The physical arena is essential for creating customer satisfaction in the hotel industry

Schermafbeelding 2015-10-11 om 21.06.43

Source: Userlike, 2015

In order to be successful in the market a hotel not only needs to attract new customers, they also need to retain existing ones. In order to retain existing customers, hotel groups must implement policies that focus on customer satisfaction and loyalty. These policies will make sure that by monitoring customer satisfaction, customer loyalty can be improved and thus benefit the image of the hotel in a positive way.

Especially in the hotel industry, the competitive advantage is to deliver high quality services, which results in satisfied customers (Shemwell et all, 1998). This whole experience clients go through exists of a mix of products and services. According to UKessays (2015) “a hospitality experience such as a hotel stay is a sum total of satisfactions with the individual elements or attributes of all the products and services that make up the experience.”

Thereby, since Sim, Mak & Jones (2006) found a significant link between customer satisfaction and hospitality, it is important for a hotel to get an insight into the service they offer. They “found out that ambiance and hospitality are two significant indicators for customer satisfaction. Hospitality focuses more on the service that is delivered by employees who have direct contact with customers and ambience is more about the atmosphere, architectural design, colour harmony and décor. It is suggested for hotels to provide a high level of service and maintain their hotel to perfection.” (Smout, 2015).

Even according to Dominici (2010) customer satisfaction is significantly linked to quality of service. These hospitality services usually consist out of three elements:
The product itself, for instance a hotel stay; the behaviour of employees who have direct contact with the guests; the environment, such as the furniture, lighting and lobby (UKessays, 2015).

What we can see is a direct link between the importance of the physical arena and customer satisfaction. The physical environment influences the perceived service quality that relate to customer loyalty and customer retention. It is of high importance for the hotel industry to monitor the physical arena as much as they can, so they can profit from the influence it has on their customers and indirectly on their profit.

References

Dominici, G. (2010). Customer Satisfaction in the Hotel Industry: A Case Study from Sicily.

Shemwell, D.J., Yavas, U., & Bilgin, Z. (1998). Customer-service provider relationship: An empirical test of a model of service quality, satisfaction and relationship-oriented outcome. International Journal of Service Industry Management, 9: 155–168.

Sim, J., Mak, B., & Jones, D. (2006). A Model of Customer Satisfaction and Retention for Hotels. Journal of Quality Assurance in Hospitality & Tourism , 7 (3).

Smout, F. (2015, October 4). Customer Retention in the Hotel Industry. Retrieved on October 10, 2015, from WordPress: https://customerengagementmanagementintourism.wordpress.com/2015/10/04/customer-retention-in-the-hotel-industry/comment-page-1/#comment-59

UKessays. (2015). Customer Satisfaction In The Hotel Industry Tourism Essay. Opgeroepen op October 10, 2015, van UKessays: http://www.ukessays.com/essays/tourism/customer-satisfaction-in-the-hotel-industry-tourism-essay.php

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Customer Retention in the Hotel Industry

NaamloosSource: Olivier Le Moal – Fotolia.com

According to Choi and Chu (2001) hotels that are able to attract, maintain, satisfy and retain customers are more successful. It has been proven that long-term customers are more profitable for organisations, since they tend to buy more, bring in new customers by positive word of mouth, take less of the service provider’s time as they are acquainted to the processes, and they are less sensitive to price (Reicheld, 1996). He also found out that attracting new customers is seven times more expensive than retaining old ones. So, focussing on customer retention will eventually lead to higher profit.

Since there are so many advantages to customer retention, it would be great to know how to enhance the retention of customers. Multiple studies have noted a significant link between customer satisfaction and retention (Bolton, 1998; Cronin & Taylor, 1992). Customer’s repeat purchase behaviour is closely linked to their level of satisfaction with the initial purchase (Sirgy and Tyagi, 1986). Therefore, it is important for hotel management to understand the relation between customers’ satisfaction and customer retention (Sim, Mak, Jones, 2008).

Sim, Mak & Jones (2006) found out that ambiance and hospitality are two significant indicators for customer satisfaction. Hospitality focuses more on the service that is delivered by employees who have direct contact with customers and ambience is more about the atmosphere, architectural design, colour harmony and décor. It is suggested for hotels to provide a high level of service and maintain their hotel to perfection.

Since Sim, Mak & Jones (2006) found a significant link between customer satisfaction and hospitality, it is important for a hotel to get an insight into the service they offer. A way to do this is by looking at the customer journey. As mentioned in one of the previous blogs, the customer journey mapping strategy enables hotels to identify the desires and expectations of each guest and provide appropriate services at each touch point during their stay.

