The Margin of Utility: Keeping the Ordinary Expectation...Ordinary

Now that the book is done, and I've used my sledgehammer to drive my stake in the ground on Social CRM, and the CRM Evolution 2009 conference is over - the best thing I ever attended - I need to stretch my mental muscles with you guys. I'm going to throw out a concept that might be a crock or might add to the thinking around the social psychology of SCRM, at least at an intellectual level if not a practical one. But I need lots of feedback.

The hospitality industry has been on my mind a lot in recent weeks because over the last several months I've done a lot of traveling and it won't let up at all for the rest of the year. That means, airplanes, cell phones, restaurants and hotels if you want to put all the pieces of my trip into one place. That's obviously nothing more than the standard road warrior's trip. What always varies for each traveler is the perception of the quality of each of the entities, which of course are judged according to the expectations and values of the traveler. For example, what kind of service did you get from the airlines you flew. That's of course based on what class you booked, what your frequent flyer status is - though that seems to matter less and less - what flight conditions you had in the air, which airport you flew from, what the airline amenities are to begin with, what kind of airplane you were on, and how long you were flying among other things. How you judge each and all of those things is based on your past experiences with that airline, your past experiences with other airlines, what you've read about the airline both directly and in comparison with the other airlines and what you've observed about them other ways too. Each of these components has an effect on your flying experience. Even the experience you are having live with the airline affects what you think of it. For example, I was on Lufthansa as a Star Alliance partner of United on my way back from Mumbai in January and I had an eight hour ride to Frankfort as the first leg. The airplane seats were horrible and uncomfortably hard in economy class. But I had a great seat companion, a musician and composer who does fusion music with India and contemporary styles. In fact, we've remained friendly with a hookup on Facebook. It made the trip much more pleasant than it would have been if my companion was the stolid, silent type. But that was chance. The seats in coach were all uncomfortably hard it seemed so anyplace I sat would be uncomfortable unless I had had an equally hard butt. The United leg to Frankfort wasn't much better. On the whole, though, I think we all know what I'm thinking about my carrier of (inert) choice - United - these days.

While airlines are not the subject of this, you get the idea. The factors that go into making up the experience are tied to both the value chain of the company that I'm dealing with and the decisions they make on what kind of products, services, tools and experiences they want to provide me with and my personal value chain which consists of my judgments, expectations and emotional matrix, as well as my past relevant experiences which can impact my expectations.

Let me illustrate one other case to begin to paint the picture I'm going to produce a bit more clearly.

Lets Go Yankees

Three weeks ago, my wife, my brother and my cousin-almost-brother, and I went to the new Yankee Stadium to a Yankees - Rangers game. This was just after the CRM Magazine conference had ended (same day). The stadium was stunning, the evening wonderful and the Yankees won 9-2. The tickets had been procured via my Major League Baseball MasterCard points. The four tickets would have cost $1500.00 otherwise. The seats were spectacular and behind home plate. Jack Nicholson, Paul McCartney and Lorne Michaels of Saturday Night Live fame were 10 rows in front of us. A great experience all in all.

The next day, my wife and I realized that there was a day game for the Yankees with the Rangers so on a whim we went back. Beautiful day, but this time, it wasn't points that procured the tickets - it was money, dollars, dinero, moolah. It was also a steep $750.00 for two friggin' tickets but we figured, you only live once and we were in a position to afford it so we went ahead.

Again, great seats, crowded stadium, this time a beautiful day, rather than an evening. The ballpark is spectacular and a fan friendly, high tech coliseum that carries the feel of the old Yankee Stadium and all the tradition that's important to Yankees fans - which is probably why despite the incredibly high price for tickets they still get 45,000 people per game - day or night.

This time, the game stunk. The Yankees were lackluster, they were cuffed around and they lost 7-2. Now if I were dealing with the quality of the product alone - in this case the game itself - the money was disastrously spent - who wants to spend $750.00 to see the team they are passionate about lose? But, in reality, the totality of the experience which included the interactions between the other fans and us, the beauty of the day, the ambiance of the park, the feeling in the air so to speak, made it $750 well spent. The product wasn't worth it; the experience was worth it.

