So Market Gravity, why Canada? Because it's 2017.

And Canada. It's time to grow.

A few months back when Market Gravity were exploring the opportunity to establish a permanent presence in Canada with a local office, we met with a number of senior innovators at some of the country's biggest businesses to understand their needs. One of them asked me a rather simple but interesting question: what makes Canada interesting to a boutique firm with offices in the UK and US?

Over the past few months I’ve reflected on my response and discussed with tens of people and the more I think about it, it’s the most important thought in my mind right now as we properly establish ourselves.

Canada’s reputation in the world has always been strong, safe, friendly, reliable and well, nice. There’s almost an infinite amount of jokes about it – especially if you have an obsession with shows like ‘How I Met Your Mother’.

There’s almost an infinite amount of jokes about Canada – especially if you have an obsession with shows like ‘How I Met Your Mother’.

But, I digress. Ultimately, apart from its dramatic scenery, Canada has never really seemed that interesting to the world. In 2017, Canada’s 150th birthday, I believe that story is changing. The country is finally making its mark on the world.

Canada has always been wealthy. It’s always been safe. It’s pretty much always been very boring politically (I imagine you would struggle to name five Canadian prime ministers).

During the 2008 financial crisis, Canadian banks were much less impacted than their US and UK counterparts. Whether down to regulation or their own appetite to risk, they had played it safe. With large oil reserves in Alberta, Canada has a certain amount of wealth but at the same time a consciousness of the environmental impact of extracting it.

So what's changing?

One of their biggest challenges has been a brain drain of talent leaving the country. Whether that’s iconic actors or comedians heading for Hollywood, tech stars taking flight to Silicon Valley or top talent being poached by other global institutions (think Mark Carney). Canada has struggled to hold onto its top talent.

While this isn’t always a bad thing, countries need this talent and the confidence to retain it.  It’s something I am starting to see too. Whether that’s the ubiquitous Drake sightings in Toronto and not just at a Raptors game, or tech firms choosing to base themselves around world class ecosystems like Communitech at Kitchener / Waterloo.

It could also be that the nation is making a mark on the world stage. As political leaders like Trump and May add a little fear, Canada is now the world leader in liberalism. Regardless of your politics, Justin Trudeau has transformed the country’s image on the world stage compared to his predecessor.

Canada- a world leader in liberalism has had it's image transformed on the world stage by Prime Minister, Justin Trudeau.

In the year Canada turns 150, the country will welcome a new wave of immigrants that provide great diversity. It is the #1 place to visit on the New York Times' 52 Places to Go in 2017  list and most importantly, it will finally give Tim Hortons’ steeped tea and maple donuts to the world.

To come back to the original question ...

... of why Canada is interesting to Market Gravity. After spending much of the last two years working with fantastic companies like ATB Financial and Atlantic Lottery, we want to be a permanent part of this ecosystem. We want to design and launch the best customer propositions for a new world of ambitious and confident Canadian companies. And we want to do that with world class Canadian talent based out of our new home in Toronto.

If you flew on an Air Canada flight during the latter part of 2016, you will likely have seen this wonderfully confident statement to the world. I can think of no better way to sum up how the country is made interesting, because the world needs more Canada.

 

If you’d like to chat about ideas you have to launch a new proposition, how to overcome innovation challenges you’re facing or about our move to Canada- get in touch with Iain.

iain.montgomery@marketgravity.com


Does brand loyalty really pay?

The last blog I wrote here was a little bit of a rant about airlines, and I started thinking about this one as a rant about hotels, but then cleaned out my wallet and thought about loyalty in general.

I’ve got cards for Starbucks, Cafe Nero, Costa, a local coffee joint, Club Carlson, British Airways, Air France, Walgreens, Starwood, Rite Aid, Foodtown, Best Buy and a whole host of others I can’t remember.

Throw in the emails I get from most of the above plus Hotels.com, Verizon, Uber, Capital One, AMEX, Lastminute.com, Expedia, Avis et. al. and it’s all seems pretty pointless.

For instance, I’ve flown a lot on BA and spent thousands on their BA credit card but can’t redeem it due to a million Terms & Conditions. That means instead of being loyal to the OneWorld alliance I’ll use Star Alliance or SkyTeam carriers instead. So much for loyalty.

On a recent project we tested a rewards element with partner brands in Canada like WestJet or Chapters. It tested off the charts in quantitative surveys but during qualitative user testing, there was a common statement ‘What’s the catch?’. 

