Famously, if you stay at the Ritz Carlton, you get $2,000 in experiential insurance. Now mind you, this isn’t one of those upsells you see when you book a plane flight, trying to scare you into insuring “your very expensive and potentially ruined $249 flight to Boise,” but a well-known brand guarantee offered by the company. If you have an issue at a Ritz Carlton: the concierge goofs up a reservation, a drink is made poorly, whatever the issue is, the staff are empowered to spend up to $2,000 a-piece to make things right.
This guarantee is one of many famous guarantees used to ensure that customers for decades have had complete confident in the Ritz Carlton brand, among many other bespoke and luxury brands that offer such guarantees. Yet, we have also seen and heard of many brands whose way of doing business seems to ensure the opposite.
Today, we’re talking about the value of a white glove and consistent experience over time with any company, brand, or service, and why it might matter more than you think.
Your First White Glove Experience
Have you ever had one? Do you remember it like it was yesterday? Admittedly, my personal white glove experience was quite less glamorous than the phrase implies; having had a sergeant in the army literally take a white glove to inspect how clean a weapon system we were responsible for cleaning was (spoilers: that glove did not survive the inspection.) But, my first white glove experience in a more commercial sense was going to an all-inclusive resort in Puerto Vallarte. Admittedly, it’s a bit disconcerting to have literally everything you want to be given to you without question or asking for a credit card, and with a pairing of “It would be my pleasure, sir” from the staff, but it’s illuminating to be waited on hand in foot; at least metaphorically.
What do you take from such an experience? Certainly, it brings your day-to-day experience in a more commonplace sense into a different perspective. “Why is the line in the coffee shop so long? Why am I bumping elbows with the guy next to me on the plane? And what do you mean Pina Coladas are $14 plus gratuity?” It gives you a sense that your day-to-day experiences are much more at the margins. For example, I personally have reached a point where, barring outrageous cost, I won’t fly economy class on a plane anymore. I’m tall enough to have my knees crushed even in economy plus seating, people never respect the rules about who gets an arm rest on which sides, and plane snacks in economy have gotten to the point of borderline inedible. Je refuse. So I pay twice what I once thought was reasonable for just about every flight, simply to have leg room, not bump elbows with a stranger, and for a “complimentary” beer.
But, let me also suggest that there’s a more commonplace version of a white glove experience that may not be so obvious: consistency. Let’s take the example of a McDonalds. McDonalds would be considered by anyone in the United States as far removed from a white glove establishment as possible. Cheap, greasy, generally unhealthy, and the butt of a million-and-one jokes about what you’ll do if you don’t go to college, McDonalds is actually a remarkable case study in consistency. Regardless of which state you’re in or the time of day, you can reliably get the exact same menu with the exact same products from location to location across all 13,457 locations in the United States. You probably know their food so well that you’d actually notice if there were a quality problem during any given visit. That’s how consistent their service is.
But what does that teach us about a white glove experience?
Credence Claims and the Problems of Inconsistency
Permit me to point a finger at my industry here. Financial services, particularly in the financial advice domain, are what academics call “Credence Claim” businesses. That is to say, it is very difficult for a consumer to readily identify whether we are going to provide the value we claim to provide, and once we’ve provided our service, it’s challenging to ascertain whether the success or failure in the outcome is a byproduct of the quality of our work or external factors. Other examples of credence claim professions are doctors and mechanics. “Did the treatment get botched, or was this complication always going to arise? Did the mechanic break one part of my car when they were fixing another, or is it a coincidence that the catalytic converter went bad a day after I had the engine repaired?”
This leads many clients to suffer from a sort of Stockholm syndrome, though it would be more accurately called confirmation bias. Having made a professional decision, the client finds themselves in a position to defend their choice, even if their choice wasn’t very good. In this, as a financial planner, I often find that many clients are paying a lot of money for very little value, and this puts us in the awkward position of having to be the bearer of bad news, which puts a potential client in an even more awkward position of having to overcome their confirmation bias to believe us or otherwise tacitly defending a bad professional so as not to feel like they’ve made a mistake.
For example, we recently onboarded a client who, frankly, has been getting a bad deal on all ends. They engaged a financial advisor from one of the big insurance companies about a year ago, who promptly put them into an underperforming portfolio with net expenses of over $37,000 annually for both the products and the professional’s advice. Meanwhile, other than the investment portfolio, the professional’s advice was: “Buy this whole life policy for $50,000 a year in premium.” Great advice for the financial advisor’s commission check, but not so great advice for the client. But, to double down on the bad run of professional help, this same client was also paying a tax professional $12,000 a year for their tax returns and quarterly tax planning. You probably don’t need me to tell you this, but if you’re supposed to be getting quarterly planning, you probably expect to get your Q1 planning recommendations earlier than November. Yet, that’s exactly what this client has suffered.
It turns out inconsistent delivery is the bane of the client experience, often without the client knowing it. For our example above, a competent financial planner would never have put a client into a portfolio costing them a net of 2.05% of their investments annually. A genuinely skilled tax professional charging such a premium would not only deliver their services in a timely manner but at such a premium price, but would also have curated a ratio of team members to clients that ensured the delivery. But neither of these example professionals is offering a Ritz Carlton guarantee for their work, and frankly, $2,000 wouldn’t make up for the harm.
Hearn’s Law and the White Glove Experience
I’ve invoked one of Hearn’s Laws many times over the years (there’s more than one, but I’ve always focused on this particular example):
You will pay for what you get, and if you’re lucky, you’ll get what you pay for.
When you go to the Ritz Carlton, you pay a premium, but you know that there’s some insurance behind the experience you’re expecting. When you go to a McDonalds, you’re not expecting a Michelin Star experience, but you know exactly what you’re expecting to get, and you get it every time. But as you consume experiences and services that are less familiar to you or that involve a degree of information asymmetry between what you pay for and what you get, it behooves you to be a bit more critical and a bit more demanding of the professionals working for you. Because it’s not enough to pay $12,000 for tax planning or $37,000 for portfolio management, or even to get your money’s worth in good tax advice or investment returns: You have to get a $12,000 or $37,000 experience out of the service too.