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Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J. 07458 Customer Service and Quality Strategies Chapter.

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Presentation on theme: "Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J. 07458 Customer Service and Quality Strategies Chapter."— Presentation transcript:

1 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Customer Service and Quality Strategies Chapter 9

2 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J HMS - Customer Service and Quality Strategies Overall Customer Satisfaction TQM (Total Quality Management) CQI (Continuous Quality Improvement) Malcolm Baldrige Award

3 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J HMS - Customer Satisfaction Age of the Consumer How Satisfied is the Hospitality and Travel Industry Consumer? Satisfying the Consumer in the Future

4 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J The Age of the Consumer The Consumer Dictates Satisfaction and Quality

5 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J In many industries, the expectations and behavior of today’s consumer is much different than that of 20 years ago. Increasingly Time-Poor More Savvy More Demanding

6 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Increasingly Time-Poor Consumers have less time to shop - but will not trade off service quality... Shop at home (L.L. Bean, Land’s End) Express check-in Express auto service Banking on the Internet

7 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Speed is the New Currency Speed is shortening product lifecycles from years to months and sometimes weeks. Speed is the worldwide financial network that transfers money at the rate of $41 billion a minute. Speed is real-time responsiveness, 24 hours a day, 7 days a week. Speed measures competitive advantage.

8 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Connectivity Widens the Market From mobile phones, pagers, satellite communication, , and the Internet, virtually everything and everyone is in reach. Connectivity means that business is not bound by location. “The Death of Distance”

9 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Speed + Connectivity = Real Time Every aspect of business operates and changes in real time. Virtually everything is becoming electronically connected, from consumers and products to companies and countries.

10 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Speed and Connectivity Are Blurring Traditional Boundaries of Products and Services Source: Blur, Stan Davis & Christopher Meyer Anytime Customer Access and Response Real time operation Speed No Product without Service Online Online No Service without Product Interactive Anyplace Customer Connectivity Access and Response

11 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Implications for the Consumer Consumers have control of the information Anytime access Anyplace access Real time continually raises the expectations of the consumer resulting in “the never satisfied customer”

12 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Consumer is More Savvy Internet usage Sixty-five million U.S. adults access the Internet. Forty percent of these Internet consumers are spending more time online than a year ago. Sixty percent go online to shop.

13 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Consumer is More Savvy As a result, the difference between the “expert” seller and naïve buyer is getting smaller. Consumers are better informed and more assertive buyers.

14 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Consumer is More Demanding Across industries this New Consumer has higher expectations of service. Consumer demands continue to intensify.

15 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J What is Consumer Satisfaction? Customer Expectations +/- Perceived Value Received Equals Customer Satisfaction

16 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Customer Satisfaction - Areas of Measurement Consumables vs Durables Products vs Services

17 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J The Auto Industry has Responded to Emerging Customer Demands

18 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Conclusion Today’s customer expects satisfaction with the product and with the service across a wide range of purchase experiences....

19 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Customer Expectations has Resulted in Customers Demanding: What they want Where they want it When they want it

20 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J U.S. Traveler Satisfaction is Beginning to Decline Rental Car Up-Scale Hotel Airline 1999

21 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Behind the Consumer Electronics, Automobile/Truck, and Telecommunications Business on an Absolute Basis Consumer Auto/TruckTele- Hotels Airlines Electronics Communications Source: National Quality Research Center

22 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Loyalty Intention Increases With Satisfaction and... 85%80%75%70%65%60%55%50% SatisfactionIndex Score *Satisfaction Index Score Source Source: J.D. Power & Associates. Based on Frequent Business Travelers R 2 = 0.70 Renaissance J I HG F D AC B E

23 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Financial Performance Increases with Loyalty TopTwo % Intention-to-Return Top Two % Intention-to-Return Source: Syndicated Upscale Guest Satisfaction Studies D R 2 = 0.93 C A B

24 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Conclusions The Customer is NOT in the driver’s seat in the travel industry yet. Travel organizations that are delivering customer satisfaction are reaping the financial benefits of loyal customers.

25 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J What is Important to the Traveler? Approximate Contribution To Overall Key Areas For Satisfaction* Improvement Reservation/Check-In40% Speed & Ease Car/Hotel Room/Flight40% Performance vs Price = Value Return/Check-Out20% Speed & Ease *Average across Upscale Hotel, Rental Car, and Airline

26 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Checking-In Using Express Service Increases Satisfaction for The Entire Experience, But... % 56 Truly 54 Outstanding/ Excellent Satisfaction Source: J.D. Power and Associates 1998 Domestic Rental Car Customer Satisfaction Study Frequent Flyer Magazine/J.D. Power and Associates - Domestic Hotel Guest Satisfaction Study. YesN o 40 Upscale Hotel 38 Rental Car

27 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J …Waiting 5 Minutes or More to Check-in Greatly Decreases Satisfaction With the Experience 17 Rental Car 11 Upscale Hotel min min.

28 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Membership in a Frequency Program Increases Satisfaction With the Experience by Delivering Added Value, But... % Truly Outstanding/ Excellent Satisfaction Membership In Frequency Program Yes No 42 Rental Car 37 Upscale Hotel 26 Airline

29 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Having a Problem With the Experience Greatly Reduces Satisfaction % Truly Outstanding/ Excellent Satisfaction53 46 No ProblemProblem 18 Rental Car 16 Upscale Hotel

30 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Summary Improving satisfaction will result from making - Reservation/Check-In Faster & Easier Rental Car/Hotel Room/Flight More “Valuable” for the price paid Return/Check-out Faster & Easier While delivering a “problem-free” experience.

