Ms. Knutson

Sales & Marketing

The Answer is Yes, What is the Question?

By Bonnie Knutson, Professor, The School of Hospitality Business/MSU

Nearly a half century ago, business guru Theodore Levitt said that the purpose of business is to make and keep customers. It might seem that his admonition is just plain common sense, not some cutting edge revelation. On the other hand, growing competitiveness in the lodging industry has forced many executives to believe that the purpose of their hotel is making money. The focus on revenues, REVPAR, ROI, escalating costs, cost containment, and a series of sophisticated business school jargon has drawn attention away from the real purpose of any hotel - i.e. to make and keep guests. No one is suggesting that revenues are not important; they are. Without adequate revenues a hotel "ain't no more." So let's give Levitt's definition a modern lodging marketing perspective: Marketing is managing your hotel's brand so that guests recognize that your hotel will solve their needs better than any alternative.

As a hotelier, you understand your products/services, managerial accounting, how to compute ROIs, establish cost control procedures, and manage your employees. Each of these functions is an essential support to the purpose of your hotel; i.e., your guests. But it is marketing that focuses a hotel on the value of making and keeping its guests.

Therefore, you have to view marketing as a process with three major functions:

Each of these three marketing responsibilities involves a variety of marketing functions: research, positioning, packaging, differentiating, pricing, promotion, servicing, budgeting and analysis - all of which, serve the purpose of increasing occupancy and REVPAR. In other words, we can adopt the mantra of the camp song we use to sing as children: Make new friends (guests), but keep the old; one is silver and the other gold.

To help bring this goal into focus, let me tell you a story about my mentor and his marketing teacher and mentor. My mentor was Don Smith, former director of the hospitality program at MSU, and marketing genius extraordinaire. Those of us lucky enough to be taken under his wing call him Coach. His mentor and marketing teacher was the unparalleled visionary, Winston Schuler of Marshall, MI. Win Schuler knew the restaurant business technically, managerially, and conceptually. He was without equal. In the opinion of many, he was the most intuitive restaurateur of the 20th century. He also had the gift of communication and was always willing to share his wisdom with others.

In 1960, Coach was getting ready to open his first restaurant in Dundee, Illinois. He called Mr. Schuler, who graciously offered to spend a few hours giving him an overview of the business of hospitality. They met and talked in the lobby of Schuler's first restaurant in Marshall. What this genius talked about was not food costs, not profits, not sales growth. Instead, he talked about football! For Don Smith, who happened to be leaving the coaching field after ten years, this was exciting.

The following is in Don Smith's own words:

"The three things that I will never forget about that meeting are how he viewed football coaching and business as one in the same business. First, winning (within the rules of the game) is everything. He viewed the restaurant business as competing for customers, with that competition being won (or lost) one customer at a time, inside the restaurant (his playing field).

"The reason we were sitting in the lobby was that Schuler could accomplish the most fundamental and important task of hospitality at his restaurant - greeting every customer personally and orchestrating their evening of good food, service, and atmosphere in a memorable experience. I have never seen another host so skilled at making a customer welcome as 'Win'. His ability to sincerely concentrate on customers and, in less than two to three minutes, build a bridge of friendship is still unmatched.

"Nothing was more important than the customer when he or she entered those front doors. He didn't have to speak to that importance, write in a policy manual or drum it into his employees' heads with platitudes. He lived and modeled caring for people every moment he was at work. Time after time, he would interrupt our conversation or whatever he was doing the instant someone walked into Schuler's. He literally jumped up to greet the customer and, through actions, demonstrated how important that person[s] was to him. The customers never doubted their importance to Win Schuler. He had a marketing person's single greatest attribute - he could listen. It was only minutes and he knew something special about that visit and was calling customers by name (a business's greatest asset) as he seated them to explain that this dining experience was especially suited to their needs that day.

"Second, Schuler was a fundamentalist and a master of the details of his business. The wizard of hospitality would shift from the role of a host to the role of an organizational man by turning the customers over to his employees -- a team well trained in the details of hospitable service. He was certain to win the competition for the customers. No one was going to provide a product (broad sense) as Win Schuler. He had established a system of customer satisfying standard procedures that exceeded their expectations.

"Third, he orchestrated the Schuler hospitality through the most productive team of caring people I have ever seen in the industry. He constantly found ways of reinforcing the behavior of hospitality in his staff. The only individuals who received more attention than a Win Schuler employee was a Win Schuler customer.

"He was a great coach. He led by example, stayed close to the customer and found beauty in a relish tray. His enthusiasm galvanized his people into a caring team. And most of all, they gave the customer what they could never get anywhere else - Win Schuler hospitality."

But how many Win Schulers or Don Smiths in the hotel industry are there, you might ask? How can you reproduce such personification and hospitality in your property? You can't. Hospitality is in people, not restaurants, jewelry stores, gas stations, factories, offices, or hotels. There are no great hospitality businesses, only great hospitality people!

Can you be that great hospitality person? Of course you can! Just as coach learned from Win Schuler, always remember the Platinum rule: The Answer is always "Yes"! Now, what is the question? Your REVPAR will thank you.

Bonnie J. Knutson is a professor in The School of Hospitality Business in the Broad College of Business at Michigan State University. She is an authority on emerging lifestyle trends and innovative marketing. Her work has been featured in The Wall Street Journal, USA Today, and on PBS and CNN. She has had numerous articles in industry, business, and academic publications. Bonnie is a frequent speaker for executive education as well as business and industry meetings, workshops, and seminars. Dr. Knutson is also editor of the Journal of Hospitality & Leisure Marketing. Ms. Knutson can be contacted at 517-353-9211 or drbonnie@msu.edu Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.