Why Operating Your Business in a Constant State of Beta Can Create a Community Around Your Brand

By Hâfi Martinsdóttir

Estimated reading time: 14 minutes | 2870 words

Image source: Customer Thermometer

One of the biggest threats currently facing businesses is the drop in sales due to the coronavirus pandemic which is why we would like to take the time to share a more stable business model that, if used wisely, could tide your brand through a crisis. We believe that no matter which industry we are in, there are ways in which we can mitigate the impacts of a catastrophic quarter (or two) by utilising some creativity, determination and, of course, courage.

In this article we will share how keeping your services operating in a constant state of beta can greatly improve your chances of getting through a crisis by focusing your efforts on your guests and building loyalty through relationships, emotional connections and experiences.

Why beta mode?

At Magpie Creative Co. we’re big believers in never having a finished product or service. In this modern communication culture where we potentially have access to our clients, guests and audience round-the-clock, it’s crucial that we never stop adapting our services to meet their needs. Essentially, we should always be in beta mode.

Life-long relationships with our guests and clients is what we should be seeking. A transparent relationship full of respect, appreciation and listening. Lots of listening on our part. More often than not companies design a product then try to find the audience to sell it to, as opposed to listening to what their audience needs and then building something for them in tune with that.

By creating several touch points across your business through which you can communicate with your clients, you are able to receive instant feedback, make changes accordingly and continue to adapt. But the moment we believe our product is perfect or our service impeccable, we begin to lose the strength that comes from being adaptable, flexible and fluid. Our guests and clients’ needs change over time, so should our service offering.

Build a community

There are businesses out there who have no idea who their customers are, they know vaguely who they are marketing to but they are out of touch with what those people actually want. The days of creating a product, drawing in a customer, making a quick sale and waving them off to never see them again are in the past, or at least they should be.

We need to be building a community around our services. That is what will make our brand stand out from all the others. Create a place where your clients can feel less like numbers and more like members. Give your customers a direct influence in the ongoing advancements of your services and products.

“(If you can) think about what you’re making as a living, breathing experience instead of a static product, then why not enlist your customers as innovation partners all the time? Why not stay perpetually in that beta mindset?” Tien Tzuo, author of Subscribed and founder of Zuora.

Where a subscription business model fits in

The rise of the subscription business model is growing exponentially simply because it is the smartest way to do business in the 21st Century. The younger generations are no longer so transfixed on owning anything, and would instead much prefer to rent and experience something and then trade it in when the time comes.

It’s now possible to become a member of Porsche Drive, hire one of their vehicles and then trade it in for a different model when it suits you. This removes the client’s responsibility of paying insurance and maintenance fees as they are all covered by Porsche themselves and instead offers the flexibility of enjoying a four-wheel drive in the winter and trading it in for a convertible in the summer for a more affordable fee each month. Compare this to taking a loan to purchase a car, having its value halve as it gets driven out of the showroom and for it to continue draining your funds until five years later you try to sell it for a hugely discounted price.

The wisest amongst us are renting, not buying. This also goes for clothes, technology, software, entertainment, education. We are essentially renting the access to these services and products and paying less upfront than if we bought them outright but for this we also receive regular updates, improvements and have no commitment to an outdated model or style. We can switch up and trade in at any time we want, we can be flexible with our choices and get the best without having to pay a hefty upfront price tag.

“Subscriptions lead to growth. Once customers can get the outcome they want, without having to worry about owning the physical assets, that’s where the demand goes, and that’s where new revenue streams are created.” Tien Tzuo

The benefits

Not only does this benefit the consumers as they appreciate the flexibility involved with a subscriber set up where they can experience more for less and immediately benefit from your services. But it also stabilises the revenue that your business can rely on. Imagine having a certain amount of your clients paying you monthly for a service. You would no longer have to forecast how much money you think your business will earn this next quarter and hope, but instead you would know precisely how much your business is starting this next quarter with.

This would allow you to take more creative risks because you could rest assured that your monthly business overheads are taken care of by your monthly recurring revenue. Your business could take a breather from constantly grinding, marketing and just hoping that someone will buy your products. Instead, you would be building an ongoing relationship with your clients, be gaining continuous feedback from them and valuable data and insights into how they utilise your services to tweak and improve. Staying in beta mode, essentially forever, is the smartest move you can make for your business.

