Do Customer Experience Measures Matter More than Social Media Reviews?
Ratings, Rankings, Reviews and Everything In Between
By Janet Gerhard Partner & CXO, Inquizo | August 04, 2013
Internal vs. External Ratings
Do customer experience rankings compiled by multiple firms really matter? The unfortunate answer, "It depends." Some customer experience measures do matter. Internal ones are used in most accountability programs. Hotel companies spend millions of dollars each year to ensure the validity and reliability of these programs, holding hotels accountable to certain performance thresholds. Many of these quality assurance programs are written into management contracts and are the basis for formally moving hotels out of the brand. Companies differ in their approach to accountability. Some use overall satisfaction as its measure of performance. Others create an index of average overall satisfaction, intent to recommend and intent to return. Still others use a combination of performance metrics deemed important to the brand experience.
New territory is being forged with the onslaught of social media, and its use by hotels is maturing beyond managing reputation and customer retention efforts. Although relatively new to the scene, consumer generated media has high visibility with customers. But, when compared to the millions of traditional surveys collected by the rigor of quality assurance, they are a mere drop in the bucket. Total volume is difficult to calculate and the quality of the consumer generated feedback varies greatly by the source. Many hotels rely on the review sites, but numbers here are thin. And it's even worse if the hotel is not actively engaged in it.
Social media gets more attention because it is publicly available. All too often it is reactionary and primarily an additional channel for customer care. The Cornell study, "The Impact of Social Media on Lodging Performance" is often cited for initial evidence of ROI. The findings show if a hotel increases its review scores by 1 point on TripAdvisor's 5-point scale (e.g., from 3.3 to 4.3), the hotel can increase its price by 11.2% and still maintain the same occupancy or market share. However, moving up an entire point is no easy task unless your hotel has little to no volume of reviews to speak of.
A May 2013 tongue in cheek article titled, "What is the ROI of your (expensive) kids? Should be the same as your hotel guests" by Carla Caccavale, did not speak to specific financial returns but assumed the same tenants of the Service Profit Chain – better experiences brings stronger preference and greater loyalty. With only a small percentage of hotels responding to reviews, there is definitely room for improvement. And, accountability in its traditional sense will fall to engagement, meaning the large hotel brands are likely to track "responsiveness of hotels" as the first item of social media to be measured consistently. Performance, rolled in to a more traditional measure like customer surveys, is already beginning to integrate social sentiment.
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