Make Your Company Magnetic: Here’s How

By Diane Merlino

The majority of your customers love your products, your offers, your service. In fact, they love your company so much that they’re enthusiastically recommending you to their family and friends, about five times a month.
That, says Adrian Slywotzky, is what a magnetic, demand-generating company looks like.

Slywotzky is the author of several internationally distributed books on business strategy, including Demand. Creating What People Love Before They Know They Want It (Crown Business/Random House, 2011). A partner in Oliver Wyman, Slywotzky has consulted to Fortune 500 companies from a broad cross-section of industries for /uploadedImages/TW_Plus/xTW_Plus_Images_ONLY/Demandcover2LPET.gifmore than two decades, working extensively with CEOs and senior executives on issues related to new business development and growth.

Slywotzky has insights, advice and examples for business leaders in travel who want to become expert demand creators. This is the second excerpt of a discussion with Travel Weekly PLUS editor in chief Diane Merlino, edited for clarity and length.

Merlino: You identify making a product or offer “magnetic” as the first step to creating demand. How do you make something magnetic?
Slywotzky:
There's a simple formula: m (magnetic) = f (functionality) x e (emotional connection). Something is magnetic when I provide the best functionality to the customer times the most powerful emotional connection. It’s that emotional connection — which so often distinguishes the product — that generates five times as much volume as a very good competitor.

Functionality is the foundation. It's very hard to get to a magnetic product or offer if the quality is bad, if the thing doesn't work, or if the service is inconsistent. And, having the best functionality is very important, because if I'm trying to create a strong emotional bond with the customer so that they will love what I have to offer and talk to others about it — not just like it and respect it — I've got to get an A+ on the functionality.

Q: Does it have to be an A+ on functionality? Will a simple A do?
A:
I'll take an A, as long as we're shooting for the A+. Because magnetic seems like a fuzzy idea, but it's not; magnetic companies have measured themselves against their competitors by asking a couple of very hard-edged questions.

Question number one is, ‘do you love my offer, do you love my company?’ Companies that get to magnetic literally have 70% to 90% of their customers say they love the product, they love the company, whether it's a grocer like Wegmans, or a device like an iPod, or a car like a Prius. But love doesn't mean a lot in business until it translates into other things — and it does. 

The second measureable aspect of magnetic is based on asking customers the question, ‘have you recommended my service, offer or product to others?’ Companies that get to magnetic actually have 40% to 60% of their customers proactively recommending their product to others.

Q: Those are accolades from a very high percentage of a company’s customer base.
A:
Yes. Magnetic might start off as being kind of a fuzzy idea, but it's really hard edged. When you're starting to get scores of 70% to 90% of your customers saying they love the product and the company that delivers it, and 40% to 60% of them saying they are constantly talking about it and recommending it to others, that makes magnetic real.

Q: Is there a metric for how often those customers recommend a magnetic product, offer, or company?
A
: Five times or more in the last month.

Q: That's very high.
A:
You can set that bar higher or lower, depending on the industry. But we measured customers who have recommended the product, the service, the offer, five times or more in the last month. That’s astonishing when you start translating it into advertising dollars you don't have to spend, and so on.

Q: Emotional connection was the other part of your equation on how to make something magnetic. How is that created?
A:
Creating that emotional connection comes from several places. The reason for starting with the customers’ hassle maps is if a supplier takes a huge hassle of mine and makes it go away, I'm beginning to fall in love with them. Or if they take something that's neutral in my hassle map and turn it into something that's delightful — like Amazon making it possible to load Kindle wirelessly instead of through a PC — I'm starting to fall in love with them.

The functionality clearly is the hugest step forward, but then other things come into play — the design, the esthetic, the style, the story that the product or offer tells, or the story that it allows me to tell about myself.

Then what is maybe the most powerful factor that people have just started to understand in the last few years — and where the travel and hospitality industries could have a huge advantage — is, very simply put, employee excitement. When I'm experiencing a product or a service where the employees are excited and knowledgeable, not just positive and engaged, that gets me going.

Q: Can you give us examples of that principle in action?
A:
There are a couple of companies that are worth noting in this area, even though they're outside the travel industry.

Eleven years ago Apple started building stores. Today they have more than 350 of them. They started at a time when people said, ‘Oh, you don't need retail. It's all through the internet.’ Apple went exactly the other way, because when you interact with the employees in those stores, you start thinking differently about the products and the company.

Nespresso, a subsidiary of Nestle which makes espresso coffee machines, discovered this at exactly the same time as Apple and they started building retail stores to give customers an opportunity to experience not just the machine, but also the coffee. Today 80% of Nespresso's employees are customer facing.

