Customer Crossroads

Dining upscale casual and how this has improved the ladiesroom

There is a phenomenon in the dining out category that I would call upscale casual. The food has become much more sophisticated in presentation and seasoning, but it is still approachable. The menus are familiar, often a blend of cuisines, and lacking the stamp of an individual chef, as a bistro would have. These are menus that could be franchised.

The service is very friendly and down-to-earth -- it is identical to what you would encounter in anything from a Hard Rock Cafe to a Kelsey's Roadhouse.

These establishments represent better eating in suburbia and smaller urban centres, something that never used to be available.

The big change is in the decor. Instead of themes like Irish pub, rock'n'roll or country kitchen, with a decor package that varies only in the details from location to location, this new type of casual dining lets the guest be more of the star of the show. The guest is not visiting a theme park, they are visiting a private club.

Wildcraft in Waterloo is a great example of this trend. There are usually lots of high ceilings, dark wood, and better appointments, often leather upholstery.There may be a very visible wine cellar as the feature point in the room, as you see here. These are people who have refined tastes, but still want to be relaxed. They want some of the experience of what we used to call 'fine dining', but without the attitude.

The food is described as "new American comfort food", and the experience is adventurous and independent:

Wildcraft is adventurous and independent. Wildcraft is fun, fresh, natural and dynamic.

The ladiesroom experience

One of the best things about this trend is what it means for the ladiesroom. Others in our party were encouraging those who 'didn't have to go' to 'go anyway', just so they could see the premises.

Going down the stairs beside the wine cellar, you enter into a lounge area. I expect that this is a vibrant place in the evening, with people making calls and making time. What a change from the barren hallway, where you must squeeze past others in order to squeeze into the bathroom. This is a foyer!

Once inside, the club-like appointments continue. More wood, more candles, and high-style design in evidence everywhere. This sink was particularly thoughtful, with a place to hook a handbag.

We don't ever want to be without stimulation, and the additional source of advertising is always welcome. So of course there is now video.

I was impressed. These appointments are much nicer than many private clubs, and rival the appointments in dining rooms that charge three or four times the price of a meal here. Note the full-height cubicle doors, again in wood, in the background of the picture below. This is not a temple to fine food, it is a temple to feeling good, feeling relaxed, and feeling special.

I was glad to have the place almost to myself, and my trusty Razr, seen below.

Taking the brand into the bathroom, and other blogfest items

In a retail space designed to profile a brand, what should the bathrooms look like? This question is addressed on Flooring the Consumer by guest author Marianne Cone. Ms. Cone visited the M&M's World and Hershey's stores in Times Square and discovered... that all the attention on the brand image completely disappears with the bathroom. M&M did nothing interesting with theirs, and Hershey's doesn't have a bathroom for customers. According to Marianne Cone, they missed a huge opportunity. I agree. Customers do notice. And we would have to think that both these stores are popular with children. [d'oh] And children have much less ability to 'just hold it' than adults. Why not capitalize on this, and make moms and dads love the brand even more with kid-friendly, themed bathrooms?

It seems that carpet and tile retailers have a better grasp on these issues than destination entertainment retailers. In another recent post on Flooring, CB Whittemore reports on a bathroom in a carpet and tile store. A little attention and creativity has customers raving about the bathroom, and becoming inspired  for their own renovations.

Iris Shreve Garrott at Checking Out and Checking In notes that the National Zoo has amusing animal facts in their bathrooms, taking the zoo customer experience into the bathroom. See the poster about hippo poop here.

Disney gets it, and tends to continue their area theme right into the bathroom, according to Becky Carroll writing at Customers Rock. If you don't, the magic kind of disappears, doesn't it?

Other notable posts:

Katie Clark, writing at Practical Katie, had to fight to get drop-down shelves installed in the ladiesroom at her library, and counts it as a big achievement. [Why are some things just so hard?]

Carolyn Townes writes about that well-known cultural phenomenon -- the women meeting in the bathroom and talking. I've noticed bathrooms in clubland are getting larger, no doubt to accommodate.

