Customer Loyalty In The Hotel Industry Tourism Essay
Customer loyalty and satisfaction are important in any service industry; however, they are especially important in the hotel industry. When a customer is satisfied with their experience at a hotel, then they will then refer that hotel to their friends and family, as well as continue to use the hotel themselves, therein being thus remaining loyal to the hotel. Customer satisfaction and loyalty is are not always an easy tasks for hotels and requires extensive work and research to achieve. Customer surveys are conducted in order to understand what the customer wants and how to implement that into the hotel’s training programs to try to ensure that the customers are satisfied with their hotel experience. Many employee programs implement apply the suggestions by employee survey and comment cards, as well as expert advice on how to satisfy the customer.
Introduction
Customer loyalty and satisfaction can make or break any business, and, in particular, a hotel. When a customer is not unsatisfied, they will not return to the hotel and will spread share their bad experience with everyone they know; but however, when a customer is very satisfied with a hotel, they will tend to be loyal and keep coming back, as well as share the information with friends and family. Customer loyalty is more than continuing to patronize the hotel; it can also include referring friends and family, using the hotel for business functions, and patronizing supporting the “sister” hotels that are within the same chain. A customer becomes loyal by continuing to be satisfied with the hotel chain, either by through being listened to by the staff when there is a problem, through being treated with respect, or even through something as simple as having fresh towels in the room on a daily basis. Many customer surveys are conducted to receive feedback as to how satisfied a customer is with a hotel and what the hotel can do to either keep the customer satisfied or make the customer more satisfied. The hotels use this feedback from the customers to implement new training programs, as well as include expert advice in their employee training. The following literature review of these features of customer loyalty and satisfaction in the hotel industry supports the hypothesis that customer loyalty and satisfaction are imperative to running a successful hotel.
Customer Satisfaction
We all know that customer satisfaction is a key point in having a successful business, but what is customer satisfaction? (Too personal and assuming) Before continuing with the review, the definition of “customer satisfaction” needs to be explored. Customer satisfaction can be defined in several different ways. Many people believe that customer satisfaction is just that: a satisfied and happy customer; however, Engel and Blackwell (as stated by cited in Back, 2001, p. 23) define customer satisfaction as “an evaluation rendered that the consumption experience was at least as good as it was supposed to be beliefs with respect to alternative.” Back defines customer satisfaction as “the consumer’s overall judgment, including service features, the service product, sales personnel, or other situational variables,” (2001, p. 24). While all of these definitions are correct, the fact still stands that it is imperative in hotel management that the customer is fully satisfied in order to retain their business. Customer satisfaction can be achieved in through a variety of methods. Some of these methods include meeting customer expectations in regards to comfort, offering excellent customer service through effective employee training methods, and utilizing customer surveys and comment cards.
Meeting Customer Expectations
Meeting customer expectations regarding comfort can be compiled into five different categories: product, staff, arrival, value, and location. Product comfort can be a variety of items to the customer. According to Barsky and Nash (2003) “when describing comfort products, guests most often commented about their room-in particular the room’s design, a comfortable bed and room, room and hotel cleanliness, and convenient and special amenities.” Being comfortable with hotel staff members can have an impact on customer satisfaction as well. The staffs’ knowledge, attitude, and helpfulness enhance the customers’ comfort when staying in a hotel. Also In addition, “guests felt comfortable knowing that they can trust the staff with their safety, belongings, messages, and wake-up calls” (Barsky and Nash, 2003). When a guest arrives at a hotel, they want to feel instantly comfortable with their choice in hotel. Upon arrival “using courteous words, repeating the guest’s name, and treating the guest warmly makes the guests feel comfortable,” (Barsky, and Nash, 2003). Value is an important aspect in regards to customers being comfortable with their hotel choice. According to a study by Valerie Zeithaml in 1987 (as stated by Gordon, 1999, p. 18-19) value can be categorized into four groups:
Value is low price – the perceived value is based solely on paying a low price.
Value is getting what I want in a product – the perceived value is based on the benefits the consumer receives for a product.
Value is the quality I get for the price I pay – the perceived value is defined as affordable quality.
Value is what I get for what I give – the value is defined as the trade-off between what is received versus what is given up. Some common examples could be time or money.