But that brings me to the question.

Now to the Meat of the Thing: The Margin of Utility

If we're in agreement that the components of a customer experience consist of products, services, experiences and tools, then when does the product's utility begin to predominate over the totality of the experience and all of the other components? When does utility predominate so greatly that it controls what the result of the experience is going to be?

I'll try to clarify and then explain, but understand this is only somewhat thought through so far. I need some help in deciding how it how this impacts Social CRM or even if it applies or is it just a quack idea. Even more germane, if it applies, how does it affect the planning of a hotel or any company that has the customer experience as a paramount piece of its strategy?

OK. I'll carry on with the rest of the story and the discussion.

The Visual Scenario

I did a lot of traveling in the first quarter that culminated in March 2009 in a trip to Chicago and New York. Both were for speaking engagements. I didn't choose the hotels that I stayed at or the class of travel I flew - though I did choose the airline. But that's no biggie. The hotels are what I want to talk about.

In Chicago I stayed at the Allegro Hotel, a converted old hotel in the downtown on the slightly west side. In NY it was the Hudson Hotel on 53rd between 8th and 9th, right at Columbus Circle.

We're going to need visuals on this one. So let's get going with some pix of each of the hotels.

The Allegro

The Lobby of The Allegro

A Room at the Allegro

A Bathroom at the Allegro

Now for the Hudson

The Lobby at the Hudson

A Room at the Hudson

The Phillip Starck designed Bar at the Hudson

Desk Space at the Hudson (note the Bathroom through the Curtain)

The Pix Explained

If you look at the images of both hotels, there are several things that stand out:

1. The lobbies and bars etc. are très chic - very contemporary, almost deco. In fact, the Hudson Hotel is designed entirely by Philippe Starck, the master of contemporary architectural creativity.
2. The rooms are incredibly small. If you look at the Desk Space Hudson image and peer through the curtain, you can see the bathroom behind the gauze. An interesting architectural choice, n'est ce pas?
3. 1. To further elaborate on the room's smallness. The TV you see is in a corner between the desk and bathroom curtain and the bed. What you don't see is that there is almost no space between the walls and the bed. Now, if I said the wall and the bed, no biggie, because, you would think, that just means they made a decision to have one side of the bed up against the wall. But actually, I said walls. For now, I'll leave that to your imagination. Later, I'll explain.
4. The drinks at the bar at the Hudson are incredibly expensive. Well, you can't tell that by looking at the image of the bar exactly, but you can imagine what it costs to maintain a Phillippe Starck designed bar. I had a "finally, we're meeting in person" meeting with James Wong of Avidian and four drinks cast over $85.00. That is correct, sir.

The Euro Retro Styling

The arrangement at the hotel is actually a trend, if not a style, of hotel. There is no particular name to it except I've heard Euro/Retro once or twice. However, the idea is very popular. It consists of:

1. Small rooms that are relatively inexpensive - usually in a city like Chicago in the $100 or so range and in NY around $200 or so. Less than half the pre-recession prices of most decent hotels.
2. The smallness is truly small. Everything - all the so called individual rooms are compacted into what I would call a divided studio apartment style. Bathrooms about a foot from the rest of the rooms - which consists of a bedroom with a bed, a dresser of some sort, a mini-style desk and a TV.
3. The external hotel areas - like the bars and the lobbies are trendy, chic, stylish and clearly well appointed (as I mentioned above).
4. The rooms themselves are given high end accessories so that, for example, the showerheads might be Sparkman shower heads or Hans Grohe bathroom fixtures - all expensive and all work well.
5. The idea of the high end accessories and the trendy lobbies and bars is to offset the real estate savings that the small rooms provide - by allowing more rooms per floor for example with the customer being gaga over calling the elevators "lifts" and seeing Hans Grohe fixtures presumably, preserving the luxurious experience for the customer while living in something that feels a bit like a FedEx box.

