Lessons From The Overlook: Experience Your Customers' Experience

Jeff Toister May 23, 2017

Note: Lessons from The Overlook is a monthly update on lessons learned from owning a vacation rental property in the Southern California mountain town of Idyllwild. It's a hands-on opportunity to apply some of the techniques I advise my clients to use. You can find past updates here.

Guest experience was initially a blind spot at The Overlook.

When we bought the property last October, our property manager did a property walk-through with us and gave her assessment. That was helpful, but we didn't have a lot of data other than that.

How were we going to find out what our guests liked or disliked? Or how we could make their stay align with our customer service vision, Welcome to your mountain community retreat?

Most people would default to a guest survey. We did that (through our property manager), but we also used two techniques that are arguably more powerful in this situation: experience and observation.

Here's what we did and how you can use these concepts, too.

Experience Your Product or Service

The first thing we did when we bought The Overlook was spend a weekend.

The house was already a vacation rental and it was sold turnkey, which meant it came fully furnished. What we didn't know was whether those furnishings were adequate.

You can learn a lot when you experience your product or service the way a customer would. For example, it might be easy to miss a few burned out lightbulbs if you weren't relaxing at the dining table underneath your faux-antler chandelier.

So we tried to experience everything a guest would experience. We slept in each bedroom, used each bathroom, cooked in the kitchen, watched TV, and used the internet. We even brought our dog to see how comfortable she would be.

This experience allowed us to experience The Overlook the way a guest would experience it. We might not represent every guest, but we could still use empathetic insight to imagine what guests might like and what they probably wouldn't.

Then we made a list of everything we felt was sub-par and made improvements. We went back a few times over the next several weeks to make updates and complete some minor repairs.

A few weeks later, we returned once again. This time we booked our stay through our property manager's website. We wanted to experience the entire reservation process and then see what it was like when The Overlook was prepped for guests.

It's amazing how many small things you can discover this way. For example, we noticed we often had to find creative ways to store leftovers after cooking a meal. We figured our guests would feel the same way, so we added some extra tupperware to the kitchen.

Lesson Learned: Try mystery shopping your own business so you can experience a product or service the way a customer would. You might notice opportunities for improvement from a whole new perspective.

Observe How Customers Use Your Product or Service

Another exercise we did was to visit The Overlook several times immediately after guests checked out.

Our timing was critical because our property manager inspects the property after each stay and then sends a cleaning crew in to clean the house so it's ready for the next guests.

Our goal was to see the cabin before the inspection. We wanted to see it exactly our our guests left it. In particular, we looked for four things:

What was dirty?
What was moved?
What was damaged?
What was missing?

This exercise gave us insight into how our guests used the cabin. Here are some examples:

We got clues about how guests used the kitchen by what was dirty and what had been moved from it's original location. This helped us better organize and stock the kitchen.

One particular vase was always moved from its original location. This signaled to us that it was in our guests' way. They were likely moving it to make more room for their stuff, so we just removed it completely.

Plates and glasses sometimes get damaged, too. Some guests will notify our property manager, but other guests will try to hide the damaged dish in a cupboard or fail to mention a broken glass. Looking for those items allows us to replace them.

Lesson Learned: Observe how your guests use your product or service. You'll almost certainly gain insight that you'd never get from a survey.

Conclusion

It's always good to have data from multiple sources. We look at our guest survey data and combine it with our experience and observation data.

For instance, our guest observations tell us that the typical guest uses 75-100% of the bath towels. That's not surprising since we provide eight sets of towels, our max capacity is eight, and we tend to get a lot of groups that size.

Our survey revealed that guests would like even more towels because they often shower after a sweaty hike and then use the hot tub later in the evening. Using the same towel more than once in a day get leave it feeling a bit soggy.

We're working on that one now.

Lessons from The Overlook: Know Your Financials

Jeff Toister April 20, 2017

Many customer service leaders tell me they struggle with financials.

Things like margin, variable costs, and fixed costs are a mystery. Capital expense doesn't make any sense at all. Cost centers are confounding.

This makes it difficult to ask for money.

