On Purpose

by Shaun Smith

  We started by looking at the target audience. The people who like citizenM are people who are young at heart. They are very well informed. They have technology at their fingertips so they can compare prices very quickly. They know the value, say, of the dollar or euro or pound, and they are willing to pay for certain luxuries, but they are not willing to be taken for a ride.

  We took a two-tier approach: first, what is their lifestyle? We were looking at other brands that they associate themselves with or the aspirational brands that they want to be associated with. And then, second, looking at them in terms of the hotel experience. What do they like? What frustrates them?

  These people are contemporary travellers. They know how to book a flight online. They get their QR code so they don’t need to print out the boarding pass. They carry hand luggage only. They are not going to pack their large-size shampoo or water bottle, because they know they are going to get stopped at security. So it’s all about speed and efficiency for these people.

  When it comes to their lifestyle, it’s a little bit of mix and match. People want to spend their money on certain luxuries, but for other things they prefer to buy what is smart and efficient. I describe this social group in this way: ‘They travel by train but drink champagne.’

  Out of all that data came the idea of these mobile citizens. So we said: ‘Let’s actually name the brand after our target audience: citizenM.’

  Stand out – infectious communication

  Then we started looking at how to communicate with them. When we first launched in 2008, a lot of the social channels weren’t really there. So we did a lot of communication through our own channels, such as our own website, to tell the story. We made a brand movie to show this big idea: why we were doing this; not how good we are or how cool our rooms are or our technology, but why there is a need for this. Why this hotel is for you.

  Social content is used to communicate why you should book citizenM. Genuine reviews from guests who have actually stayed with us are pulled in from TripAdvisor. We also have our citizenMag that is based on the target customer’s lifestyle and what is relevant content for these people when they stay in different cities. What do they do there? Where do they eat? Where do they drink? Where do they go for a morning run? What is a cool little trail that only the locals would know? More and more people want this kind of local experience when they travel. We have customers who are contributors to citizenMag from all around the world; it’s a platform for our customers to share.

  The way that we usually run campaigns is to start with a teaser, often on Facebook, to engage with people. For example, when we came to New York, we had a campaign called: ‘Letters to Locals’. We wrote a letter to famous New Yorkers in a very kind of naive way: we wrote to Andy Warhol, to Donald Trump, to JayZ. One of the letters was to Woody Allen asking him to make a little promotional film for our new hotel in Times Square: ‘Something along the lines of your most famous film – Manhattan, not Antz.’

  We’re shooting a video with a very famous stop-animation artist called Pez who is making a one-minute movie for us about affordable luxury. He usually averages about 1 million hits per video. So we’re doing a lot of things online just to get the buzz going. And it’s measurable. That’s the nice thing about online. I’d rather invest in that than putting a big billboard on Times Square, because how do you measure the impact of that?

  Stand out – distinctive customer experience

  We thought long and hard about our marketing communication: how do we advertise? How do we communicate? We came up with the idea of a tone of voice that is about communicating directly: ‘citizenM says’. Our citizenM sayings are very, very strong and we use that as the basis for our communication platform. We came up with an idea to use traditional hotel clichés and exaggerate them to our benefit. In London our main tagline was: ‘London, you look like you need a new place to sleep.’ We also had taglines like: ‘citizenM says: Death to the trouser press,’ or, ‘citizenM says: ‘Why pay for bits of a hotel you don’t need?’ Then we pushed the boundaries a little bit more, so one said: ‘citizenM says: Stay in a hotel that is 400 metres from here and a million miles from the Hilton.’

  Image 5.4 citizenM marketing communication

  We rented a stretch limo in New York and had a huge poster stuck on the side that said: ‘Luxury isn’t a long car; it’s free Wi-Fi and free movies on demand.’ Then we took the car and took pictures of it in front of the Marriott and the Sheraton. The Marriott got angry with us. We actually wanted to park the limo and get it towed away. We also got the classic luggage trolley that bellboys use, and we put branding on it saying: ‘Luxury isn’t a bellboy taking your luggage up to your room, it’s fresh cappuccino and free Wi-Fi.’ We took the trolley to the other hotels and took pictures of it in front of them. All of this created great content for our own social channels.

  We think about the complete end-to-end customer experience. The customer has been inspired through awareness to come to our website. Then comes the critical decision moment: why should I book citizenM? So you need to provide justification. Why is this better for you than staying at the Sheraton or the Marriott or some other hotel? Then comes the actual booking moment: how easy is your booking process? What happens after booking? What should the pre-stay communication be like? For example: ‘Thank you for booking with citizenM, we’re looking forward to receiving you on this and this date. You’re staying in London. By the way, did you know that the Tate Modern is showing an exhibition by Roy Lichtenstein? Click here for discounted tickets, brought to you by citizenM. Borough Market is serving fantastic burgers on Saturday, you should check it out.’ Pre-stay communication is very important.