The Margin of Utility

So what's my problem? Here it is. At the Allegro, this worked all in all. The bed in the small room left sufficient space to not feel cramped too much and the appointments and accessories and the look and feel of the hotel as a whole kind of worked to make it an interesting experience - despite the lack of space.

However, at the Hudson Hotel, there was so little room between the walls and the bed I could almost hit the wall just by rolling over in the bed. I actually didn't have room to put anything like a suitcase on the floor if it was near the bed because there was no room to put it down.

Now, if I were to take the rest of the experience at the Hudson and simply eliminate the failed utility of the room - i.e. the main product - it was a truly chic, trendy, utterly cool, though a bit insincere (elevators called "lifts" a.k.a. Eurofake) experience that would be awesome if I weren't staying there. But the simple fact that I couldn't roll over without banging my head on the wall, so to speak and that I could see the well appointed fixtures of the bathroom through a curtain at my desk which was pretty much up against the foot of the bed - made the room a big "FAIL!" for me.

That's where the margin of utility comes in. My purpose for being at the hotel wasn't to go to the bar, though it was utterly cool and trendy (apparently a hot ticket place to even get into on Friday night according to my cousin), it was to stay at the hotel in a room that I was going to sleep in.

So the primary purpose of this was the use of the product - i.e. the product's utility to me. But its poor applicability, unlike the Allegro which wasn't as well appointed but the room was simply more (though not greatly) functional - just enough actually, made the Hudson a bad experience.

So my questions to you are the following.

How do you think about this when you are developing your Social CRM strategy? Do you break out the likely effect of the products, services, experiences and tools on the overall experience? Do you weigh the likely impact of each "functional area" and look at how the ordinary is going to affect the overall experience.

Keep in mind, the sleeping on the bed is the most ordinary of the functions that are associated with the overall hotel experience. When the ordinary fails, the impact is greater on the results of the experience than when the extraordinary or luxurious fails. Because there is no expectation of even possible failure when it comes to the ordinary.

For example, if I make a phone call to a company to find out an address, I expect, that I can get that address in a minute or two. I'm not having a problem with that company. I'm simply inquiring into something. If it takes 20 minutes or I get the wrong address or no address - in other words, if an ordinary action that's associated with an expectation of a simple success - not an extraordinary experience - fails, it will have a far greater impact than if something that is far more extraordinary fails or if I'm calling with a complaint - which means there is already a failure.

There is HUGE merit in providing a good customer experience by simply keeping the ordinary, ordinary.

The Hudson Hotel failed at that, and crossed the boundary by providing me with a dysfunctional product for an ordinary expectation. The Allegro stayed at the margin and with less luxurious accommodations, kept the ordinary ordinary - meeting a standard that I'm calling the margin of utility.

Does any of this make sense? Again, this is an incomplete line of thinking. I need help, feedback, someone to tell me I'm an a-hole idiot because it's a bad idea, not because they like the Hudson Hotel. (see the defenders of the Redskins lawsuits against their own season ticket holders or some of the United defenders for exactly what I have ZERO interest in hearing).

In Sum

1. The margin of utility is that part of the customer experience which involves the functional reason for the customer's interest in the company. It could be what a product does or what a service provides. It has little to do with the ambiance or additional accoutrements that go into the totality of the experience. But it has a huge impact on the experience - or does it? Tell me.
2. Keeping the ordinary entirely ordinary is the foundation of one kind of a customer experience and the failure to do that despite the success of the other components usually will mean that the experience as a whole will be a frustrating failure to the customer. No one cares about feeling luxurious if they can't go to the bathroom - metaphorically speaking of course.

Tell me what you think. Help me here. Please.

