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  I've been stressing the difference between customer needs and customer wants. The hotel gave me the minimum I needed, but nothing more than that. And I don't think my expectations of something more were unreasonable.

  In fact, like most customer expectations today, my expectations of a hotel are high in relation to what is normally offered. But they are not high at all in relation to what is possible. Remembering the check-in information I put down on the loyalty rewards forms should be standard operating procedure. Thanks to new technology, the hotel industry has the opportunity to give much better service than the customer is used to experiencing.

  The hotel in St Kilda may not have figured this out yet, but the Four Seasons hotel chain has. The BusinessWeek top twenty-five listing of 'client-pleasing brands' (a customer service ranking) ranks Four Seasons Hotels and Resorts number two. Lexus, not surprisingly, ranks number seven. USAA, an insurance provider to mostly military families, is number one.

  Four Seasons, in the words of founder Isadore Sharp, set out to 'redefine luxury as service'. For instance, they implemented what they call 'curbside check-in' for frequent guests. When you arrive, you are literally handed your room keys as you get out of the car. Oh, and how many visits makes a 'frequent' guest? As few as five.

  The 'no luggage required' policy is a feature of the hotel to help guests who lose luggage in transit. Lost or forgot a tie? No worries – tell them what your suit looks like, they'll fix you up. Wait, what was that? You lost your whole suit? No worries – we'll fit you for a new one you can borrow.

  Consider the following stories that appeared in a US News & World Report article about Four Seasons hotels:

  A concierge donned fins and a snorkel to find a wedding band lost in a lagoon.

  A hotel telephone operator spent forty-five minutes on the phone directing a lost guest all the way to the hotel's entrance.

  A man asked room service for a martini shaker, only to find a tuxedoed server standing at his door – accessories in hand – ready to do the shaking.

  The results speak for themselves. A tiny 2 per cent of guests in 2006 reported problems or registered complaints about service (down from the lofty heights of 4 per cent in 2005 . . . oh the shame!) at the hotel. RevPAR (revenue per available room) was up 11.8 per cent in 2006, on the back of a 10.6 per cent rise in room rates, at the same time as a 70 basis point rise in occupancy. Gross revenues were up 10.5 per cent and operating profits 18.2 per cent. Four Seasons are committing to 20 per cent earnings growth for each of the next five years. Only an unstinting commitment to the customer experience makes this possible.

  DESIGNING THE TOTAL OWNERSHIP EXPERIENCE

  The Apple iPod is an excellent example of how all four fundamentals of the total ownership experience can come together to create profitable global hits.

  When the iPod came along it didn't sound better than existing digital music players and it cost more. Worse, it had lousy batteries that often failed long before they were supposed to.

  But thanks to Steve Jobs, whose brainchild it was, the iPod had a great marketing slogan, 'A thousand songs in your pocket', that instantly told the story of what it would do for customers in their daily lives. It had a distinctive look, a pure white rectangle with white bud earphones where other digital music players were all shiny metal and awkward, complicated shapes. And it set a new standard in ease of use and ergonomics on its own and in tandem with Apple's iTunes software. When Apple later launched the iTunes Music Store, customers finally had a compelling, comprehensive answer to their digital music player needs and wants. The battery problems, serious though they were and are, have never held the iPod back because of the way the product and iTunes work in customers' lives.

  As important to the rise and rise of the iPod is how people think they look when they're carrying their iPods and listening to them. They feel cool and believe they look cool. They are part of a hip community formed around and experienced through a commodity, just like the middle-aged businessmen who buy Harley-Davidson motorcycles and fantasise about riding them with Marlon Brando in the movie The Wild One or with Peter Fonda, Dennis Hopper and Jack Nicholson in Easy Rider.

  Part of the story of the iPod community even came to include the fact that the white bud earphones were a signal to muggers and pickpockets: this person has an iPod. In places like New York City it became a weird badge of honour that the pickpockets on the subway or the bus would focus on you because of your iPod earphones. It meant you were cool enough to have something worth stealing, something hot that everyone wanted. The New York Police Department and the Metropolitan Transit Authority even put up posters specifically warning iPod owners to be wary of pickpockets and other thieves.

