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Relationship Marketing in a Hotel Environment
By H. James Hulton III, PR/Marketing Consultant
A. What is Relationship Marketing in the First Place?
Many hotel executives and marketing managers focus on closing the individual sale rather than building the hotel over the long run. This process tends to make one think that the hotel is built around “the deal.” Not so. The hotel is built around relationships and the best relationship that exists is that between the party selling a product or service and the party buying that product or service.
Relationships are frameworks of a hotel where activities take place. A customer comes to a hotel to buy a product or service for a variety of reasons. Finding out those reasons is an important aspect of managing the hotel, to know why customers come there and how to satisfy them.
If one is to build a lasting hotel, there are several things that need to be done. They are:
• Understanding the relationship that exists between the hotel and the customers
• Doing the things that will ensure that the relationship will work well, at a profit, in the marketplace.
• Advancing the relationships through sound sales, marketing, and product/service development.
In today’s market or economy, there are striking differences that exist now that have changed the face of how we do business. The old hotel model was company driven; now it is customer driven. The old hotel model was product based; now it is need based. The old hotel model was to create need; today it is to determine need. The old hotel model advertised the product or service; the new model markets the value of the product or service. The old hotel model had a reactive service; today it is proactive in providing service.
Today the hotel marketplace must be connected to the customer more than ever before. It is vitally necessary to add value above and beyond the product or service being offered the consumer in order to keep customer loyalty. How to add the value is the challenge.
B. Connecting through Customer Service is Key
As in most any other hotel, the focus is on the customer. If the focus is on the current customers, to do the things necessary to retain their business, the result will be loyalty. Loyal customers will most likely purchase the product or service than those customers who have not yet done any business with the company. Although the natural tendency is to go out and obtain more customers, the truth of the matter is that the current customers, if treated properly, will come back time and again.
This part of the customer service is about giving customers information about the product or service that is offered. It’s creating the feeling of comfort and trust that allows customers to come back and do repeat business. It’s not only about fulfilling current customer needs, but also about anticipating future needs. Making sure the customers know everything that the hotel offers and reminding them on a continual and respectful basis is very important to the survival of the hotel.
Taking a hard look at the customer service area for increases in value offered is very essential. If there are problems to be solved, stand back from them and see them in their true perspective. If a hotel owner or manager can distance himself/herself from the problem, the answer will always come. Then replace the word “problem” with “opportunity.”
Serving current customers well takes time and effort. Finding out how to do this is a complete project in itself. Always be asking these kinds of questions about customers:
• Does cutting customer service increase profit? If money is trimmed out of customer service, where can it be put to increase productivity?
• Are hotel problems caused by others in the company or are they inherent to the overall process?
• Does the customer service effort allow other parts of the hotel perform less well?
• Does resolving customer service problems serve the best interests of the company and customer?
• Can a dissatisfied customer be turned into a loyal one?
• Is there a customer service policy in the first place?
• Does the hotel ask the customers for feedback? What would the customers change if they were asked for their advice?
• Does the hotel offer action instead of just words?
Other important questions to ask are:
• Do the customers drive the hotel or does the company?
• Does the hotel know what the customers want better than the customers do?
• Does the hotel utilize customer contacts to gain more information about them?
• How does the hotel ask for customer input? Surveys? Written forms? Phone calls?
• Does technology replace or enhance human experience or labor talent? Too many customer functions attempt to replace the human interaction.
• Does offering complete customer service information online help?
• What about a program that determines the value of each sale?
• Can a smile be more valuable than efficiency? The information age drives us all to objective measures of performance. How can the hotel encourage subjective measures to customers?
C. Who Are Your Customers and What Do They Want?
First, the hotel must find out who are the customers patronizing its facility. A thorough analysis must be made to find out where they come from, why they are doing business there, what they expect to receive for the prices they are paying, and are they happy doing business there? Know the customers first before trying to find out what they really want.
It is a danger to assume that the hotel already knows what the customers want. If the hotel directly asks its customers what they want, they will tell you. Of course, the customers must be given a forum to freely speak their minds in order for the hotel to find out the truth. How questions are asked and if it is a part of or separate from the ordinary customer service program must be determined. And who asks the questions, customer service or the sales staff? Is the hotel willing to hear the answers?
