Mr. Gambhir

Guest Service / Customer Experience Mgmt

Hotel Guest Loyalty: Creating Social Customer Intelligence

By Ashish Gambhir, Co-founder , newBrandAnalytics

More than any other industry, hospitality has been transformed by social media. Not that long ago, hotels assessed customer satisfaction using traditional forms of feedback - such as customer surveys, printed comment cards, inbound emails, website comments, etc.

But times have changed dramatically. As the volume of feedback from these traditional sources continues to decline - response rates from these channels have fallen from 50% in 2007 to 28% in 2011 - mentions per brand, region, and even unit (or product) per year on social feedback channels are increasing exponentially.

Customer satisfaction can no longer be relied on as a metric to predict loyalty. The presumption has been that satisfied guests will remain loyal. Research shows, however, that customer satisfaction does not always equal customer loyalty:

• 40% of satisfied customers switch suppliers without hesitation (Forum Corp).
• 65%-85% of customers who choose a new supplier claim to be satisfied to very satisfied with the former supplier (Harvard Business Review).
• 85% of customers claim to be satisfied, yet willing to switch to other suppliers (University of Texas).

These statistics are compelling, clearly indicating that even for the best-of-class service provider hotels, there is a strong need to look well beyond customer satisfaction scores and take a deeper-dive into what truly drives loyalty: The guest experience. Mining and analyzing online feedback gives great insight into the guest experience. What’s driving repeat stays? What’s causing guests to defect? Are they recommending your hotel? Why or why not?

Hotels Need to Take a Deep Dive into Online Guest Feedback

Hotels, for the most part, are not online asking questions about the hundreds of factors that impact a guest’s experience, such as: location, room amenities and comfort, cleanliness, service, staff, maintenance, and parking. Instead, customers are tweeting, posting, and blogging their opinions about these topics based on their own motivation in unsolicited forums.

A consumer survey by Temkin Group, a customer experience research and consulting firm, (taken in Q1 of 2011) found that:

• About 20% of the respondents said that they had reported a bad experience on Facebook; and 13% said that they had reported a good experience on the social networking site.
• 11% had reported a bad experience on a third-party review site like Yelp or TripAdvisor; 7% had used such sites to report good experiences.
• Only 21% of the respondents said they sent feedback directly to a company via a phone call, a letter, an email message, or its website; 63% said they complained about a bad experience to friends via email, over the phone or in personout of a company's hearing, so to speak.

Whether sharing positive or negative feedback, social media’s growing power as a real-time consumer sounding board opens the door for a new level of customer intelligence because it represents the most important elements of the experience as defined by the customer. Unfortunately, few marketers actually use this data to inform an enterprise-view of their customers. The Intelligent Approach to Customer Intelligence (2009), by Forrester Research, raises this issue. The report, which highlights the difficulty executives are having in using social media feedback data intelligently, explains that the majority of companies struggle to fully understand their customers and leverage their customer data as a strategic asset.

"Feedback is cheap, actionable insights are priceless,” says Bruce Temkin, managing partner of the Temkin Group. “Once you get into actually quantifying how customers view you, it starts changing how your people think about the business. They start to spot customer issues and put in place processes where they can highlight and start to solve the big problems. And the big payback is customer loyalty."

Turning Insights into Action

As social media has quickly evolved into the most important source of guest feedback, it is critical for hotels to be more customer-focused and socially savvy. Being able to effectively translate the rich information embedded in online customer mentions into actionable opportunities arms brands, regions, and units with the unfiltered voice-of-the-customer insight they need to enhance the guest experience and earn their loyalty.

The vast majority of companies today capture customer feedback in some form. But, nearly all are struggling to create structure in the unstructured and unsolicited feedback fire hose that is online customer feedback. How, they ask, do I turn volumes of online insights into actionable opportunity?

