ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

EXTENTION PROGRAM

CASE SUMMARY

PREPARED BY: TAMENE AMARE

ID NO: GSE/8922/13

SUBMITED TO DR TEWODROS WEHIB

JUN 08, 2021

CASE REPORT - CHÂTEAUFORM’

1. Identification of the main issues/problems

Châteauform’ was a fast-growing company that had 37 host couples and locations in Europe for
hosting residential seminars. It intended not only to provide customers with comfortable stays
along with fully equipped activities but also to have the flexibility to adapt to all customers’
needs in order to offer a superior experience. With it’s highly focused and value shared
management, Châteauform’ received a very high customer’s satisfaction rate. Despite the global
economic crisis immediately affecting Châteauform’s sales, the company rebounded quickly,
becoming a larger and more robust hospitality organization with focus on not only continuous
small improvements but also to bigger innovations. Although Châteauform’ had strong financial
performance, during the annual management forum, the host couples brought up several issues
that highlighted irregularities between their various departments. All of these focused on
customer centricity, which ultimately is what they were ‘graded’ on. The host couples felt that
some concepts and shared values were too abstract to implement. Concerns were also brought up
by host couples that e-mails between the Family Home and customers were so frequent that they
felt left out from the relationship with their customers. In addition, host couples had received
complaints from their suppliers for late payments made by the accounting team. Châteauform’s
CEO Horovitz, who’s entire strategy behind Châteauform’ was a customer focused organization,
needed to come up with solutions to these issues as soon as possible in order to manage the
expectations of the various departments, as well as to sustain the customercentric culture in his
fast-growing organization.

2. In what industry does Châteauform’ compete? How was data used to differentiate themselves?

Ultimately, Châteauform competes in the hospitality market where it services the multinational
executive seminars, which are hosted by hand selected ‘host couples. This type of market runs
entirely on customer centricity, keeping customers at the top priority and meeting all the last
minute and ad-hoc requests. Host couples along with a chef manage the site totally on their own.
The customer service team knew the organization that was to be served inside and outside, got to
know their clients to make pointed suggestions. They were usually experienced, friendly, and
enthusiastic and had customer centricity at the forefront of their priorities. Châteauform’ used
data to find potential customers in various segments. The company had a customer relations team
in place to look for potential customers across the globe by using a database that had top 500
companies’ information in each country. The company also collected customers’ feedback by
providing a “Sweet and Sour” survey. During the last day of the seminar, participants are
personally asked to complete the survey about their experience at a particular Châteauform’
location. This customer satisfaction survey helped both the host couples and the company to
further work on things that might have been missed in that particular outing. Since the survey
was taken on site, it gave the host couple an opportunity to work in real time and fix any issue
that clients had faced. The response rate for the survey was over 90% and the feedback was
systemically analyzed by the customer relations team and then compiled in monthly reports. The
comments that participants had for the site were also formulated systematically and were
analyzed for future use, becoming the basis for any investments to be made in that particular site
or region. From the survey repose calibration, 96% of the participants were extremely satisfied
but the company had an objective to take that score to 100%. Based on this feedback, a service
recovery plan was introduced. Being in the service-based industry, everything was at stake and
Châteauform’ took this as a challenge to head on. The company processed 5 million surveys
every year to understand participants from different countries across the globe. Apart from
participant survey, Châteauform’ also encouraged their employees to give feedback for the areas
of improvement, which further helped the company to increase the employee engagement. The
employees gave their feedback in a Golden Book which was present at every site. 20% of the
employees’ salaries were depending on this internal customer satisfaction survey, so
Châteauform’ understood what data points they needed, and how to organize it.

3. What can you say about the company’s target group? How does its focus on business customers
help them to differentiate the company from the competition? (recommendations and/or comments
on effective solutions/strategies) Châteauform's main customers were large multinational
companies that wanted to be able to hold meetings, trainings, or other types of corporate events.
One of the characteristics of multinational companies is that they have employees from all over
the world, which means that there might be employees who had long flights before arriving at
Châteauform’s sites. In addition, company events generally require a large number of different
venue types, such as conference rooms for meetings, auditoriums for training, and spacious halls
for company annual meetings. In response to these different needs, Châteauform’s goal was to
meet all customers’ demands. The company provided a variety of conference facilities, such as
audiovisual equipment, various types of conference rooms, and auditoriums, which greatly met
the needs of various corporate activities. In addition, in order to facilitate the arrangement, when
a company signed an agreement with Châteauform’ by holding its event at Châteauform’s site, a
specialist called "nanny" from Châteauform’s office would take care of various matters. This did
not only convenience the company that was planning to host their event at Châteauform’, but
also allowed Châteauform’ to better coordinate the use of the sites’ facilities. Châteauform’ had a
large number of leisure areas and facilities. The use of these facilities was completely free for
employees who hold company events at Châteauform’. This meant that companies no longer
needed to book and plan for these facilities separately, which significantly helped increase
customer satisfaction and transparency- a rarity in the hospitality industry. Another thing worth
mentioning is that Châteauform’ had a very good quality bedroom, but a very simple shower.
This might seem insignificant, but it shows their ability to target large multinational corporations
but not focus on the aesthetics of the facility, but rather the amenities and extracurriculars
offered. This was because Châteauform’ found that what customers’ really needs were not
luxurious bathrooms, but a fast and effective way to take showers. The bedroom was high
quality, in terms of sleeping arrangements, because participants from all over the world were
tired from traveling, so they would like to have better sleep. Most of Châteauform’s sites were
located around international airports and major cities. This made it easy for employees of
multinational companies to get there quickly after a long flight. It also gave customers the
opportunity to go around after the company event. All of these reflect the characteristics of
Châteauform’ with simple, intimate, instead of luxurious.

