Class 1 • Introduction to Strategy for Effective Quality Service Delivery • Examples from Disney and Marriott International. • Why quality matters. • Setting the service table: Porter’s Model in brief and Co-alignment • in brief
While innovations in hotel design and style, technology, and personal amenities will always be important, nothing comes closer than personal service to providing what • Strategist Michael Porter has defined as true competitive advantage: the ability to deliver distinctive benefit for which customers will pay more, over time, because those benefits are highly valuable and difficult to imitate. • A company can outperform its rival only if it can establish a difference • that it can preserve; • Competitors can quickly imitate management techniques, new • technologies, and input improvements; • The most generic solutions-those that can be used in multiple settings- • diffuse the fastest; and • Competitive strategy is about being different…choosing to perform • activities differently or to perform different activities than rivals. • Michael Porter, “What is Strategy?,”, Harvard Business Review, November-December 1996,pp.62-64.
COMPETITIVE STRATEGY Forces Driving Industry Competition
Three Generic Strategies STRATEGIC ADVANTAGE Uniqueness Perceived by the Customer Low Cost Position STRATEGIC TARGET OVERALL COST LEADERSHIP Industry-wide DIFFERENTIATION FOCUS Particular Segment Only
Class 2 • The importance of Quality Guest Services to Your Hotel Business’s Bottom Line. • The monetary cost of a lost customer (from Keiser, DeMicco, et al. textbook) [Future Value of a guest] • What the customer expects • What is quality customer service • The importance of understanding the “service (and product) lifecycle and the cycle of service”. • The service process and blue print-an introduction to these concepts (more in depth later in the program on TQM and CSI).
An Example: McDonald’s Quality Service Cleanliness and Value
Disneyland Great Quality and Innovative Food Over-the –top Guest Service Exceptional Cleanliness Entertainment & Show
“You can dream, create, design and build the most wonderful place in the world… But it requires people to make the dream a reality.” Walt Disney
Lost revenue Your costs 1. What an average customer spends in a year The cost of poor service To estimate how much poor service costs your organization, calculate the following: 2. The number of customers lost each year (for the average company, 25%) 3.The revenue lost form lost customers (1*2) 4.Lost revenue form people ex-customer talk to (3*10) Labor costs 5. Time redoing things not done right in the first time 6. Time spent on warranty repairs 7. Time spent apologizing to customers 8. Time spent responding to government agencies, consumer complaint bureau etc. Other costs 9. Cost of shipping express instead of regular 10. Cost of collections from angry customers who refuse to pay 11. Cost of liability insurance
Your costs Other costs (continued) 12. Legal costs 13. Telephone costs for apologizing, explaining, etc. 14. Postage costs for reshipping, apologizing, explaining, etc. TOTAL (add number 3 through 14) Cost of poor service Adopted form G. Roberts_Phelps
Remember We will be better tomorrow than we were today. Deliver the best service possible all the time. Use the guest’s name often. Practice personalized service, especially for out return guests. Humility, Humor, Humanity. “Thank you for staying with us” a great way to say “Happy you are here.” At your service, How many I assist you, Certainly, My Pleasure. The 2.5 inch rule. Eye contact.
Remember ! 96 percent of unhappy customers never complain. But if their problem remains unsolved—they usually tell ten other customers!
The Hotel Service Guest Process(1) Guest Occupancy-Check in Departure Pre-Arrival Arrival Guest Feedback Loop (1) Case Studies—EI Front-office Management book (DeMicco,2009)
Keeping customers happy is good and profitable for the business. A 5 percent increase in customer retention has been shown to increase profits more tan 25 percent. It is estimated that companies lose 15 percent to 20 percent of revenues each year to ineffective, inefficient processes——although some might suggest that it’s even higher. Six Sigma provides a goal that applies to both product and service activities and that sets attainable, short-term goals while striving for long-range business objectives.
Statistics… • Only 4 percent of dissatisfied customer tell us, 96 percent tell other people. • Each unhappy customer tells an average or 10 or more people (13 percent tell 20 • or more). • Resolving a problem quickly will turn 95 percent of unhappy customers into return • customers. • 40 percent of your perceived customer service is how well you solve problems.
Customer complaints are great fun… Here’ s how to deal with any complaint and turn it around: G et the facts R esponsibilities E mpathy A gree a solution T hank the customer for complaining F U N---Follow-Up Now! Adopted form G. Roberts_Phelps
Keeping customers • Customers are for life…not just for Christmas! • Lost customers… • 1 percent die. • 3 percent move away. • 4 percent just naturally float. • 5 percent change on friends’ advice. • 9 percent can buy cheaper elsewhere. • 10 percent are chronic complainers. • 68 percent go elsewhere because the people they deal with are indifferent to their • needs. • Make the extra-ordinary---ordinary! • Every year most businesses lose between • 10 percent and 30 percent of their customers— • and they don’t even know who these customer are.
