Mr. Steinbock

Guest Service / Customer Experience Mgmt

Creating Guest Loyalty

By Erich Steinbock, Managing Director, The Carlyle, A Rosewood Hotel

There are two ways to create guests loyalties: Buying or earning. Where would you prefer to allocate your resources?

Buying can be the easiest solution to create guest loyalty as chances are it will show immediate results, but it also tends to be costliest. Whereas earning a guest’s loyalty is harder to obtain, but the rewards are felt longer creating a more fulfilling relationship between service providers and its customers.

Complimentary upgrades, value add-ons and frequent traveler programs have saturated today’s tourism market place. They have become the signs of the industry’s commoditizing. They encourage repeat business and increase short term earnings, but they do not necessarily result in loyalties to the providers themselves. These types of programs create customer allegiances to the various programs versus the service providers.

The airline industry has cleverly found ways to add more benefits to its loyalty programs by adding surcharges to previously complimentary features for the everyday traveler but creating them as a benefit to its loyal passengers. This practice not only helps the various carriers increase their profitability as they fight for financial survival but also create a benefit to customers in frequent flyer miles programs.

But how would this type of program work for hotels? Should they offer a special menu of services and amenities to its frequent guests only? Should they begin charging the everyday guest for shampoo or television access? It seems unimaginable, but then again who would have thought airline carriers would charge for snacks on a five-hour flight.

In many cases, buying loyalty is like a broken faucet, it can easily be turned on to increase flow of traffic and revenues but it is harder to turn off. The danger with buying loyalty is that they tempt service organizations to lose their focus on creating emotional connections with their customers, which could be of greater, longer term value for both parties involved.

In the luxury hotel business we need to continue to focus on activities which increase “earned” loyalty.

Service providers attempt to measure their successes by including questions like the following in their customer satisfaction surveys:

1. “How likely are you to return...?”
2. “How likely are you to recommend...?”

However these questions associated with customer research can lead organizations astray. Many travelers, who were dissatisfied with their experience, may still mark on surveys that they are still likely to return because the benefits of the frequent traveler awards programs, the location of the hotel, or other matters of convenience may trump over the levels of dissatisfaction they experienced with service and the product. On the other hand, another traveler’s experience may have been the very best, but they may have mentioned that they do not plan on returning to the same location as their trip was being paid by their company.

Some time ago, The Carlyle was expecting the return of a loyal guest and his wife. The team and I positioned ourselves as the welcome committee in the hotel lobby. Upon the couple’s arrival, they shook hands and with a smile expressed how nice it was to be back. Their security staff quickly rushed them to a dedicated elevator, which brought them to their accommodation. The whole process took less than a minute.

The next morning, during my regular hotel walk through, I stopped by the fitness center where I observed a housekeeping attendant speaking with the wife. They had known each other for more than twenty years and were sharing stories with each other about their respective families. It had all the appearances of a very cordial and genuinely friendly conversation between two individuals enjoying each other's company. The housekeeper was respectful and the guest was happy to see her once again.

At that particular moment I realized what mattered most to this guest. Chances are she frequently received the same formal welcome by the general manger and his/her team at every other hotel in the world. I could not help but feel that this particular relationship she shared with the housekeeper, who she happened to see that morning, meant significantly more to her than any formal receiving line.

In the competitive business of luxury hotels, the quality of the relationship between the employees and its guests cement more loyalty than any frequent travel program. Many guests who frequent luxury hotels are able to afford almost anything money can buy but what brings them back is the intangible, topped by genuine care.

The quality of a product, the cleanliness, the efficiency of services and the fine furnishings of the accommodations are the stakes which keep us in the game. A game that has been played for thousands of years, as demonstrated below.

Around 300 B.C., a tired traveler arrived at the home of Epicurus, an ancient Greek philosopher. He was tired and hungry, and Epicurus provided him with a simple bowl of porridge. “This is the greatest meal I have ever had,” said the visitor. Epicurus responded, “How could it be? It is only a simple meal.” “Yes, but I am having it with a friend.” “What difference does that make,” questioned Epicurus. “The porridge tastes the same, with or without a friend.” “It tastes better because you, my friend, validate my existence.”