What Apple and Nespresso and others illustrate is it's hard to be magnetic without an employee base that is as excited about the product and the service and the offer as you are. Because if they're not excited, why should the customers be?

Q: How might those examples look in the travel space?
A:
The huge advantage for people in the travel and leisure industries is that the nature of their offer to the customer is one in which a very significant portion of the employees are customer facing. They can either communicate neutrality, or some level of positivity and engagement, or they can communicate actual excitement — that they love being there, and they love that you're there. That changes the nature of the experience for the customer.

The simplest way to illustrate what makes a magnetic product is to draw the product as a little box in the middle of aAdrianSlwotzkyHS2 piece of paper, then draw a big circle to the left of the little box and another big circle to the right. The circle to the left is employee excitement, and the circle to the right is customer conversation. You and I know a lot of products where those circles are very small. The employee excitement is not there and the word of mouth on the customer side is not there.

Q: Let’s talk about a couple of travel industry examples you’ve included in your book. Eurostar is included as an example of a magnetic company.
A:
Eurostar started off with about 22% share of the total volume between Paris and London, including train and air travel. Richard Brown (currently Chairman of Eurostar and previously CEO) was one of those folks who, either by inclination or by learning to do it talked to customers all the time. I mean hundreds of customers a year, especially the business customers.

One thing he learned was that every time he could save the business traveler 10 minutes off the total time of their trip, more and more travelers would flock to him. Sometimes that was very cheap to do, like helping business people buy tickets faster, or helping them get through security and customs more quickly. Sometimes it was very expensive, like spending a billion dollars to convert some of the track from conventional to high-speed track.

But that process was relentless and continuing, and over a period of years Eurostar's share of the total traffic between Paris and London went from 22% to something like 75%. It was quite a metamorphosis.

Q: It sounds like you personally like this company.
A:
I was an inveterate flyer until a friend of mine said, ‘You're crazy. Take Eurostar.’ I had never considered it. I did it, and it felt amazing. So then I did a couple of experiments. I flew between the two cities and took Eurostar and measured everything I had to do for both — how long it would take, how many euros I had to spend on one side, how many pounds I had to spend on the other, the 75% on-time ratio versus something like 97% on-time ratio for Eurostar. That was a real eye opener for me.

Richard Brown is still talking to customers today. I've got to tell you a story, which just blew me away. On my last Eurostar trip I wound up in London and I had to wait 10 minutes for taxis. And that drove me nuts, because I had this very quick trip and here I had to wait. When I was interviewing Richard Brown, he said, ‘You know, I talked to some people lately and they've been complaining about the 10-minute taxi wait.’ I was about to open my mouth and say something, but I didn't. And he said, ‘You know, that's odd to me. But they're not making this up so I have to get my team and myself to work on it to do something about making that taxi wait shorter.’

I think that tells you that entire story in a nutshell. Eurostar has had its problems; it's had difficulties with trains in winter, and so on. But in general, if you talk to 100 customers who travel between Paris and London you'll hear a very similar story. I think it's important in this context because it is a travel company, and train travel is a field that runs into a lot of delays and problems.

Q: In your book you also identified Virgin Atlantic as a magnetic company.
A:
For Virgin Atlantic, I did the same thing. Now, I confess I did it as a business traveler, not as a coach traveler. But I took all the steps, and I wrote everything down. With Virgin sending a car to your house to take you to the airport, getting you through customs in a very short period of time, getting you into a lounge that makes you feel good, getting you onto a plane where the people are happy to be on it — the time savings, the aggravation savings, and not having to spend a fortune on taxis in both directions was quite extraordinary.

Now, Richard Branson talks to customers, just as Richard Brown does. He also walks around with a notebook. He sits down next to a customer on the plane, chats them up, and writes stuff down. He puts on an apron when he's on the plane, and works with the flight attendants serving the customers.

You find things out when you do that that you never find out from a survey. But I think Branson and Richard Brown would both tell you that conversations with customers without a quantitative survey afterwards, or a quantitative survey without actual customer conversations — either of those are the sound of one hand clapping.

Q: You’re saying that companies need to do both — personally talk with customers and conduct quantitative surveys.
A:
You have to have the interaction from both to get to what's really important to the customer, and to determine the most cost effective way to change things. Some customers will even generate good ideas on how to solve those hassles if you talk to them several times.

Looking at examples like Eurostar and Virgin, there are things companies can emulate like the incessant talking to customers, finding out what the hassles are. These companies do what the good people in tech do. They do what the good people in retailing do. They do what the good people in B-to-B do. That's why these principles are so interesting; they cut across all of these industries.

ALSO SEE:Create Demand by Solving Your Customers’ ‘Hassle Maps’
 

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