I ask this question a lot when I'm working with the hotel industry. I'm always surprised by the answers I receive. Some of my clients respond it's our location. I then have them walk outside with me, and there's a whole group of hotels all around them. Some of my clients respond by saying it's our product offering and amenities. So I then have them go online and look at the other hotels on their level to discover that they also possess the same level of product offering and amenities, if not better. I won't even go into the pricing one. I'll spare you from going down the entire list of responses as well, but I do want to tell you what I've told others in the industry.
The X- factor insight
Your X-factor is what will ultimately differentiate you from the other 52,000 hotels in the United States, and the X number of national and international hotel brands in the world as well. It's your true competitive advantage to your customers that can't be easily procured, duplicated, or exceeded by your competitors. You see, when all things are equal in the marketplace location, product, brand, ratings, services, price, etc., what is your differentiating factor that separates your business from the pack? How do you stand out and make an impression with your customers that generates memorable experience toward achieving loyalty with your brand?
In a customer experience design perspective, when it comes to developing the X-factor of your business, it's built on cultivating those characteristics of your business that have the ability to enhance the experiential value that your customer receives from your business, that in turn makes you more identifiable, approachable and engaging. It's not so much based on a marketing perspective of what you can offer them in the tangible sense per se, but more so on how you make your guest feel about themselves during their stay at your hotel.
The number guys have weighed in
Now, let's presume that all the behavioral and social economists are right, as well as the entire customer experience profession. They all profess that the industry has become commoditized, i.e. purely seen as a product offering and not as a total experience in the eyes of their customers. I believe this has been happening to the hotel industry, due to the relationship the OTA's have with the industry's customers, and some industry overbuilding, as well as the past couple of recessions affecting supply and demand.
Let's also consider that these experts are in agreement that we are in a customer-based economy that is based more on the total experience of the business, versus one that competes solely on the tangible aspects of the business, i.e. product and pricing, for earning customers’ preference and loyalty.
Sorry to be the bearer of bad news
If that's the case, then everything I listed in a tangible sense to do with your business is only equivalent to being 50% or less of the perceived value by your customers. It's the introductory value of the business equation, when it comes to creating a total customer buy-in. The other 50% of the business is then made up of the non-tangible elements and is considered the long term value of the business relationship, i.e. the experiential value, which is usually left undervalued and unmanaged as well as badly underdeveloped in over 90% of the hospitality industry businesses.
The bigger challenge with this paradox is that's where your X-factor qualities reside for competing in a customer driven economy, as well as achieving sustainable customer loyalty and brand relevance. It's the non-tangible elements of your business that enhance the tangible. It's basically where the gap exists between your customers and your business. It's where the physical qualities meet the personal attributes and qualities of the business.
Tangible, versus the non-tangible
The hospitality industry puts too much pressure on the tangible aspects of their business as being the catalyst for creating their financial performance and improving loyalty with their customer segments, but never consider the impact the non-tangible elements can and do have on the overall performance of the business. By not having a good understanding or awareness of your non-tangibles can really impact the consistency and the quality of the tangible elements of the business and the overall ability for the business to achieve a stronger level of customer loyalty for enhancing the long term financial picture of the business.
You can have the greatest location, the nicest and the newest hotel property with strong branding and star ratings positioning, but if you're not equally focused on the non-tangibles of the business and managing the total customer experience of your enterprise, then all those niceties and over the top investments on the tangible side of the business will not yield the level of customer loyalty or sustainable financial performance that you would deem appropriate for the amount of energy, time and financial investment you have committed to in your business.
Cultivating your X-factor qualities
Let me give you a little direction on how to start cultivating your X-factor. First, take a look at position of your business model, specifically the value proposition. Is it really focused on what you think you can be remembered for by your customers? Is it more focused on the tangible and logical side, versus the non-tangible aspects that make up the total customer experience of your business? Does the value proposition have the ability to connect with your customers on an emotional level that makes them feel good about themselves from the experience they have received from your hospitality enterprise in perhaps the same way Apple does with their customers?
Do you have the goods?
Secondly, consider looking at the amount of resources you put into the tangible elements of your business, versus the non-tangibles. Look at the level of importance and significance the non-tangible elements receive versus the tangible. I find 99% of the time, this scale is considerably out of balance. Consider what's important to your customers when it comes to the non-tangible aspects of your business and invest in developing those areas.
Do you have a separate business discipline that's just committed to the customer experience aspect of your business? Do you have a well-established service excellence program that's in alignment with the customer experience business strategies? Do you have a customer experience management system in place? How much time and resources do you invest in developing your people around the customer experience and the service excellence initiatives? Is it somewhere between 250 to 300+ hours a year per employee , like the Ritz-Carlton, Southwest airlines, and Nordstrom's?
Getting to the core
Look at the position of your core guiding principles. With a strong focus around the vision and mission statements position, are they customer focused with the balance between the tangibles and the non-tangibles elements of your business? Look for the qualities in your hospitality culture that seem to align or identify with your hospitality enterprise. It's not something you do, it's something that you are. That's when you get to the core of your X- factor sweet spot that will have you connecting better with your customers, like Disney, Crystal Cruise Lines and Starbucks.
When I see businesses that understand and cultivate there X-factor qualities, they're not solely focused on competing against their competition or designing their operation to do so as well. They are more focused on contributing value to their customer's life. It is more of a focus of creating the business as a brand extension to support their customer's life, versus being overly focused on the competition. They are being hospitality and have moved out of the position of trying to do hospitality. Please keep in mind the stronger your X-factor quality and persona are, the stronger your customer and employee relationships will become. The businesses with a strong X-factor awareness are the ones that are able to maintain their relevance and connectivity in the marketplace during good times and bad.
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, to recently completing his education as an executive leadership and engagement coach in the area of 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 hotels like Stouffer's hotels, Pan Pacific Hotels, and Le Meridien hotels, as well as working with prestigious five-star club resort enterprises like Longboat Key and Greenbrier to the launching of a nationally award-winning four-star hospitality brand in 2007. From there, he built a hospitality business strategy platform that he developed and trademarked out of his commitment for achieving customer experience excellence. Brett then turned this business strategy platform 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 engages with some of the top hotel brands and hospitality groups both nationally and internationally in the industry.
