customer experience report part 2
TRANSCRIPT
Sponsored by
The Customer Experience in the Hospitality Industry
Part 2The Sub Sector & Competitive Set Performance
© Customer Service Benchmarking Ltd June 2012
1
ARE YOUBEING SERVED?
LEGAL MATTERS
Why is it that we recognise the increasing demands ofcustomers in the hospitality sector, but so often fail to applythe same measures to the legal profession? How often do youhear lawyers talking about customer service? We believe all businesses, small or large, should expect thesame level of service from their legal partners as they do fromtheir hospitality providers. We’ve built our business modelaround the needs of our clients, providing price certainty and service choice.
Using a first-class legal team combined with a unique technology platform, we can deliver fixed priced legal services in a more flexible, tailored way whether you are a small business, mid-sized company, or a large organisation balancing your internal legal capabilities with an external panel of experts. We know how important it is to meet both the changing needs of our clients and their expectation for a quality service at a fair price. Learn more at www.RiverviewLaw.com or call 0844 257 6000
2
“A vital piece of intelligence”
Forward“A vital piece of intelligence for all hospitality leaders.
Whether in preparation to welcome the world as hosts of the Olympic Games 2012 or simply to grow sales and profit in the most competitive economic conditions for a
generation, this report, based on robust “actual” visit data identifies the challenges and opportunities ahead.
The report presents compelling evidence for a shift in focus - to engage existing guests and leave them with a desire to return and tell their friends. Peer to peer recommendation
has always been the most powerful marketing vehicle and in a social media-rich environment the opportunities and risks are even greater.
Such customer centric intelligence, vital for competitive advantage, was not previously available but Customer Service Benchmark now provides an accessible tool for all leaders
to assess where they are currently and to identify the scale of their opportunity-gap by measuring and benchmarking performance in areas that matter.
The report raises some important questions and challenges.”
Bob Cotton
3
Sub Sector Accommodation Food Led Drink Led
Competitive Sets B&Bs Casual Dining Community Pubs
Budget Hotels Fast Food High Street
3-4* Hotels Coffee + Destination Pubs
5* Hotels Fine Dining
Boutique Hotels Gastro Pubs
Ancillary
“When the majority are average, focus on and deliver excellent experiences for competitive advantage”
In Part 1 we illustrated the performance of the hospitality industry. In Part 2 we drill down to consider the relative performance of the sub sectors of the Hospitality Industry and each of their constituent competitive sets. We aim to
challenge. We aim to identify average and offer guidance for those who aspire for more by highlighting the performance gaps and identifying opportunities.
Introduction
4
WANTED: Places that excite and satisfy guest emotional needs!
Every Sub Sector, Every Question Below Target
70
72
74
76
78
80
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend
AccommodationDrinkFood
Each sub sector performs below target in all areas. Too much emphasis on training systems and process. Too little welcome, warmth, interest and knowledge.
Accommodation businesses only manage a welcome score of 77.68% even with a receptionist.Being welcome is not defined by saying hello, it is exhibiting behaviours that make people feel welcome!
The Drink-led Sector offers the best perceived value.Food-led team appear to be trained - but in what? It appears the wrong things.
Restaurant teams are perceived to be better trained - they know how to take orders, serve goods and transact guests yet lack personality. What is the purpose of your training? Provide systems and processes to aid the team but train knowledge
to instil confidence and release personality. Recognise behaviours that matter!
PersonalityWelcome, Warmth, Interest, Confidence
SkillsPace, Training,
KnowledgeReflections
Perceived Value, Willingness to Recommend
10
“I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
Maya Angelou
photo credit: Ben Sutherland
11
Ensure you deliver on experience not just design and kudos!
Accommodation fails to deliver Home from Home Experiences
60
70
80
90
100
PersonalitySkills
ReflectionsAverage Score
3-4 Star5 StarB&BBoutiqueBudget
Disappointing performance from the Accommodation-led Sector, only 5* Hotels achieve 90% and only for reflections. Under-performing overall, 5* Hotels benefit from kudos and association rather than the team behaviours and the experience afforded guests. Guests want to tell people they stayed there despite the
experience rather than because of it.Boutique Hotels demonstrate how differentiation on design rather than actual guest experience fails to deliver.
3-4* Hotel performance demonstrates why it has shrunk in a sector revolutionised by the development of budget hotels. While net growth in rooms has been nominal over the last 30 years, the growth in Budget hotels that offer a better price and a better experience has hastened the demise of the undifferentiated and squeezed mid market
offers.
Differentiate or die! Experience is the only competitive advantage
opportunity for mid market as budget hotels grow and
improve.
