Here are a few of our favorite Big Ideas + Other Cool Stuff from Week 3 of Chip Conley’s 5-week course Peak: How Great Companies Get Their Mojo from Maslow.
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Shortly after graduating from Stanford business school, Chip Conley took over a motel in a seedy area of San Francisco. Over the next several years, he built his company, Joie de Vivre, into one of California’s leading boutique hotel firms. When the market took a hit in 2000, Chip turned to Abraham Maslow--looking for ways to apply Maslow’s mojo to his company.
The result? Joie de Vivre TRIPLED during an incredibly challenging time when most hotels were struggling just to stay afloat.
THIS WEEK we covered chapters 7, 8, & 9 from Chip's book Peak, which all discuss the Customer Pyramid: how to meet expectations (and create satisfaction), desires (and create commitment), and unrecognized needs (and create evangelism).
Let's check out some of our favorite Big Ideas from this week's class:
Big Idea #1: Customer Satisfaction is Not Success
For decades, many businesses have built their brand on simply meeting the broadest level of customer satisfaction, thinking that if they were dominant in the field and met customer expectations, they would succeed.
Meeting expectations, however, is just the beginning. To succeed, one must go beyond expectations, towards meeting desires and unrecognized needs. Today, customers have so much more choice. With the internet, they can access those choices seamlessly, painlessly, and for free. The deciding factor for a customer now will be those top two levels of the pyramid.
It's also important to know what your customers' expectations are. This will be, in part, based on how you're marketing, how you're pricing, and your reputation. Are you a Motel 6 or a Four Seasons? There will be very different customer expectations here.
Big Idea #2: The Four Keys to Understanding the Customer Pyramid
Help customers meet their higher goals: Nike and their slogan "just do it"
Give customers a chance to truly express themselves: Apple (when they were smaller) - buying their products made the consumer feel hip, cool, and in the know
Make customers feel like they are part of a bigger cause: Patagonia giving 1% of their sales to environmental causes, since 1985
Offer something of real value that customers hadn't even imagined: JetBlue being the first airline to have television sets in all of their seats
Big Idea #3: What Business Are You In?
Write down your answer. Now do that another four times. At first, you may have a very straight-forward response, but by the fifth time, you may find something else.
Here's how Fred Smith, CEO of FedEx, answered the question:
"I thought I was in the business of transporting goods; now I realized I’m in the business of peace of mind." So what did FedEx do? They created a way for customers to track their packages.
The goal is to find out what your customers truly need and care about - and then deliver on that!
Other Cool Stuff
At the beginning of the call, Chip mentioned an article in The New York Times on Marvin Windows and Doors, and how they have weathered the recession.
Their tactics are right out of Maslow's Hierarchy of Needs: survival, succeed, and transformation levels. Read the full article here.
Prep for next week:
Read pages 165-66 in Peak to learn more about the Inn at Little Washington - located in Virginia, they are consistently rated one of the top 10 restaurants in the country.
Think of companies (might even be yours) that are using the Customer Pyramid.
In week 4, Chip will talk about the Investor Pyramid, which is exactly the same as the Boss Pyramid.
Here's a book Chip referenced (and is quoted in Peak):
Soul of the New Consumer by David Lewis
from the book: “New Consumers frequently see the acquisition of authentic products and services as a means of achieving self-actualization, the peak of Maslow’s Hierarchy of Needs, signaling the attainment of our true potential.”
Other companies using the Customer Pyramid principles:
Hope you enjoyed and see you in Week 4!
- The en*theos Team