You might want to invest in new technology, hire more staff, or boost wages to improve retention. Knowing the cost isn't enough. Fluffy platitudes about investing in service won't get you there, either.

You need to convince executives there's a financial benefit to spending that money.

I can relate. My wife, Sally, and I wanted to turn the garage at our vacation rental property into a game room. But first, we had to run the numbers.

Why We Wanted a Game Room

We thought it would be a great addition for our guests.

An analysis of similar vacation homes in the area revealed that guests generally looked for a few benefits:

A well-equipped kitchen
Expansive views
A spa
A deck
Walking distance to town

Our property, The Overlook, already has all of those features except for walking distance to town. Pretty difficult to change that one.

A few rentals had a game room, which many guests called out as an added benefit, though not the primary reason they booked. Most game rooms had a pool table in a kitschy room that looked like somebody's basement from the 80s.

We thought we could do better.

The Overlook has a detached single car garage. Guests don't expect to park in a garage, so we thought we could make better use of the space. Our vision was to finish off the garage and put in a ping pong table.

Truth be told, we also really wanted a ping pong table to enjoy ourselves.

Running the Numbers

First, it's important to know exactly how much adding a game room would cost.

We had a few contractors come out to give us estimates. It wasn't pretty. The garage needed a new roof, a new side door, and new windows. The roll-up garage door was unsightly. The floor wasn't level.

Total price tag, including a ping pong table, was $16,500.

Now that we knew the cost, we had to calculate the return. What would we gain financially from having a game room.

We talked to our property manager. She told us that in her experience, game rooms were nice added features, but it would be difficult to justify a rate increase on that alone.

This actually jibed with our earlier analysis that guests liked game rooms, but it wasn't a primary factor when booking a rental.

If we couldn't get a rate increase, could we get more bookings?

There are two factors that might drive this:

The game room could be a tie-breaker between two similar properties
Guests might be more likely to return if they enjoyed the game room

We didn't have a lot of data here, having only owned The Overlook since last October. So we took a guess.

The Overlook was already booked most weekends during the busy winter season. A game room couldn't improve upon that. But perhaps we could gain two extra rentals during the summer.

Here's how that works out:

Rate: $325 for two nights, $275 for each additional night.
Average stay: 2.5 nights
Total gain: $975

Would you spend $16,500 to gain $975 per year? Wait, the math gets worse.

Our nightly rate includes the cleaning fee. We also have to pay our management company and some other miscellaneous fees. That means our take on the $975 is really about $500.

Here's our payback calculation:

$16,500 ÷ $500 = 33

This means it will take us 33 years for the game room to pay off. Suddenly, that game room seems like a terrible business decision.

Apply This Lesson to Your Business

Let's step through what we did to run the numbers. You can apply the same lesson to an investment you want to make in your own business.

Step 1: Identify the costs. Know exactly what you're getting into. For instance, if you want to add staff, the cost isn't just their wage. It's the cost of employment taxes, benefits, equipment, etc. Costs are almost always underestimated.

Step 2: Identify the financial benefits. Do your homework to get an accurate estimate. Many leaders make the mistake of making up numbers without doing their research. Those estimates are almost always too optimistic. For The Overlook, we analyzed the competition and talked to our experienced property manager who oversees more than 40 properties.

Step 3: Calculate Your Return. The easiest way to do this is to divide the cost by the gain. This will tell you the amount of time it will take for that investment to pay off. Hint: executives usually want to see unplanned investments payoff within the current fiscal year.

Epilogue

There's one more lesson you can take from our game room example.

You can often find money in the budget for a project that the business owner or a key executive passionately believes in, even if the financial return isn't there. This means you need to do more than just run the numbers.

You need to get your executive emotionally committed.

In our case, we imagined epic ping pong battles with family and friends. We wanted to put barn doors on the garage that opened wide in the summer to let in the cool mountain air. Perhaps a couple of bar stools for guests to sit on while waiting for the next game.

It was a terrible investment, but we really, really wanted a ping pong table. So yeah, we did it.

Lessons from the Overlook: How Standardization Drives Service

Jeff Toister March 23, 2017

When my wife, Sally, and I purchased The Overlook, we had a lot of big ideas.

