Queen Margaret University, Edinburgh B.A.

International Hospitality Management ITM-IHM, NAVI MUMBAI

MANAGING HOSPITALITY ENTERPRISE 2009

Module Code B3109 Module co-ordinator Ms Arpita Pandey Matriculation number 09006150

Word count 2302

Customers are important for the functioning of any service. Customer expectations are faced by any service industry which is in business. Customer expectations are the benchmark against which popularity and goodwill of the establishment can be measured. This essay explains the importance of customer expectations and how can hotels achieve customer satisfaction and eventually grow their businesses. Customer satisfaction for an individual varies according to ones needs and requirements. A good service for some might be just another service for a different client. A customer could rank the service 6 on a scale of 10 while another could rank the same service 8 on the same scale. This is because both the clients have different level of expectations. From a different dimension, customer satisfaction could be a degree to which customer expectations of a product or service are met or exceeded. The objective at all times should be meeting the satisfaction of maximum people by maximum degree. Customer satisfaction is very important because it is directly linked to the sustainability of the business. (Kevin cacioppo, 1995) A satisfied customer is more likely to return to a hotel and would act as a referral for more clients. This means more business for the hotel just by providing good service and not investing more to bring in more clients. On the contrary a displeased client will definitely bring bad repute to the hotel and his contacts would avoid the same hotel. The hotel lost business in the later case just because it couldnt satisfy a single customer. Thus, customer satisfaction is highly proportional to a sustainable business. A hotel focusing on a particular segment of society should be able to provide maximum degree of satisfaction to its focused group to achieve a sustainable business. (Kevin cacioppo, 1995) Determining the right service for the right set of clients is very important for a service provider and it could be done only after a good study of the focus group. Once the right service is established, the next step is implementation and monitoring of the results. Monitoring the efforts is crucial to ensure if the objectives are met and implementation is done in the right manner. One of the most common ways to monitor this is by getting feedback from the clients directly who have received the service. For an airliner the best way to monitor feedback would be to receive a filled questionnaire from the fliers using the airlines directly. Similarly for a hotel receiving a filled questionnaire from a client using the hotel service would serve the same purpose. (Kevin cacioppo, 1995) Customer satisfaction is very ambiguous to define but very important to determine because of its direct relation to the sustainability of the business. For a service provider understanding its customer group and accordingly determining the right customer service becomes crucial for its future business and sustainability.(Adrian Thompson, 2002) Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. (Cook, Sarah, 2004)

The different factors affecting Customer satisfaction are Product quality, level of expectations, support service, initial customer experience with the product, interaction related with product, marketing buying experience, support experience. (Swami Natarajan, 1999) Satisfaction is relative to expectation and this can be easily proved. People tend to expect more from Oberois as compared to Hyatt. There are many factors influencing customer service as we have seen above and it is not impossible to manage those expectations. Management of expectations can be key to success in the hospitality sector. Managing expectations of the customers helps the hotel to provide service, improve on service standards. (Breault, 2006 ). We very well understand that satisfaction is relative to expectation of a customer. A customer expecting a north Indian Red Beans would probably never be happy with same cooked in South Indian style. The Holiday Inn promise is to solve the customers problem, if the problem cannot be solved, the customer does not pay for that part of their stay. Holiday Inn is trying to meet its set an expectation and has also ensured that the customer returns in case of a bad experience first time around by refunding the charges. Even excellent customer satisfaction in this case will not be enough to fulfill the clients expectation in the later case. These expectations keep changing over time and only those organizations that are able to track the needs and expectations of the customers will achieve high growth. (Cunnane,2009). To manage expectation, the service provider will have to set the expectations that are achievable and can meet a customers expectation. The expectations will have to be appropriately marketed, communicated and delivered as promised. Not being able to meet set expectations can turn out to be a disaster for the service provider. There are some other factors that need to be kept in mind while determining expectations. The service provider will have to understand its corporate image and whether the new product range is in line with past products. Setting expectation is very crucial and one of the key factors to be kept in mind during the process is the business proposition. Business proposition has to be understood very carefully from the service providers dimension and the customers dimension as well. The business proposition for a customer would be value addition or value creation. Though a customer gets to eat what he pays for but his rich experience at the hotel by being well attended by the hotel staff would leave the client more satisfied without him paying more and without the hotel spending more. This would be value addition for the customer and him/her returning to the hotel creating more value for the hotel. Guests want an experience not just a stay and that is achieved through personalization of the customer experience from Checking in to while the customer departs. It is challenging in the hotel industry to anticipate the customer`s needs and delivering the desired service but there is also goodwill and recognition to gain which is far more valuable in this competitive industry. ( Eyefortravel.com, 2007). Measuring customer is now considered an important aspect of providing customer service. Service providers now know that providing service is not just a monetary exchange but more than that. Providing excellent service is a prime requisite to excel in the business or even sustain ones business during a recession like the one we had in the last year. There are other factors