For instance, a hotel may cull samples of online feedback and notice an unsettling service issue, but is it enough to warrant action? Management may even be able to see an inconsistency in service from a few customer mentions online, but are the authors credible? Collecting the data via current methodologies does not pinpoint clear opportunities for improvement, let alone what actions need to be taken to turn the situation around, re-engage the customer, and earn their loyalty and brand ambassadorship.

The Answer: Creating Social Customer Intelligence

The intersection of online customer feedback with business intelligence - or what is known as social customer intelligence - is the sweet spot from which brands can most effectively leverage online feedback for operational, marketing, and strategic insight. By tapping into tools that blend social media feedback themes, customer satisfaction, author credibility algorithms, web analytics, and enterprise business intelligence, hotels can capture a complete, real-time view of customer satisfaction, synthesize it into the richest customer insight, and distill the actionable insights needed to drive marketing and operations strategies.

It is important that marketers understand the distinction between operational and marketing opportunities with social guest feedback. When customers generate substantial feedback about business processes, it can potentially serve as the basis for making operational improvements. For example, Hersha Hospitality Trust has found that intelligently mining online guest satisfaction feedback has enabled their hotel executives to get "back in touch" with the day-to-day operations. Through a social media flash report, they were able to identify a critical mass of feedback requesting towel racks in the bathrooms at one of their hotel properties. The executives made the informed call and authorized the addition to the hotel. This was an issue that the GM was familiar with but had overlooked as there are hundreds of competing priorities—but it became priority because of guest satisfaction feedback, and generated measurable value post implementation.

Furthermore, since this data lives online, there are associated marketing-based opportunities. Content on the web is read hundreds if not thousands of times over by potential customers. If customers read comments online about an inadequacy, they are likely to maintain that impression about the business until convinced otherwise presenting a tremendous opportunity for strategic marketing efforts.

Marketers also need to realize that each mention online presents a unique value proposition. Not every mention on the web is created equally. Certain authors possess tremendous reach, others are well-respected on certain topics, and more are relevant within certain social graphs. Understanding the context of how “far” information on the web is traveling is a key insight into determining the most appropriate internal or external response.

In addition to context, the mere fact that guests are talking about your hotel means little unless you can also unearth the credibility and sentiment of the comments. For example, look at these three posts:

• “I loved staying at Hotel XYZ.”
• “If the beds were cleaner at Hotel XYZ, I would have loved it.”
• “I loved staying at Hotel XYZ, but it’s tough for them to beat out Hotel ABC on location alone.”

Three comments that all talk about LOVING HOTEL XYZ - but three postings with very different meanings. The only way to arrive at true insight from these comments is by using an industry specific natural language processing (NLP) engine to read the feedback for you. An effective NLP engine is the equivalent of having a team of hundreds of analysts read through every single mention about your hotel on the web word by word, extracting themes, anomalies, opportunities, successes, failures, etc.

It is also important to pay attention to feedback you deem credible. Organizations like to run their businesses according to a distinct set of principles. It is important, then, that you measure guest feedback by those same principles. If you are part of a business that cares substantially more about service quality feedback than pricing feedback, consider those same weights when evaluating performance feedback online.

There is no denying that social media feedback is rapidly growing, has tremendous reach, and is unbelievably influential. Knowing what customers are saying online and putting all of the social media activity to work in a productive way is a business imperative. Data is undoubtedly one of the most vital raw materials in today’s information economy, and the payoff of being able to effectively leverage all that data in terms of innovation, productivity, and business growth is undeniable. As Jack Welch is quoted as saying “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”

Ashish Gambhir is co-founder of newBrandAnalytics, the industry’s only social business intelligence platform proven to help operating and marketing executives turn real-time social customer insights into actionable information. Harvesting a depth and breadth of customer feedback unmatched by other platforms, newBrandAnalytics solutions deliver the tools, research and analysis required to distill a real-time, 360 degree view of social guest satisfaction data. His company is helping leading hotel executives generate the social business intelligence to improve guest satisfaction, increase guest count and drive revenues. Mr. Gambhir can be contacted at ashish@newbrandanalytics.com Extended Bio...

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