ServicesMarketing:

People,Technology,Strategy

(8thedition,2016)

CASE6

KIWIEXPERIENCE

OVERVIEW

KiwiExperience(KE)isanadventuretransportnetworkformedinDecember1988bythree

partners.Theyrecentlycelebratedtheir28thbirthday,andmorethan400,000passengers

havenowhadaKE“experience”.KEisacustomer-centricadventureoperatorthatstrivesto

passontotheircustomersoneofthebestmomentsspentintheirlifetime.KEzeroesinto

someoftheprimary/goldenrulesofbusinessendearing,i.e.,innovation,word-of-mouth

advertising,packagecustomizationspecificallyindefiningitstargetmarket,tie-upsfor

discountsandprivilegeswithpartiesofrelevanceandinterest,strategicrecruitmentand

selection,customerengagement,andrespondingtotheircomplaints,ifany.

ApartfromallthenichesKEhasbeenengrossedwith,oneamongthemisawaytoobeyond

andperfectexampleofoneofitskind,i.e.,everysinglestaffhasaroletoplaywithwhenit

comestointeractingwiththecustomers;defyingthecommonmyththatonlymarketing

peoplearetheoneswhoactasbrandambassadorstoanycompany.KEbelievesthatevery

workingmemberofthecompanyirrespectiveofhisprofile(HR,Finance,Purchase,Admin,

etc.)shouldgetchancetomeettheircustomers(throughBBQs,etc.)andgettoknowwho

theircustomersareandhowtheyfeelaboutthecompanytheyareworkingwith.

___________________

?2016MarkColgate

TEACHINGOBJECTIVES

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1.Tointroducetheconceptofbusinesssustenanceandprofitabilitythroughstrategicplanningandimplementation.

2.Toobservehowthemodelofbeing“customer-centric”canwinnewcustomers

throughout,inthelongrun.

3.Todeveloptheinsightbehindthesocializingofin-houseemployeeslikeaccountantandotherstaffswithcustomers.

4.Tounderstandtheprocessofdevisingrecruitmentandselectionproceduralforspecificdivisionofemployees.

5.Tounderstandtheroleofcultureandleadershipinthesuccessofthecompany.

STUDYQUESTIONS

1.HowdoesKiwiExperiencemaintainacontinualcustomerfocus?

2.WhatroledoescultureandleadershipplayinthesuccessofKiwiExperience?

3.Brainstormastohowotherservicecompaniesmightgetcustomerstopayamoreactiverole(ratherthanpassive)intheserviceexperience.

ANALYSIS

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1.HowdoesKEmaintainacontinualcustomerfocus?

KEhasaselectclassofspecificallytargetcustomersintheagegroupof18to35years.Knowingexactlywhotheircustomerswerewashalfthebattlewon.KEhadbeensuccessfulingettingthroughthemindsofthesecategoricalcustomersandchalkingouttheirpsychebeforetheystartedtheirtour.

KEensuredtheoverseasprospects(astheyformthebulkpartoftheirbusiness)arewell-informedthroughplacingleafletsinbackpackers’andyouthhostelslocatedatcommonlyvisiteddestinationsthatbackpackersvisitbeforetheycometoNewZealand,suchasHawaii,Sydney,BangkokandFiji.OncethebackpackerswereinNewZealand,KEusedpeoplecalled“streetfighters”—backpackerswhohandedoutbrochuresatrailwayterminalsandbusstationsthroughoutthegatewaycitiesofAucklandandChristchurch.Theyalsospreadthewordthroughbackpackerhostels.KEpreferredrecruitingbackpackerswhohavehadthe‘Experience’astheyweremoreinformed,motivatedandcrediblecommunicatorswhocouldselltheKEservicebetterthananyoneelse.KE,itseemed,reallydidfightforeverycustomertheycouldget.KEalsocreatedtheirownpropagandaletterscalled“Bullsheets”,whichtheysenttotheirmajorbookingagentsinNewZealand.ThismoveenabledagentstobebetterinformedabouttheserviceKEoffered.Finally,KEtriedtoensuretheirservicewasmentionedinpopulartravelguidessuchasLonelyPlanet,whichwaswidelyreadbybackpackers.

MarketresearchhasshowntheinteractionbetweenthecustomersonthebuswasthesecondmostimportantpartofaKEtrip.Backpackersgenerallyenjoyedmeetingotherlike-mindedpeople,whichwasthenatureoftheirtrip.KEdidseveralthingstoensuretheyachievedthecorrectcustomermixonthebuses,andthatcustomersinteractedwelltogether.Toavoidanynegativecustomerexperience,KEdidnothesitatetoboard-off(withfullrefund)anycustomerwhofailedtobepartoftheKEengagementandmightactasathreattoother’senjoyment.

Thedriverencouragedsocialinteractionbetweencustomersonthebus.Thisenableddifferentcustomerstomeeteachotherandformbondsandfriendshipsatanearlystagewithinthetrip.Thismayincreasethepositiveexperiencescustomershaveontheirbus,whichshouldpositivelyimpactontheimpressioncustomershaveontheoveralltrip.The

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driversusuallyencouragedinteractionthroughgroupmealsandsocialactivitiesintheevening,suchasfancydresscompetitions.

