So map that full guest journey. Think about what it means depending on where you live in this ecosystem. What's the journey from airport to stadium to your dorm? And how do you fit in? Where do you fit in on their journey? Is it transportation? Is it food service? Is it hotels? Is it restaurants? Is it concession years? Is it security? Thinking about where you lie in that system, thinking about where you, you fall in the customer journey, the guest journey, so that you can think about how you can positively impact that journey. What are the friction points that you need to sand off and how can you ensure a really, really Good experience for those that are visiting. So just remember you're not just a moment in time. You are a part of a larger journey. So you have to make sure that you've thought about how that's all going to fit together and how can you connect the dots for folks? So I remember one time I was listening to the folks at Brightline Trains here in Florida. Uh, they run high speed trains in Southern Florida and up to Orlando. And so they're really working on, I think, conquering the world of high speed travel in Florida. But I remember the CEO, I was on a call one time listening about the whole process and the construction when they were building a lot of railway. And the CEO said, you know, we're not just worried about getting the guest from the train to the station, we're also worried about the last mile. You know, are there going to be places for Ubers to pick up? Are there going to be places for people to grab a bottle of water? Are, uh, there any places for, or ways for people to get to their, to their plane, to their gate, to the terminal, if they're just taking bright line up, say from Miami to Orlando? But the CEO was very, very invested in making sure that the whole ecosystem fit together. Even though once they got off the train, technically they weren't their problem anymore, they still were thinking about how they fit in to that larger journey and that's what has to happen here. So the other thing too, you think about how you're going to be culturally fluent, you know, if you're in one of these areas, because you're going to have folks coming from all corners of the world to attend this. You're going to have folks in your concession stand lines walking into your hotels, walking into your restaurants, getting in your cabs and Ubers. And have you thought through how you're going to communicate? Have you thought through what that looks like, what that feels like, what the expectations are? How do you serve people and deliver hospitality in different cultures? It's not that anyone needs to be an expert. They just have to ask and listen rather than assume. And just understand that everybody comes with a different cultural expectation of what hospitality is. And their interactions with the teams are different, their expectations are different, their behaviors are different based on what country they come from. And none of this is right or wrong, it's just different. So understanding that this is an opportunity to really drive this hospitality piece, knowing what you've got coming in, thinking through how will people read a menu board, how will people understand how much something costs, how Will people understand the check in process at your hotel? Just making sure you've really thought about that so that you're not surprised in the moment. And the other thing I would say too is there is a real tendency when big things happen, particularly in the US of trying to raise prices. Now it's supply and demand and I get that. But don't price yourself out of the relationship, right? Think about how you can hold rates, how you can eliminate surge pricing. Think about a rate strategy that still drives your bottom line, still ends up being profitable for you, but also doesn't make people feel gouged. So that when they leave after this event is over, they want to come back for another event, another thing. Maybe not as grand and spectacle, but they want to come back for something local in your area because, uh, they discovered it was a really cool place to be, there was a lot of cool stuff going on. And oh, by the way, there was great hospitality and value for my time. So just consider that this, this whole World cup is a great chance not to just have a customer one time, but to develop customers for life. And to do that, you've got to think about value, you've got to think about communication and cultural, you know, cultural interactions. And you've got to think about how you will sand the friction off and make things just as easy as you can. So be nice to people, respect their differences, right? Fair pricing and make things easy. If you can do that. Operators, no matter where you are, I'm talking to the concessioneers at the stadiums, I'm talking to the security and parking in valet, I'm talking to hospital, you know, talking to hotels and restaurants, talking to all the folks out there who are going to be taking care of all of these visitors coming in. Please do a great job, do it with kindness, do it with hospitality and you will set a fantastic example for the world that will make people want to come back again and again. So that's a big deal. So think about that. Uh, and the last thing that I will say around this whole piece is it's going to come down to a couple of things, right? It's going to come down to the leadership on site, it's going to come down to the communication