It would seem that summer has officially kicked into gear. Holidays can be a great time to recharge for many and re-imagine for some. In my experience entrepreneurs by nature are often doing the latter. We’re always thinking of new and exciting ideas, and it’s frequently when we step away from the busyness of life, that the best thoughts come forth.
For those of you who have attended one of my keynotes or workshops, you’ll know I am a big fan of disruption – at least from a marketing perspective. Disruptive companies challenge convention, change their product or offering in a unique way, and usually alter one of the 4Ps of marketing – product, price, place (distribution), or promotion. The really disruptive ones take a run at all four. Re-imagining is the first step to disruption.
So this week, I’m going to challenge you to do just that. Re-imagine something about your business or your life with an eye to disrupt your category. To get the creative juices flowing, we’re going to look at some examples from the hotel and travel industry. I figure that’s in keeping with the holiday theme and just might engage you if I happen to have landed in a hammock with you (on your iPad of course!) Cubicle farmers, take this as your opportunity to look busy…
Disrupting the accommodations industry: Airbnb was founded in 2008 in San Francisco as a trusted community marketplace for people to list, discover, and book unique accommodations around the world – online or from a mobile phone. They boast 15 million plus guests, 34,000 plus cities, with 600,000 plus listings worldwide in 190 countries. At the forefront of the “sharing economy” they essentially brought the eBay and Craigslist approach to accommodations, branding the portal for listing and booking like a higher end hotel chain, and ensuring some turnkey standards of the experience along the way. It’s no mistake that two of the three founding partners come from an industrial design background. The other is an engineer. While initially dismissed as a niche offering, a recent round of financing now pegs them at a $10 billion valuation, making them worth more than most large hotel chains including the Hyatt and Wyndham. Yes, they are the world’s largest hotel chain, and they don’t own a single property, nor have the expense of property maintenance or staffing. Airbnb is a classic example of disruptive innovation. They started with an under served market and are now moving mainstream. Cleverly they are now extending beyond the leisure market and appealing to business travelers. It’s the same moving mainstream model that Southwest and Westjet airlines both used successfully. www.airbnb.ca disrupted the product, the pricing, the promotion and the place (distribution) of the marketing mix.
The first Ace Hotel opened in 1999 in Seattle, WA. It was a transformed halfway house, meant to appeal to the creative class. The hotel partners had previously founded Rudy’s, an edgy Seattle barbershop concept that eventually expanded to more than a dozen West Coast locations. There are now Ace Hotels in London, LA, New York, Palm Springs, Portland, Seattle and Panama. The properties are all unique pieces of architecture, renovated to reflect impeccable attention to design savvy detail, and offer authentic experiences reflective of their particular locations. The Portland location is run by classic hipsters, serving Stumptown espresso, and locally grown spelt bread with unsweetened hazelnut spread for breakfast. While most rooms have classic king and queen style beds, some can be had with bunk beds or shared bathrooms at a cheaper rate. Rooms are furnished with locally sourced artisan fare such as hand knit blankets and pottery, flatscreen TVs, free wifi, and many have an acoustic guitar, turntable and vinyl records – just because. The stairs are encouraged, there are bikes to use and they’ll loan you an umbrella. You get the picture. They proudly boast that their authentic approach is why people want to sleep with them. Enough said. Ace Hotels disrupted the product experience, went from initially serving a budget market, to being able to serve a very top end market at top end prices – many times in the same hotel, disrupting the pricing model. They also disrupted promotions simply because they don’t advertise. They let word of mouth do it all. www.acehotel.com
Ever wonder why check out has to be at 11am, when check in is 4pm, and there might not even be anyone taking your room anyway? So did the Olsen Hotel, a stylish 5 star hotel in Melbourne, Australia. They offer the world’s latest check out. Their promotion means that if your room is not needed by another guest later that day or even the next, you can stay on absolutely free. All you need to do is call reception in the morning and find out when the next guest is due to arrive. It’s simple and it’s honest. There are no limits, so technically if there is no booking behind you, you are welcome to continue as long as you like – quite revolutionary. Of course the hotel is popular, so the likelihood of a huge extended stay is probably limited, and most travelers have some sort of schedule that would prevent over indulgence, but the fact that they’ve erred on your side and were honest about it, makes them a winner. Of course they encourage folks to post photos to their Facebook page or on Twitter and Instagram telling others about their overstay, or what they did with their additional time in Melbourne. The value of the free publicity gained I’m sure far exceeds the costs of awarding some late checkouts or extended stays for free. Check out this short video about the promotion. http://vimeo.com/53397052 It’s a cheeky and memorable visual. The Olsen disrupted the product and service offering by challenging industry convention. They also disrupted the promotions model by brilliantly leveraging social media in their favour.