forcing service providers to rethink their ways of providing service. Increased competition, reduced product differentiation and increased global market place are some of the major factors. (Ravindran, Cinoy, 2007) Only by measuring customer satisfaction, a service provider can latch on to an existing customer and save expenses on bringing in new ones. Cutting costs and maximum benefits is ideal to todays business but never at the expense of customer satisfaction. The annual Service in Britain survey, now in its 4th year, tracks service and value satisfaction, complaint incidence and loyalty for most UK sectors. (Ravindran, Cinoy, 2007) The survey polls 1,000 UK adults online. This is an important poll referred to by various large and medium organizations across different sectors. The 2008 report shows a fall in the number of consumers complaining at all for the third successive year, down to 70% from 86% in 2005. Half agree that customer service standards in general in Britain are declining, whilst only 1 in 6 think they are improving. As a result, half also think they need to complain more today about service than they did in the past! So the drop in actual complaints is accompanied by a consistently high level of frustration with service standards and the ability to get address. (Ravindran, Cinoy, 2007) Half the population say they would rather take their business elsewhere than complain, and a similar proportion say they wanted to complain but didnt, because it involved too much effort. This suggests that increasingly the first sound of discontent a company hears is their customers footsteps as they walk away. Social networking sites, TV watchdog programs and other online feedback growth all reflect the way that complaining has moved from lonely frustration to a sharing phenomenon in recent years. (Garry Upton, 2002) We also see from the paragraph that usually it is too late to stop a customer from migrating to another service provider once you have a negative feedback. Now we know how important is it to measure customer satisfaction since a customer ideally never gives you a second chance. The widely used method to measure customer satisfaction is to do a survey involving a feedback from the customers. (John R. Dijulius, 2003) The first step would be to decide the objective of the survey which will include your clear purpose of the survey. There are different ways of satisfaction surveys depending on the customer base. Some companies use a numerical scale (15), others use word descriptors (poor, fair, good, excellent), and others rely solely on customers own comments. Each organization will ask customers different types of questions according to their own needs (Zeithaml and Bitner, 2003). We can have random sampling for a very large data base of customers. If the data base is small an exhaustive survey can be carried out. Data can be collected in different manners and ways. Interviews (face-to-face) can be conducted for a small group. This type of survey will provide a clearly communicated feedback. Telephonic interviews are another way of conducting surveys. It is a fast and cost effective way of completing the survey for a larger base. One of the most popular ways of conducting a survey is sending out questionnaires. Questionnaires can be