  Popular retail chains can also engender loyal communities of customers. In the last chapter I spoke about the Uniqlo chain in Japan and elsewhere. In the United States the discount superstore Target has carved out a distinctive brand identity as the favourite discount store of design-conscious, hip consumers in all demographics. The millions who are in on the secret often refer to Target as 'Tar-zhay', as if it were a fancy French boutique. This brand identity, summed up in the slogan 'Expect More, Pay Less', allows Target to enjoy a price premium over rival retailers such as Wal-Mart and K-Mart.

  Target's formula for flipping the discount-store brand DNA around and making itself known for high-quality, well-designed products that it can charge a little extra for has two main prongs. One is a product mix that is on the cutting edge of customer trends, thanks to in-house trend-spotting and product lines from style gurus such as the fashion designers Isaac Mizrahi and Todd Oldham and the architect Michael Graves. The other is to have superb customer service that would be more expected from a luxury department store than a discounter. Both support the hip design- and value-conscious story that Target customers experience in shopping there.

  Target has not succeeded in establishing the same brand identity in Australia, but their recent deal with Stella McCartney, Paul McCartney's designer daughter, was a good step in the right direction. In March of 2007, Target launched an exclusive Stella McCartney clothing line at its Australian stores and triggered scenes of chaos. Racks in Target stores in Melbourne (where there were queues before opening – unheard of for Target in Australia) were cleared of the Stella garments in as little as forty-five seconds, with security having to be called in to keep the commotion under control. The scenes of women fighting with each other to 'steal a bargai?' was the stuff of reality TV programming. One hundred Target stores across Australia opened at eight-thirty am, only to be emptied of mid-sized Stella range dresses by twenty past nine. It was absolute chaos. People were actually stripping clothes off mannequins as they cleared the stores of stock.

  Target paid McCartney $1.27 million to design the one-off range of clothes exclusively for their stores. This is part of their move to position themselves at the 'high end' of the discount market. Target US last year teamed up with style guru Isaac Mizrahi for the same reason, and H&M have Madonna designing clothes for them in a similar push, as discussed in chapter 2, 'Fast, Good, Cheap – Pick 3.'

  However, a few weeks after these scenes of mass hysteria, a few articles surfaced which mentioned that the glow had worn off rather quickly. After the initial run on the products, they actually sold really slowly after the hype wore off, with Target only marginally (and sometimes not at all) meeting its sales targets (no pun intended). So while it was a great marketing coup initially, there wasn't really a sufficient follow-through.

  Nevertheless, this is a sign of things to come as Target attempts to carry their 'cheap chic' story to Australia from the US. In Australia, Target has lifted earnings 16 per cent to A$248 million on sales of A$3.2 billion.

  Cirque du Soleil is another great example of bringing the four elements together. From its origins in the work of two Montreal street performers, Guy Laliberté and Daniel Gauthier, Cirque du Soleil has become a worldwide phenomenon with multiple touring companies and permanent residencie
s at Walt Disney World in Orlando, Florida, and no less than four Las Vegas casino-hotels.

  The secret of Cirque du Soleil is nothing other than 'Superficial is Anything But'. Cirque du Soleil takes the traditional elements of circus performance and stitches them together into story concepts such as Love, an interpretive stage production done to a musical score of Beatles songs at a specially built theatre in the Mirage Hotel- Casino in Las Vegas; Kà, a martial arts fantasy performed at the MGM Grand in Las Vegas, or Mystère at the Treasure Island Resort in Las Vegas, which has as its theme the origins of life in the universe. Cirque du Soleil's other resident companies and touring productions have similar narrative themes that make the familiar circus formula of acrobats, animals and clowns new again.