Other bloggers participating in the blogfest are listed on the blogroll to your right (or click through if you are reading the feed).

A family bathroom for a family restaurant

There's a neighborhood in Toronto we call Little India. It's really more Little Pakistan, but whatever. There's an iconic restaurant there called the Lahore Tikka House. It's been under renovation for at least two years, but in the fashion of this culture, they've continued to run the restaurant the whole time, building as resources permit. The staff are delightful, and the food is excellent, plentiful, and inexpensive.

When I last visited, the renovations were really starting to take shape. I was visiting with my parents. My mom, who has baked a few loaves in her day, looked in the window at the bakers making naan in the huge tandoor oven. They invited her in for a closer look. Delightful!

On our way to the ladiesroom (more on that in a minute) I commented on how good the renos were looking, and we got to peek behind the curtain. What a great way to make your customers feel welcome.

The bathroom areas were really nicely appointed, with beaded shoes mounted above the doors, nice tile and roomy entry ways.

Inside, what really caught my interest was the family bathroom. Look how roomy this is, and how it has been built with knowledge of the local market. I loved that they have a step-stool, just like you would have at home, to help the little ones wash their hands.

When I saw the basket of supplies available, I knew this place really values their customers and is trying to be a special destination. There were disposable diapers in various sizes, baby wipes, and baby lotion.

Perhaps there will be a need for frequent re-stocks, but what of it? it's a small price to pay to be clearly superior in every way than every other place in the neighborhood.

They have always paid close attention to cleanliness. When they had their huge outdoor area in the summer, before building the new edifice, there was a roomy outdoor washing station with sinks and hand-towels. A great idea for a place with a lot of finger food, and families.

On your next trip to Toronto, ask your cabbie to take you by -- most likely, he won't even need directions, since it is so well known. And let me know if the men's room is just as nice, or even nicer.

Cleaning up the ladiesroom: 2007 bathroom blogfest runs Oct. 29 – Nov. 2

The bathroom blogfest was cooked up on a let's-get-acquainted phone call between me and San Diego blogger Stephanie Weaver (Experienceology) a little over a year ago. We wanted a blogfest topic that related to customer experience but not in a specialized way … we tagged it ladiesrooms. I don't think it changed the world, but people seemed to enjoy the event, so we are hosting it again, this time with the addition of the able organizational skills of C.B. Whittemore (Flooring the Consumer) as part of the organization team.

What's the point of this? Well, every human being has to use the bathroom. But most organizations act like the bathroom is just a nuisance. They tend to be hard to find, tucked away into a corner and often unsatisfactory in a number of ways. In a public place, we are at our most vulnerable in the bathroom, conducting our private ablutions in front of perfect strangers. For a night at the theatre or an afternoon at a ballgame, and many other situations, we ladies can usually count on losing out on some fun by having to wait in line. 

As human beings ourselves, we bloggers would like to see some improvement. And we want to celebrate the improvements we do see. 

Along the way, we'll all be using this approach to illustrate the ways of deconstructing, innovating and generally doing a better job on the ladiesroom. Gents are certainly allowed, even encouraged to join in. It's a big tent, after all, an issue shared by the largest group imaginable – all of humanity.

Like all such grassroots projects, this thing has taken on a life of its own. There are a total of 20 bloggers taking the plunge, and more are welcome to join in. I've listed the group below, but for the duration, I'm going to add a category to the blogroll.  We're also trying a Facebook group, to see if that helps us stay connected. [So far, it doesn't seem to be working. Personally, I don't think the group application is all that useful yet, but stay tuned.] There is a consolidated blogfest blog planned to host all the posts – a one-stop shop for all your bathroom blogfesting needs.  And we have two new logos this year. That's my fault, as I am the chief logo-designer, and I didn't like the first one – a pixellated pansy – so I built a second one. But there are pansies sprouting everywhere, so others clearly like it.

There will be posts on this topic throughout the week of Oct. 29^th – Halloween week, appropriate for a scary topic such as this. So grab your miniature chocolate bars and candy kisses, and join in the infotainment. Or just pass by the posts with this logo, and we'll talk again when our regular programming resumes.

