Intercontinental Hotels Customer Service and Customer Expectations - Case Study Example

An evaluation of how Intercontinental Hotels’ service measures up to expectations. Table of contents Introduction 3 2. Customer services in Intercontinental Hotel 4 2.1 Current customer service and customer expectations within Intercontinental Hotels 4 2.2 Strategies which could be applied to Intercontinental Hotels in delivering sustainable customer service excellence as well as competitive advantage 5 2.2.1 The Quadrant model 6 2.2.2 The Customer Service Model 7 2.2.3 The Six Principles of Service Excellence 8 3. Conclusions - Recommendations that would help Intercontinental Hotels achieve world class customer service excellence 9 References 1. Introduction In the context of the global market, the efforts of firms to secure their competitiveness are likely to face many obstacles; customer preferences may change continuously while financial turbulences have become a common phenomenon. Achieving customer services excellence can help organizations to secure their position in their industry. The standardization of customer services excellence is also required in case of organizations that aim to achieve a long-term growth. The customer services of Intercontinental Hotels are reviewed in this study; reference is made specifically to the level at which customer services in the specific organization meet customer expectations; the issue of customer services excellence becomes therefore a key element of this study. Intercontinental Hotels are one of the seven brands of Intercontinental Group, an organization that operates in about 100 countries worldwide (Intercontinental Group 2012 About us); the group hosts about 153 million guests annually (Intercontinental Group 2012 About us). Intercontinental Hotels was first established in 1946 (Intercontinental Hotels and Resorts 2012 History); in the decades that followed the firm achieved a significant growth becoming the major competitor in hospitality industry worldwide. Intercontinental Hotels, like the other brands of the Group, has developed many initiatives in order to achieve a customers services excellence; still, there points of the firm’s strategies that should be improved so that customer expectations are fully met, a fact that would lead to the standardization of the firm’s customer services excellence. 2. Customer services in Intercontinental Hotel 2.1 Current customer service and customer expectations within Intercontinental Hotels Intercontinental Hotels is a leading firm in the global hospitality industry. The firm highly emphasizes on the quality of its customer services; in fact, the high quality of the customer services is considered as the key advantage of the organization towards its rival. In 2010, the firm ranked first in Stevie Awards for Sales and Customer Service (The Stevie Awards for Sales and Customer Service 2010). The firm is based on a particular strategy for ensuring the high quality of its customer services: a variety of rewards is provided to the firm’s members, the Priority Club Rewards; also, the firm’s members have the chance to Book with Advantage, to identify and attend a meeting or event developed in the firm’s venues, or to make use of the firm’s Affiliate Programme (Intercontinental Hotels and Resorts 2012 Strategic priorities). At the next level, the firm has set a series of strategic priorities, for keeping its performance at high levels; as noted in the organization’s website, key performance indicators are used for monitoring the firm’s competitiveness. In the context of the Group, an effective differentiation strategy has been employed for ensuring that the Group will meet customers’ expectations: each brand of the group targets a different market and has structured its facilities/ services accordingly. This strategy is characterized as ‘guest experience’ (Intercontinental Hotels and Resorts 2012 Strategic priorities – guest experience) and ensures that the expectations of each guest are met. For this reason, it can be stated that the firm has achieved a customer services excellence, which would need, however, to be standardized securing the firm’s growth in the long term. 2.2 Strategies that could be applied to Intercontinental Hotels in delivering sustainable customer service excellence as well as competitive advantage As noted above, Intercontinental Hotels is already a leading firm in the global hospitality industry. However, because competition in the particular industry is strong, it would be necessary for the organization to develop new strategies or to update its existing strategies in order to achieve a competitive advantage. Emphasis should be given on the firm’s customer services’ sector, which is critical for business performance. Different models and techniques could be employed for developing a plan, which can ensure sustainability of the provision of customer service excellence and which can help the firm to achieve a competitive advantage. Through these techniques also, the customer expectations can be identified and evaluated, a fact that would help to suggest appropriate strategies so that the firm is able to achieve world-class customer service excellence. At this point the following issue should be made clear: how an organization can achieve customer services excellence? According to MacNeill (1993) in order for a particular organization to achieve services excellence it is necessary ‘to manage effectively customers expectations’ (MacNeil 1993,p.6). Moreover, Cook (2010) noted that customer services excellence can result to the long term growth of the organization only if its’ senior managers are fully committed to the achievement of organizational goals, a fact which is proved by checking ‘the time, money, effort and persistence’ (Cook 2010, p.40) that senior managers devote to the development of organizational plans. Gilbert-Jamison (2005) notes that each organization has certain strong points, which can be characterized as ‘pockets of excellence’ (Gilbert-Jamison 2005, p.2). At the same time, all organizations have one or more weaknesses, which ‘are often characterized as gaps’ (Gilbert-Jamison 2005, p.2). In this context, in order to identify the strategies that would allow the standardization of a firm’s services excellence it would be necessary to evaluate primarily all aspects of existing services, trying to identify the pockets of excellence and the gaps, as described above. Then, strategies could be recommended for decreasing or even eliminating the gaps so that services excellence is standardized. In the case of Intercontinental Group a similar approach should be used. 2.2.1 The Quadrant model A valuable model for evaluating the firm’s current status of customer services is the quadrant model, as described below; this model, as analysed in the study of Clifton and Ahmad (2009) offers a detailed framework for understanding the effects of various factors on the organization’s customer