A coming paper in the Journal of Marketing addresses that very subject. Building on past research on the role of gratitude in human relationships, it argues that a customer who is made to feel grateful most likely becomes enduringly loyal as a result. Gratitude, as the paper bluntly puts it, can “increase purchase intentions, sales growth and share of wallet.” Robert Palmatier, an associate professor of marketing at the University of Washington and an author of the paper, says that making a customer feel truly grateful toward a business is harder than it might sound. And the hard-wired feelings of reciprocity that can trigger gratitude can just as easily trigger the sense that you’re being treated unfairly.

Read the full article in the NYT

In these examples what has happened is that competition has come from where it was least expected and in both cases this competition was initially ignored as not significant – “they are not delivering the kind of quality that we do” – and bam! One day we wake up and Ryan Air is a huge airline business and we all have digital cameras in our pockets – even the pro’s

This has happened in industry after industry ever since the buggy whip business was exterminated by automobiles. Why and how this happens is well documented by Clayton Christensen in his wonderful book : The Innovators Dilemma

The same shift in client behavior is now occurring in the meeting and conference industry. The competition is not from other regular players in the market but from a combination of events that together have created a perfect storm. Once the storm is over the market will never be the same again.

The elements that are causing this are:

1. The financial crisis has forced business to be more careful how they spend their money so they question the value of every thing – if it is not adding value why are we doing it? ROI i now a key requirement – see more here

2. CSR – The realization that we need to curb our Co2 emissions and one of the big sinners in this is of course travel. (It is also a convenient excuse to cut travel cost)

3. Time pressure on every one means that we are are all looking for ways to cram more into the same 24h/7d week /360d year frame – there is now mores stuff to do, read, see than we have ever experienced before and that means prioritizing. Asking one self hard questions like: is this worth the effort ( travel, money, another night away from home etc).

4. Web 2.0 the big shift from web 1.0 is the ability to interact – real time two way communication on the web. Virtual classrooms, breakout rooms – web casts etc. There is a whole new industry that is growing rapidly and that sees a huge opportunity to replace the traditional meeting environment with a virtual environments. Brush up on Web 2.0 and learning here

Points one 1-3 are the problems we would all like to see solved and point 4 seems to be a possible solution. Not perfect but it works and is easy ( Just like digital cameras)

“At IKEA Virtual Meetings should always be first choice”

Progressive business are responding fast. IKEA has a campaign running called Meet More Travel Less

Tandberg, TNT and Vodaphone are others also working on this.

TANDBERG – 100 000 video calls per month – 2500 flights avoided, 2,5M$ saved on business trips (30M$per year) – 17500 man-hour saved per month – 275 tons of CO2 saved per month

TNT – On track to save nearly11,5 $ in 4 years by replacing travels with videoconferencing – ROI:71%

VODAFONE – 25% reduction in business trips in 2 years – Resulting in double digit millions of cost savings

The response from the meeting industry is ahh.. no need to worry, virtual meetings will never be as good as f2f meetings.

Perhaps not but that is exactly what Kodak said about digital cameras, What BA said about the zero service concept from Ryan Air and what the vinyl record producers said about music on CD’s.

So is there no hope for the meeting industry – yes there is but we need to understand how to deliver value. Class rooms and serial power point monologue are not the solution.

The problem with creating value in the traditional meeting and conference set up is that it is very limited – there is often a short term entertainment value, the odd aha experience – but that’s it.

In a situation where we are all under pressure. Supply, by far, outstrips demand in virtually all industries and services – most business’ create meetings and conferences in order to help participants change – but as any one who has tried to get a teenager to clean up their room by telling them to do so, will recognize, we do not change because someone tells us to do so ( there would be no smokers left in the world if that where the case) Telling does not work.

We change when we arrive at our own conclusions. ( if you do not believe me read Change or Die that will help you reach your own conclusion)

So having one or even worse a series of speakers stand up and tell us what to do, think or feel in order to cope with change is relatively useless – the ROI is negligible – and in that connection the speakers fee is not the main cost, it is the time and travel of the participants.