Here's the list of bloggers and blogs:

• Anna Farmery—The Engaging Brand
• Becky Carroll—Customers Rock!
• C.B. Whittemore—Flooring the Consumer
• Carolyn Townes—Spirit Women
• Claudia Schiepers—Life and its little pleasures
• Dee McCrorey—The Ultimate Corporate Entrepreneur
• Ed Pell—K+B DeltaVee
• Helene Blowers—Library Bytes
• Iris Shreve Garrott—checking out and checking in
• Kate Rutter—Adaptive Path
• Katia S. Adams—Transcultural
• Katie Clark—Practical Katie
• Laurence Helene Borel—Blog Till You Drop
• Linda Tischler—Fast Company Now
• Maria Palma—Customers Are Always
• Marianna Hayes—Results Revolution
• Reshma Anand—Qualitative Research
• Sandra Renshaw—Purple Wren
• Sara Cantor—The Curious Shopper
• Stephanie Weaver—Experienceology
• Toby Bloomberg—Diva Marketing

You can also keep up by scanning technorati or del.icio.us or flickr using the tag, ladiesrooms.

Express bag check in at Air Canada: not quite

See this line of people? They have already checked in ahead of time, like good customers. Now they want to drop off their bags. But there's no one there to take their bags. The floor-walking customer service person tells them several times "someone will be here soon".

Meanwhile my companion and I try ticketing our own bags at the new kiosks. We can't seem to get them to work. Neither can anyone else. The people at our end of the counter take pity on us and offer to tag our bags for us, so we don't have to stand in the other line.

My question is simple: why pay someone to walk around the floor "helping", when they could be actually helping. If you know what I mean.

Off to get inspired at the conference, and pick up booty at the trade show.

Ten minute manicure: what to do while waiting at the airport

Seen at Pearson Airport in Toronto: 10 minute manicure. A great solution to boredom at the airport, and a little indulgence. Great concept. Sorry the picture is so blurry.

Airport retail is a great place to see creative thinking in action.

Getting upgraded: how Westin does it right

I'm here in Vancouver at the QRCA 2007 conference. The Westin knew they would not have enough standard rooms to accommodate all the registrants. So instead of upgrading latecomers, they upgraded those that reserved early. Good decision!! This gull stopped by to chat.

Rethinking research

I'm off to the QRCA conference for the week in Vancouver this year. My mission, beyond catching up with friends and colleagues, is to try to really push the boundaries of how I think about qualitative research.
The reason is: fieldwork costs keep going up, and are going up faster than client budgets are. The whole infrastructure that surrounds qualitative research -- lists, panels, recruiters, facilities, catering, incentives -- is a large part of what is costing a fortune. It ain't me.

One of the worries about rising incentive costs is that this encourages people to become professional respondents, supplementing their income by participating in focus groups and interviews. Surely we have not tapped out the adult population of North America. There must be people who would like to share their opinions without being paid a huge sum to do it. Or are people so exhausted from constant requests to complete poor/badly written/excessively long surveys that qualitative is just one more intrusion?

I think there must be other ways of finding people -- perhaps Facebook? Is anyone finding respondents on Facebook?

I'm hoping to get inspired for a few days. Pick up a few new ideas. And challenge my own assumptions about how things should be done.

And, according to my own personal tradition, I'll keep you posted about anything interesting that I see or hear there.

Culture and Consumption II: an anthropology undergrad in 7 easy chapters

“…heirlooms can evoke one of several notions of family continuity and the individual’s responsibility thereto…”

-- Grant McCracken, Culture and Consumption II

The back story: of teenage girls and their grandmothers' jewelry

I conducted some research with teens aged 15 to 16 recently, about their relationship with technology. One of the questions I asked them was this: if your home was about to burn down, and you knew your family and pets were safe, what five objects would you take with you, and why? Much later, when I was compiling the results of this project into a report, I noticed something quite interesting. About two-thirds of the young women named an object of cross-generational significance. Most of these were items of jewelry, such as "my grandmother's ring".

