A House Divided - MX '08

Slide 1: A HOUSE DIVIDED Two Perspectives on Managing the Customer Experience Ryan Freitas | ryan@adaptivepath.com

Slide 2: “Ideas from Neighboring Fields.”

Slide 3: “I stick with subjects I'm passionate about and avoid any article or subject where I'd have to adopt the pose of ‘expert’ or ‘authority’.” - Tony Bourdain

Slide 6: “Lin Visi e of bilit y” Reservations Database Ticketing Flight Search Loyalty CRM Systems Before they ever get on a flight, Virgin America’s customers have encountere multiple systems within the airline’s “Back Stage.”

Slide 7: THE “BACK STAGE” PERSPECTIVE THE “FRONT STAGE” PERSPECTIVE The customer The customer experience is built on experience is built on the quality, consistency the intensity, variability and timeliness of the and appropriateness of product or service when the service encounter. the customer receives it.

Slide 8: A HOLISTIC PERSPECTIVE “It is essential to consider the entire network of services that comprise the back and front stages as complementary parts of a service system.” - Glushko & Tabas

Slide 9: MANAGING EXPERIENCE My “high concept pitch.” Everything you need to know about managing the customer experience can be learned from the restaurant industry.

Slide 10: “Back Stage” = The Kitchen

Slide 11: THE KITCHEN’S PRIORITIES “Quality” “Consistency” “Timeliness” Did your meal taste You order the Did the kitchen time good? Was your porkchop every your meal correctly? food fresh? Well time. Did they cook Did you wait too seasoned? The right it the same way the long for a course? temperature? always have? Did you feel rushed?

Slide 12: “Front Stage” = The Dining Room

Slide 13: THE DINING ROOM’S PRIORITIES “Intensity” “Variability” “Appropriateness” Was your server Did you get the How well did the responsive to your feeling that your level of service table? Were they server had the match up with your overbearing, or freedom to treat you expectations? invisible? as a special guest?

Slide 14: HIGH VARIABILITY 20% tip 25%+ tip “Maybe they “They love HIGH INTENSITY remember me.” me here.” LOW INTENSITY 15% tip 18% tip “Y’know. To “They were quite be polite.” attentive.” LOW VARIABILITY

Slide 16: MANAGING EXPERIENCE The stakes we’re playing at.

Slide 17: £4.3 Billi on

Slide 18: 27 M arch , 2008

Slide 19: WHAT DOES CASCADING FAILURE LOOK LIKE? 1 2 3

Slide 20: WHAT THREE DAYS CAN COST 30,000 bags separated from owners 500 flights cancelled £16m in losses to British Airways

Slide 21: "Terminal 5 is like a Formula 1 car that has two- star petrol in it. It is a perfect storm of poor infrastructure and over-optimistic assumptions." - Mike Platt, Hogg Robinson Group

Slide 22: “@* &%$ !”

Slide 23: MANAGING EXPERIENCE What any good chef would tell you.

Slide 24: MANAGING EXPERIENCE From the Back of the House

Slide 25: ORCHESTRATE DELIVERY An essential element of Structure your offering menu design is ensuring to make efficient use of no single station will end the resources you have up being overloaded available. every night.

Slide 26: “getting hit” “getting slammed/crushed” “in the weeds/dans la merde”

Slide 27: B Prep e ared !

Slide 28: OPTIMIZE FOR CONSISTENCY In the dining experience, Studies have found that “variability is the enemy.” customers prefer Consistency is essential, predictable service to from the dish’s fire time variable service of to its plating. higher intensity.

Slide 29: Lon gevity

Slide 30: MANAGING EXPERIENCE From the Front of the House

Slide 31: PAY ATTENTION TO PATTERNS “I know what’s up in the Keep an eye on the kitchen based on how output of backend fast the food is coming systems to predict out... and I disregard macro- and micro-trends everything else.” in production.

Slide 32: USE WHAT YOU CAN CONTROL What happens in the A comped drink or kitchen is out of the dessert, or a visit from hands of the service staff. the General Manager can This can impact their defuse a bad situation ability to meet the needs quickly. of customers.

Slide 33: SERVICE RECOVERY PARADOX “With a highly effective This means that a good service recovery, a service recovery can turn angry or product failure offers a and frustrated customers chance to achieve higher into loyal customers. In satisfaction ratings from fact it can create even customers than if the more goodwill than if failure had never things had gone smoothly happened. in the first place.” - Bernhard Schindlholzer http://tinyurl.com/4lzzob

Slide 34: netflix envelopes

Slide 35: RECORD EVERYTHING, AND SHARE IT Top restaurants have They also have a second databases of the usual system of manager data: your reservation “logs.” Any detail that history, table size, visit could contribute to frequency, average better service the next check amount. night is kept there.

Slide 36: WHY SHARE WIDELY? The restaurant industry Having vital customer has personnel with data stored in the head shifting weekly schedules. of a single employee, no It also has a shockingly matter how senior, is low employee retention untenable. rate.

Slide 37: MANAGING EXPERIENCE From the Both Sides of the House

Slide 38: Velc ro!

Slide 39: COORDINATE ACTIVITY TO DISTRIBUTE LOAD Restaurants structure Forget “C.Y.A.” - figure out service times and promos how to cover everybody’s to ensure a steady collective ass. number of customers throughout the night.

Slide 40: KNOW WHERE TO DRAW YOUR LINE Restaurants experiment If it makes sense to move with the elements of the elements of production dining experience that forward, consider it as a are hidden from their means to build a customers. compelling experience.

Slide 41: The Ope Kitc n hen

Slide 42: “Gla VW’s ss Fa ctor y”

Slide 43: MANAGING EXPERIENCE In Conclusion.

Slide 44: NO MAGIC BULLET, NO MOMENT OF TRUTH “A service outcome is never the result of a single encounter between a service provider and service consumer. Instead, it emerges from the service system of back and front stage services.” - Glushko & Tabas

Slide 45: “Our bright and glorious future.”

Slide 46: THANK YOU FOR YOUR ATTENTION Ryan Freitas | ryan@adaptivepath.com