4/13/14

Enhancing the Vacation Experience Enhancing the Vacation Experience for Guests of for Guests of XXXX

Presented by Matthew HudsonPresented by Matthew Hudson

Lily Rothwell, LLCMatthew@LilyRothwell.com

410.409.3776

This presentation is property of Lily Rothwell, LLC., and is strictly confidential. It contains information intended only for the person to whom it is presented or transmitted With receipt of this information, recipient acknowledges and agrees that: (i) this document is not intended to be distributed, and if distributed inadvertently, will be returned to Lily Rothwell as soon as possible; (ii) the recipient will not copy, fax, reproduce, divulge, or distribute this confidential information, in whole or in part, without the express written consent of Lily Rothwell; (iii) all information herein will be treated as confidential material with no less care than that afforded to its own confidential material.

Voice of the Customer

Meet Your “Typical” Guests

I am about to tell you a lot about myself and my family.

Not because I am full of myself, but because I believe...

You already know us rather well.

We are pretty much exactlythe typical guest

Demographic Portrait

Age: 40-something Marital Status:

Married (with 2 kids) Home State:

Virginia (MD & PA) Household Income:

$100k+ Vacation Type:

Rent a house for a week with friends and/or family Why we visit the Outer Banks:

Relaxed, no crowds, great for families, driving distance

Where We Have Stayed

As a family or individually, we havestayed all over the Outer Banks

For the most part, we have been morenorth or south – not in the center (i.e. Nags Head, KDH)

Every visit includes a trip up to the 4x4 area as well as a ferry ride down to Ocracoke

We are reasonably familiar with the full length of the Outer Banks (and several other east coast beaches)

Who We Have Stayed With...

Group of High School friends (18 adults)

College and Grad school friends (12 adults, 2 kids)

Brothers-in-law families (8 adults, 6 kids)

Coworkers and their friends (10 adults, 2 kids)

Mother-in-laws family (11 adults, 6 kids)

Family of kids friends (4 adults, 3 kids)

Just our family (2 adults, 2 kids)

Neighborhood friends (8 adults, 5 kids)

Starting on a Sour Note

Every Place, Every Group, Every Time...

In the 15 years since I started visiting the Outer Banks, I have had a single consistent source of stress

No matter whom we stay with, no matter where we have stayed, the problem remains the sameIt is not on any guest survey I have seen ...

None of the rental companies have addressed it yet ...(but somebody really should!)

It impacts almost everyone that rents a house ...

Getting groceries into our rental home is a HUGE, time-consuming frustration!

You have two choices: Bring them with you or Buy them here

Bring the Food with You

A grocery trip the day before you leave is chaotic How do you store it the day/two before? What do you pack it in for the trip? Will there even be room for everything in the car? How are you going to keep the cold stuff cold?

Can you even bring frozen items?

Fun Fact:

We go to an ice cream distributorabout 5 miles away from home and

get dry ice to pack frozen items.

This is not as fun as it might sound.

Shop When You Arrive

Not everyone does this, but you will sure feel like it when you get to the store

The store layout is not the same as your regular store, so finding every item can be difficult

What if they are out of some key ingredient or just do not carry your kid's favorite cereal?

After X hours in the car, checking in, sitting in Saturday traffic, and unpacking an over-stuffed SUV, do you want to go back out (in traffic) for a 3-hour grocery store trip?

A Problem Not Fully Solved

I'm not the first to see this latent need...

You likely already work with local “Grocery Stockers”

Homewood Suites and Residence Inns have been offering a similar service for years in some locations

Affinia Hotels and some resort locations are trying as well

Grocery stores across the country as well as some big players (Walmart, Amazon) are building home grocery delivery

The Problems with Local Stockers

High Cost: They buy at retail, so they must mark it up further to make a profit, typically 18-22% of the total bill

Poor Ordering Experience: Many just accept a list via fax. Web sites are primitive and lack features for vacationers

No Back-end Customer Support: None of the services can take returns, fix problems, or help out after the initial sale

Not Scalable to Reach Broad Market: Their approach cannot service hundreds or thousands of houses each week

Confidence Gap: Such small operations are likely to have little depth if someone is sick or out of town – this worries me as a potential customer

Stressors That Do NOT Exist at Home

How can I stir fry? No wok in this house!

