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Strategy

3 Ways Customer-Centricity Benefits Your Hotels

 
In our previous blog, we explained the differences between product- and customer-centricity. We also offered a few examples of product centricity to help you evaluate your hotel, and briefly explained the pitfalls of that particular strategy. 

If you read that blog, it’s probably clear to you that product-centricity is not the ideal approach for building and maintaining a successful hospitality company in today’s world. It can lead to decisions that hinder growth, alienate customers, and diminish the guest experience. 

Customer-centricity, on the other hand, offers several benefits. When you and your team use technology (along with some old-fashioned listening skills) to understand what your guests want and then incorporate that information into your decision-making process, you may see changes that you didn’t expect. Here are three positive changes that might occur when your brand shifts to a customer-centric approach. 

Increased revenue

When a company curates an experience that meets the needs and desires of its target audience, they see a spike in revenue. This is true across industries, but it’s especially evident in hotels.

According to the PwC Future of Customer Experience Study in 2017, customers are willing to pay a 14% higher price for hotel stays when they feel appreciated and taken care of. However, this is only true if the fundamental elements of the experience are done well. A hotel with up-to-date technology and trendy interior design may not see this benefit if its staff are rude and dismissive. 

Disney World in Orlando, Florida provides an excellent example of this benefit. They’re known for providing a one-of-a-kind experience to visitors, offering several resort hotels that allow their guests to remain in the “Disney bubble.” While guests could save a significant amount of money staying offsite (with very little added travel time), many choose to pay more for the “magical” Disney experience made possible by exceptional employees and elaborate theming. And they do pay more, especially at moderate and deluxe resorts. Basic rooms at one of Disney’s flagship properties, the Grand Floridian, cost $720 / night on average. 

What’s more, customers who participated in the PwC study also “said they were more likely to try additional services or products from brands that provide superior customer experience.” This, too, is evident in the Disney example. The hospitality giant has around 220,000 members in its Disney Vacation Club, a timeshare program that allows guests to purchase real estate interest in their resort hotels via a flexible points-based membership system. This program makes it possible for members to book stays at a different elite Disney hotel each year, and even visit properties in California, Hawaii, and other international locations. By practicing customer-centricity, Disney can attract and retain customers at a higher price point than many of its competitors. 

Improved reputation

Even in a world where brands have the power to craft and influence their image across a variety of digital channels, word of mouth still has a huge impact on reputation. According to a survey that American Express ran back in 2011, Americans tell an average of 9 people when they have a positive customer experience. They’re even more talkative when they have a negative experience, telling around 16 people when the brand’s service doesn’t meet their expectations. 

Stories of a poor experience can spread even more quickly through social media and review sites like TripAdvisor. Around 86% of consumers will hesitate to purchase from a business if they see negative reviews. If a potential customer gets a bad first impression of your brand from a friend, family member, or review site, it can be difficult to change that image. 

In the United States, Hilton has the best reputation of any major chain. While their success can certainly be attributed to several factors, their commitment to creating a positive experience for their guests has made them a favorite for travelers across the country. 

Consider this story: In 2018, author Mark Nagi reserved a room at a Hilton hotel online. In the “Additional Comments” box on the reservation page, he requested that “a picture of Johnny Utah and Bodhi from the 1991 classic “Point Break” [be] waiting for him upon arrival.” Surprisingly, the hotel staff obliged his strange request, and Nagi was delighted to find the photo propped up against the pillows in his room when he arrived. 

While this may seem small, experiences like this can have a powerful impact on a brand’s reputation; Nagi’s tweet about the photo received 48,000 likes and 9,000 retweets. 

Higher employee retention

While there isn’t currently data to show, definitively, that customer-centricity causes happier employees, research from Survey Monkey shows that customer connection is positively correlated with employees finding their work meaningful. That same research also shows that customer-centric brands have lower employee attrition rates. Among people who saw their company as having high customer empathy, 82% said that they would be working there in two years. Among those who thought their company had low empathy, that number dropped to 66%.

This shows in the data; that Hilton, Hyatt, and Marriot consistently have the highest ACSI (American Consumer Satisfaction Index) scores in the country, while also making the top of the list based on Glassdoor ratings from employees. 

When turnover can cost a company up to 1.5 to 2 times the existing employee’s salary, implementing a customer-centric culture can be a way to avoid losses while taking advantage of the benefits listed above. 

Customer-centricity = success

It’s likely obvious, by now, that we’re fans of the customer-centric approach. Customer-centric hotels see huge benefits, including increased revenue, improved reputation, and higher employee retention rates. 

What might be less obvious is how hotels can implement this approach - especially if it represents a big shift from the status quo. In part 3 of this series, we’ll explore how brands can adapt their strategy, culture, and operations for the era of customer-centricity.

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