Why it is time, an hotel business should start using user-generated contents

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The ways of advertisement are shifting. A company needs more than a couple of messages on the social networks to reach their target groups. Paid advertisement is not as effective as it was before. Especially not those on the social media. People find a personal, funny or remarkable item on the social media far more interesting than mass advertisement. Therefor UGC is a successful marketing tool in general

User Generated Content (UGC) is the concept of using customers as a marketing tool. In this way, UGC provides authentic contents and entertains the target group via marketing tools which are not provided by the business itself. In today’s social media culture, customers turn to online product feedback, social media and blogger reviews. ‘Experts agreed on the fact that UGC has become an essential for brands that increasingly build direct, authentic and transparent relationships with customers.’

‘UGC is a content strategy then encourages consumers to share their experiences with a brand which in turn shares the experiences with other consumers through digital channels.’ The Australian Marketing Institute CEO, Lee Tonitto said also that, ‘consumers trust content produced by their peers far more than what is created by marketers, and they reward brands that deliver UGC with engagement.’

In term is Customer Engagement Management, UGC is an effective strategy to be used to engage more customers. ‘Since it is often found more trustworthy and memorable than other sources, a strategy like this will increase transparency and honesty that empowers clients and users to be heard by the business,’ a managing director of a global production company, Bo Thorp said. What makes UGC so successful is that the followers of the ‘online influencers’ have chosen themselves to follow these content creators. As follower you are aware that those people make UGC for companies. But since many people feel connected to these ‘online influencers’ the advertisements become far more personal and not as annoying as ads you didn’t chose for to see.

This new strategy will reduce costs of expensive advertisement campaigns and will therefore create more profit for a company, which is after all the final goal of a commercial enterprise. According to Tonitto, ‘online influencers which a dynamic content range who make the advertisements interactive and personalised are the best trick for successful UGC.’ A UGC campaign increases brand recognition for a higher Return On Investment.

An entrepreneur in the hotel industry should use the knowledge of this CEM strategy because the hotel industry is service and experience focused. A good example for a successful UGC campaign is the Loews Hotels. They have replaced their models by real time hotel guests. By a first person perspective, the content is more seen as a personal story, and therefore people can identify more easy than with ‘normal and oldfashioned’ marketing techniques. UGC offers a unique perspective which can’t be reached by the business itself.

 

Sources:

Tonitto, L. (2016). Australian Marketing Institute. Retrieved September 2017

Williams, A. (2016, August). (CMO) Retrieved September 2017, from CMO: https://www.cmo.com.au/article/605551/why-it-time-your-brand-leveraged-user-generated-content/

 

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THE QUESTION OF THE CENTURY: Should Hostels pursue a mass customisation strategy?

Hart (1995) further identified four key decision factors:

Customer sensitivity: the first question hostels need to ask themselves is whether the customers care if they offer more customization. If the answer is no then the potential of mass customization is limited.

Process amenability: does the technology in the area of your hostel allow you to customize your product or service? The next question is how much is it necessary to invest? Is your marketing department trained enough to analyse and have enough access to the needs of customers? Is your company capable of translating the found information into a specific product?

Competitive environment: is your hostel competitive enough, or do you have enough competitive forces that would benefit or reduce the advantage of executing mass customisation?

Organisational readiness: since mass customisation strategy differs for each company, is your hostel ready to capitalise on mass customisation and shift the organisational strategy to a more open-minded management and adequate financial resources.

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Lavender Circus Hostel Budapest, for writers, Hostel World Instagram page

DO YOU WANT TO MASTER MASS CUSTOMIZATION FOR YOUR HOSTEL?

This is how:

four approaches to customisation

Figure 11.3, Ed Peelen and Rob Beltman, Customer relationship management, Chapter 11

If you want your hostel to be COLLABORATIVE you need to approach your customers in order to understand their needs, afterwards you have to come up with an offering that meets those needs and as a last step if you both agree you create the customized product.