I was sorry that I was no longer able to probe deeply into this topic, and in any case, it was far outside the scope of the project. But I was still fascinated. What was the meaning of these treasured objects? I own a few myself, and recall how proud I was to be entrusted to carry these precious items across time into the next generation. Although not valuable in the conventional sense, each of these objects is individually listed in my will. I wondered if the objects are significant to the teens in my study because they are invested with meaning about the passage into adulthood, a meaning perhaps more important than the monetary value of the objects. I wondered if girls are more likely to get such objects than boys are. And I thought to myself that someone like Grant McCracken probably knows what this is all about, because a) he is a really smart guy and b) he is an anthropologist.

I believe this was the incident that really pushed me over the edge, and forced me to buy one of his books. This decision was taken with some trepidation, since I know his working vocabulary alone is plentiful, beautiful and scary in action. Was I really up to the task? And which book to read? 

The book

I settled on Culture and Consumption II, which is not a book about conducting lab work on tuberculosis bacteria at all, but is about "markets, meaning and brand management".

What a genuine treat. And I mean that sincerely. This book is compelling. And like few business books* you will read in your career, it has the potential to change your thinking in profound and lasting ways.

“It is time to see that goods carry many meanings additional to those of status and that some of these meanings are very deliberately at odds with the status system and the objectives of conspicuous consumption.” **

Consumer society explained

Mr. McCracken is at his most adept when he explains the ways in which our consumer society is as rife with meaning as the society of any aboriginal bushman.  He provides many engaging examples of how our relationships with objects are part of our constant and evolving definition of our very selves; part of our battle for status in society; and sometimes our refuge from that battle. This is a man who loves consumers with the tenderness and absorption that many men reserve for their children. And indeed, we need someone to love us, because we have often been dismissed as grasping hollow vessels that mindlessly serve the corporate machine.

"As the contemporary world becomes more dynamic and transformational, consumers find themselves living in a fluid, unpredictable world.” 

The Royal Ontario Museum as a clash of cultures

The ROM is a venerated institution that houses everything from Egyptian mummies to dinosaur bones. In one section of the book, Mr.McCracken contrasts the mission of the institution from the perspective of the staff and its de facto place in the lives of visitors. As a cultural analysis, this brings quite a different lens to the visitor experience than most of us would have.

The ROM has recently had a controversial renovation designed by Daniel Libeskind – the Crystal.  Although not discussed in the book, I understood more fully than before why a successful immigrant from Jamaica would want to contribute $30 million to this institution to fund this renovation, and put his family name on the Michael Lee-Chin Crystal.  It made sense to me before, but now I can see the nuances that made this particular philanthropy almost inevitable in some way.

If you are part of any institution that has ever held itself above its customers – whether it be a university, a museum, a library, or even a banking institution -- you simply must read this chapter.

A suggested reading strategy, lest you think I am completely bonkers

There are many other gems in this book. But you will have to wade your way through a document that is occasionally hip-deep in academic language, and asides that you probably need advanced degrees to follow. Virtually every paragraph has citations. I thought those might be my undoing until I decided to ignore them.

Even after that momentous decision, I had to accept the fact that some passages were unlikely to reveal their meaning to me no matter how many times I cast my eyeballs over them. And I struggled with Part Three, a section about "the way in which mid-century modernism and certain notions of social mobility were played out in the 1954 Buick and subsequent car designs". I struggled along without relief until there was finally a reference to Sunday drives, a tradition I remember well from my youth. [Although we usually drove to see refineries, a phenomenon you will understand if you have an engineer in your family, afterwards we drove through new suburbs under construction.]

So don't get bogged down in the language. Understand that this kind of language is how academics demonstrate their chops. It does not mean you are an idiot. It means you are not an academic. Take comfort in the fact that most academics would be completely at sea in your annual budgeting process, and keep reading for the good stuff that will follow. Or as a skiing instructor once said to me, "there is always snow on the other side of the ice".

This is not a conventional business book.  It's much better.

