Number 31: Summer 2005
Innovate Customer Solutions
By Matthew Rekers & George Rekers
Editor's comment: Focusing on your customers' needs is the best way to ensure sustained success for your organisation. This feature looks at different ways in which it can be done to provide innovative solutions.
Many guests of the Lötschberg Hotel in Interlaken, Switzerland, repeatedly return for their vacations from year to year. There they receive—on a daily basis—a variety of individually tailored and innovative options for vacation activities. This traditional villa-style hotel is located in the heart of a renowned tourist center that lies between two gorgeous lakes in the Swiss Alps with views to the highest mountain peaks of Europe, including the famous Jungfrau. There, the competition among the numerous hotels is quite fierce.
What sets the Lötschberg Hotel apart from others nearby is the unique, personalized attention you will receive from Susi and Fritz Hutmacher, who own and run the place. Whether you come fully prepared with an itinerary of what you would like to do, or if you have no idea, they will lend you their helpful and timely advice. It is like having a friend or relative living in Interlaken telling you about all the places you should consider visiting—tailored exactly to your interests and to the day’s weather conditions.
For one adventurous family with one member who could not ski because of a recent knee injury, Fritz helpfully suggested sledding at an uncrowded location not known to most tourists, but favored by the locals. To another couple and family interested in genuine Swiss fondue in an authentic setting, he personally arranged for and led a short mountain hike and a sled ride. It ended at an old rustic lodge run by a Swiss couple in their 70s who personally prepared the type of fondue and traditional Swiss drinks that the locals have enjoyed for generations.
One older gentleman who had recovered from triple bypass heart surgery and an operation to replace his knees had long desired to go paragliding. But he did not know how, where, or even if he could fulfill his dream, because he was physically unable to run in order to take off. Fritz personally took him up a gondola to a mountain ridge and paraglided with him, safely making his dream come true.
People often repeat the axiom, “Time is money.” You will certainly save time and money if you stay at the Lötschberg Hotel. You won’t need to waste time looking up appropriate activities to do, or trying to find their locations on the map. Both summer and winter weather can vary from day to day, making certain outings possible and others impossible that day. Fritz offers specific up-to-date weather reports, with a variety of options for activities suitable to the day’s weather conditions. So you won’t end up arriving at a favorite spot on a day that the weather has closed the attraction. Fritz wonderfully prepares you by volunteering all the pertinent information you need to have a great time.
“Every day, I try to see and talk to each guest at least once,” explains Fritz. That is why he helps to prepare and serve the included breakfast each morning in that this gives him the opportunity to interact with his guests and to innovate customer solutions on the spot.
Early on, Fritz was one of the first hotels in Interlaken to provide Internet access for hotel guests. In fact, for a time, when guests of the nearby five-star hotel requested access to the Internet, that hotel sent them to the Lötschberg Hotel!
So if you are ever in Interlaken, check into the Lötschberg Hotel, and you will have an experience you will never forget.
By the way, if you get a chance to be their guest, ask Fritz how he likes his job. He will probably reply, “What job? This is a hobby.” He obviously enjoys providing innovative customer solutions—arranging events that guests have interest in, and even serving as their personal guide to surrounding locations during the day and evening hours.
Customers everywhere are looking for solutions, not just mere products and services. That is why it is so important for executives to focus on serving the customers’ needs and wants—otherwise the firm will, sooner or later, simply cease to exist. To provide sought-after solutions, businesses need to constantly evaluate the needs and wants of their customers, like Fritz does at the Lötschberg Hotel.
Because each and every product or service is subject to a life cycle, they need to be carefully monitored. In every life cycle, there is a time period of
- invention/launch,
- growth,
- maturing, and
- saturation.
Eventually, every life cycle comes to an end. When some products or services die, others emerge to take their place. Take for example the 8-track; it was replaced by the cassette, which later got replaced by the CD. As time goes on, products die and new ones are born. On the average, the contemporary product life cycles tend to consist of three years for products, one and a half years for services, and only six months for Internet services.
Amos R. McMullian, the chairman and CEO of the baking giant Flowers Industries, describes the place of innovation in his company: “Good management must be able to break away from the habit of doing things the way they were done a long time ago. Habit is the enemy of innovation. Innovation is the mother of increased productivity. It is increased productivity that allows us to accomplish our company’s mission.”
Marcian E. “Ted” Hoff was working for Intel back in the 1960s when Busicom placed an order with Intel to manufacture a set of 12 custom chips for its new calculator. Busicom specified that each chip would perform a single function. In taking charge of the project, Hoff wondered whether one chip could be a general-purpose central processor that could be programmed to perform each of the 12 functions that the individual chips were to perform. Hoff thought that one chip that could do various functions would be better by far.
For some reason, Intel let Hoff pursue his idea even though it was not exactly what the customer asked for. Hoff later made this remark about Intel’s decision, “Those managers allowed me to break a cardinal rule of business: Always do what the customer wants. We didn’t do what the customer wanted. We did something better.”
All too often, when customers ask for a product or service, the run-of-the-mill company simply supplies that product or service. But instead, the top companies seek out the outcomes that a customer wants and then produce the products or services to meet those outcomes. Sometimes you know a much better way to provide a product or service than your customer even imagines, just as in this example at Intel. Hoff wasn’t afraid of thinking outside the box and is credited with being an inventor of the microprocessor.
Peter Drucker wrote, “One can use market research only on what is already in the market.” But, the top companies are not content to stagnate with the products and services they already have on the market. At the highest level, your company will be a leader in your industry because it produces large quantities of innovative products/services.
Such a company continually “wows” its customers with new, creative innovative products and services. They gain an increasingly larger market share as they introduce improvements to existing products, and as they introduce new products and services. The company’s business culture is one of innovation. Its employees and suppliers help it to create innovative customer solutions. Thus, a significant competitive advantage is gained over the competition.
Take, for example, mobile phone companies. They continually surpass each other with new and innovative ideas:
mobile phones that have access to the Internet,
mobile phones with one flat fee,
mobile phones that allow you to take and send pictures,
global phones,
mobile video-telephones, and
multiple phones on a single plan.
These examples illustrate how top businesses steadily “invent their business anew.”
ATA Services, a company that does maintenance, repair, and rebranding of automated teller machines, is in an industry with a five-year negative growth rate of -17 percent. But somehow ATA Service’s five-year growth rate was an amazing 1,167 percent. So how in the world did ATA Services manage to produce such outstanding growth in such a declining industry?
The answer is that they provide innovative customer solutions. ATA expanded its services and reach to provide a solution to a growing problem that affected the industry. This industry was highly populated with repair shops that operated locally to service automated teller machines. Mike Robson, the president of ATA Services, watched as the regional and national banks bought out local banks. This development created a problem for the banks putting together a large network of ATMs in various locations, which caused all types of servicing problems.
So Robson jumped into action to transform ATA Services into a one-stop ATM-maintenance shop. “We are not the low-price leader,” Robson says. “But by packaging all of our services to replace many different vendor interactions, ATA provides maximum value for the banks at these hard-to-handle remote locations.”
In this rapidly changing market, what Robson did was keep up with the changes and capitalize on the market situation by providing innovative customer solutions tailored to the newly emerging needs of the customers. This is how ATA Services managed to amass such an incredible growth rate in a declining growth industry.
John Hammond, a sales executive was once quoted saying, “From where I stand, the elevator to the top is, has been, and always will be ‘out of order.’ In order to get to the top, you’ll have to take the stairs—and you’ll have to take them one at a time.”
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© Mathew Rekers & George Rekers / Through the Loop Consulting Ltd 1998-2005