12
“We brought prices down, down, down so they are now essentially commodities. So if we want to succeed in this business, we have to move in a direction of adding other value to the relationship with our clients. And so where I might have said 15 years ago, 'We want to be the best
discount brokerage,' today I want to be the best 'relationship company' in financial services.”
Charles Schwab
“We have the best customer satisfaction record, based on Transportation Dept. statistics, of any airline in America, the fewest complaints filed per 100,000 passengers carried. So
you’re not just getting low fares, you’re also getting wonderful customer service.”
Herb Kelleher
Price isn’t enough!Even for successful low-cost operators!
13
Formality is the enemy of warmth and hospitality!
5* Hotels Reliant on Kudos and Maslow
60
70
80
90
100
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Score
3-4 Star5 StarB&BBoutiqueBudget
5 Star willingness to recommend is excellent but clearly driven by kudos rather than the quality of the experience. High price provides status and high personal brand value but experiences are formal and often inhospitable.
B&B personality performance eclipses all. Boutique Hotels are welcoming but often disappoint on every other level.Warmth is the most concerning aspect - reserved, formal, slightly distant or just don’t care prevails.
Guests want warmth & personality - a home from home experience is sadly lacking across the accommodation sector.Stop processing people and start welcoming guests to your home!
Budget hotels are growing, booking is easy, they are developing the experience and offering far more than a cheap bed.
What are the doormen and receptionists
doing?
14
Recognise team members that mean it!
• Let your personality and welcome reach out from beyond the counter.• Acknowledge queuing guests - let them see you are there and have seen
them• Make eye contact and Smile - with your eyes as well as your mouth.• Be first, Be there & Mean it• Ensure all team members recognise their responsibility to welcome
guests• Make the section closest to the entrance smaller, providing that team
member the capacity to welcome guests• Only one host - are you sure?• Good Afternoon, Hello, Hi, Evening Madam or Howday Dooday - it’s less
about what you say and more about how you say it
Be welcoming - AND MEAN IT!
15
Price is an unsustainable battleground!
Food-Led Businesses lack personality
60
70
80
90
100
PersonalitySkills
ReflectionsAverage Score
AncillaryCasual DiningCoffee +Fast FoodFine DiningGastro
Unlike the hotel sector the restaurant industry has “enjoyed” phenomenal growth in guest choice - the competitive challenge has grown in tough economic times yet price rather than experience has been the approach adopted by
most. Each competitive set delivers experiences below the 90% target. Fine Dining best and only 6.34% adrift.Over-supply and the challenging economic climate demands competitive advantage.
The consumer needs experiences, they want places to escape, socialise, explore and enjoy, yet the evidence shows a bewildering choice that fails to excite and engage. In the face of rising prices, debt burdens, static or falling sales and profit the answer is not to slash costs and cut prices but to engage guests and provide experiences worthy of
recommendation. Discounting is not a long term or strategic solution. The eating-out market fails to deliver and faces increasing competition from supermarkets and entertainment sources that better meet their experience and value
requirements.
Ancillary is 19.52% adrift of earning
recommendations.
16
In a competitive market - Differentiate on Experience!
Unrivalled choice but lacking experience and engagement
60
75
90
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Score
Ancillary Casual Dining Coffee + Fast Food Fine Dining Gastro
Welcome, Warmth, Interest and Knowledge are weakest!Ancillary where the hospitality provision is secondary e.g. motorway services, theme parks, museums and
supermarkets are the worst performers in almost all areas.Surprisingly(?) even those with formal host / maitre’d, the welcome is below 90% target level.70%-89.9% just means ambivalence, it is not at the level (90%) required to develop advocacy!
Fast Food and Coffee+ ‘off the pace’ required by guests and lacking in personality.Gastros: over-promising on design and marketing but failing to meet guest expectations.
17
Return to what made pubs the social hub!
Drink Competitive Sets Illustrate why there are so many closures!
60
70
80
90
PersonalitySkills
ReflectionsAverage Score
Community Destination High Street
The Smoking ban effectively turned pubs into restaurants overnight and with the added competition from a rapidly growing restaurant sector which has benefitted from fresh ideas and investment, pubs have largely lost their place and their way. Despite an enviable heritage and fondness they have allowed others to steal a march on them and
clearly bring up the rear in the experience stakes.Once the heart of the community - “the third place” - they now close at a double digit rate every week.
Pubs and Bars - venues for convivial socialising and escape, fail to deliver against all measures but particularly disappointing and damaging is the lack of personality factors. Most even fail to acknowledge guests at the bar.
Destination pubs are the best performing set but still almost 10% below target.
18
Pubs need to be the 3rd place again!