Why are we splitting the entire bill? I'm not drinking that beer and it is half of what we are paying!

How many burgers do we need for 18 people?

What happens to all the left over items at the end of the week?

Who is going to make the shopping list?

Do we have foil/plastic/tupperware to store the leftovers?

Is Uncle Fred lactose intolerant or egg allergic?

It is late, we just got in, the restaurantsare already closed, and I'm starving!

A Better Way

We Can Do it Better for Our Guests

Work for the rental ecosystem not outside of it

Work from a wholesale base, not retail

Provide a better online shopping experience, focused on the needs of a large group of vacationers

Provide exceptional customer service before, during and after the initial delivery

Continue to innovate in the future

Work for the Rental Ecosystem

Stocking service, if offered by XX as a standard service, becomes a delighter and competitive advantage

Lily Rothwell plans to provide the back-end service for rental companies, like linen service, maintenance, etc.

Focus on BOTH customers (XX and vacation renter)

Provide support for all aspects of this service so XX can offer the service with little to no overhead

Constantly improve the renter's online and real-world experience

By delighting the end user, XX shines – a win-win-win

Work from a Wholesale Base

By purchasing items at wholesale, costs are kept down

No need to add markups above the “typical” retail price

Opens up this service to everyone, not just wealthy

This option becomes a “no-brainer” versus shopping at home

Improved control over availability of items

All products are ordered on demand so availability problems are known and secondary suppliers can be utilized to ensure delivery

Stockers (and guests) shopping at retail are unaware of specific product availability or stock levels before they arrive at the store

A Better Shopping Experience

There is a huge shift on online shopping in general because it is faster and easier than going to a retail location

Online grocery shopping specifically is growing in popularity, and may be the norm in the next 5-10 years for many families

Size and suggest items for the vacation shopper Condiments, salad dressings, etc.

(sized for one week) Cleaning products (sized for week) Storage for leftovers (i.e. tupperware) Cooking spray, aluminum foil Sunscreen and sunburn relief

Service after the Initial Delivery

Accept returns both during and at the end of the week

Provide source for specialty items such as seafood steamers, deep fryers, waffle makers, ice cream makers, woks, etc.

Be available for additional deliveries at any time

Half-week initial delivery, second delivery mid-week

Forgotten items

Fresh-from-the-boat local seafood??

We have more Innovation planned...

Focus on the needs of a Vacationer, not just any shopper

Give serving size advice to guide buying for large groups

Provide recipes that use minimal “specialty” ingredients

Online collaboration tools to plan meals as well as activities

Allow shopping by the meal, not by ingredients *

Select meals like ordering from a restaurant menu

Site calculates ingredients and quantities and creates list

Deliver selected recipes online and in book form (with food)

Design the site to minimize clicks to select items ** Looking into a patent for proposed method

This is NOT what I want to look like when I am on vacation.

But it IS what our team will look like on Delivery Day.

A Call to Action

Partnerships and Pilots

Lily Rothwell has identified XX as an ideal partner Our partnership will equally beneficial to both

companies

The biggest winner might be the guests that use the service

We propose that we run a pilot program in May/June to: Evaluate this service and gauge customer interest

Study and optimize logistics for operations

Gather customer feedback on current and future offerings

Pilot Program Overview

Limit launch to small, controlled effort

Limit geographical region so a single village Limit total number of houses being serviced

Focus on Customer Service and Feedback

Provide delivery for free initially Collect customer feedback to improve service

Expand services offered, area, number of houses

Expand service area and total customers each week after pilot

Build out web site and add features over time End of summer goal – 200+ houses/week

Conclusion

A Winning Partnership

We think you can agree that offering a stocked kitchen will delight customers and boost Customer Satisfaction

Offering this service to all of your guests can be a huge competitive advantage

Lily Rothwell can offer this service on this scale – no other competitors currently attempt to do so

Because Lily Rothwell will manage the entire process, this partnership will cost XX nothing to launch, almost no time investment, and present very little risk

Future innovations will continue to draw these customers back to your company for years to come

Thank You!

