Jim Barnes

Hilton Hotels has recently come under widespread criticism for their decision to devalue the points that members of the Hilton HHonors program have accumulated. As of January, members will need to redeem approximately 25% more points for reward nights at Hilton properties.

By taking this step at this time, Hilton has created a monster. Travel journalists and Hilton HHonors members have been burning up the electronic airwaves. Some see it as the epitome of bad timing in that most hotel chains would welcome a few more guests in these difficult economic times. But, it’s not just bad timing that Hilton is guilty of.

Hilton’s action may be seen as just one example of a widespread practice amongst corporations that run so-called loyalty programs to reduce the trillions of points that represent contingent liabilities on corporate financial statements. If they can get us to use our points more quickly, or to spend more points to get rewards, then they will burn through...

We're all focused these days on the customer experience and with good reason. But there is very good evidence that increasing customer inexperience may represent an opportunity for companies to step in and help customers accomplish things.

At the end of the day, customers need to get things done. Ted Levitt, many years ago, made the cogent observation that nobody ever went out to buy a quarter-inch drill. What's needed is the hole; the drill is merely a means to the end. More recently, Clayton Christensen has written eloquently on the jobs that customers hire products (and services) to get done. In other words, the life of the customer is full of minor day-to-day challenges—getting dinner for the kids, getting the dining room painted, taking the car in for service, finding a dress to wear to Cousin Jane's wedding.

Increasingly, customers are finding it difficult to complete many of these relatively straightforward tasks. I suspect there may be three...

A company's value proposition can't be carved in stone; it must be flexible and adaptable. The value we offer to customers is constantly changing, whether we intend it to or not.

The challenge we face in business is ensuring that a large percentage of customers, and particularly those customers who are critical to our long-term success, view our value proposition consistently and as we intended, and that they see real value in it.

The customer's perception of value is individualized and dependent on context and circumstances. What to one customer represents great value is to another a waste of money. What customers perceived to be great value in early 2008 may not represent the same value a year later.

What is Value Today?

In troubled economic times, many consumers will forgo a vacation or delay buying a new car, but they will retain a few items on which they are not prepared to skimp. Last week, while I was having my hair cut, Jennifer...

I set out this morning to write a blog with no mention of subprime mortgages, recession, economic downturn, or bailouts. I figured that maybe we have all heard enough gloom and doom in the past few weeks. My message was to be about the role of the HR department in ensuring solid customer service and in delivering jaw-dropping customer experiences. Then, as I began to collect my thoughts, I realized that, in the midst of the economic crisis that has galvanized us all, I am still hearing customers complain loudly about terrible customer service, and occasionally regaling others with less frequent stories of wonderful, caring service encounters.

I attended two enjoyable social functions over the weekend, marking the holiday season. At both, I listened to conversations in which customer service seemed to be the second most discussed topic. Where I live, the weather is always the most discussed topic (it’s unusually balmy at the moment).

I find myself paying a great...