In order to create real change we need to gather people in order for them to interact. Change requires learning and learning is collaborative – no I do not mean 10 min of ‘networking at the coffee break – but real meaningful conversations – deep dialog.

Only through dialog will you get people to reach their own conclusions and then hopefully act on them. Yes we can have inspirational input if it is short, sweet and to the point AND gets people thinking and talking.

But this will require the meeting industry to radically change their formats,( venues, room, seating,speaking formats, tools, etc) those that do will survive those that don’t will join the buggy whip business as interesting business cases for future students to smile at.

October marks the tenth anniversary of the coining of the phrase, “amenity creep.” With all of this new “stuff” for our guests, you would expect to see guest satisfaction scores increase. But the North America Hotel Guest Satisfaction Index Study by J.D. Power and Associates showed that overall guest satisfaction has been declining over the past several years.

The key to success isn’t adding more amenities; it is adding more authenticity to your hospitality.

The most successful operators are differentiating themselves by providing authentic hospitality through Systems of Truth and Honest Leadership.

Systems of truth
You can’t put a line in your new hire orientation that says, “give authentic hospitality,” and expect it to happen. It happens as the result of systems and processes that you put into place, which I call Systems of Truth. Two that work in any hotel are:

* Active vs. passive service—Stop asking guests to “call if you need anything,” and start asking them what you can do for them. Don’t wait for the guests to come to you because statistics show they won’t. Solve problems on the spot.
* After action review—Common in the military, this post-event meeting is structured to give honest feedback. Gather employees and let everyone speak as equals. This allows continuous improvement in every aspect of the guest’s path.

Honest leadership
Great operators know that even with exceptional talent, the key to producing results is leadership. Good leadership comes down to one thing: trust. Some suggestions on bringing honesty into leadership:

* 100 percent rule—Tell the whole truth. We have a responsibility to let associates know all of the information, especially the “why.”
* Care to confront—It’s important to be willing as honest leaders to confront even our best associates about their performance. This feedback leads to a long-term trust that can’t be faked.

Our business is all about relationships—the relationships your staff has with your guests and the relationship you have with your staff. That is authentic hospitality.

hwn@questex.com

If you have not followed the discussion the crux of the matter is very well summed up in the following video clip:

My point here is not so much to enter into the discussion — to me the conclusion is inevitable — but to point out the fact that once again an industry has been caught out by the famous frog syndrome.
( if you drop a frog into a very hot water it will do its very best to scramble and get out, if however you put it in a pot of cold water and heat the pot slowly, the frog will not try to get out before it’s too late ) i.e. not responding to gradual changes in your environment. The situation in which print media finds itself today was predicted five if not 10 years ago. They just all hoped that the pot would not get too hot. In 10 years time this will be a classic business school case in line with the one about the buggy whip manufacturers, typesetting and landline telephones.

So how does that relate to the world of hotels, travel and conference centres? Well – I think there is a similar shift taking place in our environment. Well possibly not directly in our own environment but in the environment that provides us with our business.

There are three key drivers of this shift: The financial crisis, energy/co2 awareness and Web 2.0 together they have inspired a growing number of business leaders to rethink the need for travel and face-to-face meetings.

IKEA a trendsetting company is running an internal campaign under the banner of: Meet more – travel less. Encouraging the use of interactive web technology for meeting purposes while at the same time reducing travel costs and CO2 emissions. The target for 2009 is to reduce travel by 50 percent and CO2 emission as a consequence by 25 percent. And they are not the only ones, they are just very visible in the way they do it.

It makes sense. Cramming 20, 50 or 500 people into a conference room and feeding them an endless parade of PowerPoint slides, be they ever so pretty and well-designed is not efficient knowledge transfer, (let alone learning) We know that.

Ah but wait – I hear you say – what about the networking? That is the truly important part of meetings – it may be important, but traveling 4 or 6 hours, spending 2 days away from the job and then taking a chance on who you share the stand-up coffee table with during a 10 minute break is not efficient networking.
You could spend an hour systematically working LinkdIn, Facebook or even Twitter and you would probably produce some far more interesting connections and possibilities. So lets not kid ourselves about the networking.

