Why Your Business Strategy Should Include Exceptional Hospitality

Shannon Waller: Hi, Shannon Waller here and welcome to Inside Strategic Coach with Dan Sullivan. Dan, you made a comment today that I've just leaned into and I was like, "Ooh, let's talk about that." I think it's a great conversation. And you said that customer service is not the same as hospitality. And so let's talk about that because I think that applies to all of our businesses. We all want to make sure we take really, really good care of our clientele, and a lot of people mix those two up. So what is customer service? What's hospitality? And why is that distinction important?

Dan Sullivan: Well, I just had an experience. I was on the road in Arizona and we were staying at a resort in Sedona, which is a spectacularly beautiful environment, and it was really top-notch resort, had however number stars, and the food was good, the rooms were good, everything was good. But the service was what I would say impersonal. It's almost like there's a new thing that's happening in society where people are trying so hard not to be offensive that they've become offensive.

Shannon Waller: Yeah, irritating.

Dan Sullivan: They're trying so hard to be inoffensive that they're actually offensive. What it is, they're kind of scripted, and they have ways of responding to almost anything that you bring up, but there's never a personal connection between you and them. You can't joke with them, they don't laugh, they don't get jokes, and I think it's political correctness. And this is part of a big chain, this resort is, it's a chain of resorts where everybody's trying to be inoffensive to the point of being offensive. And what's missing is any sense of hospitality, of recognition. So we had the same waitress three times during five days, and she didn't recognize us when we sat down again.

Shannon Waller: What?

Dan Sullivan: Yeah, you could tell that we were just the people in this chair and she didn't have any recollection of who we were and everything like that. And we got a really great testimonial from a client who's Vietnamese, immigrant to the United States, I think he's in Dallas and he really did a marvelous job, he's got a restaurant. So what he did during COVID is that he had delivery for his restaurant, but the kitchens were all in trucks. And he would say, "Our truck will be a quarter-mile from where you are and your order's all ready, but come and pick it up." So they picked spots in the city where they would move their truck, and then people would phone in and say, "Well, we'll have a truck near you in a half-hour and you can go and pick it up." So they weren't actually delivering to the home; they were delivering to the neighborhood. They only had one restaurant, but they just kept track of where the customers were, from the standpoint of their trucks moving around the city. And right afterwards, they built three, four other restaurants—this is after lockdown was over—and they had developed such strong relationships with the delivery customers that immediately their restaurants were filled up. "You guys were so great during COVID and you remembered us all and you remembered our food." And he said, "That's my experience when I come to Coach." He said, "Customer service is just a standard minimum that we now require when we're being served." But he said, "You guys always make us feel at home. We're recognized. We're like part of the family. You remember us." And I have a really good memory for people's stories, so I always make reference, and they're always amazed that I remember their stories, but it's just... one is I'm interested. And that's the other thing. You feel that the people trying to be inoffensive really aren't interested. They're not really interested in who you are. They're not really interested if you come back again. They don't remember you if you come back again. So I think that you're almost doing the reverse. There's this movement in technology of making machines more like human beings. I think there's a reverse movement going on where people are trying to turn human beings into machines. But it's very annoying, and I would never go back to this place. And not for any of the quality of architecture, quality of rooms. The only ones who weren't that way in this entire were the valets who parked your car. It was on a hill where we were. So sometimes they had golf carts and they'd drive you up and they'd chat you up and they want to know where you're from and everything else. And then the cleaning staff who were all, from my perspective, they were all Mexican. It's not far from Mexico. And to the degree that they spoke English, they would really interact with you and talk to you, and that was the only buffer that you felt about the whole experience. But I would never go back for the management, the waiters. My tips are- There's a big difference between the tip for hospitality and the tip for customer service.

Shannon Waller: I think this is such a fascinating distinction, and I'm thrilled with that compliment from our client because hospitality is making people feel at home. And as a frequent traveler, you're more than I am, but we both travel a lot, being somewhere else and being treated like a human being, not like just a transaction, we're not just a thing, being treated as an individual, unique person makes a really big difference when you're away, especially for a long period of time. And when people don't know that, it's really frustrating. I've always appreciated that about the Four Seasons. Always appreciated about the Ritz. The thing I like about the Ritz is you're walking down the hallway with the housekeeping staff, they'll look up and say hello. They're not shy. They don't keep their eyes lowered. They actually greet you as a person. I'm like, thank you. It's a small, tiny thing.

