See why companies chasing shiny new technology and novel tactics are barely nudging the needle.
Robert Katz was becoming frustrated. The year was 2009, and Katz was CEO of Vail Resorts during what was turning out to be the worst economic downturn since the Great Depression. He needed revenue, so not surprisingly, he turned to his marketing team for ideas.
Katz was well aware of the explosion of new marketing channels. He had been to a number of meetings where he was bombarded with facts and figures highlighting the rapid rise in mobile, social, gaming, digital-out-of home and online video. In these meetings, his people described an always-on, connected consumer who was snacking on content across an ever-increasing number of devices. They argued persuasively that Vail’s success would depend on being able to deliver the right content to the right customer on the right device at the right time. For the most part, it all made sense to Katz.
That’s where things got sticky. Vail did what almost every company does today. Its internal mobile people met with mobile agencies and technology providers. Its internal social people met with social agencies and technology providers. And so on. In the end, Katz was presented with a mobile strategy, a social strategy and a content strategy. But here’s where the story took an interesting turn. Katz said no.
Why? He understood this channel-up approach would lead to a lot of “clever ideas that don’t matter.” Why don’t they matter? They don’t matter because Vail Resorts is a billion-dollar company operating multiple ski resorts. They don’t matter because a steady stream of one-off ideas won’t move the needle on the bottom line of such a large enterprise. And above all, they don’t matter because Katz was looking for an idea to fundamentally alter the competitive landscape. He was not looking for another short-term promotional push, but wanted a long-term strategy to enhance Vail’s ability to attract and retain customers. In short, a transformational business idea.
Give customers more of what they like best.
After Katz said no to the “channel-up” approach, he gathered his team and led them in a process to use all of these new channels to fundamentally improve the Vail experience. First, they searched for a business idea. Only then did they think about how to use all of these channels to support that idea.
The solution, it turned out, was in the 800,000 RFID (radio-frequency identification) chips Vail embeds in its passes and lift tickets each year. If the passes could be scanned automatically, and if RFID readers could be placed at different points on the mountain, then Vail would have a great deal of information about each guest – information that could be used to develop content and fuel a social experience. All that was needed was a way to display that information and share it with resort guests.
That way to display was EpicMix. Launched in the fall 2010, EpicMix provides a personal scorecard of each customer’s accomplishments on the mountain that can be viewed on the web or via a smartphone app. The idea is similar to the location-based social network Foursquare, but with one big difference: Customers don’t have to drag out their phone to check in or even to sign up. The data is already collected, ready for viewing, when and if they want it.
In a classic example of gamification, the most competitive skiers were now galvanized to get to the top of the EpicMix leaderboard by skiing the most vertical feet. As the first season with EpicMix drew to a close, the ironman atop that leaderboard had spent 140 days on the mountain at three Vail Resorts properties, chalking up a ridiculous 5.8 million vertical feet of skiing.
Knowing that every resort visitor isn’t made of 100-percent testosterone, Vail wisely built other, more accessible challenges and rewards into EpicMix. Resort visitors can also earn digital pins – inspired by the colorful metal lapel pins that have been part of ski culture for decades. These coveted 87-by-85 pixel icons, and the accomplishments they represent, can be displayed on guests’ personal EpicMix pages and shared via Facebook and Twitter.
Some pins are bestowed for purely athletic accomplishments, such as the “Millionaire” granted to those who manage at least 1 million vertical feet in a season. The “Conqueror” is awarded to those who ski every lift at a resort in a single day. The opportunity to win these few thousand square pixels of recognition has driven skiers to try new things and to push their personal limits.
This gamification of snow sports via the rewarding of status to Vail Resorts’ guests has paid some immediate dividends in terms of customer loyalty. “The real value of this program is to drive increased sales, increased days of participation and increased loyalty from our core customer segment,” Katz says, “and all indications are that people are responding to it that way.”
The net result is far-reaching promotion for Vail Resorts that hits some very desirable targets: the like-minded friends of current customers. The math is compelling. More than 50,000 Vail guests activated their EpicMix profiles during the first five weeks of the program’s trial season, posting an average of four updates on Facebook. According to Facebook, the average user has 130 friends, meaning those 200,000 posts translated into 26 million-plus potential impressions for EpicMix and Vail Resorts. Participation tripled since the launch, and so far this year, Vail has seen more than 1.8 million social posts from EpicMix members.
While one of the ultimate aims of EpicMix is to spur this kind of unbiased promotion, Vail Resorts doesn’t look at the program strictly as a marketing expense. Katz explains that EpicMix is designed to enhance the quality and fun of a visit to the resorts, so Vail looked at the investment in EpicMix as essentially the same as adding lifts, snowmaking equipment or a new restaurant.
And it’s not a one-off. Katz is committed to expanding and enhancing the EpicMix experience over time. This year Vail Resorts posted professional photographers on their mountains to take candid photos. A quick scan of the skiers’ passes and their photos are waiting for them when they get home. Most guests quickly post the photos to Facebook.
It’s no wonder Katz is continuing to support EpicMix as a core differentiating strategy. Despite continued softness in the economy, Vail Resorts managed to increase revenue 31 percent between 2010 and 2011.
Think cross-channel and long term.
We all have a lot to learn from Katz, Vail Resorts and EpicMix. The essential lesson: Stop thinking about channel strategies. Instead, start thinking about transformational business ideas. Dig into your customers’ needs. What do they love about our brand? Can we enhance it? What do they hate about our brand? Can we fix it? What deeper need do they have that we can satisfy?
Be relentless. Don’t be satisfied with clever one-off ideas that live alone within a single media channel. Keep digging until you uncover a real problem you can solve. Once you’ve done that, and only after you’ve done that, should you engage your mobile and social content experts. Find an idea then unleash the horses.
The rise of the scatterbrained brand.
Unfortunately in business today, management team members too often say yes when they should be saying no. Too often, brands spend millions of dollars on individual, channel-specific programs. Too often, companies tout the efficacy of their social strategy or mobile strategy or content strategy. Why too often? While each may deliver a positive ROI, they don’t add up to anything substantial in terms of the larger goals of the brand.
Is it any wonder in a recent survey, more than 70 percent of CEOs said they don’t believe their marketing people can adequately justify their investment in new media initiatives? I experienced this firsthand when a CEO told me, “Sometimes I feel I’m jogging in a swarm of gnats. There are all these new marketing ideas swirling around. They’re full of energy and extremely distracting, and I keep thinking I’m going to choke on them. And they sure don’t help me run any faster.”
Those of us who have bet our careers on the success of these emerging channels need to take heed. Senior leadership will never embrace our ideas unless we let go of our myopic focus on individual channels and instead solve real business problems. We need to do things that matter.
So how to proceed? There are many ways to approach it, but here’s my favorite prescription for success:
First, take it easy for a few days (this is going to be a lot of work). Then next Monday, pull together the widest possible team. From the client, include people from marketing, IT, product development, finance, stores, and customer service. Include all of your agencies–traditional, digital, social and mobile. Ask the new team this question: “What do people dislike about being our customer, and how can we use digital to fix it?” Force them all to help define the problem and generate ideas. Threaten to fire anyone who acts like a prima donna or seems more worried about his or her own empire as opposed to the success of the group. When you decide on a direction, sell it to your CEO and get it funded. Once the program is launched, act quickly by testing, learning and refining everything you’re doing. Don’t relax until your customers are telling each other what a great company you are.
Oh, and make sure you do something that matters.