Once upon a time, luxury brands were premium and budget brands were mass-market.  Yet as consumers become more demanding, brands are becoming ever more creative in meeting multiple, seemingly irreconcilable customer needs.

The launch of Bloc Hotels is in Birmingham is the latest in a series of such feats.  A ‘Boutique Budget’ hotel brand, Bloc has developed a new model based on an in-depth understanding of customers’ behaviour and needs when travelling on a budget (rooms start at £30).

As most short-stay travellers do not unpack and prefer not to eat in their hotels, Bloc has chosen not to offer storage or dining facilities.  The resulting savings mean that its hotels can focus on those elements that cue a premium accommodation experience for guests: for example luxury linen, powerful drench showers, state-of-the-art WiFi and HD TVs, and a superb location.

By focusing on the brand touch points that make a real difference to its customers, Bloc is able to provide a luxurious experience in spite of its failure to tick all of the customary ‘luxury hotel’ boxes (with associated price tags).  This innovative challenger model has potential to shake up not only the travel industry, but also potentially any luxury product category.

Even if you can’t build your customer experience from the ground up, do you have a full understanding of what’s important to your customers and what isn’t?  Focus on the elements that have a real impact on consumers’ perceptions, rather than wasting resources on those that don’t, and you can create a superior experience without an associated increase in cost.

If you’re interested in identifying and innovating around the touch points that are most significant and differentiating for your customers, drop us an email today to find out more about how The Value Engineers can help you chart and make the most of your customer journey.

If you read the marketing press this week, you’ll find it hard to miss the news that Expedia has launched its new advertising campaign, anchored in ’People shaped travel’.

We were delighted to see the new campaign, which has its roots in a brand positioning and pan-European research study that The Value Engineers developed  for Expedia last year.

In the past few years, of course, the online travel market has become very commoditised, particularly in the UK. As a result, brands are struggling to find ways to move beyond price and create a real sense of connection and trust among consumers used to searching across multiple sites and expecting to be stung by hidden costs. It’s great to see Expedia claiming its leadership in a way that puts a very human face on the brand.

We wish Expedia every success with the new campaign, and look forward to seeing it develop.

It sounds like the worst kind of complacent pap to say that every bad experience for a customer is an opportunity for a brand, but a quote in the Chicago Tribune this week from American Airlines managing director of customer experience Mark Mitchell suggests that’s exactly the case.

Cited in an article examining the role of the ‘professional apologizers’ – aka specialist customer service staff – employed by the airlines, Mark said:

“We know how our customers score us on a routine flight, and we also know how they score us when we handle a delay situation very poorly or very well. When we handle a delay situation well, they score us about 14 to 16 points higher than they do for just a regular old on-time flight.”

Does your brand leave your customers feeling like Mr Grumpy or Mr Happy?

Staff at Southwest Airlines, meanwhile, aim to contact every passenger affected by delays or other problems within 24 hours of their experience to apologise, offer a brief explanation and a small gift - usually a discount voucher for a future flight. The result is that Southwest had the lowest consumer complaint rate of the 19 airlines ranked by the US Department of Transportation in 2009.

There are at least two differing schools of thought as to why the successful recovery of a poor experience can do wonders for brand perception. The first (and somewhat depressing) view is that consumers have come to expect certain industries to perform badly and provide poor service - a perception for which Ryanair is surely the poster child. A brand that makes an effort to repair some of the damage done, therefore, accrues bonus points above and beyond the norm.

The alternative, more encouraging possibility is that consumers understand that no brand can be perfect one hundred percent of the time, and respect those brands which acknowledge that fact and act appropriately.

Interestingly, the latter view agrees with the findings of some qualitative research we conducted recently among brand loyalists of another service provider. When talking to those most loyal to the brand, we found that they were capable of transforming even a strongly negative experience into a reason to support and believe in that brand. Thus a wrongly charged fee subsequently refunded became an  example of excellent customer relations, while stories of oustanding service from competitor brands were ignored or dismissed as ‘salesman’s tactics’.

It’s often difficult for marketers to persuade senior management that the best thing a brand can do when it gets something wrong is metaphorically to throw up its hands and admit it. No organisation likes to open up a vulnerable area to attack. The alternative, however, may be to log in one  morning to find your brand immersed in a stream of vitriol from unhappy customers – particularly in this age of social media and blogging.

So the next time you find yourself in a situation when the ordure has just headed skywards, take a deep breath, tell the truth and say you’re sorry. As your mother always told you, it’s the right thing to do…

My team and I were recently travelling to mainland Europe on a business trip, as you do. Shortly after crossing the Channel an operator message started to pop up on my (personal) mobile phone:

“Don’t forget, using data on your iPhone while abroad for things like web browsing, Google maps, and Apps can use 1MB/min. To monitor how much you use, go to Settings/General/Usage. It’s £3/MB in the EU and £6/MB outside the EU.”

Not only was the message persistent, it was also missing a trick. What a wasted opportunity to make me happy and get some money off me at the same time – I thought. European Commission regulation states that customers travelling to another Member State must receive an automated message of the charges that apply for data roaming services.

All fine, except, in their eagerness to satisfy the authorities, the operators, in this case O2, forgot that their primary objective should be to satisfy their customers and please their shareholders. Is it really that difficult to dream up a bolt-on data plan for a one day trip and put a ‘YES PLEASE’ link / button at the end of this horrible and mildly threatening message? I think not.

Customers demand nothing less than seamless experiences these days, particularly if they are prepared to shell out on their all-singing, all-dancing smartphones. One would think this should particularly be the case if those same customers are travelling within the integrated market of the European Union. This looks to me like a big wasted opportunity not only to create positive outcome for the customer but also to make the operators some money. The irony is that we were travelling on a project that addresses customer experiences and ways of making them more joined-up, more satisfying and more profitable.

You can always rely on Michael O’Leary to play the pantomime villain.

True to form as Britain’s skies opened for business, Ryanair’s Chief Executive told passengers his airline would not meet hotel and subsistence expenses incurred while stuck abroad. Ryanair would reimburse travellers the original price of their air fare and no more, he said.

Ryanair’s deal is pretty clear – and the brand has been very appealing. A cheap, no frills service that gets you to your destination and if you want a bit more in the way of service, you will have to pay a bit more.

But is Michael’s declared refusal to abide by European legislation on looking after stranded passengers a step too far? Giving a no-frills service: fine. But, if you run an airline in Europe, you probably have to put up with European aviation laws.

Ryanair is already reaping some pretty venomous criticism from the stalls.

‘You can’t say, as O’Leary has, “the laws weren’t designed for these circumstances”.  Everyone understands that you’re just saying “the law is there to ensure that money goes into Michael O’Leary’s pockets, not out of them” – Telegraph April 22nd 2010.

“This is shocking behaviour and rubs salt into the wounds of those who have been stranded overseas” - Norman Baker, Liberal Democrat transport spokesman.

When does cheap become mean? Michael may be one brand owner who should get closer to his customers but might find the experience a bit uncomfortable in the near future.