Once a hotel has identified the clients’ touch points and the level of customer satisfaction, it can analyse which improvements can be implemented. At Taj Hotel Resorts and Palaces, they give every customer a souvenir upon departure (SlideShare, 2013). As this is a very thoughtful gesture and not always implemented at other hotels, we suggest hotel groups to re-analyse their own services and make the necessary improvements.

All in all, it is very important for hotels to get a clear idea on who their customers are, what they expect and how to meet those needs. If a hotel can satisfy their customers, the chances of them returning are higher, so a happy client might become a loyal client.

 

References

Bolton, R. N. (1998). A dynamic model of the duration of the customer’s relationship with a continuous service provider: The role of satisfaction. Marketing Science, 17 (1), 45-65.

Choi, T. Y. & Chu, R. (2001). Determination of hotel guests’ satisfaction and repeat patronage in the Hong Kong hotel industry. International Journal of Hospitality Management, 20, 277-297.

Cronin, J. & Taylor, S. (1992). Measuring Service quality: A re-examination and extension. Journal of Marketing, 56, 55-68.

Reichheld, F. (1996). Learning from customer defections. Harvard Business Review,74, 57-69.

Sim, J., Mak, B., & Jones, D. (2006). A Model of Customer Satisfaction and Retention for Hotels. Journal of Quality Assurance in Hospitality & Tourism , 7 (3).

Sirgy, M. J. & Tyagi, P. K. (1986). An attempt toward an integrated theory of consumer psychology and decision-making. Systems Research, 3 (3), 161-175.

SlideShare. (2013, March 30). Taj Group Of Hotels. Retrieved on October 1, 2015, from: SlideShare: http://www.slideshare.net/rjamarchawla/taj-hotel-17918313.

Customisation in the Hotel Industry

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Source: customiseitnow, 2015

The Milestone Hotel in London is a 5-star boutique hotel, where nothing is too much trouble. All the guests are treated according the British way: with warm smiles and outstanding personalised service at every moment of their stay. The hotel definitely goes the extra mile and offers loads of “thoughtful touches” as they call it. The “thoughtful touch” that really struck my interest were the individually designed and decorated rooms. During the booking process, guests can fill out a form with questions on their favourite colour, taste in art, etcetera. According to their personal taste, they will get assigned a certain room, which will be decorated to the guests’ desire (The Milestone Hotel, 2015).

Yet, why do hotels put so much effort into tweaking their products to fit their guests’ needs? According to Prahalad and Krishnan (2008) the value of an organisation is based on the entire customer experience, not on the specific product offered. Thereby, creating unique experiences for customers will result in longer lasting relationships (Peelen and Beltman, 2013). So, it is safe to say that customers should be involved in the process of value creation.

There are countless ways to apply customisation, but in this blog I am just going to focus on mass individualisation. With mass individualisation customers get the opportunity to personalise the product within certain boundaries. It can be approached and therefore implemented in four different ways: cosmetic, transparent, collaborative and adaptive (Peelen and Beltman, 2013). These approaches are based on the way in which customers communicate their wishes to suppliers and how the suppliers respond to it.

* Cosmetic customisation: the product stays the same, yet its representation is adjusted

Previously, I already told about the personalised rooms of The Milestone Hotel in London, yet this isn’t the only way hotel groups implement cosmetic customisation.

Hotel groups already implement cosmetic customisation by offering their products in different locations or by selling their product to different clients with changing terms and conditions. In the end, the product stays the same, yet the representation differs.

* Transparent customisation: the product is adapted, yet not its representation.

With transparent customisation the clients are not explicitly informed about the changes that have been made especially for them. As a hotel, you just serve them their personalised product.

The Ritz-Carlton hotels use a very well designed database, in which they document their clients’ personal preferences. By doing that, they can customize the product to those specific needs during the client’s next trip (Pine and Gilmore, 1999).

It might be quite some work for hotels to start up a database, yet basically all you need is personnel that pays attention to minor details. For instance: which newspaper the client reads, which news station the television was on when they left their room or the room temperature and air-conditioning setting the clients used.

* Collaborative customisation: both the product and its representation are adapted.

In the hotel industry it is difficult to find an example of collaborative customisation, since the product (an overnight stay in a specific room) doesn’t change or can’t be adapted.

* Adaptive customisation: neither the product nor the representation is adapted.

