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The winning presentation to the senior managers at the Ritz-Carlton in San Francisco, for a course in Managing Innovation at the San Francisco State University College of Business -- Spring, 2006. ...

The winning presentation to the senior managers at the Ritz-Carlton in San Francisco, for a course in Managing Innovation at the San Francisco State University College of Business -- Spring, 2006. Recommendations for improving the in-room dining experience based on direct observation, research and insights.

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Winning Presentation Presentation Transcript

  • 1. The Care & Feeding of the Discerning Affluent By Bill Emmack & Maureen O’Neil
  • 2. Why are we here?
    • Provide insights from
    • our subjective experience
    • Highlight latent needs of
    • Ritz-Carlton guests
    • Offer actionable
    • recommendations for
    • increasing guest loyalty
  • 3. What have we done? understand observe interpret refine visualize evaluate realize implement scoping, identifying issues to explore learning about people, context evolving insights as design ideas expressing ideas in visible tangible form trying them out, improving them resolving details in final form IDEO Process
  • 4. Project Focus and Agenda
    • First and Last 15 minutes
      • Mixed experiences
    • General Hotel Recommendations
    • In-Room Dining Recommendations
    • The Competition
  • 5. Shifting Our Lens…
    • To Experience the RCSF as a Discerning Affluent Guest
    • Demands first-class quality/service (assumed)
    • Seeks experiences over material goods
    • Wants to feel special
    • Wants to feel and interact like a local
    • Wants to feel comfortable
  • 6.
    • Bill :
    • “ Delightful ”
    • Champagne: Wow!
    • Apples: Wonderful
    • Service: Perfect
    • Maureen:
    • “ Below Average”
    • No food or beverage offered
    • Bag left in lobby
    • Carried luggage to room
    First 15 Minutes
  • 7.
    • Pre-Arrival Contact -- email or phone call
      • Anticipate needs
    • Consistent service
    • Better Bell Desk - Front Desk Communication
    • Make me Feel Special
      • Bellhop Offers Drink from Bar
    First 15 Minutes Suggestions
  • 8. The In-Room Dining Experience Bill: “ The first night I had a steak, which was delicious! (It was maybe just a tad underdone, but not worth sending back.) The main thing I remember was that the waiter had to take all the bottles out of the Mini-fridge to put my ice cream in there to keep it from melting while I ate my dinner. Then there was melted ice cream in the fridge for the rest of the weekend…”
  • 9. The In-Room Dining Experience Maureen: “ There were a few little things that we could have been nit-picky about, but overall everything we had was just what you’d expect from someplace as nice as the Ritz -- the food was excellent, and the staff was obviously trying to address us by name (even though they kept getting it wrong since we have different last names). It was all great, but nothing really stood out as exceptional to me…”
  • 10. It’s Only Above Average The Problem:
  • 11. Where’s the “ Wow! ”… ?
  • 12. People will talk… Or will they?
  • 13. Make it Memorable! To increase passion… Passion Confidence Integrity Pride 36% 63.7% 63.7% 54.4% Loyalty
  • 14. Iced Tea -- with frozen-tea ice cubes; Black napkin for my dark pants Free ride home, broke “the rules” for me “ Breathing” sleep indicator on PowerBook “ Wow!” Make it Memorable! To increase passion…
  • 15. “ Uh, wow …” Make it Memorable! But in the right way… High Tea: Bill received noticeable “attitude” and quite poor service. It sure seemed like it was because he and his date were wearing jeans and sneakers… Housekeeping: Drinking glasses weren’t restocked. When Maureen asked a housekeeper just outside the door for some glasses, they were given “grudgingly.”
  • 16. General Recommendations
    • Location, Location, Location!
    • Who has Ron Siegel? You do!
    • Who needs a big health club?
    • Remember, remember to feed passion’s embers…
  • 17. San Francisco is a destination… Use it to your advantage.
  • 18. At The Ritz-Carlton: Local Local Local Local Local Local The Honor Bar Emphasize the Local
  • 19. Local Local Local Local Local The Honor Bar At The Ritz-Carlton: Emphasize the Local
  • 20. At The Fairmont: Local Local Local Local Local Local The Honor Bar Emphasize the Local
  • 21. Emphasize the Local
  • 22.