and selecting the right team on the ground to serve guests wherever you are in the ecosystem. And it's also going to come down to ensuring that you have the training and processes to deliver. Because the boring stuff behind the scenes, the training, the process, the communication, the selecting, uh, the right team, all of those things is what will ultimately drive the engagement you want in this, in this amazing World cup event that's just getting ready to kick off. And oh, by the way, that's transferable to any, any big event you might be hosting, any customer service or hospitality interaction, any organization who's listening. It's the exact same way that you drive success in your business. Train the right team, hire the right people, make sure that you're communicating well and recognizing and celebrating, lead with purpose and intentionality and inspire them to want to drive hospitality through training and engagement. So it works in any organization, not just for large ones, uh, like this World cup we have coming up now. One of the things I want to talk about this week is this idea of the value paradox. So consumer sentiment right now, it's at an all time low. The pandemic era readings even included. Right. Customer sentiment is starting to crash. People are anxious out there. They're scrutinizing every dollar. And there's this emotional backdrop with guests that are really, regardless of what they're spending, guests are guarded with what they want to spend. They are. Again, the economy is one of those things that's a little bit in flux right now. It's got people a little bit anxious. So they are really scrutinizing their discretionary decisions and spending. Now here's the paradox. At the same time, luxury spending is booming. The top 10% of U.S. households are spending $500 billion in leisure travel this year alone. Private aviation is up, ultra premium hotels are up. And I will tell you, it used to be when you would book first class travel that a, you could get upgraded way easier than you do now. I used to get upgraded all the time when I was out there in the world. And also first class travel was not nearly as expensive as it is now. First class travel was usually, you know, two or three hundred dollars more than main cabin. It wasn't cost prohibitive. I can remember flying from Detroit down to Orlando when we lived up there on vacation. If a flight for a main cabin was 400 or $500, then you could get, you know, for 50 or 60 bucks more, you could get into an upgraded seat and for maybe $700, you could get into first class. And, and we did that for years and years coming down, flying from Detroit to Orlando and, and it worked every time for us. It was never more than a few hundred dollars more. Now, now, that same flight, now I would bet if you looked at, uh, a $500 main cabin ticket, it would be close to 900 to $1,000, maybe even more for that first class upgrade and people are paying it. And so it's supply and demand, as I said before, right? People are willing to pay the money for that first class experience. And so the airlines recognize that. So there are fewer upgrades being granted. And if you think about it too, the pricing just keeps going up because people will pay it. So higher prices, fewer upgrades. But again, first class is always full. So that reality is sort of in paradox to the value piece that I started off and the discretionary spending decisions people are making. So the thing is, it does ultimately end up coming back to experience because in restaurants, 7 out of 10 consumers say that they'd dine out more if they had more disposable income. The desire is there, there is still pent up demand and it is real and it is there. What's missing is the confidence. And so when people do spend at a certain level of income, they want to make sure they're making every penny count. You know, there's a certain level where the luxury spending, that top 10%, that spending still off to the races. So the market is splitting. Brands that are investing in experience are seeing real sales revival. Brands discounting their way through it or cutting to make margin, they're struggling. So the data is really clear on what's winning. And that means the most dangerous word in hospitality now is value. Because operators hear that and think price, they think discount, they think deal. But guests don't mean any of that. Value is that gap between what someone expected and what they got. Are you living up, uh, to what they were thinking they were going to get, right? And when you think about the definition that way it changes everything. So it comes down to, it's like there are these layers. First it's functional. Did it work? Was the food correct? Was the order accurate? Was, uh, the room clean? You know, did the plane take off on time? You get that right, you get the table stakes right, nobody's going to write a five star review about it, but you got it right. Then there's this emotional layer. Did folks feel something? Did they feel welcomed? Did they feel seen? Were they remembered? Did someone notice something about them? Remember their name, know it was their anniversary, you know, understand that they're a regular. This is built one interaction at a time, but it can be special. Then there's the memory value layer, right? You start clicking up, uh, did, did the brand tell a story? Is it going to bring someone back? And I think about Disney, I think about Chick Fil. A, right? They