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.

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.