How to Invest to Maximize Guest Satisfaction and Loyalty
By Jonathan Barsky Partner, Market Metrix | November 03, 2013
Research has shown that in very competitive markets, such as hospitality, companies benefit from increased investments in customer satisfaction. In less competitive markets (e.g. local telephone) customers are hostage, so satisfaction has little to do with loyalty.
In hospitality, with so many options available to customers, a distinctive experience that connects with customers will pay off. Satisfied customers buy more, are less price sensitive, and will generate positive word-of-mouth, all contributing to revenue performance.
But hospitality companies have limited money to invest and will only spend on things they believe will have the biggest impact on performance. The challenge for all hospitality businesses is to figure out how to invest to maximize guest satisfaction and loyalty. With advancements in customer feedback and data analysis tools, it's easier to identify the investments that will have the biggest impact on the bottom line. Here are three ways to invest that will help maximize satisfaction, loyalty and the bottom line.
Invest in What Matters Most
Linkage analysis measures the impact of customer satisfaction on the bottom line. By linking satisfaction information with customer behavior, it is possible to validate the benefits of measuring and managing satisfaction. Linkage analysis also guides the allocation of resources.
The foundation of a successful hospitality business is customer loyalty. Loyalty can be defined in several ways, including future purchase and advocacy (personal and online referrals). Many hotels and casinos invest substantially in measuring loyalty and in making improvements based on customer feedback.