Dan Sullivan: I don't know about the Ritz, but the Four Seasons has a rule that if anybody from outside the hotel organization approaches you and asks for something, whatever you're doing, you stop and you take them directly to that person where they're going. And that's anybody on any job, regardless of how low or how high in the hierarchy is, you just instantly feel good. And the other thing is that the Four Seasons has this rule that if we make a mistake, make up for it in such a way that people have a better memory than if you'd done it right in the first place. Which is hospitality.

Shannon Waller: Right? Yes.

Dan Sullivan: The Four Seasons just bends over backwards if they've made a mistake.

Shannon Waller: Yeah, you kind of hope they do.

Dan Sullivan: Yeah. I remember we stayed at one in Boston. There's two in Boston, but we stayed at the older one. They were really late in getting the bags to our room, and we had to get dressed and go to dinner that night. And that hotel, the next day, because we called down and we said, "We've called twice, but our bags have been..." It's 45 minutes after we had checked in, the bags hadn't arrived. They didn't make excuses or anything. They said, "We're really sorry." And the next morning, we were downstairs and the general manager came up to us and he says, "Ms. Smith, Mr. Sullivan, I just want you to know that last night's on us, that there's no charge for last night. And if you come during your stay to dinner, the chef would like to come to your table and anything you want, he'll make it for you." And then about five times during the day, a bellman would stop and say, "Mr. Sullivan, really sorry for last night," and then the front desk, everybody said- So the word went right around the hotel that you'd give extra special attention to Babs and Dan. So that's hospitality, that's not customer service.

Shannon Waller: I love that. One of the other things you just said, Dan, which really struck me, is not making excuses, not saying what happened backstage that caused this issue, because ultimately you can't do anything about that anyway. It's just really accepting, taking responsibility, and bending over backwards, as you said. And I think the Ritz is ladies and gentlemen serving ladies and gentlemen. So there's a respect given to the team, which then they bestow [inaudible 00:09:18].

Dan Sullivan: Well, the other thing is that every staff member in the Ritz has a budget, and I think they're given $500 a quarter, that on their own, they can make a discretionary purchase to help out a customer. They can go and buy something and deliver it to the room. All they have to do is hand in the receipt and say who the customer was and just automatically, they do that. Our favorite hotels are actually a series of small hotels in London and New York, and the company's name is Firmdale, F-I-R-M-dale. As a husband and wife, and we've stayed in three other hotels in London: Covent Garden Hotel, Soho Hotel, and the Ham Yard Hotel.

Shannon Waller: Multiple times. Yeah.

Dan Sullivan: Yeah. Well, since 1998. We go to London at least once a year, and we always stay. We'll go in on Monday morning, because we're flying overnight, and we'll walk in, they said, "Your room's all ready, Ms. Smith, Mr. Sullivan, great to have you back, and we made sure, Ms. Smith, that everything is defeathered. There's no feathers." It's her thing. New York, we haven't been in New York for four years, but if I went in, the concierge would be there, Chris McAllister. It's called the Crosby Street Hotel in New York. You walk in, it's like you were there last week. They do that. And you're either committed to that or you're not. And I'll tell you something that I know instantly I'm not going to get hospitality, is where, in your room are standards of customer service and they have written out their standards of customer service, that tells me I'm not going to get good customer service. And if they have to write out customer service rules, that means it's not a habit.

Shannon Waller: So that's interesting, Dan. So if they've written it out, it means that they're holding everyone to that frankly-

Dan Sullivan: It's a minimum standard.

Shannon Waller: Minimum standard, but that's also the highest they're going to get to?

Dan Sullivan: Yeah.