Turn complaints into opportunities • Welcome complaints ! • Complaints are opportunities. • Problems are wake-up calls for creativity and commitment. • People complaining are people to value---they want to stay customers and are simply telling you how to achieve it and keep their custom. • Be pro-active, not re-active to customer service issues.
Quality, like beauty, is in the eyes of the beholder (Customer).
The Meaning of Quality QUALITY CONTROL: measurement of goods and services against established standards of excellence.
What Is Quality Service? We are now ready to address the question, what is quality customer service? So, here is my response. Quality customer service is the ability to consistently meet external and internal customer needs, wants, and expectations involving procedural and personal encounters.
The Difference Between Product Quality and Service Quality: • Product Quality is WHAT YOU GET • and is easily quantifiable. • Service Quality is HOW YOU GET IT • and is less quantifiable.
Quality service is service that consistently meets or exceeds customer expectations. Every customer comes with certain expectations about the quality of the goods, the services, and the total experiences of dealing with your business. When you exceed his expectations he perceives the quality as relatively high. When you fail to meet his expectations he experiences the quality as relatively low. In the back of every customer’s brain is a scale that compares what he gets with what he expected. The recipe for success in hospitality is the same s that for any other type of business: identify customer expectations, consistently meet or exceed those expectations, and do so at a prices that is acceptable to customers and generates profits acceptable to the company.
The factors in Dumping a Company: • Service • Quality • Price
The factors in a Purchase • Price • Quality • Service
Think of the last time you stopped • doing business with a company… • 70% say it was for poor SERVICE
Class 3 • Basics of High Quality Customer Service • Identifying and retaining your loyal customers • High quality customer service • A systems management approach • The “Service Profit Chain” • Employee Satisfaction via “internal service quality” –how this impacts the quality of the service delivery by your employees. • Tools for evaluating customer satisfaction- electronic tools, gap analysis, Importance-Performance matrix, SERVQUAL. • Time Out for a -Group mini-case (work in teams)
U.D. HART. DeMicco 2009 SUPPORTIVE PROCESS Workplace design Job design Employee selection Employee development Employee rewards and recognition Tools for serving customers Internalservice quality • The Service-Profit Chain Employee satisfaction Employee productivity Employee retention External service value Customer satisfaction Customer loyalty Revenue growth Profitability
THE SERVICE PROFIT CHAIN =VALUE, SATISFACTION, LOYALTY
Importance/Performance Matrix U.D. HART. DeMicco 2009 (B) Performance Hi (A) Importance to customer Low Low Hi
The Service Gap Analysis Matrix Exceed Expectations High Guest Expectations Performance GAP! “Must Have” “Necessary to have” “Nice to have” Low High Low Performance DeMicco,2009
Q LH: Of all the components that make up the guest experience, from valet to front desk to housekeeping to foodservice, is there one that’s more critical to the resort’s success and the guest experience? If so, what is it? A Wynn: The total voice of the employee. Everything else is a joke by comparison. Everything else doesn’t amount to one percent. Everything is the eye contact and the tone of voice of the employee. Forget everything else. People of taste and discretion don’t want big, they want nice; they don’t want dirty, they want clean; they want pretty, not ugly; and they want to be cared for by people who care for them as human beings, not as Blackjack customers or a drink customer, or a diner, but as human beings.
Food for Thought: If 95% of Guests left satisfied; is that good enough? At the Magic Kingdom last year, 5%=745,000 dissatisfied Guests Dissatisfied Guests tell approximately 16 to 20 people about their experience. *And if the Guest has access to Internet? Can we afford to let this many Guests leave dissatisfied?
Gap analysis To determine the difference between what you do and what your customer expect, complete the following analysis and fill in your answers on the table that follows: 1. Fill in your four most important outputs (products or service) in the space shown (A—D). 2. Visit or talk with at least three customers to determine what they expect for each of your listed product or service outputs, how important each expectation is, and how the customers rate your company in providing it. 3. Fill in what you learn about your customers and their expectations for each product or service listed. 4. Note how important each expectation is to the customer on the following scale: 1=Unimportant/unnecessary 2=Somewhat important 3=Very important 5. Show how your customers rate your product or service in this area on the following scale: 1=Does not meet expectation 2=Meets expectations adequately 3=Superior (exceeds expectations) 6. List any problems you uncover of which you were unaware.
Product/Service • Product/service:____________________________________ Expectation Importance Rating • B. Product/service:____________________________________ Expectation Importance Rating • C. Product/service:____________________________________ Expectation Importance Rating • D. Product/service:____________________________________ Expectation Importance Rating
Examples of good and bad service----Worksheet • Working in a group discuss examples of good and bad customer service from information obtained when you were a customer, list at least three of each. • Be sure to examine each case in detail, identifying what impressed or depressed people in each case. • Transfer to a flip chart and select one of your group to present back. Bad Good • Discuss points • How many of the good example are mistakes or problems by suppliers that are solved well? • What are causes of dissatisfaction-small things or bad attitudes more than major problems? • How many of the bad examples involve the attitude of staff serving? • What are the similarities between the examples? • Adopted form G. Roberts_Phelps