Don’t mistake my hospitality for being weak. It actually can be your business’s strongest asset for creating a competitive advantage by differentiating your business over your competitors.
What I’m alluding to is a hospitality enterprise possessing a business strategy approach built on a customer experience design platform that is primarily focused on the guest experience as the value proposition of the company’s business model. When a hospitality organization is operating from a more traditional, analytical and solely logical business platform, it can create tremendous limitations on the enterprise’s ability to create a sustainable competitive advantage and generate breakthrough financial performance.
Lacking the ability to create a guest experience that’s engaging and connective for achieving stronger loyalty to the business can also put your organization in a situation where you’re working off the same playbook as your competition. This limits the creativity and innovation to properly problem solve, develop and grow the business.
I constantly ask hotel executives, what makes your business stand out from all the rest? What business strategies does your business employ for managing the guest experience? How do you go about creating a more personalized experience for the guest that has the potential to generate increased brand relevance, impact advocacy, and create strong customer loyalty, as well as positive financial outcomes to the business?
Before attempting to answer these questions, I think it’s important for the hospitality industry to first understand the difference between being in a service-focused business and being in a experience-driven one.
When a customer purchases a service, they purchase a set of tangible activities to be carried out on their behalf. But when a guest buys an experience, they have paid to spend time enjoying a series of memorable events that the business lays out to engage them in an inherently personal way.
Now with that said, there is a lot of talk about the guest experience in the hotel industry, so it’s safe to say that the hotel industry offers more of an experience to the customer than it does goods and services. When you factor in that the strongest driver for customer loyalty in the hotel industry is derived from creating a more personalized experience with your customers, I think it’s safe to say that it would be in your best interest to consider a customer experience business platform on which to develop and run your business. Elevating the business’s level of Hospitality Intelligence in creating a more intuitive and balanced hospitality enterprise would also be of great importance to the industry for achieving a high level of operational, brand and financial performance.
Let me share with you some companies and brands that have built their company on a customer experience design platform, as well as have a very high level of Hospitality Intelligence. Disney was one of the first. Some other notable companies are Apple, Amazon, Lexus automobiles, Nordstrom’s, Safelite AutoGlass, Whole Foods, USAA insurance, Southwest Airlines, Ritz-Carlton, Benihana Japanese steakhouse, and one of my favorites is the Library Hotel Collection in Manhattan.
Let’s stay with the Library Hotel Collection for demonstrating the contrast between a traditional business model and a customer experience design one. I ask hotel executives if they are happy with their company’s ADR, direct booking percentages, and the customer loyalty performance of the business. The response to these questions and many others is always, no, no, and no. No one in the hotel industry is elated about these areas of their business, but the Library Hotel Collection is more positive about the performance of their hotel group and its sustainability.
They have created a very customer compatible and highly attractive hotel experience in their business. They achieved this during a very difficult time in the industry since they launched their brand just before 9/11. Here are some KPI’s to chew on. Their occupancy levels are well above the competition in the region. They have more control over the ADR then their competition. Their online advocacy position is always in the top 10, with over the top ratings and reviews in one of the most competitive hotel corridors in the world, and their customer loyalty doubles the national average. They have balanced the tangibles with the non-tangibles for creating a highly intuitive guest experience that generates a sustainable competitive advantage.
I really want to point out to the industry how important it is for them to seriously consider developing their business on a customer experience platform, as well as indexing how compatible the guest experience is in their business. In a traditional business approach, you may end up treating everything in your business, like a nail that needs to be hammered, with an overly logical and transactional manner that could end up pushing the customer out of the conversation of the company. In a sense, your enterprises ends up commoditizing the guest. Whereby creating a very internally focused hospitality enterprise. That lacks the ability to connect with their customers, as well as create a memorable and endearing bond. In my research the lowest driver for creating customer loyalty in the hotel industry came from price at 12%, and the highest came from personal experience by well over 60+% points.
The way I see it right now, it’s all about strategically conceptualizing a more personalized guest experience that generates stronger brand equity, and loyalty to the business. If the industry keeps attempting to grow their business on the more tangible business elements and discount the importance of the non-tangible side of the business, they will drive themselves further and further down the road of becoming commoditized. They will lack the ability to achieve significant brand relevance, advocacy and loyalty with their potential customer segments, as well as limit their ability to be in more control of their ADR and overall growth of the company. The battlefield for the hotel industry is going to be fought and won in the 21st century through creating a more connective personal experience with your customers.
About the author
Brett Patten is approaching 35 years in the hospitality industry where he has spent those years accumulating invaluable experience in a variety of leadership positions, and business enterprises. Brett has becoming known as one of the top executive leadership and organizational engagement coach on the subject hospitality intelligence, and customer experience design. Brett is also a feature writer for global hospitality, a national and international publication on the subject customer experience design.
Brett’s unique management and business approach consistently transformed hospitality enterprises with sustainable growth results from his days with the prestigious four and five-star hotel brands, such as the Stouffer’s hotels, Pan Pacific Hotels, and Le Meridien hotels, as well as working with prestigious five-star club resort enterprises like the very prestigious Longboat Key, to the launching of a nationally award-winning hospitality brand in 2007.
Brett then turned this business processes into a company called “Five-Star Customer Experience Design.” Today, after spending the last 15 years researching, studying and developing customer experience design strategies for the hospitality and tourism industries, he has become an industry pioneer and the foremost authority on the subject of Hospitality Intelligence. Brett’s company engages with some of the top hotel brands and hospitality groups both nationally and internationally in the industry.