Earning loyalty has much to do with the heart of an organization, starting with the genuine care shown towards the employees which, in turn, results in genuine care for the guests. Employees who experience it stay engaged and guests who feel it will return to the ones who have validated their existence, like the weary traveler described above. In a world filled with the unknown, guests look forward to returning to something known and being recognized by the employees they know. It is something which goes beyond the computer generated guest recognition system, when even being recognized by name seems mechanical.

A good quality hotel’s employees know the guests by name. In a great hotel the guests know the employees by name and trust them to have their needs met.

Fred Crawford and Ryan Matthews, authors of the book “The Myth of Excellence,” state trust leads to long term business relationships. They proceed to list the five attributes of business with “experience” being one of them. When a customer believes a company has their best interests at heart, “ that you will tell me the truth because you respect me as a human being and care more about me and my satisfaction than you do about making the sale,” then it will result in the customer trusting a business and lead to a long-term relationship.

The service industry is about helping customers feel better about themselves through anticipating their needs and participating in their experiences which will allow them to later on relive the moment again and again. To fulfill this goal, it is imperative for businesses to understand their unique strengths. It allows them to allocate the right amount of resources to create guest loyalty.

What makes a luxury hotel so great that guests’ loyalties are a natural outcome? What will happen when someone discontinues the “bought” loyalty programs offered by other service providers? Chances are that bought loyalty will dissipate while earned loyalties will remain intact.

In the profession of luxury hotels, we are fortunate to be in an industry where we have “guests” and not clients, customers, or patients. It is their choice to stay or live with us, and if they enjoy their time on property they will look forward to returning for years on end.

We see our guests’ families grow up. We participate in our guests’ special events by ensuring their needs are met, and we look forward to their next visit just as much as they do.

Let us call upon all those who are engaged in the tourism industry to ask themselves, “What can I do to improve the trust of my guests by providing a warm welcome, an overall exceptional experience and a fond farewell?”

Will we see more amenities taken away and then returned complimentary to the frequent travelers? Have we reached the saturation point of purchased loyalty programs? The answers to both questions are “Maybe”.

There is certainly more the service industry can do to earn the loyalty of its customers. We can continue to be honored by guests’ loyalty if we are able to evaluate how we show guests that we truly do care. Our success will depend on how we develop employee interaction skills, giving them the confidence in their profession, and finding ways to accurately measure these skills. We need to focus on those things that our guests simply cannot get anywhere else, and find out about our guests’ broader needs, aside from their direct purchased from us. A good understanding of these needs will lead to our ability to respect them. For instance, some guests are pressed for time. Even a brief introduction to the hotel’s services and facilities upon check may seem intrusive to them. Others may be a little intimidated by entering a hotel for the first time. Taking a little more time and offering assistance, with a warm smile, for specific needs may help take the stiffness out of the air gradually.

Most people enjoy assisting others as it provides a sense of accomplishment and purpose. Being successful in the service industry is an art as we not only validate the existence of the guest but also oneself.

A 45-year veteran of the hospitality industry, Erich Steinbock holds the position of Managing Director of the legendary Carlyle, A Rosewood Hotel, New York. He also oversees the operations at Rosewood Tucker’s Point, Bermuda. Mr. Steinbock joined Rosewood Hotels & Resorts following eleven years with The Ritz-Carlton Hotel Company. At Ritz- Carlton Mr. Steinbock became General Manager of several properties within the collection and participated in the opening of 14 Ritz-Carltons both domestically and internationally. Mr. Steinbock also served as Vice President of Food & Beverage at the Ritz-Carlton Corporate office where he worked on developing concepts and opening restaurants with distinguished chefs Eric Ripert, Laurent Tourandel, Dean Fearing, Wolfgang Puck and others. Mr. Steinbock can be contacted at 212-570-7100 or erich.steinbock@rosewoodhotels.com Extended Bio...

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