If you want to have standard elements for your hostel then choose the ADAPTIVE method which consists in having products that the customers can adapt themselves.

If your customers want the same product but in a different representation than choose the COSMETIC approach by changing the exterior look of the product without altering the product itself.

If you have easy customers who are clear about their needs, the best option is TRANSPARENT customization, by doing this you customize all your products however giving the same representation to each of them.

In my opinion the Adaptive customisation is the best for hostels, because as it is a complex firm with a wide market, it is easier to offer a choice of standard products from which customers can select the one they can related to. A clear example of this is Pennsylvania’s Lutron Electronics Company, they offer lightning systems in order to give opportunity to their customers to choose the light effect they want according to their mood. Likewise examples regarding hostels could be the one of the breakfast, where a lot of different ingredients are offered and the clients are free to prepare what they want and giving the choice between staying in a room with different people or a single room.

There are different ways that hostels can switch to Customization utilizing the Adaptive method, it is just about knowing what the customer seek the most and what they expect.

 

Sources

Pimkuh86, 12 February 2012, Mass customization in the hospitality industry, Retrieved from: https://consumervaluecreation.com/2012/02/12/mass-customization-in-the-hospitality-industry-concepts-and-applications/

The importance of customer experience mapping in the hostel industry

The best way to understand a customer experience is through a customer experience map. A customer experience map is created from the perspectives of the customers itself. It starts from the moment the customer starts searching for a hostel until the moment he leaves the hostel.

When companies use the experience map they are able to plan how they can constantly exceed their customers’ expectations in order to create great customer experiences. An opportunity to exceed emotional expectations is to create the wow feeling to customers by remembering when they booked for the last time and to recognize the customer by using their name which makes them feel more welcome and special. The emotions evoked are surprise and satisfaction.

When  a customer has booked a room at a hostel he should be continuously satisfied. The customer journey starts even before the customer arrives at the hostel. Before booking they expect that they will get easily through the booking system and that there will be availability. They expect that if any worries and concerns exist about the booking process and the accommodation itself  they can reach the hostel either by social media or email and will get a response within a short period of time. They also expect that the hostel is easy to be found.

However, a good way to surprise customers in a positive way is to exactly offer them what they do not expect and create a happy feeling. For example, customers do not expect a welcoming card when they arrive at their room. Either a welcoming card or a small present could improve their psychical well-being and make them feel more welcome and special. A welcome sign in front of the hostel can also make a difference.

Additionally they don’t expect employees to have a small friendly chat with them or to be greeted like a friend. They just expect a smile and be given a key for their room. They don’t expect to be advised where to go around the area or get a small note with some nice places to visit. Of course on the internet it is easy to find this kind of information, but in this way it seems like the personnel cares about the customer.

All in all the customer experience map is a tool for me not to investigate what the customers expect, but to observe what they don’t expect in order to evoke positive emotions such as being happily surprised. I believe that customers can experience happiness in the simple unexpected moments that will influence their stay at the hostel in a positive way.

Sources

Abraham, J. (2013, May 06). Journey Mapping Helps Organize Around Your Customers. Retrieved September 10, 2017 from http://www.cmswire.com/cms/customer-experience/journey-mapping-helps-organize-around-your-customers-020795.php

Contributor, J. D. (n.d.). Customer Journey Mapping: A Walk In Customers’ Shoes. Retrieved September 12, 2017, from http://www.ascendforairlines.com/sites/default/files/article_0.pdf

Passion vs. Attraction: Returning Guests in the Hostel Industry

Would you rather have customers who are satisfied with their experience, but have no emotional involvement with your business. Or does your preference go to customers who have a high emotional involvement with your business, but who are not satisfied with their experience? Which of the above mentioned options are preferred if you want returning guests?

This is the ‘Customer Engagement Matrix’ (Pansari & Kumar, 2017). It discusses 4 categories in which customers can be divided.

