What Are Customer Desires?

In Chapter Two, I introduced the concept of the Transformation Pyramid, which suggested that employees, customers, and investors have basic survival needs that grow into success needs that in turn progress into transformation needs at the peak of each pyramid. In the previous chapter, we addressed the survival needs of our customers. If we deliver more than the customer expects, that usually translates into a successful customer experience. For our hotel guests, that means they aren't just impressed with an efficient check-in, a clean and comfortable room, or what feels like a safe and secure atmosphere. Hotel guests who've had their desires met may have experienced one of the following customer successes:

• They had their social needs met by having an engaged conversation with the front-desk staff, concierge, or room attendant.
• They had their belonging needs met by connecting with other friendly hotel guests at a complimentary wine hour where guests informally talked about their experiences as tourists in the town that day.
• Their affiliation needs were met just by staying in a hotel that caters to other guests who look like they do (for example, families are reassured when they check into a resort that has other families).
• Their esteem needs were met by being surprised with an upgrade to a room with a better view, or maybe they received a small bottle of wine, their favorite snacks, and a personal note from the general manager on arriving in their guest room.

It may be as simple as having all the hotel staff recognize them and use their name when greeting them throughout their stay. These are the kinds of desires that hotel guests wish they could count on every time they visited a hotel. When a hotel truly delivers on these desires, the guest is much more likely to become committed to the organization as a loyal, long-term customer. So, meeting desires is about understanding the unique preferences of a customer. In today's lingo, we call this mass customization or the ability for a company to cater to a market of one and to do so over and over again. To do this well, it requires that a company take Maslow's advice and invest in both systems and service.

In their book Priceless, Diana LaSalle and Terry Britton describe the sort of mass customization experience at Paris Miki that Maslow might have dreamed of:

Upon entering one of its stores, the customer is greeted by an associate who takes a digital picture of the customer; the computer then measures the distance between her eyes and the length of her nose. The customer then chooses from a list of sixty image words such as “glamorous,” “intelligent,” “sporty,” “sexy,” “distinctive,” and “professional” to describe the look she desires. Based on the customer's facial shape and the selected adjectives, the artificial intelligence system recommends frames and lenses. The results are displayed onscreen over the digital image of the customer's face, allowing her to “try on” several pairs without leaving her seat. The customer can even customize the eyewear if the look is close but not exactly right. The whole process takes between fifteen and twenty minutes and custom glasses are delivered within two weeks.²

We've moved from a one-size-fits-all culture to what author and Maslow expert Deborah Stephens calls a one-size-fits-one customer. Being normal doesn't carry the currency it once did. We all want to feel special, a little different, and companies that indulge this yearning will be richly rewarded. Ironically, the two common elements that define companies that deliver on this level of the pyramid seem diametrically opposed to each other: technology (hard) and people (soft). Companies that know how to harness their technology and empower their people have the potential to deliver customized service that will translate into committed customers.

Using Technology to Meet Desires

Surveys show that only one in five customers is committed to the extent that they're truly loyal. There are all kinds of ways to create loyalty. AOL created pseudo-loyalty by making it difficult to disconnect their service after the free trial period (they got sued in 2003 because of it). The airlines do it with their mileage points, which are more bribery than loyalty programs. They're just retention tactics based on trying to influence behaviors. True loyalty comes from influencing a customer's attitude by having keen insight into their desires or preferences. Historically, companies have relied on long-term employees to remember the preferences of their customers. Today, technology answers that call.

So how does a company really come to understand its customers' desires? Don Peppers and Martha Rogers suggest in Return on Customer that there are three insightful ways to anticipate your customer's preferences: memory, editorial inference, and comparisons with other customers. You'll see that technology can play a pivotal role in each of these.

Memory refers to repeat customers who have already expressed their preference for their profile—the kind of car they like to rent, whether they want to take the insurance offered by the rental car company, and what kind of credit card they might use. Investing in customer relations software that allows you to store these preferences creates a great return on investment and one that, I'm embarrassed to admit, my company waited way too long to implement. Your customers' esteem needs are met when they realize that you remembered their favorite guest room or what kind of pillow they want in their room so they don't have to ask for it. At Joie de Vivre, we relied too heavily for too long on our staffs' memories of our repeat customers' desires. Finally, we realized we needed to invest in technology to help us remember that each time a particular guest stays in one of our hotels, we know to deliver a New York Times instead of a San Francisco Chronicle in the morning.