Technorati : CRM, customer experience, hospitality
Del.icio.us : CRM, customer experience, hospitality

Comments

[www.gloriaabro.co.il/]

According to post previous goes through with that commercial airline and other air carriers, what I have go through about the commercial airline both immediately and in assessment with the other air carriers and what I discovered about them.

[Coach Outlet]

IT IS hard to look at the Capitol in Washington, DC, without a frisson of excitement

[Microsoft CRM]

Speaking of the Yankees I wonder if they are going to pay Jeter the money that he is demanding. Should be interesting.

[Cheap Nfl Jerseys]

As Esteban said, part of customer satisfaction is about setting expectations. The spacious lobby and chic entrance of the hotel seemed misleading. Enter the lobby and you think: spacious, grand. Enter the room and you think: dorm room, matchbox. Why did I expect more? The hotel’s Web site might have been part of the problem. It currently boasts the rooms are, “inspired by the romance of transatlantic travel,” that even the single room, “transports you to another place and time without leaving the city,” with a “Luxurious Full Bed.” Knowing what the hotel actually delivers, those statements are laughable. How can travelers not be disappointed?

[Ferienwohnung Greetsiel]

Viele Gruesse aus dem schoenen Fischerdorf Greetsiel

[Volker from Germany]

Hi,
I randomly came on this side and would like to leave nice greetings. I would be glad if you visit my homepage also! Maybe you want to visit Sylt Westerland in Germany http://www.MeerblickSylt.de or the Baltic Sea http://www.OstseeblickHolm.de for vacation?! We have there very nice flats with a nice view. Maybe we'll see soon!
Kind regards

[Forestry Trucks]

That look like a great place :)

[New Jordans]

It's great to hear from you and see what you've been up to. This blog makes me realize the energy of words and pictures. Keep coming up with ideas.

[GoldMine Software]

Great post.

Yikes, those tickets to see the Yankees play at their new ball park are expensive.

[London Hotels]

I am sorry but I don't have much experience in this field, what I do know is that a good hotel should give you a lifetime experience, and I don't appreciate hotels that try to do it by using big names like Stark. What I can say is that u sure sound like you know what you are talking about, I've read most of the comments here and it is just fascinating! I hope you don't mind me putting in these few words- this is a very interesting blog post- I couldn't hold back.

[Lavender]

I love reading the reactions (or shall I say the debate) in this post. Kudos to the points both of you raised.

[used computers]

It could be what a product does or what a service provides. It has little to do with the ambiance that go into the totality of the experience.

[Amy Adamsak]

This post hit home for me, after staying at the (then Ian Schrager) Hudson Hotel in 2004. I laughed at your description of the place, understanding your pain.

A friend and I found an incredible, last-minute bargain on Priceline to stay at the Hudson Hotel and were amazed (after finally finding the hotel with no address outside) how stylish it was. The brightly lit elevator at the main entrance carried us to the stunning and spacious lobby with high ceilings, dark wood and ivy covered columns. The bar across from the lobby, while a little ostentatious, looked hip and exciting. Our immediate thought: How did we get a room at this place for so cheap!? And then…we got to the room. I’ve never been on a cruise, but I expect that this room was much like a standard cruise ship cabin – dark, small and cramped. Open the front door to the room and you can trap someone in the bathroom. If you and your laptop are small enough, you *might* be able to fit at the desk.

As Esteban said, part of customer satisfaction is about setting expectations. The spacious lobby and chic entrance of the hotel seemed misleading. Enter the lobby and you think: spacious, grand. Enter the room and you think: dorm room, matchbox. Why did I expect more? The hotel’s Web site might have been part of the problem. It currently boasts the rooms are, “inspired by the romance of transatlantic travel,” that even the single room, “transports you to another place and time without leaving the city,” with a “Luxurious Full Bed.” Knowing what the hotel actually delivers, those statements are laughable. How can travelers not be disappointed?