Customer Engagement Matrix

‘True Love’ is the preferred category for your customers to be in, because they are highly satisfied with their experience while also having high positive emotions. This would be the perfect position to be in for returning guests. Its contradicting category is ‘Indifference’. This is the least ideal category, because your customers are not satisfied and they have low positive emotions. If you want these guests to return, you will need to make some changes.

Then on the one hand there is ‘Passion’, in which the customer has high positive emotions towards the business, but is not satisfied with their experience. On the other hand there is ‘Attraction’, in which the customer is satisfied but has low positive emotions towards the business.

Now, which one of the last two categories will be the best for your customers to be in if you want them to return to your hostel?

Your best bet with ‘Passion’ will be if you have a chain of hostels. Take the Youth Hostel Association (YHA), they have hostels in destinations around the world. They sell memberships which will give their guests not only benefits during their stay in a YHA-hostel, but also deals on attractions and tours for example (YHA England & Wales, 2017). With this system they encourage their members to stay at one of their hostels during every trip they make. If a guest is dissatisfied with one of their stays, it is still probable for them to choose a YHA-hostel for their next trip, because they will get the benefits. But, if your hostel is not part of a chain it can be difficult to make your guests feel very positive about you when they are not satisfied with their experience.

It can be quite challenging to get returning guests with the ‘Attraction’ category. Guests who fall within this category may have chosen your hostel solely based on a central location for example. Or maybe they had nothing booked and walked into your hostel late at night in the hopes of finding an available bed. So how do you get costumers who chose you out of convenience to return? Of course, they will first need to want to return to the destination. Also, they need to be very satisfied with their previous experience to want to stay with you again. They will actually have switched to the ‘True Love’ category because they will now feel passionate about your hostel.

So, I feel you will have a greater chance of having returning guests in the ‘Passion’ category when you have a chain of hostels. Mostly because the guests don’t necessarily have to visit the same destination. Also, if guests for the ‘Attraction’ category return, they will probably have switched to the ‘True Love’ category.

 

Bibliografy

Pansari, A., & Kumar, V. (2017). Customer engagement: the construct, antecedents, and consequences. Journal of the Academy of Marketing Science, 45(3), 294-311. Retrieved on September 17, 2017, from https://link.springer.com/article/10.1007/s11747-016-0485-6

YHA England & Wales. (n.d.). Retrieved September 18, 2017, from https://www.yha.org.uk/membership/membership-benefits

 

The importance of creating a close relationship with customers in the hotel business

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The travel and hospitality industry are constantly growing and considered to become one of the largest industries worldwide. The tourism business has achieved enlargement and diversity during recent years and also entered a new growth and conversion. According to Deloitte (2017), both industries have recently entered a new expansion and transformation. Therefore, in order to retain successful in the market a close customer-supplier relationship is of considerable great importance for both industries. This blog aims to present the consequences of a weak and close relationship between customers and suppliers in the hotel business.

In the hotel industry customer satisfaction is strongly connected with quality of service. Everyone can tell from their own experiences that personalized service always has an immense impact on personal enjoyment and fulfilment. Already a few hotel companies concentrate on a personalized service. This can be explained by the fact that it makes customers more reliable. Reliable customers are more likely to trust a business. Continuing a relationship mostly depends on trust, commitment and on the degree of intensity. Therefore, close relationships are most likely to have a long-term horizon and contribute to a successful business (International Review of Management and Marketing, n.d.).

Unfortunately, hotel companies today are still missing the personal level of service. Here is a personal example: For my internship, I worked at a hotel company in Mexico City. My parents came to visit me and stayed at the same hotel where I worked. By then, most of the personnel knew me and therefore my parents were treated such as VIP’s. Everyone at the reception, restaurant or bar within the hotel knew their names and were always very enthusiastic to either help them out with any concern or only to talk with them about their vacation in Mexico’s capital city. A missing opportunity of a well provided service and a rather weak relationship would be such as this one: A regular client of the hotel arrives and is asked about any needs and wishes. A close relationship is strongly connected with recognition. After several stays at the hotel company the personnel must know every single need of a client. Knowing who your guests are and where they are coming from is essential within the hotel business. Guests pay for what they receive. Hotel companies should always know their customers in order to create an excellent and unique customer experience.