  Then of course you have the actual experience of staying at the hotel. I think that we have this down pretty well. But what happens post-stay? You’ve checked out, we should communicate to you right away: ‘Thank you for coming.’ Maybe get some feedback. Write a review. Or give the guest a special promotion for the next time they come. Inform them about our up and coming hotels that are opening. That means the next time they don’t need to come in through the awareness channel. They come in straight at the booking stage.

  We need to be up to date on what is happening. To be very well informed about what is happening in industries such as art and fashion and media and technology. To be aware as to where the customers’ preferences are shifting and where the trends are going. I always put myself in the shoes of the customer and I speak to people in different industries just to keep my fingers on the pulse of what is happening, Otherwise how do you stay on top of the trends? You need to be relevant for customers going forward otherwise you die. Let’s put it this way, if we had simply recreated citizenM Schipol in New York, I’m not sure if it would really still be innovative because we have taken the brand further. And of course the technology has improved. Our check-in is faster. We have the tablets in the rooms. We now have digital art screens in New York.

  We are continuing to define the brand as we progress: for example, I’m busy creating a sonic identity; we are also creating a citizenM olfactive identity. The whole olfactive brand exercise is very interesting. I found a company in New York called 1229 and spent the whole day with the ‘nose’. I wanted her to really experience citizenM, so she stayed in London for one or two days, and I sat down with her and spoke to her about the brand and then we did the actual exercise of the scenting.

  She told me, ‘Before we start, I’m not a psychiatrist. Don’t tell me about your childhood memories when you smell these smells, but I want your emotional reaction to these smells. Do you think the smell fits with citizenM, yes or no?’ It’s very difficult to do but within 20–25 minutes she started to make me smell things that made me say, ‘Yes, this is citizenM!’ Finally, she says, ‘I know what citizenM smells like. It smells like this. Maybe a little lighter.’ All I could say is, ‘Yes, you’re right.’

  I think technology is the key to o
ur future. Take the whole online experience. How to make that as easy as possible? I really believe in a one-click booking. That would be fantastic. I could just go to citizenM and click. Don’t worry about payment.

  What keeps us focused is staying true to the reason of why we are doing what we’re doing. Don’t deviate from that, because along the path there will be a lot of people who are going to tell you, ‘You can’t do that, you can’t do this, it’s not possible. It’s never been done before.’ But as long as you stay true to what you are trying to accomplish, you will get there.’

  Stand out – continuous innovation

  We spoke to Lennert de Jong, citizenCommercial.

  Rattan has this vision of changing the industry, it was his sense of purpose that drove us to challenge how the hotel business operates. Our model is anchored in three core pillars: first, the way you construct a hotel, the cost of construction, your carbon footprint while doing it, the amount of ground you ask mother earth to supply to your building all have an impact. We’ve only done modular buildings. For example, in Bankside we had the first plough into the ground in July 2011 and we opened in June 2012. It was a fully finished hotel, on budget and delivered ahead of time. This efficiency creates a saving for the consumer, so for the same amount of money others spend on a budget hotel we can make a luxury hotel.

  The second pillar is the labour. Again it’s a consequence. If you construct a smaller building you have less space for an office for the hotel manager, for the assistant hotel manager, for the director of sales, director of marketing, reservations manager, the telephone team. The labour and the third pillar, the way you sell the hotel, work hand in hand.

  We said we are going to run it like a Starbucks, whereby the hotel team delivers the experience to the guests. In order to do that we have to be, not the headquarters, but the support office, so what we need is to hire experts who can take away the burden of running the functions from the hotels. By having a hotel team that is purely focused on guest satisfaction you eliminate a lot of duplication.

  The fact that you do things smarter in distribution leads to the fact that you have fewer people and lower costs. But the thing that makes us really different is the mentality of our people. Our hotel managers understand most the people component, what makes a good team, what is a bad team and what makes a good interaction with a guest versus a bad interaction with a guest. Our people are available to do everything and anything. They will never say, ‘It’s not my job.’ If you say,’ I want a ticket for the tram,’ or, ‘Can you get me a taxi,’ they will never say, ‘Oh, ask the concierge.’

  The check-in at a normal hotel is nothing about providing a service; it is all about performing a process. We give the responsibility for the check-in process to you. The ambassador is standing next to you, he doesn’t have a task to perform; he’s just there to make sure you’re okay and that you’re happy. I think that frequent travellers don’t experience the human touch very often. I travel a lot and I see when people are process oriented, and when people are people oriented. I get irritated when people are just process focused and they don’t look at me like a person, or treat me as an individual.

  The third pillar is my area, the distribution cost pillar, or the way we sell. If an operator has a hotel with 200 rooms they start selling a year in advance to reduce their risk, because the main risk with a hotel room is that you don’t sell it. It’s like fruit, if you haven’t sold it in three days it starts to rot; in a hotel it’s more extreme, if you haven’t sold the room today it’s gone, you don’t get the opportunity to sell it again.