Further, in particular for airline, hotel or credit card loyalty is the bias towards business users. You could fly with the same airline or stay at the same hotel chain several times year, with your own money I might add and receive pretty much nothing at the end of it. Meanwhile the business traveller spending his employer’s money picks up all the perks. How is that fair?

In the retail world I can fill my wallet with every card under the sun, only get the discount if I have that card or collect 7 coffee stamps and lose the card before I get my free one. Alternatively, I can bloat Passbook or other loyalty apps with all these cards and slow down the check out process. All in all, it’s a pretty dire experience that damages the brand more than anything.

A recent McKinsey study showed those that spend more on loyalty, or have more visible loyalty programs, grow at about the same rate.

While brands do this to try and make you loyal they also want your data. That’s great for them but why can’t someone make this work for me? After all, that’s what will make me loyal to you!

Thankfully, there are a few good precedents here for companies doing this well.

Hotels.com 

Hotels.com Rewards is pretty damn simple. Book 10 nights, get 1 free.

I don’t need to stay at the same hotel 10 times or at the same price. Hotels.com takes the average value of those 10 stays and gives me that as a credit towards a future booking.

I’ve just spent an incredible amount of time staying at the Calgary Airport Radisson for a project and gained no status with Club Carlson but redeemed lots of rewards with Hotels.com. To book direct was always the same price or more with the hotel itself — bizarre given Hotels.com as an aggregator will take anywhere between 10–30% commission.

If only this existed with airlines…..

Boots

Recently Market Gravity worked with Boots to launch ‘Thoughtful Inspirations’.

Thoughtful Inspirations provides customers with a little extra something as a part of their online order. A recent trial inclued a No.7 beauty product for customers to try.

This initiative aims to reinforce Boots’ unique authority in beauty product range, encourage trial and re-purchase in store as well as re-introduce some brand love loyalty reward.

What I love about this example is that a reward feels so much more special to customers when they aren’t expecting it vs. when they are waiting for something good to happen. There are so many times with the latter when the customer is ultimately underwhelmed.

EasyJet

While most airlines offer a points based rewards scheme driven by how far you’ve flown or how expensive your tickets are, EasyJet offer a more simple solution.

Initially a bare bones budget airline, EasyJet started to develop as a business airline due to low fees and convenient routes. To better meet the needs of business travellers and maintain their business, EasyJet introduced the Plus card. With an annual fee of £170, EastJet Plus members get their choice of seat, fast track bag drop, security clearance and boarding as well as an additional cabin bag.

While £170 may be steep for ad hoc travellers, it makes sense for those who take frequent short breaks or travel for business without the need for a cumbersome, expensive backend system allocating and redeeming points here, there and everywhere.

American Express

 American Express have made the age old reward mechanism of points a little bit more accessible to customers. Customers enrolled in their Membership Rewards scheme can use their points to pay for small purchases like a McDonalds or a Uber ride. 

I like how this makes it easy to spend your reward points but the challenge is that I’m never sure if I’m actually getting a good deal on the points I’ve earned. How much are my points worth and what is the monetary value of paying for my cab in points vs. cash?

Apple

And remember, at the end of the day, if your product or service sucks….a loyalty program is not the right answer. Great products and experiences will develop a loyal following.

Because no blog these days doesn’t throw in an Apple precedent….


You can't innovate without insight

Last week I was at the Chief Innovation Officer Summit in San Francisco with some of the Market Gravity team.

Basically it’s a group of innovation officers, consultants and technology firms talking about all things ‘innovation’. I’m not entirely that term means much anymore. Process this, software that, talk of the ‘Uber for …’ and so on. It was pretty similar earlier this year at SXSW too.

Innovation is seen to be done by agile, tech savvy, nimble start ups who design something awesome and make corporates jealous. Well, kinda, but I’m not sure that’s the whole story. Not every start up is innovative, some are cool, some are awesome and life changing but many, and I mean a lot here, will fail.

So it’s weird then that corporate America has decided that the only way to be innovative is to try and act like a start-up. That’s great, have a hackathon, buy a start-up, get a ping pong table and tell your customers in your ads that ‘product x has a pedigree of innovation’ with Woodkid or Bastille as the soundtrack.

And while some of that is cool, and you might get a few quick wins, most of it is crap.