We wanted our place to be unique, with a lot of value-added touches that would wow our guests and make them want to return over and over again.

So we brainstormed a list of ideas:

Leave bottle of local wine on the counter as a guest amenity?
Give our guests free firewood in the wintertime?
Put high quality toiletries in all the bathrooms?

It turned out the best way to wow our guests was to do none of these things. The biggest reason wasn't cost, although cost certainly was important.

It was standardization. Here's why standardization is crucial to service.

Fear of Service Failure

When we thought about extras at The Overlook, we also worried about service failure.

In their outstanding book, The Effortless Experience, authors Matt Dixon, Nick Toman, and Rick Delisi make a compelling argument that service failures have a much greater impact on customers than wow moments.

That's because people naturally tend to have a negativity bias. Negative experiences are much more memorable and are more likely to sway future behavior than positive ones.

What happens if one guest gets a bottle of wine, tells people about it, but the bottle of wine fails to appear for the next guest?

What happens if we promise free firewood (so guests don't bring any of their own), but the firewood isn't there when guests arrive late on a cold winter night?

What happens if the fancy toiletries aren't replenished and the bathrooms look like the last guest just left a few half-empty bottles behind that weren't removed by the cleaning crew?

We were concerned about all of these potential failures because we knew we'd need to rely on our property manager to handle any extras. Our property management company has a well-defined, standardized process for servicing the 40+ homes it manages.

Asking them to change their routine for just us would be begging for trouble.

How Variables Create Failure

Think about cleaning and re-stocking a vacation cabin from an operations perspective. The easiest way to ensure consistency is to standardize.

Write standard procedures.
Train everyone to follow those procedures.
Stock standard replenishment items (paper towels, toilet paper, soap, etc.)

Our property management company has it down to a science. There are even standard sheets and towels so linens can quickly be replaced without having to launder everything onsite.

Now, imagine changing everything for just one house.

The procedures change. You need to remind employees to follow the different procedures, and you need to remind them again because the same employees might not service the house each time. You also need to stock special supplies and make sure you don't run out for just that one cabin.

All of those variables are a recipe for things "falling through the cracks."

Even big companies struggle with this. For example, extreme variability is one of the reasons why McDonald's has struggled with service and food quality.

The Standardization Cure

You're much more likely to deliver consistently excellent service if you can standardize your service delivery process. With that in mind, we couldn't just consider our own cabin. We had to think of it from our property manager's perspective. (This is an important aspect of partnership, a topic I covered last month.)

All of our original ideas required our property manager to deviate from a standard procedure.

So we re-thought our approach and came up with some new ideas that didn't require our property management company to alter its normal routine:

Idea #1: Don't charge for snow removal. Standard procedure was for our property manager to shovel and plow snow at each cabin whenever a snow storm hit. It's a required safety item, but most cabin owners charge for this service. We decided to pay for it ourselves.

Idea #2: Stock back-up dishes. Most vacation rental guests expect a few cracked plates or mis-matched dishes. We put in an entire set of matching dishes and then added some back-ups to our owner's closet. Once a month, we inspect the cabin ourselves and replace any broken or missing items so the kitchen feels fully-stocked. (Many guests have commented on this.)

Idea #3: Stock extra kitchen items. The Overlook has four bedrooms, so it's really geared for families or couples traveling together. That means they'll cook a few nice meals in the cabin, so we made sure the kitchen was stocked with items you don't normally find in a vacation rental: a crockpot, extra tupperware, a full set of pots and pans, and even an apron for the chef. It turns out this has become one of the biggest delights for our guests!

Idea #4: Remove clutter. We talked to many people who regularly rent vacation cabins and one of their top pet peeves was clutter. They'd say, "How can I put my stuff somewhere if the owner's stuff is all over the place?!" So we went through the entire cabin and kept every table, counter, nightstand, and chest of drawers as clutter-free as possible.

Idea #5: Provide a nice guest book. The typical vacation cabin has a ratty three-ring binder that contains all of the house rules, instructions for using various items, and information about the local area. We spent a few extra dollars and created a beautiful bound book on Shutterfly. It's a classier way to share the same information.