Shannon Waller: Whereas I know, I'm an individual and I want to connect with other people. I love when I can talk to the valet. I love when I can talk to the concierge. I love when I can talk to the restaurant staff, and they treat you individually and they're interested: "Where are you from? So great to see you. Have you been here before? Oh, let me make sure you know about this amenity. You'll love it." All of those things just make you feel really welcome. And that's the point of hospitality, is that you're appreciated for coming to stay, not just as another check in the bank.

Dan Sullivan: Well, think about your favorite restaurants. Invariably, I find with people's favorite restaurants, they're not the five-star restaurants, they're not four-star restaurants. But they're restaurants where the moment you walk in, they say, "Oh, come on in, great to see you again," and they take you to your table and you feel like you're part of their family. And I think this is becoming bigger and bigger because technologically, when more and more depends on technology, the less there's a sense of personal connection. You're either going to make the cut or you're not going to make the cut during these days. And if you have to talk to a computer, I don't talk to computers.

Shannon Waller: That's such a great point. So there's actually a huge opportunity...

Dan Sullivan: Oh, yeah.

Shannon Waller: ...post lockdowns with increasing technology to actually dial up your ability to provide real humans who are interested and make that personal connection so that whatever experience you're creating for people, in some way, you're making them feel at home and like they belong. So there's actually a really big opportunity right now to do this.

Dan Sullivan: Yeah, I knew that when we switched over to Zoom out of necessity that I treated it even more personally. First of all, I like Zoom because I got them all on the screen, unless there's three pages, but I wander the pages. I'll say, "How are you?" I remember a lot about our entrepreneurial customers, and I'll bring up something about, they just had a baby, but I remember these things and I bring it up. There was somebody, he was at the Mastermind group, I was in Austin, Texas, last week. I had met him at Genius Network about 10 years ago, but we had gone to dinner at Bandera, which is no longer in existence, but we had gone in Scottsdale, Old Scottsdale. I said, "Yeah, I remember our discussion at Bandera. Yeah, I remember we went out on Friday night," and I hadn't seen him in 10 years, and he said, "How do you do that?" And I said, "It's called memory." I said, "I remember you were explaining how you did what you did and everything else, so I guess this is a real catch-up for us, where you've come 10 years." But I could tell him what he said at the conversation. And the reason is I'm truly interested. I'm really interested in where people came from and what they did.

Shannon Waller: I love that. So Dan, if someone wants to up their hospitality game, much less customer service. Customer service is the bare minimum. If you don't have that, that's the place to start, there's no question. But what are some tips or some ideas or actions people can take to really, as I said, up their hospitality game immediately?

Dan Sullivan: One thing is that all the competition in the world is to be interesting. All the competition in the world is people competing with each other to be interesting, but there's almost no competition for being interested. You got the whole field to yourself. And I'm truly interested in other people's lives and have been since a child. I've been interested in where they come from, I'm interested in how they got started. Especially entrepreneurs, I always like to know the history. Entrepreneurs. There's a story they tell about their lives from speaking platform, and then there's their real story, and entrepreneurs like to know about other entrepreneurs' failures and how they overcame it. That's catnip for entrepreneurs is to find out how somebody just fell flat, picked themselves up, and got back on their feet again. So I really remember their failure stories, and I share my own. But I'm just fascinated in how other people lead their lives, and everybody's smart in a different way. One of the things, there's a incredible number of smart people in the world, but smart comes in a lot of different varieties and a lot of different flavors. I'm just interested in how this person is smart and how this person is smart. And it's, I guess why I do what I do for a living, I'm just really, really interested. But I've met people 25 years later and remember what we were talking about 25 years ago.

Shannon Waller: I love it. So being interested, but even something as simple as you said, Dan, perusing the Zoom pages and using people's names, I think is another way to just show that you're paying attention. Spending time asking people about their thing rather than just imposing your own thoughts. There's some very simple ways to have people feel known. And we're a very personal company, I think that's one of the things that I have always loved about Coach is that I could be 100% myself. I could be my authentic, Unique Ability self. I'm a hugger, so with brand new people I say, "Are you a hugger?" So I'll hug them. I'm excited to see people. My face lights up. We always have name tags, so it's easy to remember people correctly, but it's actually a much more joyful atmosphere to be in when you can connect with people on that real level.