 

Notes

* I don't think it was intended as a business book, I have re-purposed it

** All "quotes in italics" are from the book, Culture and Consumption II, by Grant McCracken

 

Designing Experiences: prototype, pilot, tweak and adjust

James Rait posted some interesting commentary in Design-at-the-Edge in response to my Curves pieces from last week. Mr. Rait's wife is a Curves member, at a location where they sometimes give away doughnuts. [I know, it's hilarious, except it illustrates just how difficult it is to manage services with consistency to standards.]

I had outlined some possible backfires to the adoption of RFID tags to plan and track individual goals and progress. These were: [1] staff having to take their own initiative to interact with clients, instead of being forced to do it by the operational routine; [2] two classes of member emerging; [3] clients losing the happy ritual of taking their pulse rate together.

Mr. Rait, a guy with serious industrial design credentials, proposes some interesting alternative solutions to these issues in his post, here.

He also suggests that running some live market tests would have uncovered the potential issues I mentioned. I would be amazed if they had not done live market tests, actually. The execs at Curves have strong marketing backgrounds, and with 10,000-plus locations, I assume their budget supports quite a bit of research.

Sometimes it takes a while to understand what is going on. Plus the hype surrounding new technology can generate enough excitement to mask the longer-term impact. These phenomenon would have been unlikely to come to light in a short test. And if the test markets were conducted with the very best franchises -- which is usually the case -- these individuals may well have responded differently than the average.

I suspect the social evolution is not yet done. [There's lots of observing still to do. Yippee!]

Mr. Rait's post made some other interesting points about design in general, which I'll pick up tomorrow.

If you go back to read the Curves posts, note the passionate comments from one fan of the company. This kind of evangelism is a huge asset to a brand.

The photo came from a film in the Prelinger Archive, Exercise and Health, 1949.

Testing the new blog authoring tools in Word 2007

I'm having fun with productivity tools this week. Got the new Dell desktop last Friday. You know the routine, of course – move files and settings, reinstall software, ask yourself if you should have partitioned the hard drive differently, and keep changing the location of the new giant screen. It's an odd combination of daunting and exciting, with most of the excitement done and gone about an hour after you turn it on, and the daunting part that continues for weeks.

Our computers, for some of us, are such an extension of our fingers and brains that even relatively minor changes can be tremendously disruptive. Which is one reason I stayed with XP, and didn't give in to the temptation to shift to Mac. 

The shift to Dell was one I resisted, but ultimately, they were the only ones who would let me configure online. And their online configuration/ordering tools were wonderful. They have even made the unpacking process much more attractive than I was expecting. The boxes actually look nice when you open them up, all neatly packed and white inside. [I know, some of us are hung up on aesthetics.]

I did get the new Office Suite software, and even though the ribbon is kind of neat, it's still a change, and therefore a disruption. There seem to be two big bonus items here, however, that are very cool.

1. Changing fonts and styles shows up instantly! Yes, this is amazing, fun, and incredibly useful. At least it is if you are type-design junkie like I am, constantly tweaking.
2. Built in blog authoring tools mean I am actually typing this post from inside Word! The software is integrating for me, and has a whole new menu bar that replicates several functions inside TypePad. If it works [and since you are reading this, it must have worked] this will be a nice addition to my life, and end a lot of annoying formatting problems that are tricky to resolve inside TypePad.

I bumped into a neighbor today who is in her 50s, and is retraining on computer skills to get work, after a marital split. I found it hard to believe that anyone can function without computer skills, it seems so rare now. I didn't tell her how many computers we actually have in our home now, between the new desktops, the old desktops, the current laptops, the laptops we are saving for no good reason, the laptop we read the New York Times on in the dining room on Sundays…. To say nothing of the handheld devices [both working and dead], and the peripherals. It's a wonder there is room for human beings.

Our tools continue to expand our reach. And when they do so seamlessly, it's a beautiful thing to see.

The decline of Wal-Mart: skewered on the purity of their customer experience

Wal-Mart had a reputation for making suppliers and business partners jump through hoops. Someone who regularly experienced this once told me, "they aren't happy unless they think we're doing the impossible." That era is coming to an end, if it's not already over, according to Gary McWilliams, writing for the Wall Street Journal.