4. What is Châteauform’s value proposition? How does CRM play a role in their value proposition?
(Links to core CRM, marketing strategies or related research)

Châteauform’s value proposition is centered around having their client base have the best time
possible- “feeling home, far from home”. Focused exclusively on the executive seminar market,
Châteauform’ aims to find ways for a large company’s management team to relax and enjoy
themselves while finding ways to bond. Top of the list of the value proposition was a large,
community like Chateau and a hassle-free experience, including transparency. They truly
believed in the customer centricity model, and because of that their brand was able to thrive. Part
of their value proposition was also being ‘different’, rather than being stuck in a stuffy hotel for a
week, they broke the mold and welcomed guests onto grounds where they had access to a chef,
tennis, movie theatre conference rooms etc. They took a consultative approach towards
understanding their customers and focused heavily on making sure their conversion rate stayed
high. Most of all, their value proposition was based around complete and unequivocal customer
satisfaction. CRM- Customer Relationship Marketing- doesn’t play a role in their value
proposition, it is their value proposition. A strong net contributor of CRM is loyalty amongst
clients, and Châteauform’ aimed to do exactly that. Consider when, in 2009, they started seeing a
slowdown in sales and a retracting conversion rate, Châteauform’ knew to reach out to existing
customer to ask why they weren’t seeing the bookings. They got an honest answer- it was too
expensive, and a rate change might make them change their mind. Châteauform’ recognized an
important principal in CRM- customer retention is less than customer acquisition. Despite 76%
of organizations seeing customer lifetime value (CLV) as important to their organization, only
42% understand how to measure it correctly. Beyond that, Châteauform’ saw an opportunity to
turn existing customers into repeat customers since the probability of selling to an existing
customer is 60-70%, versus a new client is 20-30%. In the end, one of their business units that
sprung from this (Cities) has brought in significant revenue- so by listening to their customers, it
gained them an additional 18% in revenue and significant market exposure. Without constantly
devoting themselves to customer centricity, Châteauform’ probably would not of had the quick
rebound after the global recession that they did. Internally, they structured the organization
around the customers (delights, sweet and sour reports, pay for customer satisfaction) that
showed they knew the value of client loyalty.
 D ESIGN THINKING BY TIM BROWN

1: To be a design thinker, taking an integrative approach to projects is

crucial.

Many people understand innovation to be simply the process of inventing a new technology.
When you have your new invention, then you have an “innovation.“

This view is far too simplistic. In contrast, design thinking offers you a method to approach the
process of innovation, and thus achieve a more sophisticated understanding of innovation itself.

Design thinking encourages us to take an integrative approach to innovation. This approach

combines three overlapping “spaces,” through which a project may cycle several times.

First comes inspiration. In this space, we consider a problem or opportunity, thinking about what
we can do to solve the problem or bring the opportunity to fruition.

Second is ideation. Here we develop our ideas and theories, and then put them to the test.

Last is implementation. In this space, we introduce our idea to the market.

You won’t march directly through these three spaces – rather, most innovations will pass through
each space a number of times as part of the design thinking process.

For example, during the process of ideation, you could develop a product with features that go
beyond addressing your initial problem. In this case, you might want to revisit the inspiration
process, to consider what different kinds of problems your product’s new feature could solve.

To create an integrated solution, a design thinker must balance three aspects: feasibility, viability
and desirability. Whereas a “normal” designer may resolve the different aspects of a project
separately and one by one, a design thinker brings them all together as one harmonious solution.

The gaming console Nintendo Wii offers an example of an integrated solution that perfectly
balances feasibility, viability and desirability.
Nintendo introduced gestural control to console gaming, which at the time was not only feasible
(if not cutting-edge) but viable. The company also priced the console less than other machines on
the market, while providing a more immersive experience for the player – thus making the Wii
desirable for their target market.