Imagine spending years building a product or service, spending months marketing it and then it being a complete flop and you wind up with a millstone around your neck. What if instead, you release a product in beta, get immediate feedback, adapt it, get more feedback, keep adapting it and so on and the whole time you are being paid per month for your product. At a lower monthly fee of course but those payments add up and it lowers the risk for the consumer as they won’t need to fork over a large amount of money to buy your service or product outright. Instead, they can part with a smaller amount of money each month and immediately receive the benefits of your services. It spreads out the risk and forces you to have a closer relationship with your subscribers, it forces you to listen to what they actually want rather than trying to guess what it is you think they want.

Netflix have been doing it for years, Spotify too and now software companies are transitioning over from static products with once-off sales, to subscription services such as the Adobe Cloud.

Even creative pursuits can benefit from this continuous beta mode. Kanye West released his album The Life of Pablo and recruited his listeners to be participants in the creative process by listening to their feedback and tweaking the album, while it was still on the market. Essentially, he is treating his album as something fluid and malleable because he keeps publicly tweaking lyrics, rearranging and removing or adding songs.

Reposition your customer within your business structure

Don’t let your customer get lost in the noise, place them at the very centre of your brand’s offering and focus.

As Tien Tzou explains, “I would argue that the only true competitive advantage is your relationship with and knowledge of your customers. Think about it – what is the first thing your competitor does when you put out a new product? It buys that product on the open market and sends it to the R&D lab, which then proceeds to dismantle it, benchmark it, and reverse-engineer it in a thousand different ways. Your competitors can’t do that with the collective intelligence of your customer base. That’s something that you, and only you, can own. It’s an incredibly powerful advantage”.

It’s building relationships that will save your business because that is the one place where your competition can’t touch you. They can dissect everything else but can’t dissect the knowledge, appreciation, respect and wisdom that comes from truly knowing your clients and the trust that you have earned throughout your relationship with them.

Offer your audience experiences and create a brand culture

If you’re not already, it’s time to start designing and creating experiences for your guests. If you can offer someone a really great time to share with their friends and family then they are much more likely to remember you and promote you on social media. Create a culture around your brand. It’s why Apple is so focused on offering a certain experience within their stores. We all know that we can buy the latest iPhone online but people want to go to the physical store and experience the technology, the atmosphere, the feeling of being a member. We prefer to research online but still head to the physical stores to try them before we buy.

Remember that an experience can mean your brand’s styling, the architecture of your stores, the soundtracks your guests hear, the uniform your team are wearing, the graphic design of your menus and signs, the artwork on the wall, whether you have live music playing or you offer a free cocktail upon entry, perhaps you have a photobooth or free classes hosted within your store or hotel. It even extends to the way your products are packaged and delivered to your customers’ doors. 

Focus on building a culture around your brand. For example, if you are a hotel that focuses on surfing as you’re located near to great surf, then you already have your culture built in. Expand on that by offering lessons, hosting free classes on cross stepping, serve cocktails and have bands come and perform. Teach people new valuable skills and they will remember you forever. People want to be a part of the lifestyle your brand represents so make sure the idea of joining your tribe is desirable. 

Fortunately, businesses are starting to catch on to the importance of experiences. Many stores are moving their market to an online platform which is crucial to their survival in this day and age but that doesn’t mean that their physical stores are being abandoned. Far from it. We still want to go out and experience brands in person, to understand what they are all about and to have an experience with them. It’s why some brands host intimate concerts within their stores and hand out champagne while people try on their garments. It’s so that their customers can build an emotional connection with their brand, take videos and pictures and share them online thus spreading the awareness of this new “club” that people can join.

Instead of communicating your brand through adverts, instead communicate them through experiences.

But don't neglect your online presence

Warby Parker estimates that three out of every four shoppers in its physical stores visits its website first which just reiterates the importance of having a website and full online presence that backs up your brand and its values. Essentially, our businesses have to look and feel good on all levels, the physical, the virtual and the experiential.

And with 52% of Millenials browsing your hotel’s website for more information before opting to book via travel agencies (Source: Condor Ferries), having a cohesive brand on all touchpoints is essential. Your website is the perfect opportunity to offer a virtual experience of your brand, show your website visitors what and how they can expect to feel at your hotel.

So how can this business model be adapted for the luxury hotel market?

Well, first of all we need to be viewing your service as a result, as opposed to a product. You don’t simply provide a room and a bed for someone (a product), you provide them with an experience (a result). You provide them with a relaxing escape from their reality. Focus on the outcome you offer, not the product. The milk, not the cow.