    • Honor Bar:
    • Make some “snacks” double as S.F. “souvenirs”
    • Guests already paying a premium -- make it worth it
    • Create test packages to track strong/weak sellers
    • In-Room Dining:
    • Offer wine pairings with Napa Valley/Paso Robles wines
    • -- even wines you don’t carry in stock
    • Promote “San Francisco exclusives” in menu
    • Local beers: Anchor, Speakeasy
    Taste San Francisco… The Ritz-Carlton Way
  • 23.
    • Implementation Costs
    • Re-source ingredients & honor bar items
    • Mitigated by Ritz-Carlton’s strong buyer position
    • Revenue Contribution
    • Honor bar sales projected to increase 10%
      • Easy to create controlled experiment to test
    • 1% increase in occupancy = $290,000 revenue
    • Value Proposition
    • Meets latent need of making guest feel like a local
    • Creates taste and visual memory for guest after stay ends
    • Competitive Advantage
    • Exclusive hotel distribution of gourmet products
    Taste San Francisco… The Ritz-Carlton Way
  • 24. Ritz-Carlton Culinary Secrets
  • 25.
    • Implementation Costs
    • Production costs of filming chef cooking certain meals
      • (twelve five-minute meal preparation segments)
        • Package = $10,000
        • All-inclusive: producer, camera, sound, editing
    • Promotional materials = $3,000
    • Revenue Contribution
    • Sales of DVDs in gift shop: $21.95 each x 50/year = $1,100/year
    • Costs recovered at 450 units sold
    • 1% increase in occupancy = $290,000 revenue
    • Value Proposition
    • Help guests see and taste the Ritz-Carlton experience at home
    • Competitive Advantage
    • Proprietary Ritz-Carlton content
    • Emphasize world-class chef Ron Siegel
    Ritz-Carlton Culinary Secrets
  • 26. Health Club/Fitness Four Seasons Ritz-Carlton
  • 27. “ Let Us Help You Be Well”
    • Help guests work out in their room
    • Offer Pay-per-View Yoga & Pilates Programs
    • Make mats and props available
    • DVDs available to buy
    • Services also available in gym
  • 28.
    • Implementation Costs
    • Readily available – or partner with yoga & pilates video producers, include in on-demand selections: ~$2,000
    • Yoga/pilates mats for in-room request: $20 x 25 = $450
    • Additional TV/Video unit for health club: $1,500
    • Staff training
    • Revenue Contribution
    • On-demand Lodgenet revenues increase by 5%: ~$10,000/year
    • 1% increase in occupancy = $290,000 revenue
    • Value Proposition
    • Anticipates guest’s growing desire for alternative fitness options
    • Privacy
    • Competitive Advantage
    • Exclusive hotel distribution of fitness content
    “ Let Us Help You Be Well”
  • 29. Creating In-Room Dining Memories
    • Breakfast
    • Dinner
      • Napa Valley…in San Francisco
      • Dining: A Complete Sensory Experience
  • 30. Breakfast Why not the Freshest Orange Juice! Fresh Orange Juice?
  • 31. French Press Coffee Breakfast
  • 32. Where’s the Candlelight? Dinner
  • 33.
      • Breakfast & Dinner
    • Implementation Costs
    • Orange juice squeezer: $50 x avg. # of OJ orders per shift
      • For example: $50 x 20 juicers = $1,000
    • French-press coffee maker: $20 x avg. # of coffee orders per shift
      • For example: $20 x 40 French presses = $800
    • One-half hour additional training required to teach room-service staff juice squeezer and French press operation
    • Cost of candles/holders: $5 x 40 sets = $200
    • Revenue Contribution
    • .5% increase in occupancy = $145,000 revenue
    • Value Proposition
    • Creates a memorable experience
  • 34. Napa Valley… in San Francisco
  • 35. Napa Valley… in San Francisco CRAB RAVIOLI baby carrots, spinach, asparagus, coconut citrus sauce NIMAN RANCH LAMB fava beans, morel mushrooms, red onion marmalade, potato gnocchi, thyme infused lamb reduction STRAWBERRY-RHUBARB SORBET citrus segments 2004 Zinfandel &quot;Ballistic” Layers & layers of juicy Zin flavors. Been wine-tasting? (Or just want to try something from our cellar?) We would be delighted to suggest the perfect meal to go with your new favorite. Our chef and sommelier can pair nearly any wine from Napa Valley all the way down to Paso Robles with just the right selections from our menu! +
  • 36.