engineer for this layer. I always talk about, you know, Disney and Ritz Carlton, they're easy, right? Because that's just what their brand is. And, and you would expect that. But Chick Fil a continues to always kind of surprise me when I go in and things like the flowers on the table and they're the only, you know, quick service restaurant that buses my table and refills my beverages and things like that. The managers are out walking around, glad handing and doing table touches like you would expect to see in a table service restaurant. They really have kind of up the game for QSR or quick service. So this memory layer is really, really important. It's powerful and it's free. And the organizations that find ways to really drive this whole idea of creating memories with their guests, even small memories can go a long way toward building loyalty. Jan Carlsen, he was the former CEO of Scandinavian Airlines, he called these moments of truth. He's a favorite of mine. He's got great quotes out there, but he called them the moments of truth. The interaction between a customer and the brand and this 15 second window to make some magic, right? And it is, it's a powerful way to make connection. And you have to think about these moments of truth and is there a way for you to build a memory with them? And again, these are not firework moments. You don't have to be Disney level with this. It's down to these little things that make people tell a story about you and your brand. Like remembering that Chick Fil a has flowers on their table or I was there and they bust my table, or the manager remember my name, stuff, stuff like that. So this is all by way of saying that most operators spend everything on functional and almost nothing on emotional and memory making. And in this environment that's going to be a competitive liability. So remember, people expect the function, but the emotional and the memory making, that's really where you can set yourself apart. So the reason why this is all important and the reason we need to talk about this is because the consumer market right now is what's called K shape. So the top is going up and the bottom is going down and the middle is getting squeezed. So luxury is booming, budget's contracting and the mid market is under real pressure because they're sort of caught between the devil and the deep blue sea. This is the current reality in most hospitality organizations right now. So on any given day you're going to have both ends of the K in your building. That's the point. You're going to have the regulars who are there no matter what with no financial anxiety. And you're going to have the guest who's been saving up for this, right? The special timeout, the one time huge deal and it's going to carry enormous weight and enormous expectations for them. And you're not going to probably know that. You might sense it a little bit, but you're not going to know for sure. And you know, Disney is a good example of this again, because when you go to Disney, there are folks who are there who have been scrimping and saving for this for years and years and years. It is a once in a lifetime deal, huge stakes. And again they scrimped and saved for it and they're having the time of their life, right? But again, there's a lot riding on that. And then there are folks who buy the tickets and go when they want to. They've got the annual passes. They sort of almost start to take it for granted. Uh, a lot of those folks, by the way, spend more time complaining than they do actually enjoying it because they're there so much. So both ends of the spectrum are there. But here's the deal. You can't tell which guest is which. You might have an inkling here or there. You'll use empathy and you'll understand and you'll start to crawl inside people's head. But you really can't train or calibrate effort of your team based on who they're serving. You know, my recommendation is always to train for the highest standard for every guest, every time. And just make sure that you know the cost of getting it right with, with the guest who stretched to be there is very high. And so the other side of that coin though is the win is so very high as well. It's huge for them because they stretch to be there. It's huge for you as a business because they are probably going to celebrate it because it was such a big deal, such high stakes and you crushed it for them. So that is something to really consider. So you've got to build your experience for the ones who need it most, right? Not the ones who are easiest. But you've got to build that standard around knowing that you've got both ends of the spectrum in there. And this K shaped economy. The one thing that I will tell you is the middle is going to continue to get squeezed, right? It's why high end restaurants continue for the most part, at least in my neck of the woods, they're still doing okay, right? That top 10%. And then if you look at some of the value places they're really doing a good job. I mean, even McDonald's right now is still consistently thinking about how they're going to drive value and how they're going to bring those folks in, because you've got the real value. Institutions finding a way to deliver on table stakes, make it a little bit special, but they may be competing on price, but there's a place for them in the market. In the middle though, like in the restaurant analogy, I start to worry about the Chilies and the Applebee's and the Red