“Louis Vuitton, for example, doesn’t sell bags, it sells fashion and identity. Nike doesn’t sell shoes, it sells fitness and health. Disney doesn’t sell movies and amusement parks, it sells family entertainment.” (Source: Zuora

Perhaps your hotel has a restaurant and you offer a specific locals-only menu for a set fee each month that locals can subscribe to. It might feature certain dishes of a higher quality or variety, a special menu. They could pay a low monthly fee to have access to these dishes and perhaps a specific drinks menu, cocktails, whiskeys etc. They could always be guaranteed a table and the monthly fee could vary depending on how often they wish to dine with you. They might also be allowed to see more behind the scenes of your hotel and what goes into making the dishes, the fresh ingredients used, perhaps a few recipes that they can try at home. Anything to make them feel part of your inner club.

The benefits would be the ability to order certain dishes, being very familiar with your hotel and brand, becoming a trusted member to whom the hotel owners listen for feedback etc and they would be able to make a last-minute booking and still secure a table.

People dine at exquisite restaurants because of the experience they can expect there. What if you were a regular and the bartenders knew exactly how you wanted your cocktail made and delivered it to your table without you having to ask because they know your preferred routine. By making your subscribing guests feel special you would welcome them as a member of your club and at the same time be earning guaranteed recurring revenue. A win-win.

Brands are starting to realise that hotels are in the business of creating unique travel experiences for their guests and not just simply offering a bed for the night and that’s why some are beginning to diversify into apartment rental platforms.

Subscribers to the Inspirato Pass gain access to thousands of Inspirato-approved luxury hotels, resorts and residences and Inspirato Only experiences in exchange for a monthly fee. Their tagline? “Endless travel for $2,500 per month with no nightly rates, taxes, or fees”.

Perhaps you might set up a communal workspace within a section of your hotel where local businesspeople can congregate and work within a pleasant space for a monthly fee.

Or, returning to the surf hotel example, perhaps you could offer access to surf related subscription boxes where you deliver certain branded products from your hotel that relate to surfing adventures. It could be surf wax, zinc and reef-friendly sunscreen, beachtowel, etc. The subscription could also include access to online classes. So they might receive a box full of surf-related goodies along with access to this month’s surf tutorial from your hotel’s surf instructors.

A subscription box could extend to a whole variety of niches within the luxury hotel market, whether it be related to food, spa and wellness, adventure activities, wines, whiskeys. Essentially, you would be offering your past and potential guests the opportunity to experience your brand’s culture and lifestyle delivered directly to their doorstep.

These ideas don’t need to be restricted to times of crisis, such as the COVID-19 pandemic, instead look into integrating them as part of your ongoing brand culture during the good times too.

Summary

Rather than your business offering a service to a group of several hundred or several thousand people, instead think of it as a one-on-one relationship with all of those people. It’s a lot of work sure but by getting to know and serve each one of them on an individual level you are building a lifelong relationship rather than waving them off after they buy one product and never hearing from them again. You put so much effort into attracting them in the first place, you should at least continue to benefit each other for as long as possible.

“Subscriptions are the only business model that is entirely based on the happiness of your customers. Think about it – when your customers are happy, then they’re using more of your service, and telling their friends and you’re growing. You get to start every quarter with predictable revenue. You get to make smart data-driven decisions. You get to benefit from your own customer insights, which are a huge competitive advantage. We call this the world of happy business: happy customers, with happy companies, reinforcing one another, iterating forever, with no beginning and no end.” Tien Tzuo

We hope this article has served to get you thinking of the different possibilities out there for you to continue adapting your brand to meet your clients’ needs and to get creative with solutions. The brands with strong customer relationships and established cultures are set to fare better during crises and any business with recurring revenue is immediately in a more secure position to deal with any problems that arise, now and in the future.

We are always sharing our thoughts, ideas and strategies to help as many businesses weather this storm as possible. If you would like to request a free consultation then you are welcome to apply below.

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As COVID-19 is unlikely to disappear completely without an effective vaccine, it’s expected that we will have a W shaped recovery with lock downs repeatedly being enforced, relaxed and enforced again over time. Being prepared for this tumultuous recovery will stand you and your hotel in good stead to ride the waves to come.

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About Magpie Creative Co.

Magpie Creative Co. is a digital marketing and design consultancy with a worldwide client base. We provide branding, web design and online marketing for businesses that offer luxury guest experiences and require an efficient online booking system.

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