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My thoughts post conversation with Dave Carruthers

Ken |

I had a follow up talk with Dave after our conversation on the podcast. One of the first things he said was "hospitality is the root of every industry." The statement got me to thinking on what lessons can be learned from the hospitality and service industry that can be applied universally.

To explore this notion, I referred to Danny Meyer, the renowned restaurateur and founder of Union Square Hospitality Group. He defines hospitality as something much deeper and more personal than mere service. He views it as a profound emotional connection between the business and its customers.

Here are the key points to consider when reflecting on hospitality:

1. Hospitality vs. Service

  • Service: The technical delivery of a product or service (e.g., bringing a meal to the table).
  • Hospitality: How the delivery makes someone feel. It’s about creating a sense of warmth, care, and connection.

2. Hospitality is About How You Make People Feel

  • In his book, Setting the Table, Meyer defines hospitality as:
    • "How you make people feel while they are in your care."

      Hospitality is successful when guests feel that their needs are anticipated and that their presence is genuinely appreciated.

    • He emphasizes creating "an emotional context" that makes people feel valued, heard, and understood.

3. The "Virtuous Cycle" of Hospitality

    • Happy employees create better customer experiences.
    • Happy customers foster a thriving business.
    • A thriving business sustains happy employees.

4. The Five Stakeholders

  • Employees: Treating employees with care and respect so they can, in turn, care for customers.
  • Customers: Creating memorable, emotionally resonant experiences.
  • Community: Building a sense of connection with the local area.
  • Suppliers: Developing strong, mutually beneficial partnerships.
  • Investors: Delivering value by building a sustainable business.

5. Hospitality Hinges on “ABCD”

Always Be Collecting Dots (ABCD)

  • This means gathering information about customers, team members, and others to anticipate their needs.
  • Using this information to create personalized, meaningful moments is at the heart of great hospitality.

6. The 51 Percent Rule

  • Make sure employees possess 51% emotional intelligence and 49% technical skills.

    • Emotional intelligence includes qualities like empathy, kindness, optimism, and self-awareness.

    • These qualities are essential to delivering authentic hospitality.

7. Hospitality Extends Beyond Restaurants

  • Hospitality is universal and applies to all industries, not just restaurants. It’s about understanding what people need and ensuring they feel cared for.

    • Business, like life, is all about how you make people feel. It’s that simple, and it’s that hard.

In speaking with Dave and considering Meyer, I came to understand hospitality is the art of making people feel better about themselves because of their interaction with you. It’s about going beyond the transactional nature of service to foster a genuine emotional connection that makes people feel cared for, valued, and appreciated.

What would be the result if we applied lessons from hospitality to a financial institution such as a bank? They could possibly transform the institution's customer experience by fostering emotional connections, building trust, and creating a sense of care and value.

1. Focus on Emotional Connections

  • Hospitality Lesson: Hospitality thrives on creating personal, memorable experiences that make customers feel valued.

  • Application to a financial institution:

    • Train staff to prioritize building rapport with customers by remembering personal details, such as their preferences, major life milestones, or financial goals.

    • Foster genuine empathy when addressing customer concerns, whether in-person or online.

    • Personalize services to show that the bank understands and cares about each customer’s unique situation.

2. Anticipate Customer Needs

  • Hospitality Lesson: Great hospitality anticipates needs before they’re expressed.

  • Application to a financial institution:

    • Use data analytics to predict customer behavior and proactively offer solutions, such as suggesting refinancing options when rates drop or offering investment advice as customers approach retirement.

    • Make processes seamless and easy to navigate (e.g., pre-filling forms based on existing data).

    • Offer guidance on financial literacy or upcoming regulatory changes that could impact customers.

3. Prioritize the Experience

  • Hospitality Lesson: The experience is as important as the product itself.

  • Application to a financial institution:

    • Create welcoming, comfortable branch environments with thoughtful design, similar to a high-end hotel lobby.

    • Ensure digital platforms are user-friendly, visually appealing, and intuitive, making online banking a pleasant experience.

    • Simplify processes to reduce frustration, such as streamlining account opening or loan approval procedures.

4. The Power of Personalization

  • Hospitality Lesson: Tailored services create lasting impressions.

  • Application to a financial institution:

    • Offer customized financial products based on the customer’s financial history, goals, or life stage (e.g., student loans, first-time homebuyer programs, or retirement planning).

    • Send personalized messages or offers on birthdays, anniversaries, or other significant dates.

    • Host workshops or webinars tailored to specific customer demographics, such as small business owners or young professionals.

5. Emphasize Employee Engagement

  • Hospitality Lesson: Happy employees create better customer experiences.

  • Application to a financial institution:

    • Invest in employee training that emphasizes empathy, communication, and problem-solving.

    • Empower employees with the tools and authority to resolve customer issues promptly.

    • Celebrate employee achievements and create a positive workplace culture, as motivated employees deliver better service.

6. Consistency Across Channels

  • Hospitality Lesson: Whether in person or online, the customer experience should feel seamless and cohesive.

  • Application to a financial institution:

    • Align the in-branch experience with the online and mobile experience to ensure consistent messaging and quality.

    • Use a friendly, conversational tone in communications, whether it’s in-person interactions, emails, or app notifications.

    • Ensure all channels (branches, call centers, chatbots) have access to the same customer information to avoid frustrating repetition for the customer.

7. Surprise and Delight

  • Hospitality Lesson: Unexpected gestures create memorable experiences and customer loyalty.

  • Application to financial institution:

    • Offer small rewards or tokens of appreciation, such as fee waivers for long-time customers or complimentary financial reviews.

    • Celebrate significant milestones, like sending congratulations when a customer pays off a loan or achieves a financial goal.

    • Host appreciation events for loyal customers, such as exclusive financial planning seminars or networking opportunities.

8. Shift from Transactions to Relationships

  • Hospitality Lesson: The goal is to create long-term relationships, not just one-time transactions.

  • Application to a financial institution:

    • Take a consultative approach to interactions, focusing on helping customers achieve their goals rather than selling products.

    • Build trust by being transparent about fees, terms, and product recommendations.

    • Follow up with customers after major interactions (e.g., mortgage approvals, financial planning meetings) to ensure satisfaction.

By integrating lessons from the hospitality industry, a financial institution could transform their customer experience from transactional to relational. This approach not only builds trust and loyalty but also enhances the overall perception of the business as a customer-centric service, fostering long-term success.

What industry does your business compete in? Do you think the hospitality and service industry could create meaningful change for your business?

I'd love to hear your thoughts. Please contact me directly ken@inegmaconsulting.com or 587.574.9521

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