Example Time

Just take a minute to think why we all fall over in love with Uber or Airbnb.

Hailing a taxi in the rain or late at night sucks. Calling a minicab is annoying. Paying in cash or trying to swipe a card in the middle of the street while someone is honking behind is painful. Yellow cabs in NYC (and most other cities for that matter) are pretty grim.

Uber is great because it solves customer needs. It’s now easier to get a taxi to go where I want, for a good price and I don’t physically have to pay at the end. If there is an issue my driver, I can provide feedback and customer service immediately follow up on my issue.

All in all, a magical experience designed for people like me.

One more clichéd example. Chain hotels are boring and standards have slipped. Small hotels are often pretty budget. When I travel I want to stay somewhere cool and get a good idea of the local environment. Likewise, when I travel, it would be cool to offset my rent/mortgage.

Airbnb is great because I can stay in unique accommodation, often cheaper than a hotel and meet new people. Meanwhile I can rent my place out back home. Where else can you book a lighthouse, a treehouse, country home whether in Iceland, Paraguay or Russia all in one place?

How did they get this right? They understood the real customer need!

You (probably) don’t understand the customer

My issue with a lot of companies at the moment is many have never actually spoken to a customer. “Why speak to a customer when we can use surveys?”There’s a cool technology out there so they've decided to use it. Want an example here — see Oculus Rift. “Hey, wouldn't it be cool to do banking on this.”Erm, no, not really.

I read an article on just this yesterday by the wonderful FinTech guru, Liz Lumley — go read it!

If companies are trying to design for the customer then it’s often driven by some highly paid executive speculating what customers want. News flash, if you’re a 35 year veteran banker, engineer or marketer earning a 6 figure salary and a big bonus — you probably don’t understand the mass market, let alone a millennial, young family, single parent, OAP …. whatever. You also probably have a strong opinion that drowns out others in your company closer to these groups. It’s called HIPPO (highest paid person’s opinion).

Conveniently, there’s a good book out there

Dan Taylor from Market Gravity has a few good stories on this topic. Conveniently, he just wrote a book (that’s a plug to win brownie points) called The Secrets of Big Business Innovation. Funnily enough — one of those is get out the office, or as the Japanese say Genshi Genbutsu.

I’d also like to point out, getting close to customers doesn't mean you can just run a focus group. You won’t get a deep or honest enough understanding of a customer this way. Focus groups can be a quick and dirty way to test and iterate a concept but not good for primary insight.

On that note, don’t get hung up on the term insight. There’s blogs out there, like thisfrom Fahrenheit 212 founder Mark Payne, it’s long and I don’t really get the point. The short answer is go out there, learn something and take home a ‘so what’.

Just do it.

How do I do this? Well I’m the sort of person who enjoys people watching over coffee. Get out the office and check out your own company, speak to a customer in your branch, on your plane, in your hotel. Check out the competition, call the competition — pretend you’re an MBA student doing research and see what they tell you. Pay someone to experience your brand, make a mini documentary and show it to your team, your boss, your CEO. I guarantee it will have an impact.

Can’t be bothered to get out the office? Too busy? Well if you don’t want to watch your business become obsolete — try VoxPopMe. It’s awesome — you give them a question, they ask their panel, you get video responses recorded on their smartphones within the hour. It’s eye opening.

And whatever you do, don’t go creating a giant PowerPoint deck or Word report of your findings. Make it actionable, share it with the team, let them have their ‘A-ha’ moment.

Interpret the customer

Some might counter this and say “Well customers don’t know what they actually want”. You need to ask yourself if you interpreted them right. When customers in the 90s said they wanted bigger TVs, many took this literally and made ridiculously sized screens. It took piece of real insight to say “hold on, do they want a bigger screen or a better picture?” Say hello to High Definition TV!

You need to interpret the research to get to the right answer. Customers don’t know everything about the latest technology but will certainly point you in the right direction.

Insight doesn't stop there

Once you have understood the customer needs, you’re in prime position to be creative and come up with great ideas that customers might want.

Some ideas will be good, some bad. Got some ideas? Then go test them. Mock up an adcept and test it with customers through VoxPopMe, a web survey or in person with customers. Create a Lean Startup style landing page, tweet it, advertise it on Facebook etc. There is a great story in Dan’s book on how a team made one of these and pretended it was by a competitor to get attention in the boardroom.