Dan Sullivan: One of my favorite other podcasts, this is the big one with you, but the other podcasts, I have one with a very, very interesting, he's from Ohio, he's born about 90 miles from where I was. We're both born in the 1940s. I'm older by about four years, I'm older than he is. We grew up through the late forties, fifties and everything. And we have a podcast called Anything And Everything, just to nail ourselves down, and we're both serial ADD, but we just go back and forth, and I'll say something that makes him think about something, then we start talking about that and we talk about it for a while, and the other thing, with one exception, that on election day we don't vote the same way. And to me, that's the third rail of the subway. You just don't touch the third rail of the subway, you get electrocuted. But in today's world, most people wouldn't even associate with someone. But with 98% of what we're fascinated with in life we have in common, so why would you make that? That's so funny because each of us has said to someone else, and it's a friend of ours, Joe Polish, said, I know I don't vote the same way that Jeff does, and Jeff got aside with Joe one day and he says, "I really like Dan. I really love talking with him and discussing things. But I don't think he votes the same way." And I said, "Yeah, how you vote is really complex, where you grew up, who you were surrounded with, and everything like that." I said, "When you have so much in common, that makes... It's like a different season. Main courses you share, you just use different kinds of condiments." But he is creating in his seventies, for the first time, a Broadway play, which opens in Chicago for 12 weeks in June of this year, so 2023, and it's going to be spectacular. It's going to go right to the top. It's called Personality, and it's about probably the first real rock and roll star, and that was Lloyd Price, became very famous, early '50s. And when he was 17 years old, he went from digging septic tanks in New Orleans one month to making $10,000 a month the next month. 10,000 in 1951 dollars, a lot of money. We've been with him on the trip for five years from the very beginning when they just had a script, so we've invested enough to pay for a lot of the coffee for the... But it's really exciting. It's opening right in the main theater district on Michigan Avenue and I'm just very excited because I had thoughts about going into theater as a teenager, and then I got a chance in the Army in South Korea to run part of the entertainment program and I put on plays, and I was producer, director, I was actor, set designer, costume designer. And I could see that it wasn't a Unique Ability. I was good. And actually, I got my own theater in Coach and a producer, director, playwright. And so it was a skill that I really liked developing, but not for that particular profession. But this has given me a chance to be on the inside of a thing that becomes a major musical hit, all the music is the original music so that was already written. But the thing is, I'm just keenly interested in how he thinks about what he thinks. Because here's a guy, right at 70, decides for the first time to write and produce. He's the producer and he's the playwright. And I said, what a neat thing, just his whole life and how he's developed this and it just strikes me. I just find other human beings really fascinating. I think Babs does too. I think Babs is, the two of us together, we're just very, very interested in other people.

Shannon Waller: Well, and what I find really fun, Dan, is the opportunities that come out of that. So to help invest in and support, and I'm going to see it too with you in Chicago, which I'm very excited about. But if you go back to that waitress who saw you three times that week but didn't recognize or care to, she's just missed an opportunity, and you've missed an opportunity to get to know her. And those connections aren't made, those things aren't developed. And so hospitality, I think, being interested, just opens way more doors and way more opportunities than just anything else, if that makes sense.

Dan Sullivan: Yeah. Humans like humans. Humans want to connect with humans. But I think we're at a threshold where if you're not interested in other human beings, you are going to get replaced by a machine.

Shannon Waller: 100%, because then we don't have the hassle of dealing with you and being frustrated or annoyed.

Dan Sullivan: No, if I'm dealing with a machine, I want to deal with an actual... And I don't want to deal with machines. I got two rules regarding technology: Always have smart humans between me and the technology, and always have the technology between me and stupid humans.

Shannon Waller: I actually wrote that down as another topic for a podcast.

Dan Sullivan: Yeah, rules one and two regarding technology. There, I've handled it for my lifetime.

Shannon Waller: I love that. Dan, thank you. I think that this distinction between customer service and hospitality is a very useful one, especially in the age of greater technology. So this is how we can put the human stamp on what is in fact unique to us. Thank you.

Dan Sullivan: Thank you, Shannon.