In the response mode of the asking process, customers are willing to put the hotel first if the hotel puts the customers first. Make this process easy for the customer to participate or they won't participate in the first place.
Here are some suggestions as to how to address what customers want to keep them coming back:
• Find solutions to their problems
• Make them feel appreciated
• Use technology to help meet their needs
• Develop personal relationships with each and every customer
• Survey customers periodically to keep abreast of changing customer needs
• Utilize and train employees effectively to keep the customer/hotel relationship flourishing
D. Effective Employees Are the Frontline to Customers
Relationships are two way streets. They must be nourished if they are to survive. Hotel relationships usually reflect the eternal triangle composed of management, employees, and customers. As the management treats employees, so do the employees treat the customers. Attitude flows outward from the center of any organization. Managers must make sure that the attitude is good.
A hotel cannot pride itself on having strong relationships without focusing on its internal customers – its employees. The employees are customers of management, the people who buy a company’s products and services are customers of the employees.
Employees should feel cared for and supported to properly turn their focus on the external customers. The challenge is for the hotel to provide such a stimulating and challenging environment that employees would not like to leave.
A good work environment should include:
• Properly matching employees to job assignments
• Providing suitable training for the job being undertaken
• Offering the potential for advancement
• Providing ongoing education and technical development
• Showing appreciation for performance
• Monitoring to identify and correct performance and weaknesses
• Sharing the spotlight with employees who perform well
• Offering fair pay and useful benefits
A periodic inventory should be taken of employees to determine their relationships with customers. A determination must be made to find out how well the management knows its employees. Does management know personal things about employees like names of spouses, activities outside of work, birth dates, or anniversaries?
Relationships are built on sharing. Management must create an atmosphere in which they can share with employees and employees can share with them. Getting to know each other better is making the foundation of a hotel relationship more solid. Management must create a bond with its employees and empower them to properly solve customer service problems. And actions speak louder than words. Management must back up its philosophies by its actions to completely build its relationships with customers. Happy employees make for happy customers.
This is the most difficult part of customer relationship marketing. It’s the part where a concise message has to be communicated to the marketplace and easily understood. Branding is what the company is all about. Customers must easily recognize the meaning behind the brand, image or logo when the company name comes to their minds. Many companies have a difficult time with this because they haven’t branded themselves appropriately.
Brand identity must include the uniqueness of the overall operation. How different is it from all other competitors? Do customers identify with the uniqueness when they think of a particular hotel facility? Do customers really know why they do business with a particular hotel facility? The main problem is that business people already think they know why customers do business with them, but they really don’t. So the first step in branding is to find out why customers do business with this particular facility. Specific reasons why customers do business with any business operation must be known.
Here are some questions to ask customers:
• If the service we provide is the reason, what is it about the service you like?
• Is it because of our room availability when you place a reservation?
• Do you like the caliber of our staff? What is it about the caliber of our staff?
• Do you like the accessibility of our property through the use of the Internet?
• Do you like the way we handle complaints or back up our service policies? Why?
• Have we earned your trust? Why or why not?
• Would you recommend us to business associates? Why or why not?
Once the hotel facility really identifies its own uniqueness in the marketplace, it must become an integral part of every customer relationship. This must be communicated each and every time a marketing message goes out to the marketplace, and the message must be consistent. All advertising must reinforce the particular message that brands the facility. If the property promises speed in the reservation process, then all replies to voice mail and email inquiries must be made quickly or the hotel loses its credibility. Wisely choosing the appropriate forms of communication enables the property to brand its message. The communication must be both seen and heard to really be appreciated.
Some media examples of brand advertising include slogans on letterhead and fax cover sheets, audio or video tapes, print or electronic newsletters that educate or inform, an active public relations exposure, or slogans and notes on invoices.
Also consider using vendors in the branding program. As like in the customer relationship, if the property management treats vendors well, vendors will treat hotel management well. After all, vendors are partners in the overall scheme of things, both ways. Healthy relationships with vendors, employees and customers are of great value and benefit to everyone involved. And just about any entity with business or commercial relationship responsibilities has a role in keeping a good brand lasting.
