Adrian Michael is currently a first-year at Penn State University studying Mechanical Engineering, with a minor in Child Maltreatment and Advocacy studies. He is an associate in the Nittany Lion Consulting Group, participant in Penn State Formula Racing, and an avid reader. After graduation, Adrian hopes to explore opportunities in strategy consulting or automotive racing design.
Let us set the scene: a hotly anticipated restaurant has opened downtown, with foodies and curious eaters alike eager to get a reservation. Sure, the reviews say it’s spectacular, but can they be trusted? The only way to get a true impression is to get a first–hand dining experience. Immediately the restaurant sets itself apart, opening the door to all guests and greeting them by name. Tables are even made up with birthday decorum for the appropriate guests. Before any food even hits a plate, this dining experience is surely more memorable, and more hospitable, than any dining experience that came before it. Though the restaurant’s design is sleek, and the food is delicious, what sets this establishment apart is the nuanced details. Ultimately, the surprise made all these small acts of hospitality feel personal and directed, elevating the meal from good to truly memorable.
Sound like make-believe? Will Guidara, author of Unreasonable Hospitality would argue that making the customer feel valued benefits businesses in any industry — whether it’s a restaurant or a law firm, there’s always someone being served. Guidara has a lifelong career in hospitality, taking a mediocre New York City bistro to be the #1 ranked restaurant in the world, with 3 Michelin stars. Where others focused on food, Guidara, and his team perfected the dining experience by way of implementing surprising courtesies that didn’t exist anywhere else. He went as far as to prepare and serve a kart hot dog for a group of guests on a culinary journey of the city (in a restaurant where a single seat goes for over $350).
First, let us define hospitality as the feeling you get when you are being shown an unexpected level of respect, care, and warmth. The idea of hospitality in business is nothing new customers have come to expect it in many day-to-day interactions. A dealership always hoses down your car after it’s serviced, a doorman greets you at a hotel, and a salesperson will always ask if you need help at Home Depot. Sure, these are acts of hospitality as defined, but one would not be surprised by them. The element of surprise creates a powerful distinction between a business abiding by standard conduct, rather than taking meaningful action toward an improved client experience. If it does not surprise the customer, it does not enhance the business.
Why does surprise matter?
We remember things that surprise us, it’s human nature. A 2008 study done by Brandeis University discovered that physical changes in neuron connections occur when a novel or surprising stimulus is encountered. This new neural pathway enhances the memory of that experience over other day-to-day occurrences. In any surprise, expectations are broken, and a business’s aim should be to break those expectations for the better. It may have been unexpected for the restaurant we defined earlier to greet guests by name, but when they did, it enhanced the client experience, leading to a more meaningful and memorable time as a patron of that business.
It’s easy to think the element of surprise is only applicable to typical hospitality ventures like restaurants or hotels, but, wherever there’s a customer, there is room to surprise them… and there is always a customer. Take it from Guidara, who, when buying his new condo, envisioned how he wanted to be treated as a client. After spending months with a single real estate agent, he postulated that any real estate agent would come to understand their client’s wants, needs, and even passions over their time working together. Every real estate agent leaves a bottle of champagne in the fridge, but what if they acted on the personal connection they developed with the client? They might leave a yoga guru a mat, a dog lover a customized leash, or a car collector a key box. None of these items are more expensive than the typical champagne bottle, but it is reasonable to assume that the client would be overjoyed, surprised even, to find that item in their new home.
In any business proceeding, say a client meeting or company summit, the organizer could recall or research their partner, the customer in this example. From this, they better understand the person they’re doing business with and what interests they have. Showing personal interest in whomever, one may be dealing with is common courtesy in a business setting, but a gift or the mere mention of something you remember or found serves to establish solid interpersonal footing for the rest of any proceedings.
The Surprising Impact
As a tool that promotes successful business interactions, the surprise is conducive to garnering and maintaining a customer base. A customer who remembers a hospitable interaction is far more likely to return to that business in the future. In a study done by Small Business Trends, 68% of customers said that they would stop doing business if they perceived the establishment to be indifferent to them. On top of that, 62% of customers said that they would return to a business with outstanding customer service if nothing else. Customers are also less likely to visit local competitors, ultimately forming a powerful loyalty because of a surprise that made them feel seen.