In his new book, Kaleidoscope, customer service guru Chip Bell calls these items value-unique. They don't necessarily cost a lot of money, but they make The Overlook standout compared to other options.

We've been lucky so far. It's been booked nearly every weekend.

Lessons from The Overlook: Find the Right Partners

Jeff Toister February 16, 2017

Chances are you rely on partners to help serve your customers.

It might be a vendor, a supplier, or a delivery company. Your organization may even outsource the customer service function to another firm.

Choosing the right partners is essential.

My wife, Sally, and I own a vacation rental property in the Southern California mountain town of Idyllwild. Called The Overlook, our cabin is a two hour drive from our home in San Diego.

Needless to say, we must rely on several partners to keep our guests happy.

We count on partners to book guest rentals, keep the cabin clean, make repairs, and keep the utilities running.

Here's how we do it and how you can too.

But first, what's a partner?

I use the term partner to describe just about anyone who is not an employee that helps you deliver customer service. This could be a specific person or a company.

Here are just a few examples:

Delivery companies
Repair technicians
Suppliers
Contract or contingent labor
Marketing agencies
Business process outsources (ex: outsourced contact centers)
Cleaning and janitorial services
Technology providers (communications, software, etc.)

Great employees are essential to outstanding customer service, but your partners play an important role, too!

Now, here's how to find a partner that will treat your customers right.

Step 1: Identify Key Characteristics

It's helpful to decide what qualities make a great partner before you start searching.

Some people make one of these big mistakes when finding a partner:

Focusing solely on price
Exclusively choosing well-known companies
Picking partners because they are nice

There's nothing wrong with any of those qualities, but I recommend you dig a bit deeper. Look for partners who can align with your customer service vision.

The customer service vision for The Overlook is:

Welcome to your mountain community retreat.

So naturally we searched for partners who fit three criteria:

Are they welcoming?
Are they part of the Idyllwild mountain community?
Are they responsive?

That last part was key because we want our guests to feel like The Overlook is a retreat. To us, this implies relaxation. It's hard to relax when you need something and the owners are two hours away, so we need partners who can be responsive!

Step 2: Screen Potential Partners for Vision Alignment

The next step is to screen potential partners to see if they can truly align with your customer service vision.

For example, we contacted several companies to discuss managing our property. This is an essential role since the property manager oversees guest bookings, day-to-day customer service, cleaning, and maintenance.

One of the companies was a big-name property manager that had a centralized contact center and dedicated sales team. That's fine, but we wanted to know if this company was truly part of the local community, so we called the company's local office directly. The local manager never returned our call, which told us we'd probably get poor service from this person.

The property manager we did select, Idyllwild Vacation Cabins, was a different story. The owner, Martha Sanchez, agreed to meet us at the cabin to show us how she would manage the property and to give us tips to make it more appealing to renters. (Very welcoming!)

We also asked around the community and discovered she was well-known and had a good reputation.

And Martha is extremely responsive. She gave us her cell phone number and we soon found she is always quick to return a call or text.

Step 3: Develop a Partnership

Ditch the "customer is always right" mantra.

A true partnership is a two-way relationship. This means you need to invest in your partner's success just as much as they're investing in yours.

Go out of your way to be helpful. Make it easy for your partner to serve your customers. And be sure to live your customer service vision when it comes to working with your partner too.

That's why we try to be welcoming to our partners. We want them to accept us as part of the Idyllwild community, so we work hard to build positive relationships. And we're always responsive because we know our partners have a job to do too.

Jon Millhouse, our real estate agent at Town Real Estate, is another great example.

He went out of his way to give contractors access to the cabin so they could bid on a few upgrade projects without us having to drive all the way up from San Diego. And he did this even after the sale was final and he was no longer obligated to help us!

It turns out Jon is also an incredible photographer, and he let us use his photos for our website. You can find Jon's photography here.

Bonus Tip: Don't forget your neighbors

The Overlook is located in a quiet residential neighborhood. The people who live on both sides of our cabin live there full time.

This makes them essential partners!