Experience Lite in Pubs and Bars
60
70
80
90
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Score
CommunityDestinationHigh Street
Destination Pubs perform best against all measures but are they restaurants in disguise developed by restauranteurs?The drink-led sector looks much worse without the contribution of pubs in destination locations which serve food.
If only... there were only pubs? Competition has grown, needs have changed and a more discerning and affluent society choose restaurants that fulfil multiple needs, excite and engage them while those pubs stuck in the past struggle on and
close.A great pint is not enough! A proud heritage - the envy of many nations is diminishing fast. High Street pubs and bars are
being supported by capex fuelled fashionable design - an unsustainable strategy as volumes fall.
Community Pubs
Welcome @ 68.52% is
actually saying go away!
19
Experience Benchmarks
Focus teams on consumer metrics that matter!You have to be better than the rest!
We have evolving experience metrics for each of the following segments of the Hospitality sector.Sadly all below the 90% target - the level required for advocacy and recommendation. We are pleased to be helping
one client at a time.Part 3 considers the performance of the basket of talent which makes up The Eclectic Benchmark. The report will
illustrate clearly the gaps between the average performers (the majority) and the best of the best!
65
70
75
80
85
90
3-4* Hotels
Com
munity
Coffee +
Casual D
ining
Budget Hotels
Boutique
B&B’s
Ancillary
Destination
Fast Food
Fine Dining
Gastro Pubs
High Street
5* Hotels
Drink Led
Food Led
Accomm
odation
Hospitality Sector
20
You wouldn’t fail to greet guests to your home!
Insufficiently Welcoming across the “experience” sector
60
65
70
75
80
85
90
Welcome
Contract Catering, Motorway Services, Theme Parks and other ancillarys provide the worst welcome followed by Community pubs
Only Boutique Hotels provide a level of welcome worthy of note and recommendation
3-4* Hotels
Com
munity
Coffee +
Casual D
ining
Budget Hotels
Boutique
B&B’s
Ancillary
Destination
Fast Food
Fine Dining G
astro Pubs
High Street
5* Hotels
21
Turn up the heat on operators to demonstrate warmth!
A lack of Warmth across the Sector
60
65
70
75
80
85
90
Warmth
Fast Food and Boutique join the underachievers Ancillary and Community.Fine Dining and Gastro leading the way but all below 90% target.
Caring for, being attentive, listening to, demonstrating enthusiasm and affection or kindness towards guests delivers a sense of warmth. A simple gift easily bestowed upon guests will provide significant competitive advantage.
Warmth is the key driver of recommendation : 29.7% of guests cited warmth as the key reason for their willingness to recommend.
3-4* Hotels
Com
munity
Coffee +
Casual D
ining
Budget Hotels
Boutique
B&B’s
Ancillary
Destination
Fast Food
Fine Dining G
astro Pubs High Street
5* Hotels
22
Ask questions - show interest in their needs!
Show Interest
60
65
70
75
80
85
90
Interest
The worst area : evidence of an inability to demonstrate an interest in the guests themselves and their needs.An abject performance seriously limits sales and profitability.
Asking questions of the guest about their day, work, recent activities, holidays, shopping exploits etc, not only demonstrates you are interested in them but it provides the essential sales fuel. Understanding guests facilitates the best matching of goods, services and an experience to guests encouraging them to return, to bring their friends and
therefore maximise long term sales.
3-4* Hotels
Com
munity
Coffee +
Casual D
ining
Budget Hotels
Boutique
B&B’s
Ancillary
Destination
Fast Food
Fine Dining
Gastro Pubs
High Street
5* Hotels
23
Emotions Matter
“Fill guests with a burning desire to return and bring their friends”
24
Stop training systems and processes!Develop team member knowledge for competitive advantage!
Demonstrate Knowledge
60
65
70
75
80
85
90
Knowledge
Knowledge is the foundation for confidence and guest interaction. Without knowledge team members will actively avoid engaging with guests. 5* Hotels are the only competitive set reaching target levels while fine dining is close.
These high-end experiences do not have the exclusive rights to demonstrating knowledge and staffing levels are not an acceptable excuse. Every team member from every team should share their knowledge PROACTIVELY and build
the guests’ appreciation of your points of differentiation, values and substantiality.
3-4* Hotels
Com
munity
Coffee +
Casual D
ining
Budget Hotels
Boutique
B&B’s
Ancillary
Destination
Fast Food
Fine Dining G
astro Pubs
High Street
5* Hotels
25
The Experience is the justification for price elasticity!
Insufficient Perceived Value
60
65
70
75
80
85
90
Value
The perceived value is insufficient to justify the price in all but the case of 5* Hotels providing competitive advantage opportunities for alternate forms of entertainment, relaxation, socialising, exploration and emotional need fulfilment.