Moreover, customer-supplier relationship can be presented in various levels and interrelations. For instance, the relationship between the customer and the receptionist within a hotel will be likely primary, however, the relationship between the director of sales and a cooperate contract will be rather secondary. Classifications has been created in order to illustrate the differences between the parties involved within a customer-supplier relationship. Different categories describe a certain degree of the relationship. For example dependence or independence: the powerful party is independent while the other side is dependent herewith the supplier and customer. A task or social-emotional orientation when a big hotel company such as Hyatt is task-orientated whereas a boutique hotel is more personalized and therefore social orientated and finally a formal or informal way of communication (Peelen and Beltman, 2013).

To sum it up, personalized experience is the key to customer satisfaction and loyalty. Next to attracting new customers hotel companies should concentrate on retaining existing customers and further create a close relationship. For instance, by showing appreciation with the aid of a little thank you note after the stay at a hotel.

Deloitte (2017). 2017 travel and hospitality industry outlook. Retrieved at September 18th 2017 from: http://www.resolver.ebscohost.com

International Review of Management and Marketing (n.d.). Customer Relationship Management (CRM) in Hotel Industry: A framework Proposal on the Relationship among CRM Dimensions, Marketing Capabilities and Hotel Performance. Retrieved at September 17th 2017 from: https://www.econjournals.com

Peelen, E. & Beltman, R. (2013) Customer Relationship Management. Harlow, United Kingdom: Pearson Education Limited.

Why hotels should implement customer intimacy strategy?

According to Treacy and Wiersema, customer intimacy is a strategy where the relationship with customers and their wishes and desires are the most important factor. Using intimacy strategy companies usually focuses on selling already tested products instead of introducing new products. Providing customers the goods and services that fits their needs perfectly allows companies to build customer loyalty for the long term. (Ed Peelen&Beltman, 2013).

If the company’s goal is to implement customer intimacy strategy, it can be done in several ways. Companies could increase their touchpoints, such as customer service, websites, blogs, events or search engines queries. Moreover, quick response and social networking could increase intimacy between the company and customers as well. By showing clients that they are the most important and giving them a chance to be directly linked from the official website to other social media channels could gain their trust (CMG, 2016).

Consequently, intimacy strategy is used by many hotels. For instance, Ritz-Carlton hotel chain implemented this strategy for creating better and longer lasting relationships with their customers. A hotel created their loyal customer’s identity cards, which showed their personal data and preferences, such as type of room, breakfast packages and special needs. Therefore, every time when repeated visitors called for booking a room they already knew what are their preferences and did not need to ask many questions to find it out. This way it saves customer’s time and brings them personal feeling that the organization already knows what they like and who they are. Thus, this is a perfect example how the hotels can create better relationship with their customers and bring them unforgettable experience just by adding extra value to their service.  (Kolesar, 1998).

Moreover, many hotels fail to be successful just because they mainly focus on sales instead of focusing on their customer needs. According to Kurt Verweire, (Verweire, 2014) personal customer’s analysis could bring more benefits to the company than a constant push of the sales, because customers feel appreciated and it build their trust. It can take a while to change organization’s values and implement customer intimacy strategy. However, the key to implement this strategy is to listen to your customers to understand instead of listen to sell.

To sum it up, customer intimacy strategy is about getting to know your customer’s personal needs and providing them goods or services that fits their desires. Customer intimacy strategy can be implemented by increasing their touchpoints, by being quick to respond on customers’ requests, emails, complains and social networking. Moreover, it is important to know that intimacy between hotel and customer can be created by providing them personal experience and emphasising their uniqueness.

 

 

Bibliography

CMG. (2016). 6 most effective customer intimacy strategies. Retrieved from CMG: http://cmgpartners.com/content/customer-intimacy-strategy/

Ed Peelen&Beltman. (2013). Customer relationship management.