"American shoppers are increasingly looking for qualities Wal-Mart has trouble providing," says Mr. McWilliams. "Consumers are demanding more freshness and choice, as well as more personalized service."

As is so often the case in life and in business, we are skewered not for our sins but for our virtues. And it is Wal-Mart's down-market, low-priced, accessible, mass-appeal image that is part of its problem, when shoppers are seeking higher quality and uniqueness. More than many organizations, Wal-Mart's brand concept and their customer experience are very closely aligned. That too is part of their weakness now. 

Various competitors have added services -- anathema to the Wal-Mart model -- to support their growth. Examples cited by Mr.McWilliams include Walgreen putting basic health services in their pharmacies and Best Buy offering installation services.

Major packaged goods providers are actively trying to reduce their reliance on Wal-Mart. According to the WSJ article, for Procter & Gamble, this means their Wal-Mart related revenue has dropped from 18 per cent to 15 per cent since 2003. Big bucks indeed.

The truly shocking evidence of a change in the landscape is Wal-Mart's inability to force others to do business in a specific way. Mr.McWilliams reports that Wal-Mart asked all major suppliers to put RFID (radio frequency identification) tags on products, but backed away from the mandate when faced with resistance.

I see from Wal-Mart's online shopping site that they are trying to offer such things as jewelry personalization. OK, it is a family ring, but at less than $50, I bet they sell a lot of them. So we shall not write off Wal-Mart just yet.

Resources:

Wal-Mart Era Wanes Amid Big Shifts in Retail. Rivals find strategies to defeat low prices; world has changed, by Gary McWilliams, Wall Street Journal, Oct.3,2007.

How the world changed on Wal-Mart. After years of dominance, the big-box titan is scrambling to keep up wtih swifter rivals that are redefining the business, by Gary McWilliams, Globe & Mail, Oct. 3, 2007.(Print edition)

We recently wrote about Wal-Mart's decision to reduce their direct customer contact for internet shopping. Customer contact reduction: is Wal-Mart on brand with this program?

Making tradeoffs in customer experience design: Curves Smart, and what it means for the Curves experience

In a previous post I deconstructed the Curves experience -- how this organization has been successful at meeting the needs of people who want to be fit, but don't fit into the approach of other fitness organizations. In today's post, I want to look at a change they are making, and examine the potential impacts on customer experience. This is a great example of the trade-offs you need to make in customer experience, and why they can be so difficult.

The change

Curves is adding an RFID application backed by software called Curves Smart. You get an RFID tag that you swipe over each piece of equipment as you go through the circuit. At the end of your workout, you can see a report of your progress against targets the software sets for you. It's colorful and graphic and interactive. While you are on the equipment, you get flashing lights signaling your progress -- green for 'good stuff', and yellow for 'pick up the pace, lady'.

This program looks like it will help people on a number of levels. You work harder, but also more efficiently, so you will get fit faster. [At least that's what I hope!]  It's like having a personal trainer and a customized program that adjusts for you each time. But it's available for a very nominal cost, far below what a personal trainer costs. There is rapid feedback, which should be motivational.

The challenge

Part of the ritual of Curves has been the heart-rate check. Everyone on the circuit stops and does a 10 second heart-rate count at the same time. It's part of the routine, ensures you aren't about to expire from heart failure, and also ensures you are working hard enough to get some benefit from the exercise.

But the happy ritual is also that the fitness coaches stop the music while this happens, and ask everyone "are you ok?". With the new equipment, this ritual has been dropped. The new equipment has a heart rate monitor on one piece of equipment. It's all automated now.

The analysis

The new system clearly adds to the quality of the workout. And likely puts Curves in a place where they can compete with gyms that have much better facilities. The members using this system are likely to get much better results, for a modest investment in the equipment.

Here's the problem. There are now two classes of member. We are not all-in-it-together anymore. There are key-tag people, and no-key-tag people. And something has been taken away from everyone, but especially from the no-key-tag people. It's the happy ritual of pulse checking.