Price does not define value as demonstrated by 5* hotels. Perceived value is judged emotionally, subjectively by the individual and on the whole experience - how well the
experience actually met or exceeded the experience they anticipated. Boutique Hotels prices are clearly deemed unjustified by the experience and 67.5% means these guests are detractors.
High hopes destroyed by the reality are punished dramatically. 5* Hotels benefit from the desire of guests to tell people where they have been staying but trading on kudos alone is
fragile. Budget and Fast Food offers may have lower initial expectations but this can be an opportunity or a curse.
Your marketing indicates a promise and an expectation
which must be delivered!
3-4* Hotels
Com
munity
Coffee +
Casual D
ining
Budget Hotels
Boutique
B&B’s
Ancillary
Destination
Fast Food
Fine Dining G
astro Pubs
High Street
5* Hotels
26
87% of experiences fail to generate recommendations!
Guests not inspired to Recommend
60
65
70
75
80
85
90
Willingness to Recommend
Willingness to recommend is a reflection of the whole experience, the emotional value added and the confidence that it will be replicated if recommended to others.
The experiences being offered are not good enough - they fail to excite. Only 5* Hotels exceed the target level. High price is not a barrier evidenced by 5*, Fine Dining and Gastros better-than-average performance.
Provide guests with the fuel and confidence to recommend. In the world of social media word spreads faster than ever before. Every negative is heard by more people and damages not only the errant operator concerned. Trading
on price, design or kudos is fragile lasting only until a competitor who gets it all right comes along.
Budget brands have to work harder to gain recommendation
- its not cool to declare your allegiance to such brands from
the rooftops.
3-4* Hotels C
omm
unity
Coffee +
Casual D
ining
Budget Hotels
Boutique
B&B’s
Ancillary
Destination Fast Food
Fine Dining
Gastro Pubs
High Street
5* Hotels
27
Make your Customer’s Experiences your Competitive Advantage
Competitive Advantage Quotes• “An organisation's ability to learn, and translate that learning into action rapidly, is the ultimate
competitive advantage.” - Jack Welch• “Customer service isn’t just a department” - Tony Hsieh• “When you’ve got only single-digit market share — and you’re competing with the big boys —
you either differentiate or die.” – Michael Dell• “Arsenal have won that advantage, nobody gave it to them. By playing fantastic football and by
winning matches and by winning trophies, they won that respect that the opponent has for them.” - Jose Mourinho• “Good enough never is. Set your standards so high that even the flaws are considered
excellent.” – Debbi Fields• “It’s one thing to read about your company, but when a customer can associate it with an
actual person, it creates a deeper, more meaningful connection to the brand.” Tony Hsieh• “Information is power, particularly when the competition ignores the opportunity to do the
same.” – Mark Cuban• “A society's competitive advantage will come not from how well its’ schools teach the
multiplication and periodic tables, but from how well they stimulate imagination and creativity.” - Albert Einstein• “You do not merely want to be the best of the best. You want to be considered the only ones
who do what you do.” — Jerry Garcia
28
Fast Food & Coffee + Be personable at pace!
PACE + PERSONALITY = Competitive Advantage
60
65
70
75
80
85
90
Pace PersonalityCoffee + Fast Food
Are you in the business of providing experiences at pace? Ensure your pace meets the expectations of guests - long queues, no personality - disaster. Fast Food is expected to be just that and queues are detractors unless you
manage the guests’ queue experience. Engage people in the queue: show them you care.Demonstrate you recognise their pain. Don’t stroll through peak times.
Acknowledge people - Apologise - Give them confidence that you know they are there and that you understand they have little time to stand in a queue. Perfect solution pace and personality!
GAP > 10% GAP 20%Get faster
With personality!
90%Target
29
You have all the time in the world - make space to read!
Useful Reading•Drive - Daniel H. Pink•The Service Profit Chain - Heskett, Sasser &
Schlesinger•The One thing you need to know - Marcus Buckingham•The Seven Habits of Highly Effective People
- Stephen R. Covey•Maverick - Ricardo Semler•Made in America - Sam Walton•Purple Cow - Seth Godin•The Experience Economy - B. Joseph Pine II, James H. Gilmore
•Gung Ho - Ken Blanchard•Whale Done - Ken Blanchard•Funky Business - Kjell Nordstrom & Jonas Ridderstrale•Fundamentals - Jim Sullivan•The Nordstrom Way - Spencer McCarthy•Good to Great - Jim Collins•First Break all the Rules - Marcus Buckingham•Emotional Branding - Marcus Gobe
“Good is the enemy of great.”
“Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.”
“Those spending the most money are the worst brands.”
30
Deliver experiences and embrace Social Media!
Guests Migrate Faster than EverSocial Media means that word of mouth now happens at
lightning speeds, disgruntled guests no longer tell 8-10 but potentially thousands direct from their mobile phone.
The bottom 10% demonstrate a Net Promoter Score of -92 meaning almost every guest is a detractor and looking for
somewhere better to go or staying in.Those providing experiences worthy of recommendations
must be active on Social Media.Those failing to grow competitive advantage and advocacy must focus on what matters and on delivering experiences.
Social Media means consumers find new opportunities to satisfy their needs faster than ever before.
-100
-75
-50
-25
0
25
50
75
100
70.3378.35 74
12.4
-96
Net Promoter ScoreAmazonAppleEclectic Benchmark ContributorHospitality SectorBottom 10%
Guest MigrationPattern
Looking to buy a business?Why believe the arbitrarily generated goodwill valuation?
The P&L a/c accurately describes history not the likelihood of future sales and profits.
31
P&L a/c’s do not measure future sales potential!
Going out of business in blissful ignorance?
0
15
30
45
60
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Score
In 2012 the speed to extinction of Bottom 10% operations is faster than ever before - thanks to social media, high debt burdens, poor guest experiences and world class competitors - hastening the inevitable. Unwelcoming, cold, inhospitable and a perfect recipe for declining sales, profits and closure.
“If you always do what you always did then you will always get what you always got”If you have a business that delivers against your system and process requirements and yet is suffering declining
sales do not assume its because of current economic conditions. Many businesses are growing.Measure what guests feel!
32
ConclusionsThe average performance of the sector and its sub sets is not made up of
polarised highs and lows. The vast majority of venues are gathered around the mean. In such markets the opportunity for those who differentiate is
great. Added to this, differentiation in highly competitive markets is crucial and offers huge rewards to experience-starved consumers.
Hospitality businesses must focus on experience, not the goods they offer or the service they provide - rather focus on the
experience they afford time-poor, discerning guests who long for escape, socialisation and
exploration.
Measure what guests think about you!33
Boutique hotels market a differentiated position promising an experience that is in demand. Excellent! In many cases the experience fails to live up to the
expectations and aspirations of the guests.
5* hotels are differentiated and appeal to high level emotional needs but kudos alone is not sustainable - formal is not hospitable.
Budget hotels have developed a successful differentiated offer led by price but are adding more experience than 3-4* and are winning, squeezing the mid-market
while challenging the old order.
Differentiate on Experience!34
Pace is a basic expectation in the fast food and Coffee + market - work more efficiently with personality for competitive advantage
Simple requirements such as welcome are missing even from those with host doormen and receptionists
B&Bs owner-led warmth threatens to provide a recipe for success but lacking follow though across other question areas and the marketing clout of budget
operators
Measure what matters!35
The restaurant market is highly competitive though very few operators recognise and take advantage of the experience opportunity
While the goods must meet expectations and the service must be professional and efficient it is the experience that will attract loyal guests and advocacy
Pubs and bars have a fine history and heritage, they are fondly considered but have failed to react to the competitive charge that has taken place around them
- they were the 3rd place now they are in 3rd place.
Emotions drive value, engage guests to drive advocacy!36
Its not the burger, pizza, draught ale, bed or spa that develop competitive advantage, these are replicable by the next new market entrant - it’s the emotions
you develop that define the brand and issues forth advocates, ambivalents, backbenchers or assassins.
Focus on and consistently deliver the things that matter and are in short supply to ensure your business stands out in a cluttered and pressurised market
37
The current environment is made for standout hospitality operators who deliver excellent experiences!
Be Better!
38
Part 3
coming soon....
Why some businesses prosper and others failWhich businesses are setting the pace - the Eclectic Benchmark ContributorsCase 1: Knowledge = confidence and growthCase 2: The power of personality and paceCase 3: Engaging guests drives promotionCase 4: Budget Hotels - Better than you imagined?
What can we learn from the
best of the best?
Differentiated, better and prospering39
Our clients outperform the sector, their sub sectors and the appropriate competitive set
If you would like to:Focus the team on what mattersBenchmark your current performanceImprove your guests experiencesGrow advocacy and competitive advantage
We would be delighted to support your guest experience development.
Improve yourCompetitive Advantage
In our hands the right questions + independent professional mystery guests enables us to produce pragmatic, operator centric intelligence
reports that drive focus, improved customer service and guest advocacy
[email protected]@davidmchattie | @CSBenchmark
07795813097
40