You have to stay close to the customer throughout the innovation process — that means constantly testing and iterating. Techniques will vary depending on what you are testing but you can’t design around a survey or a focus group.

And if you’ve done it properly, you won’t end up with banking on an Oculus Rift, Pepsi AM, Google Wave or a newspaper app for Apple Watch.

And if that’s not enough — say hello to Market Gravity. It’s what we do — Discover the true customer need, Design a great customer led proposition and Deliver a fully tested and robust prototype.


The US Airline Industry is broken, it's about time someone fixed it

“Offer the best to the passengers and people will fly with you”, says Sheikh Ahmed, Chairman of Emirates.

I read this statement as part of an article on a recent story about US airlines trying to stop Middle Eastern carriers operating direct flights from Europe to the USA. You can understand why he said it based upon the experience flying in North America – something I’ve been doing a lot of lately.

Now before I go on a rant, I’d like to point out I’m a big fan of budget air travel. If I’m in Europe I’ll still choose to fly with Ryanair over a flag carrier because it’s just so cheap.

In the US, cheap isn’t really an option yet the service on all the major carriers is pretty much as bad as or worse than Ryanair. JetBlue until recently used to be the last bastion of a customer focussed experience but scrapped this under pressure from investors and quickly added 4% to the share price by announcing baggage fees and tighter leg room.

You may ask why is this important? Well America, air travel sucks. Every carrier has chopped leg room, flies aging old aircraft, charges for baggage and provides ‘customer service’ that may as well not exist. The aim of this has been to boost ancillary revenue and cut costs. The impact of that is we’re approaching a race to the bottom.

Now when I book a trip to the US I’m looking for the lowest fare. End of. I have no loyalty to any carrier, I get little in return – only those flying business class every week really benefit. So while the analysts on Wall Street might like this for short term gain, over the long term airlines aren’t building loyal customer relationships.

Now look at Ryanair again. After years re-writing the rule book of European aviation, squeezing every last penny of costs out of the business, charging low fares and profiting from ancillary revenue they hit a wall. Customers decided it wasn’t worth the hassle and were switching to the likes of EasyJet who offered a less stressful and (slightly) more meaningful experience with happier staff and an EasyJet Plus programme.

Ryanair quickly changed tack, apologized and started to look at the customer. Their Labs programme is looking at ways to improve the customer experience. Recently results show them already seeing the benefit of this.

For EasyJet in the US, see Virgin America.

So US Airways, United, American Airlines, JetBlue, Delta, Spirit et al. Please think longer term, think about the customer experience because no matter what you tell us. Flying isn’t like the glory days. It’s the worst part of my week. Here’s a few simple ideas.

  • Don’t cram in all those extra rows of seats. I’ll pay more for my ticket but I don’t want to pay extra fees for legroom seats. I’m only 6ft2 but it makes the experience crappy for not only me, but the guy in front with my knees in his back.
  • Offer a meaningful loyalty programme I can see some benefit from. See Hotels.com for their super simple loyalty offering.
  • Make a nice mobile app so I don’t have to deal with your terrible website. Tell me when my flight is delayed so I don’t have to scan the airport screens.
  • Don’t sell me terrible food and little drinks at extortionate prices. I’ll happily pay a fair price for something edible rather than rush at the airport.
  • Don’t charge punitive fees for baggage – it means me and my fellow passengers crush too much in our hand luggage then you run out of space in the overhead bins. Alternatively, work with the airlines to create more space in the cabin.
  • Partner with companies looking to get their brand out there. Birchbox succeeded by finding a model to distribute small samples. I’m sure food or toiletries brands would love to access a captive audience.
  • Make your cabins more comfortable. Be prepared to introduce design features like the Paperclip armrest, couch style seating for families/couples or the fixed headrest so I can get some sleep.
  • Let me rate the service I receive – airline customer service used to be the best, now it’s terrible. I can rate my Uber driver, why not the stewardess? I might get a smile then. Let them rate passengers in return and have it count against their frequent flier status.
  • Airlines invented the yield management pricing system but do a terrible job of short term pricing. That’s why HitList is such a good app. If American Airlines have spare seats out of NYC for the weekend, tell me about it and give me a deal. You’ll win my business.

I’m sure there’s a tonne of other great ideas here. It’s about time the industry changed and the US carriers are at the back of the line.

Maybe in future years I’ll be on US carriers for long haul services instead of always choosing the European, Asian, Middle Eastern or South American option.