IMHO, if the Hudson wants happier customers, they need to accurately explain the expected utility. They currently overpromise, under deliver and don’t understand their audience. It’s not a comfort/spa hotel, not ideal for those trying to find a work-space and not romantic in the slightest. It’s a place for site-seers who won’t be in their rooms for extended periods of time, twenty-somethings looking to party (and not sleep much) and/or Keebler elves.

CRM 2.0 Note – While planning a vacation recently, I noticed that hotels are now able to respond to customer comments on TripAdvisor.com. Out of curiosity, I looked at the Hudson Hotel and their general manager is responding to all comments from visitors. Whether the review is good or bad, the GM responds, ask for more information and says thank you. They’re inserting themselves in the customer conversation, which is smart, but I wonder if they can do much of anything without improving their lack of delivery on promised goods.

[Marshall Lager]

This margin of utility thing makes me think of the old Borscht Belt one-liner: "This restaurant has two main problems: The food is terrible ... and the portions are too small!" Designing an experience for customers will always involve compromises, so it's important to make the right ones. Small rooms are a better use of real estate, but if they're awkward, unwelcoming, or feel cramped, there won't be much repeat business if the customer has a choice. A Japanese coffin hotel can get away with cramped, because that's what you expect. A luxury hotel with high-end design can't.

[twitter.com/AllenDuet]

Paul,

Interesting observations! In the classical design sense an experience is composed of the expected + the delighters and the overall experience valuation is the result of the blend of those elements. Best practice suggests there’s a “minimum bar” which needs to be targeted for the expected elements, coupled with a combination of delighters to produce the highest valuation experiences.
I’ve seen the following trends from experience creators:
1. Nothing but the expected – companies that focus on delivering the expected elements of an experience with no delighters. Arguably you see this trend in most commercial air carriers these days. In fact a lot of these folks are clawing back items they consider delighters which many have come to expect (like seats you can sit on without requiring medical attention).
2. Just the one delighter – companies focusing on reliable expected delivery plus one thing that they feel differentiate themselves.
3. Expected element = Fail but multiple delighters – companies who go way overboard in the delighter dept but fail at delivering the minimum bar in the expected goods/services.
The 3rd trend is something I’ve seen more of lately. As a supporting story a friend went to a local restaurant known for their Cherries Jubilee – which they apparently make a big production out of. After 45 minutes waiting to order and 1 hour before getting dinner service they were only able to see part of the big production as their waiter was rushing them out of the restaurant for taking up a table. These kind s of experiences remind me of the classic line “all flash, no sizzle”. When the “min bar” of the expected experiences are not met that overall experience value becomes very low, in fact disappointing, regardless of how many delighters you throw at a customer. There’s a whole range of vendors I no longer frequent, because of what I consider a major failure in that margin of utility
Your analogy regarding your Yankee game experience got me thinking – what in that scenario is the utility? Is winning the real measure of what we’d consider a “minimum bar” expectation, or would it be enough to see the Yankees field a professional, competitive team? It’s an interesting problem for experience vendors marketing a professional sporting event – what is the ordinary definition for the functional reason for being there? Most people would say just to see professional athletes compete, but many teams would likely tell you filling seats during/after a losing season is a much harder proposition, regardless of how many “extras” are awaiting attendees. Overall industries which have already adopted an “experience” offering model (like sporting events) do act as a good lesson for businesses moving into this market, though I’m still struggling to get a firmer understanding of the fundamentals of the model beyond the high level.

[twitter.com/MarkTamis]

Humans, being the way we are, are always looking for positive experiences. These can be new ones or a repeats of an earlier or similar ones that were positive. We have risk-aversion behaviour to avoid negative future experiences.

As a customer or prospect, to decrease the risk involved for you, you look at the business proposition, your past experiences with the brand and with similar offers, and you interact with other people to form your opinion ("No man is an island", John Donne, 1624). In other words you define a set of expectations for the trade. Into this equation will also go the expectations set by the business, and the reputation that it will deliver on its marketing mix (products, services, price, positioning - and experience offer). You then decide and trade your resources against theirs, and following that you will compare your expectations with real-life to see whether your experience is positive. This hones your opinions for future reference and/or for sharing with others.