Not long after buying the cabin, we went over to each neighbor's house to introduce ourselves. We brought some homemade fudge and a card with our contact information.

Lucky for us, our neighbors couldn't have been nicer!

They immediately realized how we could help each other. Our neighbors offered to keep an eye on our place and let us know if anything seemed amiss. In return, we told them it was our intention to ensure our guests didn't cause any problems and asked them to let us know if there were any issues (noise, damage, etc.) so that we could address it immediately.

Many businesses have neighbors who share an office building, a retail center, or some other space. It's always a good idea to build good relationships with your neighbors so you can help each other.

Lessons from The Overlook: Prioritization

Jeff Toister January 10, 2017

Note: Lessons from The Overlook is a monthly update on lessons learned from owning a vacation rental property in the Southern California mountain town of Idyllwild. This experience is a hands-on opportunity to apply some of the techniques I advise my clients to use.

People misuse the word priority all the time.

It literally means one thing is more important than another, but business leaders often forget that. They'll say strange things to employees like "you need to juggle multiple priorities," which makes no sense given that nothing gets prioritized when you try to make everything a priority.

Sally and I knew we needed to prioritize our work on The Overlook when we bought it. We both have full-time jobs that involve a lot of travel, so time was already scarce.

I had envisioned myself exploring some of the many hikes in the area or building a website to showcase the cabin, but that would have to wait.

Our immediate challenge was we closed escrow on October 6 and needed to get the house back on the rental market by November 1. There were already guest reservations for November, which is peak rental season for Idyllwild.

Idyllwild's hiking trails would have to wait. Photo credit: Jeff Toister

Safety is Priority One

You never want anyone to get injured. You really never want anyone injured when they're a guest on your property.

The Overlook needed a few safety repairs that were called out in our home inspection. For example, the gap between the railing boards on our deck was too wide in places and we needed to add some additional wood to make it safe.

So a lot of our precious time in October was spent finding a licensed contractor to do the job and coordinating the work from our home two hours away in San Diego.

Sally and I also had to consider our own safety. Many people get into business without thinking about the appropriate type of organization (sole proprietor, LLC, Corporation, etc.) or insurance.

We spent a lot of time on both.

Our attorney, Ric Bauman, is incredibly efficient and cost-effective, but it still takes time to organize documents, set up appointments, etc. I shudder to think how much time we'd waste if we didn't have someone like him on our side.

Insurance was even more difficult since we had the double-whammy disadvantage of buying a home in a wild fire hazard area and wanting to use it as a vacation rental. Surprisingly few highly rated companies write policies for these types of properties, but we managed to get a good deal through a Farmer's Insurance agent who understood our needs.

Function was Priority Two

Safety issues out of the way, we had to turn our attention to making the cabin functional for our guests.

There were a few things that needed attention. The internet, cable, and phone took untold hours and 23 contacts with Time Warner Cable to get up and running.

We also needed to add some furniture to the master bedroom. (The previous owners had closed off this room to renters for some reason, so it was sparsely furnished.) Our property manager had scheduled time to take pictures to add to her website, so we ended up having just two days to get it done.

Living Spaces really saved us here after we spent half a day hitting up used furniture stores and consignment shops. They have a huge selection of reasonably-priced, high-quality furniture. We found a nice dresser and matching nightstands that could be delivered to our home the same day we bought them. This allowed us to haul them up to the cabin the next day.

There were a million other things for us to do too. We had to replace cracked dishes, get some electrical repairs done, and add in some additional items we know guests will appreciate like an iron and ironing board.

The Big Takeaway on Prioritization

October was a whirlwind, but we got the important things done.

I really wanted to spend time on fun things to help us offer an amazing guest experience, like mapping the guest journey, creating a kick-ass guidebook for the house, and turning the garage into a game room.

Those are all items that will get done eventually, but they didn't need to get done in time for the renters who had booked the place in November. Safety and functionality came first so our guests would have a nice place to stay.

This exercise was a big reminder on the importance of prioritization. There were times when Sally and I didn't know when we'd find the time. Whenever we felt this way, we went back to our priorities and set aside any task that wasn't red hot urgent.