Peppers and Rogers suggest that the second method of understanding customer desires relates to using that memory and applying it to an editorial categorization. They write, “The fact that a customer celebrates her mother's birthday with flowers means she might want to celebrate Mother's Day, too, or perhaps some of her relatives' birthdays. Because a customer buys music CDs, she might be interested in CD-cleaning solutions or CD players.”³ Clearly, there's more guesswork in this approach, but it's almost like having an angel on the shoulders of your customer asking, “Have you thought of this or that?”

Finally, the third shortcut to understanding customer desires allows you to harness data to compare this customer's buying patterns with those of other similar customers in order to make recommendations. Most large Web-based retailers now use software that connects you as a customer to the desires of other affiliated customers. Netflix does this by explicitly showing you recommendations of your friends. Clearly, this is a means of applying Maslow's social level of the Hierarchy of Needs Pyramid, as it allows you to share your experiences and preferences with your friends.

With technology in an enabling role, companies can create learning relationships with their customers such that the more the company interacts with the customer, the better the company understands the customer's desires. Peppers and Rogers suggest, “The more you can get a customer to ‘teach’ you about his needs—provided you can actually meet them with an increasing degree of customization or an increasing amount of service—the more loyal that customer will become, because he won't want to have to expend the time or take the risk to re-teach some other firm what he's already taught you.”⁴

Amazon deserves the crown for harnessing technology to develop learning relationships. It's been a trailblazer in using technology to anticipate its customers' desires. It's religious about letting me know when a new book is coming out that fits my typical buying preferences. You can bet that if there's a book with a Maslow focus about to hit the shelves, Amazon will tell me about it before I even know the book exists. Clearly, the company knows I have pyramid envy!

Still, my customer commitment to Amazon was hard-won. I'm a big fan of independent bookstores, and there are still a few in San Francisco that I love to frequent. But as my tastes in books became more eclectic, I found these books harder to find in my local bookstores. Yet, because I bought a few books with Amazon, they had a technologically driven intuition about which new books I might enjoy. Frankly, founder Jeff Bezos finally won me over when he sent me (and probably millions of other customers) the following letter a few years ago with 10 one-cent stamps enclosed:

Dear Friend,

From the start, one of our primary goals at Amazon has been to make the lives of our customers easier. For over five years, this sensibility has guided our growth, site design, and the addition of new features and services.

But recently, it struck me that despite all our hard work there are still many inconveniences we haven't yet addressed. We can't wash your dishes. We can't pick up your dry cleaning. We can't change the little light bulb in your refrigerator. We can't make your tuna salad just the way you like it. Then I realized there was one thing we could do that we've never done before—spare you the hassle of an extra trip to the post office! First-class postal rates went up a penny to 34 cents on January 7, so enclosed you'll find ten one-cent stamps—a necessity for using up your old 33-centers. Sure, we're only talking ten cents in value, but hopefully the time you'll save will be worth much more.

Sincerely,

Jeff Bezos

I still have those 10 stamps, and I occasionally show them and Jeff's letter to people when I give customer service speeches. For a cutting-edge, high-tech company, this was a perfect execution of high touch. Some might consider this a gimmick, but no one can doubt Amazon's service quality, as their representatives are first class. Both their technology and their service are a big part of the reason that Amazon is arguably the most highly respected e-commerce site in the world.

In 2016, 43 percent of all U.S. online retail sales were through Amazon. Amazon is a great example of a high-tech, high-touch company that's mastered its approach to mass customization. It represents the wave of the future as companies move from selling one standardized product to many people to focusing on selling many products to one person over the course of his or her lifetime. That's the nature of a committed relationship with your customer.

High-Tech, High-Touch Cultures

Validate me. That's what customers are looking for on this middle level of the Customer Pyramid. Sophisticated technology alone can't do it. Today's market leaders realize that touch is possibly more important than tech.

FedEx revolutionized the way we send packages, and they also use technology to address our desire of knowing just where our package is at any particular point in time. But if you ask the senior execs at FedEx who the most valuable employees in the company are, they will tell you it's the couriers who pick up and deliver packages and have the most direct contact with customers. FedEx is a master at hiring and training line-level staff people and empowering them to create solutions for their customers.