  So what do hotels do? Let’s say the hotel needs to achieve an average rate of €100 per room per night. They have promised the owners a rate of €100 and an occupancy of 75 per cent. So they start with airline crews; they contract long term with KLM for a very low price, let’s say €60, then they sell to tour operators who contract a year out at a discounted rate also. Let’s say they block a certain percentage of rooms at €70 for the tour operators. Then they approach the corporates; let’s say Microsoft because they are around the corner from the hotel at the airport, and they contract for a certain volume at €90. And then the remainder is filled up with people who they call ‘traditional transient business’. These are customers who make their individual purchase decisions, like you and me; they don’t have a contract, and they go online or they call you directly to ask for a room rate. This is the cherry on the pie; this is where hotels make their money; this individual doesn’t have purchasing power, he or she needs the room on this date and you have one. This is the marketplace that you see on booking.com and others. But in order to achieve your average €100 rate you need to charge this guest €140 to €150. I was checking in to the Novotel in Bankside in London just before we opened. I got a deal for £225 at their friends and family rate. Checking in next to me was a French couple with a child and they were paying £80 in total for the night; so that’s kind of the discrepancy we’re talking about – you pay more the closer you book to the stay.

  We said we’re not going to do business with airline crews, we’re not going to do business with tour operators and we’re not going to do fixed corporate rates – for two reasons. First, we did not want to have to compensate for this business by placing more costs on our most desired segment. That is not good for us at citizenM. Second, it’s not good for the people we’re really after, those people that make online purchases. So we took a gamble and said, we can do this, we can live without 50 per cent of the normal hotel business, and just target the other 50 per cent. But we won’t compete at €140 or €150, we start at €100 and we stay in this middle area. We used to call this the ‘affordable luxury gap’; if you look at that area between low quality/low price and high quality/high price, we really want to be delivering higher quality at a lower price. Guess what? This segment is also the most likely to review your performance online, on sites such as TripAdvisor. It also gives us flexibility in managing demand because we are not locked into advance contracts. If demand is very low because of a terrorist attack or a crisis or whatever we can change the rates. On any day we have an answer to the demand that is there; sometimes it’s a lower price, sometimes it’s a higher price.

  It is my job to maximize the citizenM proposition and its revenue potential, but I cannot mess it up. What I mean by that is if I charge so much that you have the feeling that you didn’t get a good deal. We have to say, this is the maximum I’m going to charge. There’s an annual convention in Amsterdam in the second week of September and hotels will charge up to €600 or €700. Our rates will go up and down, but not to the extremes you see with a lot of other hotels. With us the swings in Amsterdam are between €89 and €199. At the same time we were one of the first to provide free Wi-Fi and free movies. It is about removing the things that irritate the customers.

  The hotel industry has consolidated so much that it seems like every hotel company has eight sub-brands and they are all based around one thing, their loyalty programme. But the game is changing, people no longer rely on the Holiday Inn logo, for example, to know that the hotel is good and of a certain quality – technology enables the customer to see on their phone or device what is a good hotel and what is a bad hotel; I think that this transparency is catching the top five brands with their trousers around their ankles. They have not invested sufficiently in creating a distinctive customer experience, they have not invested in the staff; they’ve invested in a loyalty programme that is costing them a lot of money. I think there is an opportunity for a brand like citizenM. The more transparent and bigger the portals like booking.com and others get, the more helpful it is for us, because they expose everyone who is not delivering the value that we are trying to deliver. That’s where our opportunity lies.

  Part Three

  Stand firm

  So far in this book we have talked about the importance of standing up, through having a clear sense of purpose, and standing out, d
elivering that purpose through distinctive marketing and customer experience. The third element to being a purposeful organization is the ability to sustain itself over the long term. What we call standing firm. We think there are three elements to this: 1) possessing a ‘cult-like culture’; 2) creating a distinctive employee experience; and 3) measuring both the employee and customer experience to fuel continued improvement. While ‘cult-like culture’ may sound a bit sinister we mean it in the most positive sense. If you think of those communities that are strongest and completely aligned around a common purpose you will find that they have internal cultures that are unique and serve to protect and sustain the organization.

  Take organizations as different as the United States Marines Corps, Manchester United Football Club or Disney and you will find common characteristics: a strong sense of why they exist, shared heritage, clear values and how these require the members of that organization to behave. You can almost see a thread that weaves from the purpose to the values to the behaviour. And if you were an outsider looking in and observing the ways that these organizations and their people speak, dress and behave you might conclude that they are, indeed, a cult.

  Every organization has a culture, for better or worse, just like every organization delivers a customer experience, for better or worse. What matters is that it is the one you intend and that it serves to sustain your differentiation. Some writers suggest that a strong culture inhibits innovation because it seeks to maintain the status quo and discourages fresh thinking: so-called ‘group think’. Others argue that if the culture is one that rewards the right behaviour then the culture becomes self-renewing. We would agree with the latter point of view. For us, a ‘cult-like’ culture is one that can be defined in much the same way as a distinctive customer experience – ‘consistent, intentional, differentiated and valuable’ – valuable in this context meaning that it creates long-term value for the enterprise.