    • Implementation Costs
    • Approx. 60 hours of the Chef’s and/or Sommelier’s time: $10,000
    • Wine reps will likely provide samples and help for free
    • Additional training on menu knowledge for in-room dining telephone operators: $1,000
    • Revenue Contribution
    • Restaurant/in-room wine sales increase 5%: $10,000/year
    • 1% increase in occupancy = $290,000 revenue
    • Value Proposition
    • Meets latent need of making guest feel like a local expert
    • Create a memorable sensory experience
    • Competitive Advantage
    • Exclusive or restricted hotel distribution of Napa labels
    • Staff knowledge
    Napa Valley…in San Francisco
  • 37. Dining: A Complete Sensory Experience
  • 38.
    • Implementation Costs
    • Production costs of filming musicians to accompany in-room meals
      • Package = $25,000
      • All-inclusive: producer, musicians, camera, sound, editing
    • Revenue Contribution
    • DVDs for Sale in gift shop: $25.95 x 50/year = $1,300/year
    • Costs recovered at 770 units
    • .5% increase in occupancy rate = $145,000 revenue
    • Value Proposition
    • Creates a complete sensory memory of a meal
    • DVD enables guest to re-live experience at home
    • Competitive Advantage
    • Proprietary rights to performances
    Dining: A Complete Sensory Experience
  • 39. Last 15 Minutes…and After Thank You!
    • Checkout less than perfect…
    • What, no thank you card?
  • 40. Investment Summary $5,000 Thank You Notes $60,000 Total Investment $25,000 Concert Film $11,000 Napa Wine Pairings $2,000 Breakfast/Dinner $4,000 Yoga/Pilates $13,000 Culinary Film Costs Enhancement
  • 41. Revenue Potential *Assuming 3% increase per year $153,830 $149,350 $145,000 $5,000 Thank You Notes $1,715,900 $155,210 $325,931 $153,830 $318,270 $308,828 2009 $1,665,922 $150,689 $307,700 $149,350 $309,000 $299,833 2008 $1,617,400 $146,300 $290,000 $145,000 $300,000 $291,100 2007 $60,000 Total $25,000 Concert Film $11,000 Napa Wine Pairings $2,000 Breakfast/Dinner $4,000 Yoga/Pilates $13,000 Culinary Film 2006 (cum. cost) Enhancement
  • 42. Implementation Timeline < 3 Months 3 to 6 Months 6 Months To Ongoing
    • Juicers &
    • French presses
    • Training
    • Yoga Videos/Mats
    • Video Productions
    • Honor Bar Changes
    • Wine/Food Pairing
    • Training Staff
    • Launching Videos
    • via Lodgenet
  • 43. The Competition
  • 44. The Competition is Creating Memories…
    • The Fairmont
      • The “Classic San Francisco” Hotel
      • History
      • Great views
  • 45. The Competition is Creating Memories…
    • The St. Regis
      • Appeals to the young,
      • hip professional
      • Digital Butler
      • Modern design
      • In-room Business Center
  • 46. The Competition is Creating Memories…
    • The Four Seasons
      • Relaxed, modern elegance
      • Appeals to health-conscious
      • young professionals
      • Iced Tea Ice Cubes
      • Business center
      • advanced services
  • 47. Recap
    • RCSF brand
    • Competitive Advantage
    • Strategies to Remain Proactive
    • Continued Focus on Excellent Service
  • 48. Excellence Is Expected But, alas, not Memorable Passion is Created by Proactively Evoking a Wow! Response
  • 49. Thank You!