F. The Internet
Technology can enhance customer knowledge profiles. It can capture information about customers, but it is what the hotel does with this information that is important. This information is a valuable commodity to increasing sales. It helps to target advertising and sales efforts to existing customers based upon their current known lifestyles and needs. Also speed on the Internet has become not just a competitive advantage, but indeed an intrinsic entitlement. However, the hotel facility must learn that the Internet should be first focused on meeting the customers’ needs, not just some internal procedures that pre-empt customer expectations. Customer expectations exist and the hotel must adapt to them.
Although the Internet will never replace a personal touch, it does enhance and nurture relationships. Here are some of the advantages of building relationships electronically:
• E-mail is a quick and easy way to remember customers. And it’s essentially free.
• Subscribing to electronic newsletters via email is an excellent way to keep abreast of industry developments.
• The hotel facility can keep in touch with customers and potential customers by email.
• Web sites are useful and enhance the hotel’s image, but traditional advertising is still needed to drive customers to the web site. Every piece of paper generated about the hotel facility, such as letterhead, business cards, invoices, fax cover sheets, and return mail addresses should include the web site address.
• Network with other partners to build customer traffic on the Internet. Look for ways to link with others to promote each other.
• Create e-mail newsletters to send to customers and prospects about the property and latest news about it.
• Hire someone to program the hotel’s web site into the “high-priority” category in major search engines. This is one aspect of Internet advertising that is worth the investment.
• Market the web site as often as possible through traditional mediums
• Keep web site content as current and accurate as possible.
• Feature customers and employees on the web site to enhance its value to both groups.
G. Stick to Basics
Take care of the basics and the basics will take care of the business. Some basic practices of good business include:
• A welcoming voice on the telephone
• Showing appreciation for the business that customers place with the hotel
• Acknowledging and meeting customer expectations for speed, service and value
• Maintaining continual communications
• Viewing problems as opportunities to provide service above and beyond the call of duty
• Using technology to cater to the needs of the hotel facility
H. Customer Loyalty/Affinity Incentives:
1. Airline Miles – For frequent customers with a predetermined amount of room nights to qualify, offer air miles with a major carrier, i.e. Northwest Airlines. This can be an expensive proposition because it could cost up to 10% of the room rate and customers may never use the miles anyway.
2. Free nights – Again, for frequent customers with a predetermined amount of room nights to qualify, offer them free room nights during off-peak time of the year.
This gets them to come back and offers an opportunity to cultivate the relationship with them a bit further.
3. Cash Discounts –Offer the customer a 5% discount on the room rate if he/she pays cash instead of putting the bill on a credit card. This can increase cash flow instead of waiting for payment from the bank sponsoring the credit card.
4. Partnership with Restaurants – collaborate with restaurants in the area, such as Michael’s, to offer customers discounts on meals by dining out on the local economy at a popular eatery.
5. Free Upgrades – Offer frequent customers a free upgrade of room type, from a regular room to a suite, or single to a double, when available.
6. Computer Connections – Offer the customer a room with modem/computer phone line connections if he/she will be bringing a lap top computer for usage during the stay.
7. Dollars off Discounts – for example, a $40-50 discount for every block of 10 or 12 night stays.
8. Car Rentals – Based upon the length of stay, offer the customer a free car rental for a day or discounted rates agreed upon between the hotel and car rental agency, Avis, Hertz, National, whatever agency has a strong presence in the area. Partnering in this relationship could build customer loyalty as well as new customers.
9. Free Weekday News paper
10. Free Local Phone Calls
11. Free Check Cashing up to $50 with I.D.
12. Oil Change Coupons with a quick-lube type of place – Jiffy Lube or Valvoline, for example
I. Setting Up a Program
I would suggest starting the program process with the customer service department. There the employees are trained to deal with customer service problems and may be closer to customer needs and wants. A meeting with the department head and assistants, in addition to any other management representative(s) you choose would be appropriate.
This meeting would be to explain the customer relationship management program, the reason behind it, and to discuss ways to facilitate its initiation and installation. Are the employees willing to participate in such a program and help in finding ways to support it throughout the entire process?
We can discuss this proposal and make any refinements to it as necessary.
H. James Hulton III