“As vacationers and business travelers reduce the time they spend on the road, hotels are quietly trimming amenities and services to save money.” (wsj, 01/22/09) Warning to the hospitality industry, once you start cutting back on the services people value, you begin the erosion of your unique value proposition–your customer service. The one thing that differentiates you from your competitors is that special something, sometimes an unquantifiable service quality that builds loyalty and keeps your valued customers coming back. Eliminating a service, a perk, or a convenience — even something that seems small and insignificant like hand lotion in the rooms– and your loyal customers might start staying elsewhere. Once they leave, they are unlikely to return.
“Hotels are hoping that the cutbacks will go largely unnoticed by guests. They also are dropping rates to keep customers coming back.” Now that makes sense. Cutting back on services to save money and then offering discounts on rates to keep your customers coming. First of all, once your customers notice the cutbacks, the discounts will not fix the problem. All the discounted rates do is reinforce the newly diminished value you have assigned your property. Worse, the changes in service amenities only support that notion.
A blanket note to the hospitality industry–Do not cut back on your services. Reductions in services and discounting rates is what killed the airline industry. The airlines are still trying to figure out how to make money under that formula–and not doing a very good job of either making money or providing good service. My recommendation is to improve your service, enhance your value, promote your differentiation, offer perks to your valued customers and they will come and they will stay. Cutting back on various amenities and service only serve to save money today; but, it will diminish your overall long-term value. Is losing customers worth the risk for saving a few bucks? I trust the answer is “no.”
I wish I could post this on FB! We need a link Dave. This is super! Love it!!!!!
Sales Cooke, nice blog once again, and you brought up some very good points that I would argue are not confined to the hospitality industry alone. This erosion of service is happening in every aspect of business today. As a consumer, at first I enjoy the so called reduction in price, but once I experience the poor service I feel cheated and used which often leads me to stop using the service or product.
If businesses would focus more on quality and customer experience then maybe we can turn around our economy. Unfortunately too many in charge of our corporations today have forgotten what it takes to be successful over the long-term and only care about short term fixes. We need business leaders who are focused on 5-year plans not the next quarterly report. Given the over all lack of backbone found in corporate America today I doubt that this will ever happen.
You are so right on about this David! You should contact my friend at the Arizona Hotel and Lodging Assoc., David F. Nance, MHS – Vice President of Membership 602-604-0729 x105 and see if you can speak at an upcoming meeting!
Thanks. I will make the contact.
I agree. Service is a lost art in much of corporate America. We continue to redefine service by what we maintain as opposed to what we receive. It is both a disappointment and a huge frustration. Thanks for your comments.
There is a link to this on Facebook.
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I agree that I probably should not go back. I try to believe in second chances and would like to give Macayo’s a second chance. If I find a better alternative in the meantime, then they will be out of luck for sure.
I follow your posts for a long time and should tell you that your posts are always valuable to readers.