Lobsters, although I worry about them for a whole different reason. But when you think about these mid tier restaurants, they are really caught in the middle. They're not necessarily upscale enough for a special night out and they're necessarily not value enough for someone to find them, um, a place to go if they're on the bottom part of the K. So again, they find themselves being squeezed out. When budgets for the mid tier earners in the country, when budgets get tight, those are the audiences for those mid tier restaurants in a lot of ways. And when the economy starts to get anxiety provoking and people start to cut back on discretionary spending, travel and leisure and dining out, those are the first things that go. They start to question whether or not they need that 2 for 20 or 2 for 25 or whatever it is at Chili's or Applebee's. And so those mid tier brands have got to find a way to differentiate themselves. And so there's three moves that everyone needs to be thinking about right now. First, and I said this a hundred times, stop competing on price alone. It is a trap. I hear Admiral Ackbar from Star wars, it's a trap, right? When traffic softens, the instinct is a discount. But if your only answer to value is lower price, then you're training guests to wait for the deal. Price may get you a transaction, but experience, I'll tell you, it's going to get you a relationship. So right now you can't afford to confuse the two. So if there is ways to compete on price, that's completely fine. But it cannot be your only move. You have to compete on service, experience and quality. Train your front line to win. They are the face, the voice of your brand. Because it's not your menu, it's not your decor, it's not the loyalty app, it's not the size of your seat seats, it's not the squishiness of your bed, it's not the soap you put in the washrooms, right? The person who greets the Guests. Who serves the guest, who gets them on board the airplane, who sells them the ticket, who checks them in at the front desk, who hands them the hot dog, Right? Those are the people that people will associate with your brand. They're the people they're looking for to solve their problems, correct mistakes when they happen. And I don't care if you run a hotel, a restaurant, a theme park, a destination, doesn't matter, a grocery store, your front line is the face of your brand. There is nobody closer to the guest than them. So you have to make sure that you are training them well, you are treating them well, you are celebrating and recognizing them and that you are helping them be problem solvers in the moment. Not just task doers, but experience makers and problem solvers. Every day, every shift, every moment, every guest. And then the last piece, you have to walk the guest experience. You have to walk it now. As soon as you finish this, finish the episode first, right? And then go walk your dirt. Go walk the experience. Go look at the customer's journey. Sit in the dining room, go through your check in, visit your website, take the walk through your concession stand, stand in line in your organization, go through the self checkout, whatever it is, do the thing and make sure that it feels good. Make sure that the guest journey can be easy, that there's no friction points, there's no silly policies or roadbloc, no hassles that are going to make people mad. Go sand off those rough edges. So go take the journey and then stand back and watch your team, you know, observe them and coach them in real time. Watch that front desk person check in a team member. Watch that person finish that, that, that car rental process. Go watch somebody serve their guest at a concession stand or bus a table. How did it go? What coaching can you give? How can you recognize and celebrate your star performers? And how can you make sure everyone continues to get better? Because you're a leader worth following. And you're out there every day in your business finding ways to drive the smiles, the eye contact, the friendly positive language, the great body language, all the things that drive great guest experiences. How can you be that leader who inspires that every single day? So, folks, that is our show. We are still in the year of experiential hospitality, where strategy becomes experienced through intentional design. People and connection. That's truly your competitive advantage. And that's why we talk so much about that today. Looking around the corner like Watson Clinic does to think about the future of what your guests are going to need, not just now. But into the future thinking about that K shaped economy and not competing on price, but competing on experience and making sure that you, as a leader, are, uh, deep blue in it every single day, inspiring and leading your team. And if you want to learn more about these points, head on over to Amazon.com and check out my book, Together We Serve. That's Together We Serve by Tony Johnson. You can get it on paperback, digital or audiobook. But until next time, I've been Tony Johnson, your customer experience strategist and trainer, reminding you to keep your customers at the center of everything you do, because that's where the most amazing things are possible. Thanks again for tuning in and I will talk to you next week.

Speaker A: This has been Customer Service Academy Radio with Tony Johnson. Tony is available to speak at your event, meeting or workshop. Have a powerful customer focused day.