In your hotel example, they try to reduce the risk for you by working on their reputation - communicating about service quality level and amenities, making use of the reputation of others (Philip Starck, Hans Groehe, having VIPs in the hotel bar etc.), and other items such as being conveniently located. All this is carried so that you feel comfortable with or positive about the trade. They also try to optimize how much they can charge you and what you get in return, without you considering it as being a negative experience. In short, they want you to come back and tell others about your positive experience.

Your set of expectations for your hotel stay was a good night's sleep in a decent-sized room - with a nice deco as a bonus. Most likely your clients had invited you as part of your trade with them for your insights and your reputation, so your weren't engaged particularly in the hotel choice - so very little risk to you and leaving you to focus on the utility. Had the context been different, your set of expectations would have been different and, had you interacted with others to shape your expectation set, you would likely have gone elsewhere. Chalk it up to experience!

Businesses need to organise to make ensure that the customer experience is positive and they are profitable. In order to optimize this trade(-off), they need to optimize the margin of utility for the largest number of customers possible based on what they know about their expectation levels - and without giving away the barn. Experience Personalisation such as described by Dr Nathalie are tools to extend the number of consumers that will find the experience positive, but these will always be within the limits of profitability. Even the premium you may pay for the extra service may not cover the cost of providing it to only a limited number of customers.

By providing a means of interaction to customers and by getting people to learn from other peoples' experiences, Social CRM reduces the risks for consumers and prospects and allows businesses to better analyse and take into account the median expectation level of its customer base. It can then adapt its marketing mix and provide the optimum positive experience to the Customer in the light of the resource trade-off.

And my 0.02€ worth to a previous discussion : Loyalty can result from a consumer's risk-averse behaviour in order to obtain positive experience...

[Bob Warfield]

Fantastic article!

Paul and I chatted before this was written and he was using a term I really liked: Experience Portfolio

I've riffed along those lines and these comments on my SmoothSpan blog:

http://smoothspan.wordpress.com/2009/09/12/the-experience-portfolio-thinking-about-customer-experience-strategy/

These are exactly the kinds of strategy thoughts needed to properly formulate any CRM strategy, Social or otherwise.

Cheers,

BW

[twitter.com/drnatalie]

A Room With a Bike- Forget the View...

Well.. speaking of hospitality or the lack of it... customer experience or the lack of it...

I've been on the road alot lately... and its sometimes hard to find time to exercise... and I find it helps me sleep.

So in turning over a new leaf- I searched and search on the internet for a room to stay in in SF- and there it was-- the Westin must have heard my request... a room with a bike!!!

I especially booked a room at THIS Westin In SF -- the The Westin San Francisco Market Street because-- It had a BIKE IN THE ROOM with a WORKOUT DVD. I thought I had died and gone to heaven... that MAYBE MAYBE someone had heard my request...

I got the confirmation in email- it said, Room Amenities- Spinning Cycle And Dvd, Floor To Ceiling Windows, Westin Workout Non-smoking, Heavenly Bed And Bath, Ergonomic Workspace"

And then the sad, but real truth came to bear - when I checked in, in person- the hotel had given the BIKE room to someone else.

I asked- with the hundreds of rooms you have and the way you advertised the offering on the interent, you can't only have one room with a BIKE?

The answer was a sad YES. They suggested next time I call and tell them that I wanted the room with the Bike.

I asked -- thinking of that Seinfeild episode where he is standing at the check out counter for a rental car- telling them that he HAD A RESERVATION...

Here's the youtube video in case you missed it:
http://www.youtube.com/watch?v=A7uvttu8ct0

I said, "What do you mean I need to call you and remind you I reserved the room with a bike? That's what I did on the internet- I made a reservation for a room with an exercise bike."

She said, "Best to call us and remind us so we don't give the room away to someone else."