Kolesar, P. (1998). CREATING CUSTOMER VALUE THROUGH INDUSTRIALIZED INTIMACY. Retrieved from strategy business: https://www.strategy-business.com/article/19127?gko=81aa7

Michael Treacy and Fred Wiersema. (1992). Customer Intimacy and other values Diciplines. Harvard business review.

Verweire, K. (2014). Strategy implementation. Oxon: Routledge.

 

The secret to making Millennials brand LOYAL

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A happy returning Customer goes beyond advertising which leads to effective and cheapest advertising

A LOYAL customer is a PROFITABLE customer: increased purchase, reduced operations and WOM (Word of mouth) (M.Gillian, M.Laurent, N.Eoghan, June 2014, Consumer moment of truth in the digital context)

Want to make your customer LOYAL to your BRAND?

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Millennials have experienced an intense evolution in technology and therefore the only constant in their lives are EMOTIONS and values. Brands and hostels that can connect customers with the product and their emotions gain loyal guests which leads to word-of-mouth since Millennials are social and vocal customers.

This in fact reminds me of a weekend in Cancun, Mexico, the literal paradise of the world, I was staying in a hostel with my friends and when we were talking about missing our family back home, the receptionist heard us and offered to take pictures during the whole day and to create an album for us to take back home to our family. It was such an unexpected gesture that made us emotional and happy. This is when I realized it doesn’t take too much to make the customers happy.

In addition the hostels need to be advertised and popular on social media, since Millennials spend on average half an hour a day on social media, in fact Millennials are also known as INTERNATIONAL MARKETS, meaning that whether or not a hostels take time to attract international guests, since Millennials are global consumers, the job of spreading the word is already done by them rather than only the hostels.

An aspect that is important to keep in mind is to REWARD Millennials for activities they love to do, such as as giving them points for interacting with the hostels website or giving reviews which leads to a Loyalty card and discounts. One thing that we all know is that people in hostels mostly share the love for travel, meeting different people and creating memories, if the hostels somehow show that they SUPPORT THE CAUSE that Millennials care about it is guaranteed that they will drive them to becoming loyal to their brands. Examples of elements that I encountered in hostels I have stayed in South America are activities that they would organise to get to know the other people, and in another hostel there was a library with all sort of different books regarding travelling and countries, as well as a corner with a huge text book where guests could write their experience. I thought this was a very interesting thing to do because it helps broaden the knowledge as well feel closer and more personal to the hostel and the people.

Additional information:

Millennials loyalty statistics (Brandon Carter, blog on Access)

15% Millennials tend to be more loyal than other generations because of its loyalty rewards and its company reputation or value, moreover the personalised products and the fun they can get out of it are 2 of the loyalty drivers for accordingly 52% and 60% of Millennials. This generation uses coupons and loyalty points to save money and this interaction is done via social media among 49% of millennials and via the brand’s owned website among 54%. In conclusion millennials are 1.75 times more likely than Boomers to say they would become brand-loyal.

Want to get an idea on how it is to stay in hostels? Look at the video below:

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Sources

Anonymous, (N.D), Retrieved from: http://www.hostelworldgroup.com/~/media/Files/H/Hostelworld/press-release/PCW%20draft%20release_CV_LaunchSquad_V7.pdf   

Brandon, June 19 2017, Millennial loyalty statistics, Retrieved from: http://blog.accessdevelopment.com/millennials-loyalty-statistics

Chen. Lu, June 26 2017, How to create customer loyalty with Millennials, Forbes, Retrieved from:   https://www.forbes.com/sites/forbescommunicationscouncil/2017/06/26/how-to-create-customer-loyalty-with-millennials/2/#336dfd7832fc

G.Timi, (N.D), How to drive Customer Loyalty among Millennials, Retrieved from: https://www.emarsys.com/en/resources/blog/drive-customer-loyalty-millennials/               

P. Will, April 5 2016, Millennial travel Trends, Retrieved from: https://www.hospitalitynet.org/news/4075929.html