Finally, the guests will find comfort in the location of the hotel because of the proximity of the hotel is to the guests’ interests. Bull indicates (as stated by cited in Lee, 2003, p. 18) “the location of a lodging property not only includes the distance from, or access to one or more specific attractions, but it also consists of qualities such as quietness, views from rooms, and the nature of the property’s surroundings.”
Customer Service
Customer service given by hotel employees can be a deciding factor if in whether or not a customer stays at a hotel or not. The hotel employees are the face of the hotel, and how the customer is treated when staying at the hotel impacts how the customer remembers on their stay. “The research group’s index [Market Matrix] of customer satisfaction in the lodging business indicates that a growing number of guests are unhappy with the levels of service they’re getting,” (Watkins, 2005). Customer service is more than the front desk employees or the bellhop; customer service includes the reservation agents through the call-in line as well as the web-agents. “No matter how they contact you walk in, call a reservation agent or visit your Web site – frequent guests should experience consistent customer service from each channel,” (Sparkes, 2004). Kirwin states, “Common sense tells us that satisfied customers are more likely to return than those who’ve had a bad experience,” (1991). Also, both Keaveney and Lewis advise (as stated by cited in Lee, 2003, p. 13) that “poor employee performance has been linked to increased customer complaints and the likelihood of switching to a competing service.” Customers associate their experience of one hotel with the similar hotels within the same chain. For instance, if a customer has a bad experience with the cleanliness of a room with a Comfort Inn, they will associate that bad experience with all hotels within the Choice Hotels chain. According to Crosby, Evans, and Cowles (as stated by cited in Lee, 2003, p 13), “the behavior and attitudes of contact personnel are indicative of the level and quality of services offered by the service firm, and they exert a strong influence on customer satisfaction.” Adequate training will help to ensure that employees treat customers with respect and courtesy even through something as simple as telephone etiquette.
If a hotel does not provide effective customer service through something as simple as a phone call, then the customer will then chose to take their business elsewhere. Kennedy (2010) outlines some reasons why a hotel should focus on telephone hospitality:
Hotels typically have many important customers who never visit – their only personal experience is over the telephone. This includes travel agents, meeting planners and administrative assistants from local corporate accounts.
Family, friends and colleagues of your in-house guests who call during their stay will form first impressions from how their calls were handled.
Even guests who booked online and later call with a question or special request form first impressions from their telephone experiences. If the impression is not good, they may very well decide to cancel.
A training session may be needed for employees to ensure the best phone customer service is given and to reiterate that customer calls are not the nuisance that some people believe, but that they are the voice of the hotel. The following are ways suggested by Kennedy (2010) that the employees can be trained on to give excellent telephone service:
Answer the “know at the door” of a ringing phone line with a proper greeting
Speak slowly and clearly.
Pay attention to inflection
Convey energy and enthusiasm
Ask for the caller’s name, if not provided.
Ask permission to place the call on hold, politely explaining why it is necessary.
Thank callers for holding and apologize for the delay, especially if the time was significant
Use the transfer button judiciously
End the call correctly. Just as a positive first impression starts the call off on a good note, ending the call correctly will leave a memorable lasting impression as well.
No matter how well a hotel is run, there are always going to be mistakes by the staff; it’s just it is human nature. The issue is not the mistake per se; rather, the issue is how the mistake is handled by the staff and management. Many hotels now have employee training programs as to how to handle cope with upset or irate guests. “Programs aimed at training employees in handling guest complaints and providing value-added service are essential to developing an effective staff,” (Kirwin, 1991). Of course, hotels do not intentionally make errors and will try to fix them in any way they can possible. “No lodging business likes mistakes or shortcomings, yet occasional service failures are inevitable regardless of how rigorous standards and procedures are or how much employee training is regimented,” explained by Hart, Heskett, & Sasser, Johnson & Fern, and Lovelock (as stated by cited in Fu, 2003, p. 2). Even though mistakes are inevitable, they can also be useful to a hotel to in identifying problems that need to be addressed. Brown (as stated by cited in Fu, 2003, p.3) advises that “service failures help a business to detect the causes of poor performance and to improve its service procedures and employee training.” The customer will appreciate the effort by the hotel when they can accept their mistake and provide a solution. Bitner, Booms, & Tetreault explain (as stated by cited in Fu, 2003, p.3) “a study of consumers in the airline, hotel, and restaurant industries found that most customers who received apologies, attentive assistance, and compensation from service employees after encountering service failures actually perceived the experience as very favorable.” Customer satisfaction can be measured by customers vocalizing their opinion on their stay by through speaking face-to-face with a customer service agent, through customer comment cards, or by through surveys conducted for the industry.
