Lessons From YuMi Rabaul
We’re working in Rabaul, Papua New Guinea with 24 entrepreneurs who are interested in being tour operators for Carnival Cruises.
This is a lucrative arrangement, but it’s not for everybody.
We are running an accelerator over several months that helps entrepreneurs assess the desirability, feasibility and viability of their tours.
This involves some business modelling, customer interviews and financial analysis over several rounds, to understand if/how this might be a great opportunity for all parties.
Here are some of the lessons and conversations that have emerged from the program so far…
Customer Interviews Are A Goldmine
I am constantly surprised by how valuable customer interviews can be.
The conversations we had on Ship Day were remarkable; a mixture of positive and negative experiences in PNG, some genuine enthusiasm and some total apathy towards tour ideas, and unexpected insights into how customers evaluate their purchases.
For example, one customer said they had a good day on the Volcano tour, but his tone of voice was a little unusual.
We inquired as to what made it good, he revealed that they were expecting a different experience, but were still happy with what they received.
It turns out that Rabaul has over 15 volcanos, some dormant, some active.
That’s not the impression our tourists had; Rabaul has one obvious black, active volcano.
This particular tour involved climbing a dormant volcano (which looks like a green mountain), and observing the active volcano from a lookout.
A great morning, but not quite the same as scaling the active one.
What this revealed is that the current tour descriptions are sending the wrong message, and this is translating into less than stellar feedback about the tours themselves.
Questions Are Digging For The Truth, Not Compliments
In a customer interview, participants are often inclined to say nice things, because negative comments make for potentially awkward conversations.
This is nice of them, but it skews the data.
Instead, we need to design our questions to get to the truth, not just the polite parts of the truth.
That means giving people the chance to reveal what they really think, such as by offering multiple options, scores out of ten, asking for suggestions for improvement, letting them pick from a sample menu, etc.
These let our interviewees express their thoughts in a clean and safe manner, without the fear of insulting the entrepreneur.
Three great starting points for these questions are
1. “Would you rather…”
2. “And what else?”
3. “What should we start doing, stop doing and keep doing?”
You Can’t Outsource Insights
Honest customer interviews come with a degree of risk – the risk of rejection or the risk of discomfort.
For entrepreneurs with skin in the game, this is a good deal, since these risks also come with the chance of a beautiful insight that can improve their business.
If you send a team member without skin in the game to the interview, their deal isn’t so appealing – they get all of the downside without the same upside.
Insights aren’t so valuable to them, but the awkwardness remains.
If you want to understand your customers you need to meet them yourself.
Aside from all of the feedback they offer, they also give you a great frame of reference for the types of people you’re actually serving.
Some Tourists Just Want To Sit Down
A lot of founders try to offer as much value as they can in each product/service, either out of a love for the customer or a fear of being called out for being unworthy.
This sounds like a good thing, but it leads to an overwhelming amount of busyness for the customer.
Our interviews showed that customers aren’t actually looking for a tour with a long itinerary, but rather somewhere nice to sit and relax.
In other words, they’re happier sitting on a beach with a drink and an umbrella than they are on a bus “getting a lot more done”.
Instead of racing around all day, what if you offered a single destination that was a lovely place to unwind and take photos?
On a slight tangent – no tourist wants to sit on the ground, no matter how traditional the event may be.
People want to be physically and psychologically comfortable before they can enjoy participating in a new culture.
I’m not saying I like it, I’m saying it’s what the data shows.
Promises Are A Fine Line
Advertising experiences is a hard line to walk – if you over-promise you end up with disappointment, if you under-promise you don’t get the sale.
Promises are different from product and service features, they’re often to do with intangible things like enjoyment, relaxation, improved social status, convenience, memories (and to a lesser extent, sunshine).
It’s vital that an entrepreneur promises things that are within their control; you can’t promise good weather, but you can promise air conditioning.
