Customer Experience – The Real Differentiator in the Hospitality Industry
The AA and Visit Britain have recently announced changes to their standards for hotels, with inspections focusing more on the quality of customer experiences and less on what facilities are provided.
This new focus on customer experience ties in entirely with our (Inspiring Hospitality Management’s) opinion and experience of the changing face of hospitality customer demands and expectations.
Product v.s People
To be fair, the AA inspection has always rightly emphasised the importance of Hospitality and Services with these two sections together responsible for a third of the total points available from the 9 categories assessed.
But few owners of top quality hotels understand how much a customer’s experience of the hotel team impacts customer satisfaction and so despite spending £millions on hotel redevelopment and re-positioning, rarely is a fraction of the capital spent on ensuring that the hotel has a team, who can deliver great hospitality, service and customer experiences. And whilst some owners/managers do invest in employee skills service training, less focus appears to be given to training in hospitality, a term some hoteliers might even struggle to define.
What is Great Hospitality?
Dictionary definitions suggest that hospitality is “the act of generously providing care and kindness to guests, visitors and strangers” but a more relevant industry definition would be “how well one person builds rapport with another”.
Given that many front line hotel employees have never been hotel customers themselves, being able to recognise and anticipate the needs and expectations of differing clients and build rapport won’t just happen. Similarly, many younger employees in our industry may simply not have the life skills or confidence to build rapport and proactively interact with customers. So how do you develop this and how important is it compared to service and product quality?
Net Promoter Score (NPS)
More and more companies across all industry sectors have adopted the global metric of NPS to measure customer satisfaction and a customer’s propensity to be a repeat/return customer and/or recommend the product, service or hospitality establishment to friends and colleagues. This is because companies are now starting to recognise that customer loyalty can be viewed as a form of equity in the company.
Customers are asked the universal NPS question “Based on your overall experience, on a score of 0-10, how likely would you be to recommend this XXX to your friends and colleagues”. Those who score 9 or 10 are deemed “Promoters” (highly loyal to the hotel or brand and will both repeat and recommend), those scoring 7 or 8 are “Passives” and those scoring 6 or less are “Detractors” unlikely to return and likely to share their bad experiences with others. The Net Promoter Score is driven by subtracting the % Detractors from the % Promoters.
Too often however, when personally answering this question as a customer and scoring 8 or below, have I been asked no further follow up questions and thus given no opportunity to share disappointments and delights. How can any improvements happen without feedback on what is going wrong?
It’s not unusual for companies to have c.30-40% of respondents who are “passives”. These customers were not unhappy with their experience, but neither was it special enough to make them “promoters” and they will still be open to using your competitors.
In our experience, understanding what the key drivers of NPS are and then focusing and rewarding the hotel teams on turning “passives” into “promoters” is highly successful and in so doing, we have experience of driving passives down to less than 20% and thus achieving Net Promoter Scores well ahead of 4* hotel averages without any significant investment in facilities upgrades.
In our experience, understanding what the key drivers of NPS are and then focusing and rewarding the hotel teams on turning “passives” into “promoters” is highly successful.
Such has been our success with this approach in QHotels, not only did this contribute commercially to achieving optimum rate but also external recognition through customer driven awards such as Which Recommended Provider UK Hotel Chains 2013 and 2014, M&IT Gold Award Winner 2017 and Venue Verdict No 1 Large Group from 2011-2016, and twice awarded AA Hotel Group of the Year (08-09 and 14-15)
Key Drivers of Customer Satisfaction and Loyalty
To help achieve this requires the use of appropriate internal customer satisfaction and reputation management systems and we also worked closely with BDRC to get the same level of data on event host satisfaction. These internal systems must be set up to identify and monitor the key drivers of NPS for each property individually and for the group, these key drivers being the aspects of the offer that have the biggest positive impact on NPS/Customer Satisfaction when done well and the biggest negative impact on NPS/Customer Satisfaction when done badly.
We recommend that ideally customer satisfaction monitoring systems are developed to drive more advanced customer segmentation to identify the individual key drivers by customer type. For us, this served to confirm our view and personal experience that whilst some key drivers apply to all customers, other key drivers change by customer type. For example, bedroom facilities were shown to be a top driver for business customers but not for leisure and events customers and that the flexibility and responsiveness of the hotel team is a top key driver for an events customer.
However, in our experience, feedback from all the systems confirmed that whilst furnishings and facilities are important, these are more “hygiene factors” and unless exceptional, it’s the people at the hotel that make the customer experience, and that hospitality is the number one driver of customer satisfaction.
To build customer loyalty in an increasingly more competitive marketplace, understanding, educating and focusing teams on the key drivers of customer satisfaction is becoming even more critical to meet the varying demands and expectations of ever more discerning customers.
Whilst furnishings and facilities are important, these are more “hygiene factors” and unless exceptional, it’s the people at the hotel that make the customer experience.
The Six Pillars of Experience Excellence
In the 2018 KPMG report on global customer experience “Tomorrow’s experience, today” based on a decade of research and 2 million evaluations, they have identified Six Pillars of Experience Excellence, which are as follows:
Personalisation – Using individualised attention to drive emotional connection, i.e. demonstrating you understand the customer’s specific circumstances and will adapt the experience accordingly.
Integrity – Being trustworthy and engendering trust by delivering on the company’s promises
Expectations – Managing, meeting and exceeding customer expectations
Resolution – Turning a poor experience into a great one
Time and Effort – Minimising customer effort and removing unnecessary obstacles and bureaucracy
Empathy – Achieving an understanding of the customer’s circumstances to drive deep rapport
In our view, recruiting key customer facing employees with natural social skills is key and “open days” and “assessment centres” will help in this respect. However, these employees still need to be supported further with the right training and tools, to help them understand the varying needs of different customer types across the whole business.
Empowerment also has a key role to play in giving employees some freedom and the confidence to do “what it takes” to please a customer and when handling complaints. Similarly, team work is also vital and by engaging the back of house team in the customer focus was critical to great service delivery in hospitality businesses, where all products are the sum of multiple departments working together. And to encourage team members to go the extra mile for customers when busy, we recommend implementing an engagement strategy, which included personal, hotel and management recognition for great customer hospitality, service and teamwork.
To be successful, being committed to delivering great experiences to customers must be a key part of the business’s culture, led by senior management, who are committed to continually monitoring and measuring the key drivers of excellence.
It’s not easy…but increasingly, delivering great customer experiences is becoming one of the most vital elements of a hotel managers role in today’s hyper-competitive marketplace and customer centric world.
Founding Partner, Inspiring Hospitality Management
Vivien Sirotkin has over 30 years’ experience in four-star and five-star hotels and resorts at operational management, general management and corporate level positions, most recently as Chief Operating Officer of QHotels. In 2017 QHotels employed over 5,000 employees, achieved turnover of c£200m, EBITDA of c£50m and managed 26 hotels with an enterprise value in excess of £500m. In September 2017 QHotels was sold to a property investment company and the sale gave QHotels’ private equity backers a 25% IRR on money invested.
With her considerable experience of hotel and resort operations and of industry challenges, Vivien is able to recruit, develop and build highly effective senior operational management teams and ensure they are motivated, targeted and focused on hotel and company objectives.
As a strategic and commercial leader, Vivien inspires people at all levels of the organisation with her enthusiasm, involvement in and commitment to the delivery of above average results. With responsibility and a passion for customer satisfaction and retention, Vivien has consistently motivated and engaged teams to deliver great customer service and experiences and this has been evidenced by the winning of several service awards throughout her career.