Comment Cards and Surveys
Comment cards and surveys are very important essential to hotels to understand what customers are thinking and feeling about their hotel and how to improve their business. “To identify the operational and marketing issues that influence satisfaction and loyalty, most hotels survey their guests in some way,” (Schall, 2003). Comment cards and surveys can convey both positive and negative customer feedback and should not be taken lightly by the hotel. “Most hotels have quest satisfaction surveys that enable them to build upon strengths and target areas for improvement,” (Carlstead, 2004, p.18). Schindlerhof Hotel (SH) is an example of a hotel that provides comment cards to their guests and takes the information very seriously. “SH tries to gain information from the incident to identify company structural and process weaknesses (weak spots) and to discover new market chances,” (Voss, 2005). Comment cards should be placed throughout the hotel to ensure that customers have easy access to them and can return them easily as well. In SH, “guests can find the cards on every table in the restaurant, in every room and in the foyer of the conference rooms,” (Voss, 2005).
Many hotel surveys are done industry wide by companies such as JD Power and Associates, PricewaterhouseCoopers (PwC), and American Demographics and are measured through the Market Matrix Hospitality Index and the American Customer Satisfaction Index (ACSI). These surveys are done conducted to gather information from customers on their satisfaction with hotels and what improvements can be made. JD Power and Associates conducted the 2008 North America hotel Guest Satisfaction Index Study and based their findings on responses from more 53,000 guests over 12 months (Baker, 2008). According to Baker “hotels are rated on seven measures: reservations, check in and check out, guest rooms, food and beverage service, hotel services, hotel facilities, and costs and fees,” (2008). The study indicates that the overall satisfaction in every category dropped, except for luxury and extended stay, from the previous year (Baker, 2008). JD Power and Associates conducted the same study in 2009 and “maintained the industry overall has improved in guest satisfaction year-over-year; Market Matrix showed the first big drop in its quarterly guest satisfaction numbers since the recession began; and ACSI offered mixed results among brands, but showed the industry overall was maintaining customer satisfaction,” (Crowell, 2009).
Customer satisfaction is one of the most widely surveyed categories in the hotel industry and is important when reviewing policies within hotels. Krantz indicates “Last year [2006], hotel customer satisfaction measured 75 on the American Customer Service Index (ACSI) – the highest since 1995 – while at the same time the number of employees per occupied room declined more than 10 percent, PwC’s hospitality practice reported,” (2007). Another way that customer satisfaction can be surveyed is by going through customer letters and comment cards and tallying the complaints and compliments to help understand what the customers want. “American Demographics sifted through a generous sampling of the nearly 2,000 letters submitted by consumers last year [2002] to hotels and resorts through Planetfeedback.com, a division of Cincinnati-based market research firm Intelliseek,” (Anonymous, 2003). The most effective way to create customer satisfaction is by having a friendly and helpful staff. “In fact, the highest percentage of satisfactory letters (44 percent) fell into the “hotel staff performance” category,” (Anonymous, 2003). The most important thing to remember when reviewing customer comment cards and surveys is that, without the customer, the business would not survive. As stated by Carlstead “in general, these are used for the concrete purpose of informing practices that will enhance guest satisfaction and loyalty,” (2004 p. 18).
Customer Loyalty
A common misconception is that when a customer is satisfied with a business they will be loyal; however, this is not always the case. “A customer may be completely satisfied but may not purchase again because of factors unrelated to satisfaction,” (Gordon, 1999, p. 13). Customers require more than satisfaction with a hotel in order to be loyal. Waller (as stated by cited in Strauss, 2004) states:
Mere satisfaction does not create loyalty. We expect to be satisfied. It takes delight-recognition, feeling valued, being made to fee special. If the business traveler is just another guest, and is not recognized, he or she will jump to another hotel on the next trip with no hesitation, no matter how satisfied their stay.