An example of adaptive customisation might be offering guests the opportunity of a wake up call. At most hotels this already belongs to the possibilities, yet is it for the customer to decide if they want to use it.

So, once a hotel is aware of the different approaches of customisation they can implement their own ways and in the end attract or maintain more customers.

References

Peelen, E. & Beltman, R. (2013). Customer Relationship Management (Second Edition). Amsterdam: Pearson Education Benelux BV.

Pine, B. J., and Gilmore, J. H. (1999) The Experience Economy: Work is Theatre and Every Business a Stage, Boston: Harvard Business Press.

Prahalad, C.K. and Krishnan, M.S. (2008) The New Age of Innovation: Driving co-created value through global networks, New York: McGraw-Hill.

The Milestone Hotel. (2015). Our Service & Amenities. Retrieved on September 22, 2015, from The Milestone Hotel: http://www.milestonehotel.com/about/services-and-amenities

The Milestone Hotel. (2015). Thoughtful touches. Retrieved on September 20, 2015, from The Milestone Hotel: http://www.milestonehotel.com/about/services-and-amenities/thoughtful-touches

Steps To Customer Engagement in the Hotel Industry

Several studies have shown that building relationships between a company and its customer is mutually beneficial. However, it seems to be difficult for hotel groups and businesses in general to start a meaningful relationship. To be able to build or maintain a relationship with a potential or already existing customer, it is important to get to know them. By knowing the customer’s wishes and desires, a fitting relationship can be offered. Once one knows the customer, a fitting business strategy can be developed. This strategy describes the companies’ desired customer relationship and how that will be achieved (Peelen & Beltman, 2013).

Besides getting to know the customer and formulating a business strategy, it is also important to have a closer look at the hotel group. The most ideal company is a customer-centric organisation, in which everything is organised around customers, so an individualised value proposition can be offered. The value of staying at a hotel for instance does not lie in the room you book, but in experiencing enjoyment and maybe a sense of belongingness (Peelen & Beltman, 2013).

After formulating a fitting business strategy, a framework for customer-supplier contact has to be created. This framework focuses on the customer journey and tries to clarify how and why customers make decisions upon purchasing a product or not (Peelen & Beltman, 2013). Marketo (2015) created The Five Principles of Engagement Marketing, a strategy on how to create long lasting, meaningful interactions with people in a few steps.

Engagement marketing is all about connecting with people in several ways. I will explain per principle what is expected from a company, in this case a hotel group.

Connecting with people as individuals

According to Marketo (2015) every company wants to get to know the customer’s individual preferences, so products have to be marketed one on one. In the case of hotel groups this means the following: hotels want to get to know their customers individually so they can figure out which product is attractive to offer them.

Connecting to people based on what they do

There should be a focus on what customers do, a focus on their behaviour. To collect this kind of information you need proper technology, which monitors the (potential) customers’ behaviour via all communication channels. A hotel group can figure out what a customer is interested in for instance by monitoring which links they click in sent e-newsletters.

Connecting to people continuously over time

After putting so much effort into one customer, a company wants to maintain a relationship continuously over time. For hotels this can be tricky since there is a longer buying cycle involved, which means that the clients might not think about the hotel group they booked previously.

Connecting to people directed towards an outcome

Yet once you have created a relationship with a client, you want them to at least become a supporter, ambassador or partner. Four Seasons Hotels and Resorts tries to keep a bond with clients by asking them to share their most beautiful Four Seasons experience picture. In this way the hotel group tries to keep in touch with their followers (Facebook, 2015).

Connecting to people everywhere they are

Last but not least, the client should be reached via every online or offline channel possible, since people nowadays switch rapidly from one channel to the other. Hilton for example has many ways to interact with clients: website, email, apps, honour programmes, social media etcetera. By using onmi channel, companies create integrated customer experiences throughout.

All in all, creating a business strategy focused on building relationships with customers can be beneficial for a company. As long as the business strategy keeps in mind the above-mentioned points, long lasting relationships and loyal customers are guaranteed!

References

Facebook. (2015). Four Seasons Hotels and Resorts. Retrieved on September 15, 2015, from Facebook: https://www.facebook.com/FourSeasons?fref=ts

Marketo. (2015). The 5 Principles of Engagement Marketing. Retrieved on September 15, 2015, from Marketo: http://uk.marketo.com/ebooks/elements-of-engagement-marketing/

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (Second Edition). Amsterdam: Pearson Education Benelux BV.