  EVERY DECISION YOU MAKE MUST BUILD THE STORY

  In the last chapter I mentioned how Toyota has responded to the fact that all the major car manufacturers in North America, Europe, Japan and Korea now build good-quality cars. Toyota not only leverages its manufacturing and service expertise to maintain a lead in being fast, good and cheap in customers' eyes, it also adds an X-factor with innovations like its pioneering hybrid engine technology, and thus appeals to customers as 'Fast, Good, Cheap, Green – Pick 4'.

  Toyota has developed another X-factor in its Scion range of vehicles for Generation Y consumers, offering the attributes of 'Fast, Good, Cheap, Hip – Pick 4'. The Scion is a perfect fit for the customised car culture that has sprung up within the hip-hop generation of consumers worldwide, as evidenced by television shows such as MTV's Pimp My Ride. Toyota acted on this trend much sooner than the competition, just as it did with hybrid engines.

  Launched at the end of 2003, the Scion has been a smash hit. Dealers sell Scions as fast as they get them, and they reap significant marginal profit from customers' desire to customise their cars with side-panel graphics, roof racks for snowboards and mountain bikes, and so on. More on this in chapter 6, 'To Get Control, Give It Up'. These things have absolutely nothing to do with the vehicles' performance on the road and absolutely everything to do with their performance in customers' lives.

  At launch, Toyota set a 2006 target for US sales of 150,000 cars. In the early autumn of 2006, Toyota saw that it was on track to sell 175,000 Scions in the US by the end of the year. Industry analysts said that Toyota could quickly ramp up US sales to 250,000 Scions a year. But instead, Toyota did another flip. It looked at the prospect of those easy sales and huge profits and decided that ramping up sales volume would be foolish in the long run, because it would undermine the Scion's brand identity.

  Toyota announced that it would limit Scion production and distribution to ensure that it sold no more than 150,000 vehicles in the US in 2007. Further, it restricted Scion television advertising, which was never very extensive anyway, to a few late-night television shows – like Adult Swim on the Cartoon Network – that are popular with Generation Y consumers. It also suggested that it might eliminate Scion television advertising entirely and concentrate instead on event marketing and branded entertainment. The Scion play already includes a music label for emerging artists and the Scion Release clothing line. Instead of using commonly known sports stars or celebrities to sell their cars, they use DJs.

  The way Toyota USA vice-president Mark Templin puts it is, 'Because we no longer have to focus on brand awareness, we can be even more edgy and more risky.' The way I put it is, to sustain Scion's brand awareness as a vehicle that helps customers make their lives into a hip and exciting story, they have to become even more edgy and more risky.5 They have to do an even better job on 'Superficial is Anything But', and as the moves I've sketched out indicate they're well on the way to doing so.

  As this and previous examples show, designing the total ownership experience can have as much to do with process as product. In the case of Scion marketing, the medium is the message. DJs instead of celebrities. Edgy shows instead of mainstream. The differentiator in any particular instance depends on the story a product or service tells about customer?' lives, their aspirations and their sense of community. The story could emphasise simplicity, ease of use, beautiful design, community or some combination of these things.

  So to the big question:

  WHAT'S YOUR STORY?

  Bang & Olufsen, Toyota and other flipstars understand not just what their customers' desired story is but what their individual brands stand for. They find the common ground between their own reality and the wants of their customer, then design everything they do to build and tell a story that reflects that common ground. As you consider the competitive position of your company or your hopes for your own career, what compelling story can you offer to your customers, your staff or your employers?

  Finally, as you take the flip that 'Superficial is Anything Bu?' to heart, don't lose sight of the previous flip. 'Fast, Good, Cheap – Pick 3' is still the price of entry, and the standard of what constitutes fast, good and cheap is continually on the rise. You must have a solid product or service that matches your competitors' offerings, but to make your own offerings stand out from the pack you must also make magic from the small stuff.