Some people have complained about this. The staff response has been to show people how to check their pulse on the new machine (which works for you even without the magic RFID key-tag). But I think what we are all really missing is the staff contact. It showed they cared. Now they can safely park behind the desk and attend to critical paperwork without hopping up to shut off the music during the pulse-check.

So even though there is a big investment in something better, there is also a loss. And this is why designing customer experiences is always a challenge.

Starbucks Customer Experience: how would you answer?

Starbucks is conducting a survey with CustomerThink and GCCRM about their customer experience.

Their last two questions were good ones. My answers are in italics.

What do you like most about the Starbucks in-store experience?

It's a good place to have an informal business meeting with a colleague

What do you like least about the Starbucks in-store experience?

I really don't care much for your coffee, (except latte, breakfast blend are ok) and your bakery products are awful. Can be difficult to find a seat - one person will have staked out a whole corner for hours. I'm concerned your push into the children's market will make it too noisy and messy for adults like me.

That's how I answered. How would you answer?

Design a great customer experience: find a segment and meet their needs - like Curves

Curves fitness is an excellent example of market segmentation, of differentiation, and of customer experience design. Their strategy has been rewarded with extremely fast growth as a franchise -- more than 10,000 locations from their first franchise in 1995, and 4 million members.

I want to talk a bit about why I think they are so successful -- that's today's post. And then I want to tell you about a change they are now making that changes the experience. It's an improvement, but not everyone will see it that way. That's for the next post.

Systematically address needs of a segment

I believe Curves has been so successful because they have systematically addressed the needs of a market segment that found the gym experience hostile and unappealing. And they found a way to do this relatively cheaply. The net result is that they have tapped into a new market, instead of trying to shift market share from someone else.

I first started looking into Curves as an example of market segmentation for a course I'm teaching. And became so intrigued I joined the one down the street. It's a very different experience than any other gym I've joined. Here are some of the barriers / issues I think they have addressed in their approach:

Barrier #1: No knowledge about fitness equipment, and have no idea where to start. Response: a circuit that is the same for everyone, where equipment doesn't have to be adjusted because it adjusts itself

Barrier #2: Don't want to be seen in shorts by a bunch of men. Not comfortable around a bunch of men who are lifting heavy weights and making gross noises.
Response: women only club.

Barrier #3: Overweight and intimidated.
Response: no mirrors. No showers. Curtained change rooms.

Barrier #4: Fitness is hard work, no fun, and not motivating at all.
Response: Create a relaxed, social environment with lively upbeat music and motivating coaches to help you stay on track. Offer prizes for attendance. Run contests and fun events for members, like food-bank drives.

Barrier #5: Not rewarded for my progress. Always measured against a standard I can't meet.
Response: Monthly tracking printouts show your progress against your own starting point, not against some other standard.

Barrier #6: Too expensive, too far away, no time.
Response: local operations that are small facilities and low cost, and a workout that takes less than an hour, door to door. You don't need an appointment, or to schedule around classes. You arrive whenever you want.

One of the interesting things about the Curves circuit training approach is their philosophy that you should keep your heart rate within the weight-loss zone. So in a 30 minute circuit, at least twice everyone stops and counts their heart rate for 10 seconds, and checks their chart on the wall. Coaches go around asking everyone if they are okay. This may have started as a liability-mitigation step, and to help members be sure to lose weight, but it became what I would call a happy ritual.

At least twice during your circuit, the staff would come and say hi to everyone during the count, and generally have a moment of human contact. Quite incidentally, this little ritual meant staff had to get out from behind the desk, turn down the music, and connect over the 10 second heart rate check.

Curves has been successful because they have focused with laser-like precision on a set of customers and a set of needs, and have addressed those needs. They have avoided frills that their market does not value. There's no hot tub. There's no juice bar. But it's convenient and inexpensive. And it seems to work for a group of people that would never have joined a hard-body fitness club.

