People - Your Best Insurance

By Rob Rush CEO, LRA Worldwide | January 29, 2012

There was a time not so long ago when the DJIA was relentlessly climbing and every development deal was a good one, that a hotelier would have to engage in the old Cold War strategy of Mutually Assured Destruction (MAD) to compete. Just as the US and USSR stockpiled nuclear weapons to ensure they could destroy one another 57 times over, so did the aggressive hotelier equip his property with the latest and greatest in design, FF&E and amenities to keep up with the Joneses (or the Schragers).

In a booming economy, one purchased customer retention insurance with a healthy line of credit, an iPod docking alarm clock and a hot design team. This form of customer retention insurance was very tangible, very costly and, ironically, very easy to match. Unlike the countless missile silos designed to blend into cornfields in Iowa and mountain ranges in Utah, these flourishes were put in place to attract attention and stick out. And if a competitor wanted to match 'em, they just had to take a look and pony up the dough.

With healthy lines of credit few and far between in the current economic climate, the customer retention insurance policy du jour has become a good deal less flamboyant but ultimately more difficult to duplicate. The currency required to purchase this insurance isn't dollars, euros or yen. It's flesh and blood.

Recession or bull market, boom or bust, people are always your best insurance policy against economic conditions, flat screen TVs or whatever other flavor of the month emerges designed to provide a short-term advantage. An investment in people pays off in ways that are imperceptible in a typical ROI calculation, imbuing your workforce with a sense of ownership and commitment that will make a difference when resources are scarce. (When's the last time a buckwheat pillow gave an extra effort?)

The underwriting process for this insurance policy doesn't involve an actuarial table or a medical exam, but a few key strategies for making your workforce your first line of defense against a receding customer base.

It's simple. Shower them with cash. (Joking...)

Coming up in April 2018...

Guest Service: Empowering People

Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.