A recent analysis by Deloitte of a J.D. Power study highlights the significant financial impact of establishing a strong Brand Promise and ultimately becoming a High Prestige Hotel.
Delivering an exceptional guest experience is a fundamental goal of every hotel seeking profitability and a good return on investment for its owners. But a recent analysis by Deloitte shows how hotels must go far beyond the guest experience to achieve that goal.
The Deloitte analysis of the J.D. Power 2015 North America Hotel Guest Satisfaction Index Study concludes that:
“Underlying the guest experience, a hotel’s brand promise can have a strong impact on business results. Knowing what your brand stands for— and delivering on that promise—can serve as a key to long-term success. Loyalty and commitment are strongest when a brand offers a differentiated brand promise and consistently delivers on that promise by providing an outstanding experience.”
So building a strong, positive reputation is critical to creating loyal guests. In doing so a hotel can move into what J.D. Power calls a “High Prestige” property. As the chart on the right shows High Prestige hotels are significantly more likely to attract repeat guests as Low Prestige properties. High Prestige hotels are more than twice as likely to attract repeat guests when a guest experiences a problem during their stay.
The Value of Loyal Guests
There is a significant body of research detailing the financial benefits of maximizing customer retention.
- Gartner Research is quoted as saying “65% of a company’s business comes from existing customers, and it costs five times more to attract a new customer than to keep an existing one satisfied.”
- Perhaps the most compelling reason to invest in customer retention are the findings from Bain analyst Frederick Reichheld and published in his book, “The Loyalty Effect, the Hidden Force Behind Growth, Profits and Lasting Value.” After exhaustive research among hundreds of companies across many different industries Reichheld concluded:
“Companies with the most loyal customers are the most profitable.”
Creating More Loyal Guests
So, how does a hotel build and maintain a strong and differentiating brand promise and ultimately create more loyal guests? Deloitte offers the following suggestions:
- Know what your brand stands for and what it means to your customers. Hopefully it is a benefit guests really want to buy and not simply a feature of your property.
- Make sure your employees understand your brand promise and can help ensure it is consistently delivered to your guests.
- Create a culture within your property that consistently reinforces your brand promise.
- Measure how well your brand promise resonates among guests and employees.
- Monitor how well it is being delivered and establish standards to ensure that it is.
- Maintain ongoing training to help consistently deliver on your brand promise, reinforcing the message. with customers and strengthening your brand’s reputation.
The Deloitte analysis provides a good foundation for how a hotel can create a strong brand promise and is definitely something hoteliers should consider implementing. As Deloitte points out – your profitability depends on it.
Taking Your Brand Promise and Loyalty to the Next Level
To truly succeed however a hotel needs to go well beyond the six steps detailed above. It needs to incorporate its brand promise into every point of contact with a guest or potential guest since the hotel experience goes well beyond the time a guest spends on property.
Therefore, a hotel’s brand promise needs to shine through in the call center (especially if it is outsourced), its website, advertising, email marketing, reservation confirmations, pre-arrival and post-stay communications, brochures and even personal correspondence.
Hoteliers need to think of communicating with prospects and guests on a continuum – before they arrive, during their stay and after they leave. Repetition is the mother of learning. So, during this continuum your brand promise continues to be delivered until they rebook. Before, during and after so the cycle begins once more.
This is the essence of integrated Customer Relationship Marketing or iCRM as practiced by professional experts in the fields of database and direct marketing. Communications are designed to deliver relevant content including your hotel’s brand promise effectively at each stage of the customer lifecycle from initial awareness through where you have developed loyal brand advocates.
Brand Promise and Loyalty Case Studies
The next HospitalityMarketingBlog post will provide examples of hotels that have built strong and unique brand promises. They have used CRM best practices to establish themselves as High Prestige Properties and seen their customer loyalty, repeat business and profitability grow.
If you believe hotel has a good example of a strong brand promise that has led to increased loyalty and profitability and should be featured in the next blog post, please contact me.
About Madigan Pratt
Madigan Pratt is President of MP&A Digital & Advertising, an award-winning agency helping luxury hotels attract and retain profitable customers. Principals with over 60 years of collective experience at some of the world's largest advertising and direct marketing companies lead the agency's team of marketing, creative, public relations, Internet and social media professionals. Follow Madigan on Twitter at A_Mad_Man or on his Hospitality Marketing Blog. The agency relocated from New York to Williamsburg, VA in 2006.