You can apply this lesson too.

Take a moment to clarify your priorities. These could come from your values, your business plan, or a separate exercise. Then use those priorities as a guide to help you manage your time.

Reflecting back on last October, I was reminded that the best customer service leaders embrace prioritization. They understand they can't do everything at once, so they do what needs to be done now and do it well, before moving on to something else.

The good news is The Overlook looks great and our guests have been thrilled so far. We even survived a heater that went kaput right before guests arrived on the coldest day of the year, but that's a story for next month.

Introducing The Overlook, a New Customer Service Venture

Jeff Toister December 6, 2016

In October, I started a new customer service venture with my wife, Sally.

We purchased a vacation rental cabin called The Overlook. It's a four bedroom, three bath home located in the Southern California mountain town of Idyllwild. There are huge sunset views overlooking the valley below, a nice fireplace to keep the cabin warm in the winter, and a hot tub on a private deck that's perfect for relaxing.

The Overlook is part vacation home (we love the mountains) and part investment since we're hoping the rental income will cover our expenses. Running a vacation rental also provides us the opportunity to try out some of the same customer service techniques that I advise my clients to use.

Each month, I'll report back on our progress and share a few things I've learned. This month's focus is customer service vision.

What is a customer service vision?

A customer service vision is a shared definition of outstanding customer service.

It's something I advise all my clients to have. When properly implemented, the vision guides strategic decisions, tactical choices, and even our daily activities. (Here's a handy explainer.)

Our vision for The Overlook is Welcome to your mountain community retreat.

Each word was carefully chosen:

Welcome: we want our guests to feel welcome throughout their stay.
Your: we want our guests to feel like the place is their own, so they'll treat it well while they're there and return on a regular basis.
Mountain: Guests come here for the mountains, so we'll emphasize that experience.
Community: We want our guests to experience that charming small-town friendliness that comes with being part of a rural community.
Retreat: A mountain cabin like The Overlook is a place to get away from it all, so we want to help our guests relax.

We think this vision fits The Overlook nicely, but we'll be listening closely to our guests to make sure. (More on that in a future post.)

For now, we believe it fits the bill because town of Idyllwild is a popular weekend destination for people living in Southern California. It provides a perfect base for hiking, mountain biking, or just enjoying the fresh mountain air and scenery. It's also a great place to visit for local art, with an impressive array of artists, music, and entertainment for a small town of 3,500 people.

Many people I know tell me, "I love Idyllwild! My family has been spending weekends there for many years."

How a Vision Points the Way

Our customer service vision serves as a guide for every decision we make.

For example, we needed to hire a property manager to handle marketing, reservations, guest service, maintenance, and cleaning. The success or failure of the property rides on this decision, so it's important to get it right.

We hired Idyllwild Vacation Cabins to manage The Overlook because the owner, Martha Sanchez, embodies our Welcome to your mountain community retreat vision.

She goes out of her way to make guests feel welcome and has established a strong reputation for outstanding service. Martha is an integral part of the mountain community and seems to know everyone in town. And, she has a keen eye for what can make our guests' stay even better.

Here's another small example of how the vision guides the way.

When we hired Idyllwild Vacation Cabins, Martha walked us through a short questionnaire to spell out our rental policies. For example:

Would we allow pets? (Yes)
What was the maximum number of guests? (Eight)
How would we handle snow removal?

This last one was tricky. Snow is a special treat for most Southern Californians, but many don't realize how much work it takes to clear snow out of the way after a just a little accumulation.

Most cabins in Idyllwild charge an extra fee for snow plowing and shoveling. We decided not to pass this expense along to our guests because we thought it would make them feel less welcome.

Not charging for snow removal raises our costs in the short-term, but we think it will pay-off in the long-run in the form of repeat business.

Snow came Thanksgiving weekend, and our guests needed some help clearing the snow so they could leave the cabin. Including this in our service for no extra fee undoubtedly made our guests feel more welcome.

Best of all, they've pledged to return again next year!

Stay tuned for more customer service lessons from The Overlook. Next month's focus is the absolute need to prioritize.