In the course of your design projects, you too should make this integrative approach the
foundation of your design thinking.

2: Revolutionary design solutions stem from observation and letting

consumers take the lead.

According to economist Peter Drucker, a designer’s job is to convert need into demand. Simple
enough, yet how exactly does a designer go about doing this?

Design thinking supposes that the best insights come from observation, or taking a closer look at
how people live their daily lives.

Psychologist Jane Fulton Suri says that we are so good at adapting our behaviors to inconvenient
situations that we’re often not aware of the “thoughtless acts” that could trigger inspiration for
the observant designer.

Imagine an office worker trying to sort out the tangled chaos of cables under his desk by sticking
a label to each one. He likely wouldn’t have come up with this solution had he been asked
directly how to solve this particular problem.

This is why observing people’s real-life behavior is so important. Observing provides

meaningful insights into pressing needs.

Yet design thinking goes beyond mere observation, in that it also invites people to engage in
creating solutions to their own problems.

Psychologist Abraham Maslow suggests that once a person’s basic needs are met, he will look
instead for meaningful or emotionally satisfying experiences. From a design perspective, a great
customer experience is one that fulfills these higher-order needs.
But since every person has different needs and aspirations, design thinking proposes that we let
people participate in creating their own customer experience to make it personally meaningful
and engaging to them.

Whole Foods Market, for example, is one of the most successful retailers in the United States, as
the store provides an enriching shopping experience by offering free samples of products and a
wide variety of healthy products that cater to customers’ lifestyles.

At a Whole Foods Market location in Austin, Texas, the company is even experimenting with
letting customers cook inside the store!

This sort of hands-on approach allows customers to engage and thus gives them the opportunity
to create their own meaningful experience.

3: Think with your hands, not just with your head! A prototype will get
your idea out there faster.

Many of us played with LEGOs as children, building our own dream worlds brick by colorful
brick.

As adults, however, we do most of our inventing in our heads long before we employ our hands
to realize our ideas concretely.

Yet thinking with our hands, or prototyping, is a powerful strategy for design thinkers as it can
generate better results faster. By actually building an idea (with materials, rather than with only
our minds), we quickly learn its limitations and see the many possible directions we can take it.

Thus prototyping shouldn’t come at the end of the process but at the beginning!

The earlier you start prototyping, the more rudimentary your prototypes will be. But consider
that a ball from a roll-on deodorant and a plastic butter dish was all it took to prototype Apple’s
first mouse!
Once you have a prototype, you should put it out in the real world and observe how people use it.
This way, you can quickly discern whether it “works” or how people actually would use it.

When T-Mobile started social groups via mobile phones, for example, the company launched
two prototypes simultaneously and observed how users interacted with each. Thus the company
was able to get a deeper understanding of which solutions customers found more compelling.

The reason prototyping is so powerful is because it occupies all three spaces of innovation at
once It is always inspirational, in that using and observing a prototype gives birth to new ideas
and potential improvements. Playing with a prototype is a way to test and develop your idea. In
other words, it fits solidly in the ideation space.

And prototyping demonstrates the viability of an idea, showing that it can actually work and that
it belongs in the marketplace, discoveries that live in the implementation space.

4: Design thinking uses storytelling to make ideas and products more

relatable to consumers.

Our love of storytelling starts at an early age, and stories are at least partly responsible for how
we understand ideas and concepts.

Thus it should be no surprise that storytelling too plays an important role in design thinking.

Design thinkers use stories to make a product more relatable to customers. To develop a good
story, a design thinker must consider how a product came into being and how a customer will use
it over time.

Importantly, the storyline must involve the customer at every step, reaching as far back as the
very beginning of the product’s life.

For outdoor wear company Icebreaker, this meant attaching a code to each of its garments, with
which a customer could track, for example, the wool in a jacket to its source in New Zealand,
even to the exact farm where the Merino sheep are cared for.
The ways in which a customer uses a product over its lifespan should also be considered when
developing a story.

To sell a project that was essentially a predecessor of a modern GPS system, IDEO designers
told a story about a sailor navigating from one port to the next. Each “chapter” in the story
described another important problem the sailor encountered along his journey, and each solution
was a feature that was to be developed for the system.

But the most meaningful stories are those which customers can write themselves. By engaging
customers as active participants in a product’s story, they will be more inclined to use the
product or service.

The American Red Cross used this to its advantage when it invited people to share stories and
motivations for donating blood – a mother’s life was saved thanks to a blood transfusion, for
example – thus reinforcing the goal of getting donors to return.

These stories remind donors of the good that they do, and motivate new donors to contribute as
well to this "common commitment."