Enterprise Rent-a-Car revolutionized its industry by focusing on a different market segment (people who need a replacement car—usually involving an insurance company—because their primary car is in the shop). It is a pioneer with respect to how it uses technology to satisfy its customer base and connect with insurance companies in innovative ways. Enterprise's well-known, high-touch brand promise revolves around its willingness to come pick you up wherever you are. In addition, as a customer, I am constantly amazed at the quality of people it hires and their can-do attitude as compared with the can't-do staff I meet at many of the other rental car companies. It makes a difference that one Enterprise employee takes care of all my needs from the time I am at the counter to when that person escorts me to my car.

Similarly, Best Buy uses technology to constantly do in-depth evaluations of its customer profiles. Over the last few years, based on analyzing these data, it has determined that there are five types of highly valued customers who represent the greatest upside potential to the company, from younger men who want the latest in technology and entertainment to busy suburban moms who come to Best Buy to enrich their children's lives. The company trains its store personnel to be more proactive in sizing up each customer who walks in the door. The sales staff determines whether the person fits one of these five niches so that they can suggest customer-centric solutions that fit this particular niche. For Best Buy, high tech fosters high touch.

Introduced in Chapter Six, Danny Meyer's Union Square Hospitality Group is probably the most respected restaurant organization in the country. Its Manhattan restaurants, from Union Square Cafe to Gramercy Tavern, are consistently rated the best restaurants in the competitive New York City marketplace. In talking with Danny and in reading his book Setting the Table, it is clear that his restaurants use technology as a means of tracking the preferences of their customers. Their OpenTable reservations system allows them to make customer notes on where in the dining room a guest likes to sit, whether they're allergic to shellfish, or if they prefer to have their coffee served after dessert. But Danny readily acknowledges that in the restaurant business (and in the service industry in general), technology enables great service, it doesn't create great service.

For Danny, great service comes from finding the right people and creating a culture that is devoted to meeting the desires of their customers. In interviewing prospects, he asks his managers if they believe the candidate has the capacity to become one of the top three performers on their team in his or her job category. He's particularly concerned about the natural tendency for businesses to hire middle-of-the-road performers.

He writes,

It's pretty easy to spot an overwhelmingly strong candidate or even an underwhelmingly weak candidate. It's the “whelming” candidate you must avoid at all costs, because that's the one who can and will do your organization the most long-lasting harm. Overwhelmers earn you raves. Underwhelmers either leave of their own volition or are terminated. Whelmers, sadly, are like a stubborn stain you can't get out of the carpet. They infuse an organization and its staff with mediocrity; they're comfortable, and so they never leave; and, frustratingly, they never do anything that rises to the level of getting them promoted or sinks to the level of getting them fired. And because you either can't or don't fire them, you and they conspire to send a dangerous message to your staff and guests that “average” is acceptable.⁵

In many ways, I agree with Danny, but I think he doesn't acknowledge that the whelmers may be the most moldable depending on what other kinds of employees surround them. Peter Drucker believed that the distance between the star performer and the average always remains the same. As the bar moves up because of a few new star performers, those employees at the bottom must shift their game up. The problem with most service businesses, though, is they let the whelmers create an inertia rut of being purely satisfied with the status quo. If you let that happen, it's almost certain that your service culture will have a hard time rising to the level of consistently meeting your customers' desires.

Creating a Great Service Culture

One of my greatest lessons about how to create a bar-raising service culture goes back to the weeks before we launched our flagship Hotel Vitale in the winter of 2005. Seven years in the making, Hotel Vitale was going to be San Francisco's first luxury waterfront hotel, which is sort of surprising considering the city is surrounded by water on three sides. On many levels, this project was a defining moment for the company.

We shocked the local hospitality industry when we beat our bigger rival across town, Kimpton, in the request-for-proposals process with the city in 1997 to 1998 (the hotel is located on city-owned land). Given that this hotel site had some controversy attached to it, and there was a heavy antigrowth sentiment during this dot-com boom period, we survived votes from seven different city commissions or boards, winning approval each time. After four years, we had our green light from the city to move forward with the project, but those development entitlements were gained just as the hotel market started its year 2001 swoon. So, we sat there, paying the city rent for the land while we tried to scrounge up the financing to build the 200-room hotel. We had raised $43 million of the $51 million we needed to start construction, but that last piece of mezzanine financing (a high-cost second mortgage in addition to our first mortgage) was elusive, especially because lenders aren't fond of providing construction loans on leased land. I had provided a multimillion-dollar personal financial guaranty with the city that was in danger of being called, and not having taken a salary in a few years, I had run out of cash.

