Customer intimacy strategy to create customer engagement in the hotel industry

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(Pixabay, 2018)

The hotel industry is a dynamic and ever evolving industry, however the basics of customer or service orientation always remain the same. Increased competition and development of new offline and online models in past decades has forced the industry to go back to the basics and create strong connections with its customers (Jain & Jain, 2017). This value is called customer intimacy and is needed to to deliver more value to customers and create brand loyalty.

The understanding customer intimacy was introduced by Treacy  & Wiersema, who mention that customer intimacy will lead to market leadership. According to (Treacy & Wiersema, 1996), there are three value discipline of Customer Relationship Management, which are operational excellence, product leadership and customer intimacy. Customer intimacy is all about building a long-term relationship with your customers. It is not the market that becomes the centre of attention, but the individual wishes of the customers.  The company’s products and services are constantly adjusted to the customers’ needs and wishes  (Peelen & Beltman, 2013).

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(Treacy & Wiersema, 1996)

In order for an hotel to become successful, a strong personal connection needs to be made with its customers.  (Treacy & Wiersema, 1996) have identified an offensive and a defensive strategy. An offensive strategy focuses on the conquest of market share, obtaining new customers and getting quickly rid of any competition, while the defensive strategy focuses on maintaining and defending one’s position. The best way to achieve a strong customer relationship is choosing to work with an defensive strategy, which focuses on customer retention and increasing the customer satisfaction (Peelen & Beltman, 2013).  The key to implement this strategy is to listen to your customers and try to understand them.

However, according to (Peelen & Beltman, 2013), choosing one discipline never allows a company to disregard the other two disciplines. For these principles, a basic level still needs to be reached, as a product leader has to be at least operationally excellent compared to the level of most competitors for it to be seen as a reliable organisation. Nevertheless, (Treacy & Wiersema, 1996) do recommend that the three value principles should not be combined. It is too difficult to succeed in every area and moreover excellence in all three of the dimensions would create conflicts between them.

A perfect example of a hotel chain that implements the customer intimacy strategy is the Ritz-Carlton as they personalize services by using Member Experience Concierges who design specific member experiences by diving into the messages send and received via various channels and seeking out the details that will assist them in providing a surprise and “a feeling that I matter” to specific members  (Ritz-Carlton Leadership Centre, 2016).

To conclude, it is highly recommendable for a hotel to implement a defensive customer intimacy strategy and to focus on creating a personal connection with their customers. A hotel needs to understand its customers personal needs and provide them with the product and services that fill in these needs and  build a strong relationship with them in order to create customer engagement and customer loyalty.

References

Jain, S., & Jain, S. (2017). Customer Engagement through Social Media: Learnings from Hospitality Industry in India. In International Journal of the Computer, the Internet and Management (pp. 41-48). Jaipur: Manipal University Jaipur. Retrieved from http://www.ijcim.th.org/past_editions/2017V25N2/25n2Page41.pdf

Peelen, E., & Beltman, R. (2013). Customer Relationship Management, Second Edition. Harlow: Pearson.

Pixabay. (2018). Retrieved from Pixabay: https://pixabay.com/nl/hotel-guest-room-nieuw-deur-ingang-1330850/

Ritz-Carlton Leadership Centre. (2016, July 26). http://ritzcarltonleadershipcenter.com/2016/07/the-value-of-personalized-customer-service/. Retrieved from Ritz-Carlton Leadership Center: http://ritzcarltonleadershipcenter.com/2016/07/the-value-of-personalized-customer-service/

Treacy, M., & Wiersema, F. (1996). The Discipline of Market Leaders. INGRAM PUBLISHER SERVICES US.

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3 thoughts on “Customer intimacy strategy to create customer engagement in the hotel industry

  1. cbergbrantjes

    Interesting example of the Ritz-Carlton. They certainly excell in customer intimacy for many decades which make them still one of the best hotel chains of the world.

    However i do question if ‘defensive’, is the right word to use in the context of your blog now a days, as hotels need to be pro-active in their C.I. approach to stand out. What are your thoughts about that?

    Like

  2. If all hotels follow your advice and use a defensive customer intimacy strategy, how do they stand out and create a competitive sustainable advantage? Is there still room for a focus on product leadership strategy or operational excellence in the hotel industry?

    Like

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