What does a smart woman make for dinner? RESERVATIONS!!! and in this case - I had made a reservation, but it didn't mean anything...

So Paul... yes the margin of utility is that part of the customer experience involves the functional reason for the customer's interest in the company. It has a huge impact on the experience.

Natalie
@drnatalie on Twitter

In search of a hotel room with a bike in it-- and means it!

[twitter.com/mjayliebs]

Paul,

Insightful as usual, thanks for sharing. Congrats to the Yankees, and Jeter as well.

I am not going to jump on the 'me too' bandwagon, but offer a link and then we can all think about the relevance to your post. I am not sure if you read Wired this past month, if not you should grab a copy. There are two interesting articles, which may offer a unique perspective here. The first is "The Good Enough Revolution: When Cheap and Simple Is Just Fine" http://www.wired.com/gadgets/miscellaneous/magazine/17-09/ff_goodenough.

In the article - New York University new-media studies professor Clay Shirky is quoted a few times. Now the context is media (not social, regular old media), so a little bit of a leap is in order, but not too much:

"There comes a point at which improving upon the thing that was important in the past is a bad move," Shirky said in a recent interview. "It's actually feeding competitive advantage to outsiders by not recognizing the value of other qualit ies." In other words, companies that focus on traditional measures of quality—fidelity, resolution, features—can become myopic and fail to address other, now essential attributes like convenience and shareability. And that means someone else can come along and drink their milk shake."

The second article is about Craigslist. The relevance here may be a greater leap, not sure...folks can decide for themselves. My connection is that it is utilitarian, it works and it does not change.

By the way, you did not hit on my biggest pet peeve in the hotel industry - WiFi. Why is it that the 'upscale' and 'cool' hotels, plus the highest level of brand hotels all charge a premium for WiFi, while the stalwart for the road warriors (Hilton Garden Inn and Marriott Courtyard) give you free WiFi?

Mitch

[twitter.com/wimrampen]

Great post and a great contribution by Esteban that asks the question most relevant in the Social CRM (#scrm) discussion of today. Both clearly explain that the total experience is what matters and that the total experience is dependent on numerous factors. Factors a company can think about and influence by design and execution as well as factors that truly personal.

It all starts with understanding a Customer's needs and desires and what it is Customer's are trying to do. Real value is created when the experience is customizable based on a specific Customer's needs & desires and those depend on all the different factors as you describe them in your examples above (and so eloquently put in context by Esteban).

That actually is a whole lot to accomplish for a company, and you ask the right question: Have you thought about this when building your SCRM strategy..

Let's be clear: this question was already relevant in the pre-scrm era and it will be in whatever era comes next. The newly available applications and channels have the power to make it so much more easy when used well. SocialCRM should be all about:
- Better understand the (specific) needs and the relative importance of all these needs in the total experience of your (specific) Customer (listen)
- (Co-)Create better = more personalized experiences, based on that needs & desired outcomes.

It is great to see that Social Media is embraced as "tooling" to engage with Customers in all kinds of functions. It is important to understand that engaging is not the primary goal or function, it is a means to the two points mentioned above. Those two points, in my view, make up for the difference between a Social Media (presence) Strategy or Social CRM Strategy.

Thx for putting Social Media and Social CRM in perspective of the Customer Experience.

Wim Rampen

[Esteban Kolsky]

Paul,

This goes straight to my heart, so this is going to be (probably) a long response. Feel free to delete if you think it takes too much space for no value.

I want to provide some input along three areas: context & intent, expectations, and subconscious choices.