These promises need to be tested, to understand what appeals to customers and what can be delivered consistently every day.
Tablecloths And Choirs
When it comes to service design, never underestimate the impact of a single, well-chosen detail.
Think of a tablecloth at a conference centre – these are inexpensive and make even the ugliest folding table look professional.
Simple white cloths transform a venue, and give the perception of cleanliness.
At the port in Rabaul, the first thing passengers see is a giant, ugly warehouse full of coconut shells.
However, standing in front of that warehouse is a 40-person choir, all signing traditional songs to the passengers as the ship comes in.
They are like a tablecloth thrown on top of the warehouse at the last minute, and they make a huge difference to the customer’s first impression of the province.
The question for every entrepreneur is; what’s your tablecloth?
What small addition or detail can change the way people perceive your brand?
Customers Make Complex Decisions For Simple Reasons
Our tour operators agonise over their tour descriptions, going into great detail over what makes them unique.
What surprised them is the customer’s purchasing process.
Most people purchase tours days in advance, onboard the ship, by flicking through an eight page brochure that lists all the tours for all of the ports.
The writing is tiny, so most passengers only scan the headlines.
That means the tours aren’t being assessed on their merits, but on their first impressions.
Our tour operators will change how they name and describe themselves, with the knowledge that customers won’t be undergoing a complex analysis of all of the various options, but rather picking the one that conjures up the best mental image.
Insurance Is There For You, Not The Tourist
I heard a lot of people complaining about having to arrange insurance for their tours, since this is an added cost.
Maybe it’s just me, but this seems like an odd complaint.
You hear horror stories of Americans incurring injuries and suing for hundreds of thousands of dollars’ worth of medical costs, which raises your premiums in the future.
It’s easy to complain and resent the system, but think about it for a second:
You’re in the tourism game.
You’re hoping to serve more tourists.
You’re running tours with a degree of danger.
Accidents happen.
Customers are right to have their costs covered.
Do you want them to be paid from your account, or by your insurer?
The customer is covered either way, the insurance is there for you.
By all means seek out the best policy, but don’t grumble about something that will save you from bankruptcy.
Well Designed Systems Are Invisible
On Ship Day, I had to wake up at 5am to drive down to the port, so that we could see how all of the buses are set up.
It was really boring – just a queue of buses ready to go, without much commotion.
That’s the sign of a good system, it’s invisible.
A queue of 30 empty buses doesn’t just happen, it takes a great deal of co-ordination, planning, staffing, permits and scheduling, all of which are invisible when they work.
As they say, when you do things right, people won’t know you’ve done anything at all.
Maybe It’s Two Tours?
Lots of founders try to design “something for everyone”, in order to be as accommodating as possible and to increase their chances of making sales.
It’s almost impossible to achieve this – you might sell tickets to everyone, but you won’t fully delight them.
Instead it’s easier to run two tours without compromise.
One short and one long.
One active and one passive.
One for newbies, one for seasoned travellers.
One that’s affordable, one that includes everything.
This lets you properly serve and delight more of the market, maximise your margins and improve your reputation.
Use Your Fear To Fuel Your Tests
As we’ve previously discussed, people don’t like testing their business ideas out of fear or arrogance.
The most common fears are that customers will dislike the idea, it won’t be feasible to run, or that it will lose money.
These are reasonable fears, but that doesn’t mean you should turn a blind eye.
Instead, why not use that fear as fuel for your tests?
Use that nervousness to guide the test – you either confirm your suspicions and save a lot of time and money, or you discover that your fears are unfounded.
Fear isn’t the problem, paralysis and denial are the problems.
I am returning to Rabaul in 2020 to continue supporting these incredible businesses, with the intent of setting them up as tour operators for cruise ship customers.
This has proven to be transformative for local economies, as it creates employment, improves the reputation of the province, and keeps profits in locally owned businesses.
Good luck to the cohort as they refine and test their ideas over the Christmas season!