  The story changes slightly from customer to customer, and it also changes for each individual customer over time. The point is that if you really want to distinguish your products or services from the competition, you have to give thought to the experiences that they engender or support. The products and services we love the most become part of the story of our lives.

  Five Things To Do Now

  1. Make a short list of your potential X-factors.

  2. Think about the sort of activities you could engage in for the social good. How could you leverage these to impress customers and attract more staff, in an authentic way?

  3. Pick one of your products and develop a story about why someone should buy that product, including detail, characterisation and language. Role-play it, pretending you are a customer telling your best friend why you spent a premium to buy this product instead of your competitors'.

  4. Do an 'Easy Audit'. That is, review your 'buying' and 'ongoing service' experiences and decide if they are designed to make life easier for you or for your customer. If they're designed to help you, change them so that they help the customer.

  5. Create two compelling lists. One for how your brand appeals to Aspirational Inside and another for how your brand appeals to Aspirational Outside.

  4 BUSINESS IS PERSONAL

  In The Godfather Part III, the murderous Don Licio Lucchesi (played by Enzo Robutti) tries to smooth over a difficult moment by telling Michael Corleone (Al Pacino), 'It's not personal, it's only business.'

  A client recently said the same thing to me in justifying why his bank was offshoring its call centre operations to Bangalore, India.

  'What do you mean, it is not personal?' I said. 'Forgetting that you are my client for a second, I am a customer of this bank and I have to tell you it is very personal to me. I have choices, you know. So do the rest of your customers. Other banks ask for our business every day with credit card offers in the mail and in their advertising. The interest you pay or charge us is no different from what it is at other banks and you tell me that banking is not a personal relationship. It is now, it was yesterday and it will be tomorrow. Besides, all business is personal. It is about trust, and when customers call the bank they want to feel comfortable with the people who answer and they want to feel respected by them. Outsourcing the customer service part of your business is insane in my view.'

  My protest was in vain. The decision had been made. I bet the decision will be reversed at some point in the future, but by then there is no telling how much damage the bank will have done to its customer relationships and its bottom line.

  I'll be coming back to my bank's decision a little later in this chapter, but I want to register the general point that, more than anything else in life, relationships rule. Most pundits in and out of the business world consider this the information age, or its recent fashionable variant, th
e knowledge age. We hear a lot about knowledge workers being the most important part of the economy, the ones who will reap the greatest benefits from the dizzying pace of technological, social and cultural change.

  Sure – but lots of people in developed countries are knowledge workers in some way, shape or form. Being a knowledge worker is not going to offer competitive advantage in and of itself. Not in a truly global economy, it won't. The pundits are living in the past. We are fast exiting the knowledge age and entering the relationship era. The what'sold- is-new-again flip is that 'Business is Personal'.

  I am not talking about the traditional cynical adage, 'It's not what you know, it's who you know that counts.' Although it is certainly a part of human nature that people look out for their family and friends and scratch each other's backs to get ahead, the ideas that what you know and who you know determine your success are both flawed because they are static rather than dynamic.

  In the years ahead, two things will count the most. The first is your ability to unlearn the things that are losing relevance, to flip yourself free of old scripts and to learn the things that are gaining relevance. The second is whether people come to know and trust you as they struggle to bring their own learning forward. That is, do you really care about and respect them? Sounds soft I know, but especially in western economies it will be the hardest of business imperatives.

  In early 2007, Ben Stein wrote an article in The New York Times called 'That hard rain that's falling on capitalism', which later appeared in The Age, talking about the success of capitalism over the past fifty years. It focused on a fear that this success may not be carried on into the future. Why? Because of a lack of trust.5 Capitalism is built on trust. Trust that the goods you send to your neighbour will be paid for. Or that the cheque you send to your supplier will be honoured by the bank where you have previously deposited your hardearned cash, and that your supplier will in turn send you the goods. Goods you bought, by the way, trusting that they will live up to the quality and performance that your supplier said they would. Capitalism is built on trust, and it is through building trust with your clients, customers and staff that you will future-proof your organisation.