Sigauw advises (as stated by cited in Strauss, 2004), “While satisfaction is normally a precursor to return, there needs to be something more. Hotel companies need to establish an emotional connection.” Hampton Inn franchises are one example of this connection. Hampton Inn offers their customers a “100% satisfaction guarantee” and has offered it for over 20 years. This guarantee states “if for any reason a guest isn’t completely satisfied, that guest isn’t expected to pay,” (Anonymous, 2009). This may seem like a gimmick to some people, but for Hampton Inn, it works to help retain customers and keep them satisfied. “This 20-year promise of satisfaction has kept Hampton among the top performing hotel brands in customer loyalty and satisfaction year after year and will continue to guarantee satisfaction when you find yourself staying with Hampton,” (Anonymous, 2009). Other hotels try to retain customers with “loyalty programs” when which give points or free rooms to customers for staying at their hotel who are joined in the loyal program.
Loyalty programs are becoming more and more popular among businesses and especially in hotels. The issue is, though, do these “loyalty programs” really give hotels loyal customers or are they just gimmicks? Mattila states as an example of hotel loyalty programs, “Hilton HHonors program makes it easy to achieve an elite status, while Hyatt’s Gold Passport program offers a free stay after two stays charged to a MasterCard,” (2006). People are not concerned with how many points they have earn at a certain hotel; they are interested in what the hotel can do for them for being a “loyal” customer. “Hotel points mean very little, but recognition and in-stay perks like upgrades, expedited check-in, late check-out and so on are highly valued,” advises Waller (as stated by Strauss, 2004).
Hotels create these “loyalty programs” because they know that it is harder to gain new customers than it is to retain current ones and need to find ways to ensure their customers keep coming back. “During difficult economic times hotels are reminded of a fundamental lesson: building guest loyalty is the only way to compete without sacrificing revenue,” (Sullivan, 2004). Torres and Kline also understand the importance of keeping customers loyal with their observation in the industry that “companies are a also realizing that loosing a customer means loosing more than a single sale: it means loosing the entire stream of purchases that the customer would have made over a lifetime of purchase,” (2006).
Other than loyalty programs, below are some ways that hotels can build a more loyal customer base:
Develop a customer centric communications strategy. Treat people as individuals.
Personalize your communications and talk to guests on a one to one basis.
Don’t over communicate. Remove “email blast” from your marketing lexicon.
Surprise and delight loyal customers with perks, rewards, and value-adds.
Seriously consider using an outside communications firm with direct marketing specialists on staff who know how to:
Segment your database
Develop relevant content and compelling offers
Nurture and deepen the relationship over time (Pratt, 2010).
The image of a hotel can have a substantial impact on customer satisfaction and loyalty. Ostrowsky, O’Brien, and Gordon indicate (as stated by Kandampully and Suhartanto, 2000) “previous studies show that the image of the location, employee attitude, facilities, and services of a hotel constitute important factors in determining customer loyalty.” The way a customer perceives a hotel’s image can be a deciding factor of if the customer keeps returning or not. Kandampully and Hu explain that “those firms who have developed strategies and systems to ensure that the entire firm’s focus remains directed on assisting and supporting customers not only gain positive influence on the firms’ image but will also gain customer loyalty,” (2007).
Conclusion
Customer service and loyalty are not always complementary of each other; however they are both essential to the success of the hotel industry. Hotels realize that satisfying the customer is one of, if not the most, important factors in keeping their business alive. Satisfying customers can be include something as little as listening to their problem and finding a solution or as large as giving a “100% satisfaction guarantee” and not charging the customer for not being satisfied fully. (Conducting customer surveys and offering comment cards are essential tools for determining whether or not a hotel is serving their clientele as needed. By ensuring that customers are satisfied, hotels and other businesses can create customer loyalty; after all, satisfied customers often share their experiences with friends and family. A well-trained staff can make or break a hotel’s image; a friendly smile at the front desk, helpful staff members throughout the hotel, and amazing facilities are key factors in gaining and keeping clientele. Remaining aware of the staff’s attitude, maintaining the hotel’s property, and conducting research as to customer satisfaction will help hotel management to uphold all the standards necessary to retain customer loyalty.)