While more and more hotels are adapting a pet friendly policy, the industry standard is still to leave fido at home. France has been a leader in this area for decades. Seems the French know how to treat their furry friends like family. I remember cycling in Corsica with my husband, and seeing a couple of customer’s dogs scurrying about chasing a cat in the kitchen of the quaint little restaurant we were dining in. It was memorable particularly because of the barks, squeals, shouts and the emerging pot of bouillabaisse we had ordered; all delivered like things were normal. When in Whistler we often stay at the Coast Blackcomb Suites, primarily because there is an included buffet breakfast that will feed two hungry teens, but also for the pure entertainment and convenience of bringing the dog along. My theory is that human nature is a great regulator. Usually only well-behaved dogs are paraded since the poorly behaved ones are a reflection on their owner. They do have pet-free rooms for those who may have allergies, and they simply charge a $25 fee for the dog, donating 10% of the fee to WAG, the local animal shelter. Nice. They disrupted an accepted industry policy, kind of like the Olsen Hotel.
Disrupting the airline industry: First came Derrie-air Airline, a fictitious airline trumped up by a Philadelphia newspaper running fake ads, to prove people still read newspapers. The premise was simple enough. Sell airline seats by weight, just like meat at the deli. If you weigh more, you pay more to fly. The promotion dates to 2008 and the accompanying website is now defunct, but the ads touting Chicago for $1.40/lb were brilliant.
Flash forward to 2013, when Samoa Air became the world’s first airline to charge passengers by the pound – for real! Seems the nickel and diming for an extra bag wasn’t doing it, and they cut to the heart of the problem. When passengers book, they note an estimated weight for the fare to be calculated on, then when they check in any discrepancies are recalculated along with the inclusion of their baggage weight. Current charges for flights off the island range from .44 to .94¢ per kilo. Could this be the way of the future? What do you think? Here’s a link to a video of the news item: http://www.cbsnews.com/news/plane-travel-by-the-pound-samoa-air-says-charging-passengers-by-weight-is-paying-off/ Samoa Air disrupted the pricing model for their industry.
Disrupting the car rental industry: Conventional wisdom says when you need to rent a car in a visiting city while on holidays or for business, you turn to a conventional car rental company like Hertz, Budget, Tilden or Avis. But what if you are part of the “sharing economy” (think Airbnb success), that says, why own or rent when you can simply share? Car share co-ops have sprung up in urban centers worldwide. Initially targeted at locals who need a car occasionally but not wanting to pay to service it or park it expensively year round, car share companies are now targeting travelers with success. At Zipcar for example, with one simple annual membership, you can access cars around the world. Memberships start at $6/month and driving rates are $7-8/hr. The best part is cars are often available in convenient locations throughout a city. Picture a tourist or businessperson who simply needs it for several hours and doesn’t want to pay for an entire day or parking. Cars can be located with an app on your phone, booked on online on the spot, and a keyless entry code is sent to access them. Zipcar is set to disrupt the car rental industry through product distribution and booking, as well a pricing. www.zipcar.ca
Hopefully these themed holiday disruptions will cause you to re-imagine and disrupt something about your own business. Or maybe they’ll simply serve as inspiration for your next holiday booking, and that’s OK too!