I greatly appreciate your time and attention, and I hope we can work out a partnership that benefits both XX and Lily Rothwell for years to come!

Additional Content Follows...

Additional Content - Pilot Program Details - Management Team Bios - Kano Analysis Intro - Other Interesting Info

Pilot Program Vision

Pilot Program Details – Initiation

Identify Target week to start pilot and target area (Duck?)

Provide XX email body announcing grocery pilot program ~3 weeks prior to guest arrival

Explains pilot, offers service at no cost, explains it is limited to X number of renters during their arrival week

Email directs renters to web site to upload/create list. (Question: Use the same login used on the XX site? Or link from XX site to LR after login?)

Only caveat for free service: Renter must fill out a survey

~1 week later, follow up phone calls to non-respondents

Pilot Program Details

Collect surveys after delivery, act on feedback

This launch process can be rolling and growing every two weeks, expanding geographically and houses served

Delivery fee will be added later in the summer

Current plan is for a flat fee per house/delivery

Fee is estimated at $30 per house, may vary based on pilot

Option to pickup orders (free) might be made available

From Lily Rothwell location?

From XX check-in location?

Pilot Program Customer Service Plan

Lily Rothwell will be responsible for all customer serviceEmail, web site, and normal phone numbers will always

be available to users (normal working hours)

We will have a hotline for day-of-delivery questions

All deliveries will be well-labeled with the Lily Rothwell hotline number to limit calls to XX staff

Any calls that are received by XX will be immediately forwarded to Lily Rothwell for service

Pilot Program - Planned Limitations

Not all aspects described herein will be ready at launch

First season will have deliveries on weekends only

Delivery only to start – pick-up option may be added

Other services (special item availability, etc.) added later

Returns will be permitted on Friday only, by request

Web site will be basic to start, but features will be added

First week may be upload/FAX/email list only

Once full array of items and required suppliers have been identified, full e-commerce site will be launched

Additional shopping options and services in future seasons

Management Team

Management Team – Matthew Hudson

I have spent my career as an engineer, manager and entrepreneur.

I earned an MBA in Management from Johns Hopkins as a first step in starting my first company – an engineering design company.

Later I spent several years as a Management Consultant with Booz Allan Hamilton, hiring and leading an analysis team, then focusing on Quality Management and Process Improvement.

Currently working as a Program Manager, I lead a technical team that support a massive web application. This expertise and resulting connections with web professionals will be invaluable in building the web site. Years of financial and staff management will be key to hiring the right people, and keeping everything in budget.

Management Team – Deanna Hudson

Deanna also spent a significant portion of her professional career in the technology field helping to build software applications. She spent 10 years working as a business analyst helping companies build custom web applications to help manage their business process.

Her BS in Psychology gives her a leg up in designing intuitive user interfaces that focus on meeting customer needs. She left the corporate life and daily travel lifestyle and settled down briefly before starting a bakery business which she still successfully operates in northern Virginia.

Consultant – Ronald Watkins

Ron brings a great deal of local expertise and industry experience to the team. As the owner of a general store in the Outer Banks for over 15 years, he knows the area, distribution channels, local operations and infrastructure. He managed the store and staff and built relationships with customers and local business owners as well.

While he retired after his store was destroyed in hurricane Irene, he remains a full-time resident of the Outer Banks and will provide significant guidance in getting the venture off the ground.

Kano Analysis - OverviewMaximizing Customer Satisfaction

Based in part on slides by Jason Mesut - Head of User Experience, RMA Consulting

Kano Analysis

Tool developed for Quality Management and Product Design

Used to classify customer needs and determine appropriate levels of innovation for products and services

Based on three core tenets:

Value attracts customers

Quality keeps customers and builds loyalty

Innovation is necessary to differentiate and compete

Kano is based on three core types of need:

Basic, Performance, and Excitement

Basic Attributes

Basic: Attributes/needs that are expected, assumed, given (also known as “hygiene factors”)

Absence of these will cause dissatisfaction, but no amount of execution will cause positive satisfaction

Examples: - Brakes on a bicycle - A web site that allows you to view vacation homes

Basic and Performance Attributes

Performance: Attributes/needs that are consciously evaluated by the customer when selecting their purchase(also known as “one-dimensional quality” factors)