And there is a fourth driver adding to this:

“During the next 5-10 years, the Millennium generation will become a significant proportion of meeting participants. This is perhaps the largest generation gap in history and the consequences for meetings will be fundamental. If meetings for the older generations serve the purposes of information and networking, this means online communities, such as Facebook and MySpace to the younger generations, and they learn from Google, Wikipedia and online peers more than parents, teachers
and conference speakers. They don’t see the difference between virtual and real any more than they see why work and play should not happen at the same time. ” From The Meeting Manifesto

But it is not just meeting planers who are shifting their focus to ROI – the other sector where we can see a shift is taking place as well is within the training industry. Traditional training companies are also in the hot pot if they still believe in classrooms and PowerPoint’.

“Learning budgets are decreasing. Spending on external services are decreasing even more. And learning departments need to do more with fewer resources.

If you are inside a corporate learning department, assuming you still have your job, then you feel this by being more busy. In many ways, that’s not a bad feeling compared to either the person who lost their job. Or the people who have seen their learning business crushed by this”
Read more here

So two major purchasers of hotel rooms, F&B and meeting space, the meeting organizers and the training companies are in this shifting paradigm. Looking for new solutions and ways to connect but with out the travel. What was once a considered a perk – is now almost a curse.

Meetings and tourism are now two different worlds.

Tourism is all about pleasure and experiences which is fine, but meetings/training are business and business means somebody is looking for a return on investment. If there is no ROI or if it is too low, meetings (gatherings/trainings etc) in their current form will be cut.

That is what is happening in the market just now.

And if you think that once the so-called crisis is over then everything will be back to normal and we can do business as usual then and you have just joined all those very uncomfortable newspapermen in their very hot pot.

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If you would like to pursue this subject here are a few links that you may find interesting:

European Event ROI Making Meetings and Events More Profitable.

The Meeting Architecture Manifesto

The state of Learning as a Business

Travel is changing. There’s a lot of talk about average rates dropping in many markets, but don’t kid yourself, it’s all about value. Packaging is a wonderful way to add to perceived value without sacrificing your rate positioning in the marketplace. Getting more for less is pretty much a human concept. There is still a lot of business out there; we’ll just have to work smarter to get it.

Keeping up will require a greater emphasis on the hotel’s location and perceived value. Hoteliers will finally realize that people travel to get to a particular location and then, with few exceptions, choose a hotel based upon the best-value deal within that location. Hoteliers will ultimately understand that rate alone doesn’t sell rooms, no matter how low; what one gets for that rate is how we determine “value”. Perceived value sells rooms, not rates.

Read the full article here

We are co-hosting this event together with Toke Paludan Moeller, Interchange

There will be no transfer of ‘wisdom’ from experts to you the participants. Instead we will explore the unknown together – in a structure guided by experienced facilitators – at the end of the three-day session you will have a much better idea what you as a leader need to go home and do to manage the changes that are taking place. Changes that are going to challenge your current way of doing business.

If you have not signed up already now is the time – more information here

If you could rent this for the same price with friendly service….

From the Financial Times this weekend:

“On a trip to Italy last July, I stayed at a hotel in Tuscany called Castello del Nero. Opened in 2006, it has featured in many best hotel lists around the world. I was visiting with my family (as a journalist on a complimentary stay) and was dumbfounded. Slow, forgetful service combined with unsatisfactory food left me wondering how the industry had reached a point whereby it could charge €500 a night for a hotel that was sub-standard – aside from the excellent spa. I was told some of the lapses were because of a departing chef. The trouble is, with the luxury hotel industry entering difficult times, there will be few opportunities for such excuses.

Next year will probably see a tough, consumer-led reappraisal of the market. Interestingly, early signs of this shakedown can be seen in the generally robust market for private villa rentals”

Read the full article here

Read the post here