5: Smart teams and an inspiring work environment are the basis for
successful innovations.

Google has pink flamingos and inflatable dinosaurs. Pixar has beach huts. Start-ups all over the
world have “chill-out” lounges and ping-pong tables.

Such perks are the marks of creative company cultures. However, you don’t necessarily need a
beach hut or a comfy sofa to create an environment that fosters innovation.

Innovation happens when an organization supports experimentation and accepts failure as a part
of life.

When people are afraid to try new things, no breakthroughs will happen. People won’t dare to
develop or test ideas for fear of the consequences of failure.
New ideas require an environment where failure – and thus learning – is an acceptable step on
the road to innovation.

Innovation too requires the right kind of team. Specifically, collaboration in diverse,
interdisciplinary smart teams helps to unlock an organization's creative powers.

Any project requires input from as many people as possible, including designers, engineers,
marketing managers and so on. Bringing all these people together at the beginning as part of
your smart team allows you to capitalize on interdisciplinary thinking.

Indeed, designers will offer different ideas, perspectives and insights than accountants or
software engineers will, but their ideas are no less viable or relevant. It’s important to
incorporate these ideas as soon as possible for the sake of expedience.

Smart teams will need space to work, and companies should provide a designated space for
doing so. The internet as well offers tons of possibilities for teams to work together and innovate.

One such online platform is Incentive, where any research & development team can post a
challenge, to which thousands of scientists, designers and engineers can contribute solutions.

In a physical office, however, companies should simply designate a physical space in which
people from different departments can come together – away from their own private desks – to
get the creative juices flowing.

6: A good design thinker always asks, “Why?” and is willing to take her
ideas to the masses.

Much to the chagrin of parents, children always ask, “Why?” even about the simplest things.

Discovering and trying to understand the world from their own developing perspective, children
are always looking for insight that will help make sense of what they’re seeing and experiencing.

Similarly, a good design thinker always asks, “Why?”

Such questioning allows us the opportunity to reframe a problem, understand its constraints and
use the information to find a more innovative solution.

Instead of accepting the world “as it is” because “it has always been thus,” we should ask
whether a current solution to a problem is the optimal one, or indeed whether we’re even
addressing the right problem in the first place.

Before organized agriculture, humans gathered fruits and vegetables from near and far. This
exhausting, sometimes fruitless task was simply the way things were done for thousands of
years.

Eventually somebody asked: Why do we spend so much time wandering around for food when
we know that plants grow from and also produce seeds? By asking this simple question and
using it as a springboard for innovation, agriculture, and thus civilization, were born.

But good design thinkers aren’t satisfied with just having discovered a solution to a problem.
Rather, they want to share their ideas in the hopes that the ideas will be built upon by other
innovators.

It’s easy to get possessive about ideas. After all, we’ve put so much time and energy into them
that we start to see them as parts of ourselves. Thus we try to monopolize the development of our
ideas and bar others from tinkering with them.

But this is terrible for innovation! If an idea is shared freely, it will quickly improve – and that’s
a situation in which everybody wins.

7: Design thinking promotes change by encouraging consumers to adopt

more sustainable behaviors.

As the evidence for human-made global climate change continues to mount, companies and
designers need to consider what they can do to help preserve a livable climate for all.

Design thinking has the potential to increase public awareness and inspire everyone to engage in
a more sustainable lifestyle by effectively informing people about environmental issues.
This is not because people are intrinsically interested in environmental sustainability, however.
Rather, companies need to find ways to inspire sustainable habits based on behaviors that people
already exhibit or that are easily introduced.

For example, after design thinkers realized that shoppers valued style and comfort over basic
energy efficiency when it came to purchasing products, the U.S. Department of Energy decided
to shift its focus when promoting products to encourage Americans to adopt a more sustainable
lifestyle.

Thus designers explored the creation of stylish yet nonetheless energy-efficient products and
catchy informational tools to better attract consumers’ attention when shopping.

Design thinkers also understand that to communicate the urgency of climate change, facts alone
are not enough. Thus, designers need to start thinking about how to make sustainability more
accessible.

One practical way for design thinkers to find a solution is to use a deck of cards, called “Drivers
of Change.” The deck is composed of cards with answers to questions like, “Can we afford a
low-carbon future?” The cards get a message across with simple facts and images. In fact, the
deck has been used by discussion groups to inspire developments in sustainability initiatives.

Design thinkers should look at the entire production process, examining products from the
extraction of raw materials to disposal. In doing so, it’s hard not to find opportunities for
environmentally friendly innovation!

A good example of this kind of design thinking is Pangea Organics, a company that produces
natural body-care products. Its products employ compostable packaging that contains wildflower
seeds; thus you can soak the packaging with water and toss it in your backyard, where it would
grow!