For example, Phil Knight, founder of Nike, details how in its infancy, Blue Ribbon Shoes (now better known as Nike) consistently grew its annual revenue by keeping diligent records of their customers. Metrics like shoe size, gate pattern, sport, and customer location were meticulously recorded on over 10,000 index cards. This gave Blue Ribbon the ability to continually refer to past customer interactions, which never ceased to amaze their clients in an age before the internet. Shoe buyers would go on to enthusiastically spread the word about Blue Ribbon, all because Knight could “remember” something as simple as a shoe size. This is not to say that creating over 10,000 index cards was a simple task, but it gave the brand a competitive advantage over giants like Adidas at the time, and ultimately led to the rapid growth of its loyal customer base.
In any industry, if an entity can surprise its customers, it is standing out from competitors. In 1990, Lexus shattered the US luxury car market by not only producing a better product than its German competitors, but also surprising owners with unprecedented care. After a minor recall, Lexus dispatched technicians to all 2000 vehicles, repaired them in-driveway, and left $20 (a full tank of gas at the time) on the dash with a note. Owners surely were amazed, not because $20 is life-changing, but because a large car company personally addressed them. This guiding ethos of surprise and hospitality would allow Lexus to dominate the domestic luxury market in the two decades to come.
Competitive Advantage and Cost
PwC leader Tom Puthiyamadam says that creating an experience in which the customer feels appreciated warrants a 16% price premium on that service. Moreover, BCG found that customer loyalty is the greatest contributing factor to that brand’s growth. Great customer experiences spur positive word-of-mouth promotion. Brands that foster outstanding emotional connections with customers maintain their base even when competitors undercut prices. What separates the winners from the losers in the land of client satisfaction is the companies that surprise clients with unexpected gifts that accompany a purchase, according to the same BCG study. We’ve seen that surprising the customer, in turn making them feel appreciated, does not require any monetary cost at all. A deliberate investment into hospitality and going beyond expectations is all that is needed to cash out on the power of surprise.
Although all establishments can be in the business of hospitality and surprise to a degree, some lend themselves better than others to these practices. Expanding into spaces where the impact of these concepts not only comes with the benefits defined above but also can be a lucrative venture.
One of the largest companies in America, JPMorgan, recently announced its expansion into the travel agency industry. The business of a travel agency revolves around convenience, and thus hospitality. Although JPMorgan did not enter the space to be a hospitable brand (rather looking to capture $15B in travel reservations), it now has the room to offer a better customer experience via a lucrative facet of the hospitality industry. JPMorgan acknowledges the opportunity by taking steps to go above and beyond in this new venture. They have established multiple brick-and-mortar locations designed to better serve the needs of Chase card holders, constructed exclusive airport lounges, and now offer the express booking to customers, with the goal of giving more than what Sapphire holders expect out of their card.
With the element of surprise, Guidara took Eleven Madison Park to 3 Michelin stars, Knight kept Nike alive in its infancy, and Lexus took the American luxury car market by storm. With historic and recent tales of triumph, the power of giving customers more than they bargained for cannot be denied. It’s time businesses start surprising us.
- Guidara, W. (2022). Unreasonable Hospitality. Optimism Press.
- Knight, P. (2015). Shoe Dog. Scribner.
- Benoit, D. (2022, July 30th). JPMorgan Is Building a Giant Travel Agency. The Wall Street Journal. https://www.wsj.com/articles/jpmorgan-is-building-a-giant-travel-agent-11659182401
- Mansfield, M. (2022, December 29th). Customer Retention Statistics – The Ultimate Collection. Small Business Trends. https://smallbiztrends.com/2016/10/customer-retentionstatistics.html#:~:text=CUSTOMER%20RETENTION%20STATISTICS%201%20The%20probability%20of%20selling,percent%20of%20its%20customers%20each%20year.%20More%20items
- Fenker, D. Schutze, M. (2008, December 17th). Learning By Surprise. Scientific American. https://www.scientificamerican.com/article/learning-by-surprise/
- Puthiyamadam, T. Experience is Everything. PwC Publications. https://www.pwc.com/us/en/services/consulting/library/consumer-intelligence-series/future-of-customer-experience.html
- Bjornland, D. (2015, September 8th). What Really Shapes the Customer Experience. BCG Publications. https://www.bcg.com/publications/2015/marketing-brand-strategy-what-really-shapes-customer-experience
- Eleven Madison Park -https://www.qantas.com/content/dam/travelinsider/images/explore/north-america/usa/new-york/eleven-madison-park-new-york-restaurant-review/eleven-madison-park-new-york-restaurant-review-main.jpg
- Lexus LS 400 – https://bringatrailer.com/wp-content/uploads/2021/06/1995_lexus_ls400_16273681733c7eadd8e9e6IMG_3725.jpg