Satisfaction is proportional to how well the attribute is executed. Poor execution results in dissatisfaction, while high satisfaction can be achieved via quick, powerful or exquisite executionExamples: - Miles-per-gallon for a car - Delivery time for replacing an empty propane tank/grill

Excitement or Delighter Attributes

Excitement: Attributes/qualities that deliver “buzz”. The wows, differentiators, innovations, unique selling/value propositions (also known as “Delighters” or “WOW” characteristics)

Presence of these will delight customers and increase their satisfaction, but absence of the will not dissatisfy

“These are harder to come up with, and really require an understanding of 'latent need' which can only really be understood through observation or incredible genius intuition”

Delighter Examples: - A flat-screen TV with movies/video games in your hotel room - Permission to use outdoor facilities (i.e. pool) before check-in

Kano Diagram

Innovation & Peak Customer Satisfaction

Exciters/Delighters can quickly drive customer satisfaction to very high levels with very little down side

Competitive Advantage: Delighters draw premium prices, create brand loyalty, and encourage repeat customers

Customers share positive experiences based on delighters

In extreme examples, Exciters can create barriers to entry

However, over time Exciters become Performance, and then Basic attributes as competitors begin to offer the same thing

Web site that allows you to search homes and view availability

House linens are Basic, internet access (WiFi) is Performance

Kano Diagram

Detailed Kano Graph

Additional Information

Pilot Program – Open Questions

How will renters pay for groceries? Direct to Lily Rothwell, or through XX?

Will initial launch emails/calls be by Lily Rothwell staff “calling on behalf of” XX?

Do you have a privacy policy that prohibits a partner like Lily Rothwell from contacting renters?

Can the link to grocery site be made part of your online checkout process? Can we insert info in the process?

Does XX prefer to have the web site branded as Lily Rothwell, or as “XX (powered by LR)”?

Excerpt from article “Personalized grocery delivery a growing trend at hotels” By Alexandra Pecci, Published: 02.07.14 in New Hampshire Business Review...Waterville Valley’s Black Bear Lodge started offering the service in the early winter of 2012 after finding that hungry travelers had no place to get food when they arrived late at night, especially with kids in tow. General manager Hesser says the only grocery store open late is 24 miles away from the secluded resort town. In addition, all the restaurants are closed late at night.

“It’s a resort that’s in the middle of the mountains,” Hesser says, so guests liked the idea of having their condo unit’s kitchen stocked with late-night eats before check-in.

Hesser was aware of the industry’s burgeoning grocery delivery trend, so Black Bear Lodge started offering it, “to take that stress off the arrival,” he says. “It was the families, the people with kids, who were really excited about.”

However, Hesser says the lodge had to halt its program in April 2013 because of logistical difficulties. It ran into trouble coordinating price lists with its local grocery story partner. Cost-conscious guests wanted to know exactly what brands they were buying and how much they cost, but it was tough to keep them up-to-date when food prices fluctuate from week to week.

Hesser adds that the 10-page grocery list that they created for the program was “cumbersome.”

“The requests for it were popular [but] it was inefficient to put pricing on the sheet,” he says. “It made it very time-consuming for the grocer when market prices change.”

Black Bear Lodge’s experience highlights some of the challenges that smaller, independent hotels might face when trying to coordinate grocery delivery services of their own.

Hesser’s background was in luxury accommodations, where guests are less concerned about smaller expenses, like the difference in price between a premium or store brand loaf of bread. Business travelers too, living on expense accounts, are likely than a family traveling on a budget to care less about a 50-cent price difference in their groceries.

But Black Bear Lodge’s experience also shows the potential of a grocery-delivery service, especially for hotels in secluded spots like the White Mountain National Forest. Hesser is still enthusiastic about the program and aims to reinstate it by spring 2014.

“I think it will be a big hit once we can figure out the logistics of it all,” he says.

Questions and Discussion

Questions?

Comments?

Advice?

Thoughts?

I can be reached via the methods shown below at any time if you have additional questions or

concerns in the future:

Matthew Hudson - Lily Rothwell, LLCMobile: 410.409.3776

Matthew@LilyRothwell.com