By Renie Cavallari
Re-positioning. Most people inevitably focus on two things: capital and brand evolution. What physical changes are necessary, and how will the messaging and marketing evolve to match? Yet the real long-term ROI of any re-positioning project lies in a third strategic element that too often gets overlooked: how will you re-engineer the guest experience to bring your new product to life?
After years of economic stagnation and recovery, the hospitality industry is finally heating up again. According to a report from New York University’s Tisch Center for Hospitality, US hotels spent a record $6 billion in capital expenditures to improve guest amenities and services in 2014, more than double what was spent in 2010. Performance also improved, allowing owners and investors to think about capitalizing on new opportunities—and how to get the biggest return.
What is the Real Business Challenge Behind Re-Positioning?
The report from NYU also found that the rise of social media has resulted in “additional capital expenditures as owners become more aware of and respond to criticisms and unfavorable comments.” These expenditures are crucial, and point to the missing link in ineffective re-positioning.
According to the American Express 2014 Customer Service Barometer based on 1,000 consumer interviews, the average consumer will only tell eight people about a positive service experience, while a negative experience will reach 21. In fact, 60% of consumers with complaints “talk about these experiences all of the time.”
FACT: Poor service means lost customers. “60% of consumers intended to conduct a business transaction or make a purchase, but decided not to due to a poor service experience.”
FACT: Good service means more sales. “On average consumers are willing to spend 14% more with a company they believe provides excellent customer service.”
FACT: Good service drives new and return business. Providing ‘excellent customer service’ is the second most important factor consumers consider (20%) when choosing a company with which to do business, behind ‘good value for the price’ (51%).
FACT: Satisfaction lies in service delivery. “The best way that a company can stand out and exceed U.S. consumer expectations for customer service is simple–’deliver promised value at the right price’ (29%).”*
FACT: No one pays for a bed or a toilet. People pay based on the experience they expect (what the market says about you), and they stay based on the experience they perceive.
Facts don’t lie. A capital strategy has to support your asset value on three levels. Most people do two: capital and messaging. And yet, to operationalize your re-positioning and see long-term success and loyalty, you have to change more than the physical plant and brand promise. That’s why the third element of successful re-positioning is all about service.
Your Service Experience Is Your Guest Experience
Today, it is your customer experience that sustains your asset value. Guests have to experience your brand promise, or it doesn’t really exist. The biggest mistake investors and operators make when repositioning is forgetting to operationalize their brand promise and bring the guest experience to life. Of course your customers will see something different after you re-position; they also have to feel something different.
The key is identifying unique touch points and service opportunities. Because today more than ever, what your customers say is your brand promise. If I say, “The front desk was rude,” you don’t get to tell me they weren’t just because you promised a welcoming experience.
Delivering an experience that supports your brand promise gets customers to fulfill your social media strategy for you, as they will rave about the positive experiences they have rather than the poor experiences they like to complain about. When current customers love their experience—and when they don’t—they talk. So when leaders and employees are aligned and inspired to deliver on your brand promise through the guest experience, it drives new and return business.
Your brand is never stagnant. It is constantly being defined and reinforced by the experience that employees deliver and the value that customers perceive. The design of the service experience brings your brand to life and lends stability and long-term sustainability to any capital investment. It allows owners and operators to align their leaders and employees with the “Why” behind a capital change, so that everyone can understand their role and engage with the new service experience and expectations.
You have to ask what your customer experience will look like after you make a capital investment. How will your service reflect and support your brand promise? What should customers expect to feel when they come to your property? How will you consistently deliver? Re-designing your service standards with the same focus and clarity you use when determining the changes you want to make is the difference between a mediocre return and outstanding, sustainable success.
Want more? Get your free download of Aspire’s new white paper Repositioning: More Than A Beautiful Renovation for more tips on how to design an outstanding service experience to support your capital investment and see the return you are looking for.
*All statistics reported by the American Express 2014 Customer Service Barometer.