Something different in automotive marketing: Nissan Rogue City Guide

I actually read an automotive advertising supplement this week, a rare event for me. And came across an interesting effort from Nissan. I can get a widget for my desktop that will keep me informed of events happening in my city. I don't think my social life is quite up to this standard, unfortunately... but what an interesting way to connect with your customers! And clearly based on a lot of insight into their target customer.
You can check out their site here.

How to differentiate your organization: HOK architects

HOK architects (Hellmuth Obata + Kassabaum) are a wonderful example of differentiation. I made this decision after reading about them in John Bentley Mays' column recently, Great architecture, using less 'stuff' in The Globe and Mail. Mays was interviewing the firm's chairman, Bill Valentine.

Here are a few of the things he said that really captured my attention, and are frankly inspiring.

On waste:

"I'm really interested in using less stuff -- less drywall, less steel, less concrete. We waste [materials] like there was an endless supply of everything."

On HOK's mission:

"At HOK, there are actually very few rules. But the one thing we hope to do, the thing that binds us all, is to enrich people's lives. Not to try being on the cover of every magazine. It's about being helpful in this crazy world we live in, especially in Western culture, where there's money being spent on all kinds of super-crazy things. ... If we can get ourselves wrapped around enriching people's lives as a goal, architecture can be a social implement."

"I know Frank Gehry, I like Frank Gehry. But the whole idea of how twisted can the next thing be, how expensive can it possibly be, how rare a metal on this one -- it's all a step in the wrong direction. I'm hoping HOK will push solving simple problems. That's our glue. We communicate with each other a lot, and try to have a good time, and we try to be helpful. It's that simple."

On architecture's relevance:

"I really worry that, in our profession, there's a schism between what real people think and what architects think. People know what's comfortable. The great cities are seldom [clusters of] these superglassy gizmos."

What this has to do with differentiation:

This firm has put a stake in the ground on who they are. Nothing could be clearer than what the chairman is saying about being helpful, avoiding waste, making things better for people.

They are not trying to be Frank Gehry. They are not trying to be anyone else. They are trying to be the best possible version of themselves. This is the essence of marketing differentiation. It's not so much about the marketing as it is about the mission.

And this no doubt is a major part of the organization's success. Because this firm has some 2,100 employees around the world, and billed $475.8 million USD last year.

Resources:

HOK web site

"Great architecture, using less 'stuff'", by John Bentley Mays, Globe & Mail, Sept. 28, 2007

Another entrant in the peer-to-peer lending show

I learned about Lending Club today via Facebook. They are the latest entry in the burgeoning peer-to-peer (P2P) lending space. Here's how they describe themselves on their web site:

Lending Club is an online lending community where people can borrow and lend money, bypass the banks, and get better rates. By working together, members can borrow money more easily and at a better rate than they would get from a bank, or invest in a portfolio of loans at higher rates than those served by savings accounts or CDs. A proprietary technology called LendingMatch™ helps match lenders with borrowers using connections established through social networks, associations and online communities, and build diversified portfolios based on lender preferences. Lending Club is backed by Norwest Venture Partners and Canaan Partners.

Other P2P lenders include Zopa and Prosper. Although the models differ in various respects, they are the latest form of dis-intermediation. A bank is an intermediary -- it takes deposits in various forms, and turns them into loans of various forms. These P2P operations aren't deposit-takers; they facilitate the matching of lenders and borrowers. Because of this, they aren't covered by most of the regulations that affect banks.

These organizations are low-end disruptive in the Clayton Christensen sense of the word: an innovation that brings an imperfect solution to the market that addresses needs of a particular group of customers more cheaply than the current solution. It's a 'good enough' solution. These P2P operations cannot possibly offer lenders or borrowers some of the bells and whistles of conventional financial services, or even the simple speed, efficiency and reliability. But they may offer better rates. Over time, they are likely to get better at what they do, and take a share of the market through sustaining innovation.

Previous articles on this topic:

Update on Zopa and Prosper, online un-banks. August 17, 2006

Financial Services Innovation Watch: The E-Bay Model Comes to Banking. March 30, 2005

A related topic: Vendor Relationship Management - What the heck is it? June 13, 2007