Two years into this waiting game, after hearing no from more than 50 different lenders, we secured our mezzanine financing and built the hotel in record time at a cost that was probably $10 million less than it would have cost us just one year later when construction prices skyrocketed. During the 17-month construction process, I was virtually tethered to the hotel, as we had little room for error given how much cost cutting we'd performed to meet the lenders' requirements. Stress became my middle name. I knew my company had a lot riding on our first luxury hotel launch.

Danny Meyer and I have something in common. We both get a little queasy as the construction nears its completion for one of our new projects. So about six weeks before we were to open the Hotel Vitale, I took a sales trip to New Zealand and Australia with the San Francisco Convention and Visitors Bureau. I came back from my down-under trip rested and relaxed. I was really ready to meet the 150 newly hired members of the Vitale service team. But after a couple of orientations with the group, I had a vague sense of being troubled that I couldn't put my finger on. I sensed that there were a number of superstars in the bunch, but I could also see there were more weak links in the group than I expected. After a couple of sleepless nights, I sat down with the Vitale management team, who had been hired long before I left on my trip, and asked them about the group that had been hired. Without prompting, they admitted they weren't perfectly satisfied with the group, although they believed that the training process would help to polish some of the weak links. A couple of days later, I checked back with the managers and found that their doubts about some of the staff remained, but of course, they had their hands full with the hotel opening in a month, so it was hard for them to see the troubling big picture that was emerging.

Finally, the puzzle pieces came together for me. I was able to articulate a truism that has defined Joie de Vivre's successful approach to delivering a people-empowered service culture ever since. The reality is there are typically three kinds of employees: the superstars, the silent majority, and the weak links. To successfully launch a new hotel, especially one competing in the luxury category, you want to make sure you have twice as many superstars as weak links because the silent majority will gravitate to what's dominant. This isn't just relevant to hotels; it's important for any business that's trying to improve service or any business where employees are influenced by each other's performance. Employees are constantly looking for clues about how high they're supposed to jump. The superstars set the bar, but if they're in the minority compared with the weak links, the whole service infrastructure will slump. Even the superstars will lower the bar in that situation. The result for the customer might be service levels that may meet the basic levels of satisfaction but never aspire to that next level of meeting customer desires.

Once I figured this out, I realized that we had to change the alchemy. We immediately moved some of our Joie de Vivre service superstars from other hotels to the Vitale, and we had frank conversations with a number of the weak links in this new staff, clarifying that they had to improve or else they might lose their jobs. Fortunately, we have an amazing training department staff and a committed collection of Vitale managers, so by the time we opened, we had moved from a ratio of maybe one superstar for every weak link to a preferred alchemy of 2:1. And the process of getting to this preferred alchemy had sent a message to the silent majority in between: this hotel expects a high standard and looks for you to step up to the highest levels of service you are capable of offering.

What an amazing experience it was preparing for our opening and living in the hotel the first 10 days we were open. It was evident to me that the whole Vitale team had turned into superstars and that they really cared about exceeding the guests' expectations. I built some incredibly close relationships with this remarkable team during that time. The Hotel Vitale has turned out to be one of Joie de Vivre's biggest success stories. Extremely high customer loyalty and world-class customer satisfaction scores have led the hotel to posting the highest occupancy in its competitive set, which includes worldwide luxury giants like Four Seasons, Ritz-Carlton, Mandarin, St. Regis, and W. It is a testament to the talent and determination of our managers and employees of the Vitale that this little independent hotel that could climbed to the top of this class in its occupancy percentage so quickly after it opened. It also made me realize we'd come a long way from the days when our biggest competition for the funky Phoenix was the Travelodge one block away.

We're scaling this Customer Pyramid very well and are just about to reach the peak of the customer experience. The path from meeting expectations to meeting desires to meeting unrecognized needs is a subtle one because the line of demarcation between these three levels isn't as clearly distinguishable as what we've highlighted on the Employee Pyramid (money, recognition, and meaning). But when a customer feels the sense of self-actualization that a peak-performing company can deliver, you will know you've created a peak experience for that person, and you've immediately expanded your sales force with truly committed customers. On we go to creating evangelists.