31 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Conclusions First: Now is the time for the hospitality industry to listen to what the consumer is saying and improve satisfaction.

32 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Conclusions (continued) Second: Hospitality organizations that “set themselves apart” from their competition by demonstrably improving the travel experience will be those that successfully ride out the next economic wave.

33 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Conclusions (continued) Third: Hospitality organizations that “set the bar at it’s highest point” in terms of customer satisfaction will force the rest of the industry to play catch-up.

34 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J HMS  TQM  CQI  Malcolm Baldrige Award

35 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J HMS - Quality Strategy Goal: To consistently meet or exceed customer expectations by providing services at prices that create value for the customer and profit for the company.

36 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Quality Quality is a moving target. Value fluctuates with changing customer expectations.

37 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Total Quality Management Deming’s 14 Points Create constancy of purpose Adopt the new philosophy Cease dependence on inspection to achieve quality End the practice of awarding business on the basis of price tag Improve constantly and forever the system of production and service

38 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Total Quality Management (continued) Deming’s 14 Points Institute job training Institute leadership Break down barriers between departments Drive out fear Eliminate slogans Eliminate work standards (quotas)

39 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Total Quality Management (continued) Deming’s 14 Points Remove barriers that rob employees of pride and workmanship Institute a vigorous program of education and self-improvement Put everybody in the company to work to accomplish the transformation

40 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Juran “The quality of a product or service is determined by its fitness for use by external and internal customers.”

41 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Juran Common language “Process” External customers Internal customers

42 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Juran The “process” must produce value for the customer.

43 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Juran Quality = Product/ Service Features

44 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Juran Quality = Freedom from defects

45 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Defect Ratio Frequency of Defects Opportunity of Defects (the lower the defect ratio, the higher the quality rating)

46 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Juran CQI leads to “breakthrough performances.” Quality efforts are an integral part of a company’s business plan.

47 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Continuous Improvement Incremental- enhance or streamline current work process.

48 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Continuous Improvement Breakthrough - redesign work process and the result is unprecedented levels of quality, speed, and savings.

49 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Continuous Improvement Process (1) Target opportunities (2) Analyze (3) Develop implementation plan (4) Evaluate

50 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Tools for Continuous Improvement Brainstorming Multi-voting Priority determination charts Selection matrixes Weighted selection matrixes

51 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Tools for Continuous Improvement Flow charts Cause-and-effect diagrams Fact-finding planning sheets Check sheets Bar charts, pie charts, and line graphs

52 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Tools for Continuous Improvement Customer input Competitive analysis Empowerment Service recovery process

53 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Empowerment …the redistribution of power enabling employees to perform their jobs more efficiently and effectively.

54 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Empowerment’s Goal Enhances service to the guest Fix it now!

55 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Service Recovery Anticipating & handling service problems or failures

56 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J CQI - Improvement Resources Organizational Physical facilities Technological systems Workplace design Training systems

57 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J The Inverted Pyramid Customers Service Employees Support Units Managers

58 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J The Point of Customer Contact Customer Service Employee Support Units Managers

59 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Costs of Dissatisfaction Termination costs Recruitment and selection cost Word of mouth

60 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Quality Service Quality service is measured by the customer’s perception.

61 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Quality Service Quality service is service that meets or exceeds customer expectations.

62 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Characteristics of High Performance Companies Skills and information Participation, organization, and partnership Compensation, security, work environment

63 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Malcolm Baldrige Award National Quality Improvement Act Standards of excellence for U.S. businesses

64 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Malcolm Baldrige Award Six each year Two manufacturing firms Two service firms Two small businesses

65 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Malcolm Baldrige Award’s Purpose Three important roles in strengthening US competitiveness: Help improve performance and capabilities Facilitate communication / sharing of best practice information among and within organizations Serve as a working tool for managing performance, planning, training, and assessment

66 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Malcolm Baldrige Award’s Criteria Are designed to help companies enhance their competitiveness by focusing on: The delivery of ever-improving value to customers, resulting in marketplace success The improvement of overall company performance and capabilities

67 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Malcolm Baldrige Award’s Application Categories Leadership Information and analysis Strategic planning HR development & management Process management Business results Customer focus and satisfaction

68 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Core Values and Concepts of Baldrige Award Criteria Customer-driven quality Leadership Continuous improvement and learning Employee participation & development Fast response Design quality and prevention

69 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Core Values and Concepts of Baldrige Award Criteria Long-range view of the future Management by fact Partnership development Corporate responsibility and citizenship Results orientation

70 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J Sample Baldrige Award Criteria Categories Leadership Information and Analysis Strategic Planning HR Development & Mgmt. Process Management Business Results Customer Focus / Satisfaction Total Points Points Value

71 The Ritz Carlton Interactive Team Pyramid Guest Customer Interaction Employee Training Certification, Problem Solving and Strategic Planning Teams Hotel Executive Committee Corporate Steering Committee / Developers

72 Hospitality Management Strategies©2005 Pearson Education, Inc. By R.A. NykielUpper Saddle River, N.J The Ritz Carlton Interactive Team Pyramid Guest Customer Interaction Employee Training Certification, Problem Solving and Strategic Planning Teams Hotel Executive Committee Corporate Steering Committee / Developers


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