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Building and Maintaining Customer Relationships Chapter 7 © Hudson & Hudson. Customer Service for Hospitality & Tourism.

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Presentation on theme: "Building and Maintaining Customer Relationships Chapter 7 © Hudson & Hudson. Customer Service for Hospitality & Tourism."— Presentation transcript:

1 Building and Maintaining Customer Relationships Chapter 7 © Hudson & Hudson. Customer Service for Hospitality & Tourism

2 Topics Covered o Relationship Marketing o Retention Strategies o Loyalty programs o Benefits of Relationship Marketing o Targeting profitable customers

3 ‘At Your Service’ Spotlight: Wine for Dudes Where customer service is King! o Full service website o Quarterly newsletter o social networking o Word of mouth marketing o ‘Dudes of Fortune Quiz Challenge’ o Personal relationships with customers Accommodates individual needs Customized group tours o Encourages repeat customers Company merchandise as gifts “Dudes Dollars” trip vouchers Customer service recovery: “wine heals all wounds”

4 Relationship marketing A form of marketing that attracts customers, retains them, and enhances their satisfaction. o Less expensive to attract repeat customers o Dramatic increases in profits Spend twice as much gross income o Enhancing customer satisfaction includes: Nurturing individual relationships Making customers feel unique Making customers feel singled out for attention Loyalty programs

5 Customer Relationship Management Model Figure 7.1 (Source: Based on Winer, 2001)

6 Levels of retention strategies Figure 7.2 (Source: Adapted from Zeithaml and Bitner, 2000)

7 Industry growth in loyalty programs Figure 7.2 (Source: Adapted from Zeithaml and Bitner, 2000) o Social media o Experiential benefits o Customized reward programs o Matched benefits across brands o Coalition model Corporate-wide Across brands o Hybrid approaches

8 loyalty program memberships growth in US Table 7.1 (Source: Based on Hlavinka and Sullivan, 2011)

9 Hospitality and tourism loyalty programs o Frequent flyer rewards Repeat customers Highest fare holders Elite status customers o Co-branded credit cards Issuers pay carriers for miles awarded Significant income source o Hotel loyalty programs: Complimentary meals, internet access Included in franchise fees Joint programs for smaller brands, boutique hotels o Frequent diner programs: Rewards Cards Non-financial incentives e.g. ‘Jump the Line’ perk Hybrid approaches

10 Service loyalty classification scheme Figure 7.3 (Source: Adapted from Dick and Basu, 1994)

11 Snapshot: Legend Golf & Safari Resort Getting to the heart of customer relationship management by focusing on customer preferences. o Corporate relationships linked to management strategies o Dedicated guest relations managers and frontline employee feedback o Customer Relationship Management (CRM) strategy o ‘Operation Boat Float’ (OBF). o ‘Most Valued Client’ o Customer feedback Attention to unique requirements Rated response

12 Benefits of Relationship Marketing o Customers loyalty incentives: High perceived value ‘Get’ should exceed ‘Give’ Rewards for loyalty o Company benefits: Higher profits through retaining customers ⁻ More purchases overall ⁻ More frequent purchases Lowers operating costs ⁻ No acquisition costs Increases company referrals

13 Benefits of relationship marketing Table 7.2

14 Targeting profitable customers o Building and improving upon traditional segmentation o Studying loyalty- versus defection-prone customers Identify profitability bands Identify customers most likely to remain loyal Develop overall strategy around these customers ⁻ Target with retention strategies Other customers too costly to retain ⁻ Little potential to become profitable

15 The 80/20 customer pyramid Figure 7.4 (Source: Adapted from Zeithhaml and Bitnen, 2000)

16 Managing loyalty and profitability Figure 7.5 (Source: Adapted from Kumar and Rajan, 2009, p. 5)

17 A taxonomy of casino customer segments Figure 7.6 (Source: Watson and Kale, 2003)

18 Case Study: Service Excellence at Sheraton Suites o Service interaction key to customer loyalty Carefully selected and trained staff Brand-specific programs ⁻ ‘Building World Class Brands’ Staff empowerment Strong service culture Awards for service o Relationship marketing Tailored to each guest Personable, non-intrusive attention ‘It’s Our Pleasure’ program Starwood Preferred Guest program Loyalty reward point system Social media monitoring ….What people really remember is the guest experience.

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