1. context and intent. This is what most people in the CRM world call a personalized experience. The concept comes from NLP fields, but it applies quite well here. The content is the product or service. The context is the situation and environment in which takes place (which is usually partly personalized), and the intent is the actual intention for the product or service (let's talk about an electric shaver: the content is shaving your face, the context could be because you have to go work, or have to go out, or something else. the intent is actually the reason behind all that: you are shaving before going to work because you don't want to get fired - you need the money --- that is the real intent). As you can see, personalizing an experience is all about figuring out the context and "guesstimating" the intent (most often we need more information that is available to figure that out). Let's apply this to the Hudson (I happen to agree with you, the Allegro works well and the Hudson is so hip it hurts). The content is the hotel room with all accoutrement. The context is place to sleep, shower, store your stuff (that is what it does - right), and the intent is a place were you would like to be able to work, relax, watch some TV, etc -- depending on what you like to do in a room. So, the hotel creates the basic content (hotel room) and then the experience (context) of adding some things to the room to make ti distinctive (this is where Hudson failed). If they knew you well enough and what you like / want to do in a room they could personalize it (Wyndham does this quite well) where they keep your preferences nearby and they can stock a fridge with your preferences, or provide certain books, etc. So, the entire experience would consist from the basic, the differentiators, and the personalized. In this case, the margin of utility (intent) is deeply ingrained in you and is what makes you feel that the experience is very rich -- even if the utility is not met (for all intent and purposes, the Hudson failed at Context and Intent -- so no matter how good the content was there was no recovery).

2. Expectations. Somewhat similar to the above, but much simpler. You expect something out of a product or service - whether it is part of it or not. You may expect to have a comfortable desk chair as part of a room in a hotel -- the hotel only bother with providing you a chair. If it is a good one, your expectations are met and your opinion increases. Bad chair lowers the overall experiences - even if the bed or bath products are above standard. In this case designing experiences is a lot harder since you are highly unlikely to express (in same cases even know) what your overall expectations are across all areas (an experience is made of several smaller parts, not an entire event). Then, the hotel will try to aim higher than standard, but only manage to satisfy one portion of their client base (I am sure there is at least one person out there other than my brother than likes the Hudson). In this case, the margin of utility is made up of differentiators between a normal room or lobby and the hotel's understanding of exceeding expectations. this could be a lobby built by a hyper-cool person or exceptional service delivered impeccably through time.

3. subconscious choices. this is my favorite but not yet being played (actually, I saw last week that Colin Shaw is doing a webinar talking about this -- not sure how to use this in experience design as this is deeply personal and a psychology topic).so, the theory on this one says that your choices are not only governed by you needs but also but subtleties that only your subconscious detects. this is what makes you chose one thing over another even if they are both seemingly identical. there are small things that will make you go one way over another. so, if you could tap into those (there are studies that can pinpoint what those elements are in each experience - but hardly worth the costs to carry them out) elements for each experience, you could then design an experience at a level where the customer would not have a choice. there is supposedly no difference in between two restaurants that offer same food, same quality, same location -- but one of them just seems cleaner (maybe the hostess does not look like she missed a shower or two, or the uniforms on the waiters are a tad cleaner). these are elements that don't affect the experience (seemingly) and that you would not notice individually unless you were being extremely picky -- but you subconscious knows that cleanliness is tied to food and makes up the experience more complex by adding these elements to the decision. if you know all this things about your products or services, you can make sure that the hostess looks very sharp and that uniforms are always clean -- and that gives you an advantage. i don't think i know enough about either the Allegro or Hudson (or about the hotel choosing experience) to even imply how it went into making that decision. I am going to pass, but you are welcome to think of something (like the color of the lobby carpet).

So, let me wrap up my diatribe here.

The margin of utility you mention is real, and something that most experience designers (beyond the basic experience) rely on when building a new experience, or trying to compete aggressively without looking like they are. that utility becomes very real when seeking feedback, since you can collect the information you need directly from your customers to have them help you create the ultimate experience. imagine being able to know the subconscious elements that are repeated for several people and being able to target them when designing the experience! It is indeed that margin of utility that will allow you to differentiate without your competitors knowing how to (initially) compete with you or top you.

In other words, if you can tap into that -- you hit the mother lode.

Sorry for the long post, hoping you get something out of this crazy ad-lib. Just email me if you need more (oh, yeah -- there is more :)).