pretty helpful but there is risk involved of miscommunication in the form of misinterpretation. The response could also be less enthusiastic from a questionnaire. (Mitcheel, jack, 2003) Surveys are very important to get the right feedback and improve on the business but there are negative sides to a survey. Numerous surveys can be irritating, time consuming and may lead to confused decisions. (Dick Schaaf, 1995) The timing of survey can highly affect a survey. A customer checking in a hotel would never appreciate the idea of filing up a questionnaire and might leave a negative response to the questions asked. At the same time a well attended customer checking out of a hotel would love to fill up a questionnaire when he is simultaneously waiting for the hotel staff to present him the bill. The content of survey is important to get the right feedback. Too long a survey would leave the customer board and with not the right feedback. This in turn would be a wasteful exercise. The questions have to be formulated in the right manner and the right answers will help in determining the quality of service. (Anderson, Kristin and kerr, carol, 2002) The exercise is also helpful to determine future expectations, areas of improvement and areas helping the business. One of the major advantages of questionnaires is it establishes a communication with the customer who feels elevated when his feedback is taken seriously. On the negative side not all of the customers especially in the hotel industry love to provide feedback until they are lured in to it which might involve more expenses. (Cunnane, 2009). Customer satisfaction to sum up is about setting up of right expectations and meeting them. When there is no room for error or there is an absence of mistake in the service, customer satisfaction is achieved. The right step in achieving customer satisfaction in the hotel industry is targeting the right group of customers and establishing the right expectations for the focused group. Customer satisfaction will exist only when the business is sustainable. Attracting the right business in the hotel industry is hence very crucial and retaining the same group with customer satisfaction ensures a successful business. (Allen, Derek R, 2004) Establishing the right expectation is itself a management process and requires lot of expertise. Communication of the set expectation in a clear way is important to attract the right customers. (Brauer, 2007) Advertising in different available media always helps. Monitoring the entire process during implementation and at regular intervals is very crucial step because this helps in understanding the customers requirement even better. This helps the hotel to be prepared for fulfilling customers obligation in the future. The most common way of monitoring efforts is by conducting survey according to the customer base. Wasting too much time on surveys and making the survey very complicated may not yield the right results. Short and simple survey usually at regular or periodic intervals can help a lot provided they are implemented immediately. A customers chances of returning to a hotel after a first bad experience are almost negligible. A customer is likely to return to a hotel only when his first experience was one to be recollected again. A customer who returns to a hotel is also a medium of recommending the hotel brand amongst the right group of customer which in turn means more business for the hotel without investing in to advertising medium. Repeat customers can become powerful advocates

for the business, encouraging others to patronize the establishment. (Cunnane, 2009). Retaining a customer is not about money but only about customer satisfaction. Customer retention in hotel industry is about Zero investment to attract more clients. Customer service eventually helps the hotel grow and achieve improved sales and profit margins. (Brauer,2007)

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6) Cunnane, C, 2009, Customer Expectations from hospitality industry. 7) Davidow , William and Uttal, Bro,1989, Total Customer Service, Harpercollins, New York 8) Dick Schaaf, 1995, Keeping the Edge: Giving Customers the Service They Demand New York, Dutton 9) Garry Upton, 2002 What Your Customers Want, Decision Analyst, Inc. 10) Hill, Nigel, and Alexander, jim,2000, Handbook of Customer Satisfaction and Loyalty Management, 2nd Edition, Gower, Aldershot 11) John R. Dijulius, 2003, Secret Service: Hidden Systems that Deliver Unforgettable Customer Service, New York, American Management Association. 12) K. Cacioppo, 1995, Harvard business review 13) Karten,N., 2009 Managing Customer expectations. Karten Associates. 14) Mitcheel, jack, 2003, Hug Your Customer, Love The Result, Penguin, London 15) Mack Hanan and Peter Karp, 1989, Customer Satisfaction: How to Maximize, Measure, and Market Your Companys Ultimate Product, New York, American Management Association. 16) Swami Natarajan, 1998, RIT Software Engineering 17) (No Author), (No Date) Solutons for Customer Loyalty, available on InforCRM.com 18) Zaltman, Gerald, 2003, How Customer Think , Harvard Business School Press, Boston, Mass 19) Zeithaml, 1996, Journal of Marketing

20) Adrian Thompson, 2002, customer satisfaction in 7 <http://articles.sitepoint.com/article/satisfaction-7-steps> (Accessed on 25 Mar, 2010)

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21) Bauer, R.2007, 5 Steps to exceed Customer expectations. < http://ezinearticles.com/?5Steps-to-Exceed-Customer-Expectations&id=418394> (Accessed on 27 Mar, 2010) 22) Nikolis,N.(2007) Why hotels need effective CRM implementation Web source: http://EzineArticles.com/?expert=Nick_Nikolis (Accessed on 21 April, 2010 23) NBRI, (no date), Customer survey white paper <http://www.nbrii.com/Customer_Surveys/Measure_Satisfaction.html> (Accessed on 20 April, 2010) 24) Ravindran, Cinoy , 2007 "Measuring Customer Satisfaction <http://ezinearticles.com/? Measuring-Customer-Satisfaction---Introduction-(Part-1-of-3)&id=417756>. (Accessed on 24 Mar. 2010) 25) (No Author) ,2009, Customer expectations in Hospitality industry. Available on Academon.com, research paper # 114028.