Also,theflexibilityKEprovidedtoitscustomersingettingofffromthebuswherevertheylikedandcouldagainusethecommutingservicesaslongastheyremainedundervalidityisalsoattractivetoitscustomers.Apartfrombeingconcernedaboutexpensesincurredontickets(astheydevisedvalue-for-moneytours),oneofKE’smajorappealswastheenormousamountofpaidexcursionsandactivitiesthatwereonoffer.Fromswimmingwithdolphinstoaerobaticflights,thelistwasendless.BypurchasingaKEbusticket,apassengerwasalsoentitledtodiscountsonmanyactivitiesthroughoutNewZealand.ThiswasonewaythatKEattemptedtoexceedtheexpectationscustomersmayhave,evenbeforethestartofthetrip.Secondly,backpackerswereusuallyadventurerswhowerelookingforexcitementandactivitiesthatwouldchallengethem.Byofferingtheseactivities,KEwasfulfillingthesecustomerneeds.

EngagementamongcustomerswastakenseriouslyatKE,withthemregularlytakinggroupphotosofallthosepresentonabustrip.ThisespeciallyworkedwhenKEputinitsappealforword-of-mouthpromotionfromitscustomers.KEensuredthataconstant(excellent)standardofqualitywasmaintainedsoastoprotecttheirbrandimage.

2.WhatroledoescultureandleadershipplayinthesuccessofKE?

Acompany’scultureplaysaparticularlycriticalroleindeterminingwhetherastrategicvisionwouldbesuccessfullypursued.Theculturemustbecompatibleandsupportiveofthevision.Leadershiphadsometimesbeendescribedastakingpeopletoaplacethattheywouldnotnormallygotoontheirown.Onceasoundstrategicplanningprocesshasdeterminedwhatthatplaceshouldbe,itwastheleader’sprimeandfundamentalresponsibilitytoassurethattherewasculturalalignmentwiththevisionandthatthefullresourcesoftheorganizationwereeffectivelybroughttobeartoachievethatdestination.

OneoftheDirectors,NeilGeddes,wasaskedwhatmadetheKEsogoodandhehadasimple

reply:

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“Weensurewegivethecustomerwhattheywantbetterthananyoneelse.Ourserviceisnotdesignedaroundwhatisgoodforthedrivers;itisdesignedaroundwhatisgoodforthecustomer.Weareclosetoourmarket;weareproudtobeclosetoourmarket.Whenwe[thedirectorsofKE]travel,westayinbackpackers’hostels,soastolearnandunderstandwhatthemarketwants.Thatishowweensurethatwealwaysofferthebestpossibleserviceforourclients.Thatisourcorestrengt.h”

KEhadtriedtogetallitsstaffworkingwithinthebusinesstointeractwithcustomers.Forexample,therewasaBBQatabackpacker’shostelinAucklandrecently,atwhichKEhadtheiraccountantsandotherstaffstomeettheguests.Ingeneral,thisgroupofstaffdidnotusuallycomeindirectcontactwithcustomers,butthiseventgavethemabetterunderstandingofwhoKE’scustomerswere,andwheretheycamefrom.

Beingfirstinthemarketplacehadalsohelped,asitmeantthatKEgainedaleadinunderstandingwhattheirtargetmarketwantedandhowtoservicetheseneedseffectively.ThisunderstandinghasledKEstafftocomprehendhowitwasforboththedriverofthecoachandtheinteractionbetweenbackpackers,whichinturn,helpedcreatethe“KEExperience”.

KEalsosurveyedcustomersoneverysinglebus.Oneofthedirectorsandtheoperationsmanagerwouldreadthesesurveyssoastomonitorwhatwashappening.Theythenusedthesesurveystoimprovetheirservicetothemarketplace.Althoughtheircoreexperiencehasremainedthesame,theycontinuallytryandaddvaluetotheirservice.TheKiwiExperienceconceptwasbasedonbeingthebestinthemarketforpeopleseekingadventure,valueformoneyandamemorytobank.

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3.Brainstormastohowotherservicecompaniesmightgetcustomerstopayamoreactiverole(ratherthanpassive)intheserviceexperience.

Inthegivencontext,othercompaniesmightgetcustomerstopayamoreactiverole(ratherthanpassive)intheserviceexperiencebyadoptingfollowing:

?Followtheleaderinthegivendomainandadopteffectiveandeventfulpracticesasmuch(resourcefully)aspossible.

?Innovationorcreatinganicheisthegoldenruletoriseinserviceindustry.Adedicatedteammaybeassignedwithexclusiveroletocreatenoveltyamongtheexistingones.

?Tie-upswithotherbusinessescomplementingone’sownaddsvalue.Customerscangetextendedbenefitsintermsofprivilegesanddiscountswithothervendorswithsuchcollaborations.

?Identifyingcustomerswiththepotentialtospreadthepositivefeedback.Word-of-mouthisthemosteffectiveadvertisingmodel.

?Recruitmentandselectionshouldmaintaindisciplineatthehighestleveltoascertainthebesttalentinthecompany.

?Servicefailuresmustneverbeignored.Instead,itshouldbeappropriatelyreportedwitheveryminutedetailwhereverpossible.

?Feedbackshouldbeconsideredinpriorityandacteduponwithimmediateeffect.

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TEACHINGSUGGESTIONS

TheinstructorshouldmakeitapointtodistributetheoriginalcaseofKEto