services. In the context of this model (Figure 1, below) emphasis is given on four, different, factors: ‘products/ services, communication, environment and behaviour’ (Clifton and Ahmad 2009, p.81). These factors can affect all organizational policies and sectors, including the quality in the delivery of services. In the case of Intercontinental this framework, could be structured as indicated in Figure 1. Services High range of amenities Localized welcome Emphasis on local culture Communication Rewards to members Guest experience Welcome gifts Environment Availability of office facilities Availability of help desk with highly trained employees Hotel areas structured and decorated according to local culture Behavior Employees are continuously trained so that customer services excellence is achieved Figure 1 - The quadrant model: Intercontinental Hotels (based on the Quadrant model as presented by Clifton and Ahmad 2009, p.81) 2.2.2 The Customer Service Model An effective model for evaluating the services excellence in Intercontinental Group would be the Customer Service Model. The model incorporates four elements: ‘Processes, Service Environment, Service Delivery and Customer’ (Snow and Yanovitch 2009, p.3). The model is presented in Figure 2 below. Figure 2 – Customer Service Model (Snow and Yanovitch 2009, p.3) It is clear that in order for services excellence to exist it is necessary that customers’ needs are fully addressed. This target can be achieved, according to the above model, only if the service environment, i.e. ‘the physical setting of the organization’ (Snow and Yanovitch 2009, p.3) is appropriately structured so that the service delivery is effectively developed; the term service delivery refer to employees as those members of the organization who have the responsibility to deliver a firm’s services. Moreover, the firm’s processes have to be flexible, being able to be alternated in order to meet the demands of each of the other three elements, as explained above. In Intercontinental Hotels customers’ expectations are highly valued; it could be noted that in the specific organization customer is placed in the center of organizational strategies, as indicated in the Customer Service Model above. 2.2.3 The Six Principles of Service Excellence The level at which customer services excellence is promoted in Intercontinental Hotels can be made clear through the Six Principles of Service Excellence model (Figure 3, below). This model sets a series of values, which need to be incorporated in an organization’s mission and vision statement. If these values are incorporated in the firm’s mission and vision statement, it can be expected that the particular organization will achieve a customer services excellence. Figure 3 – Six principles of service excellence model (Gilbert – Jamison 2005, p.7) The review of the firm’s values and strategy verifies that the organization has many prospects for achieving a standardization of its customer services excellence; indeed, as noted in the corporate website the firm aims to promote continuous learning and improvement (Intercontinental Hotels 2012 About us); also, emphasis is given on ‘doing the right thing and on promote cooperation’ (Intercontinental Hotels 2012 About us). The organization’s mission statement is divided into parts, addressing each organizational sector; all these parts are incorporated into the section ‘How we behave’ (Intercontinental Hotels 2012 About us), a section that sets the organization’s priorities within the global market. 3. Conclusions - Recommendations that would help Intercontinental Hotels achieve world-class customer service excellence The achievement of competitive advantage is a key challenges for organizations in all industries. Intercontinental Hotels is, already, the key competitor in its industry. However, the standardization of its position would require the introduction of certain measures for achieving customer service excellence. At the first level, it would be necessary for the organization to reduce its costs in regard to certain sectors, so that the funds invested on the firm’s customer services sector to remain high. In the study of Harkins (2006) reference is made to the efforts of managers in Intercontinental Hotels Group ‘to reduce the firm’s expenses by $100 million, annually’ (Harkins 2006, p.121). The ‘relocation and merge of the firm’s shared services center’ (Harkins 2006, p.121) has been suggested as a strategy for achieving the above target. The new organizational department, the Corporate Shared services, incorporates both the firm’s ‘service centers and its IT department’ (Harkins 2006, p.121). In this way, operational expenses were reduced allowing the increase of investment on the firm’s customer services sector. Apart from the reduction of the firm’s expenses, for allowing the increase of investment on its customer services sector, the firm should also update its current marketing strategy. In the study of Heskett et al. (2008) reference is made to the lack of effective mechanism in Intercontinental Group for checking customer feedback. The firm’s managers have already addressed this issue by introducing a wiki community (Bennett 2008). Still, the performance of this mechanism is not clear. Additional initiatives of similar character would be developed so that the promotion of the firm in the WWW to be effectively supported. In Intercontinental Hotels a similar problem seems to exist; the problem is clear in particular in the case of communication between the customers and employees. Despite the fact that a feature of online reservation is available in the firm’s website, still there is no availability of real-time communication, through the Internet, between the customers and employees. Another gap in regard to the firm’s promotion to the customers exists at the following point: social media have not been employed for communicating with customers or for promoting the firm’s services. Such features should be added so that the firm’s presence in the online community to be enhanced, a fact that would also lead to the increase of the organization’s profits. Intercontinental Hotels Group uses a unique strategy for keeping its competitiveness towards its rivals: the differentiation strategy, which denotes the use of practices, which does not exist in the market (Sturman et al. 2011). Indeed, as noted above, the firm has a series of brands each of which promotes different cultural characteristics, aiming to address the needs of the targeted customers (Sturman et al. 2011); for example, the Crowne Plaza, owned by the firm, which emphasizes on business tourism (Sturman et al. 2011). Intercontinental Hotels, as a brand of the Intercontinental Group, is characterized by high prices. The fact that the firm addresses people of high financial status should not be used as the basis for the development of all organizational plans. Since the firm has managed to cover the needs of its existing customers it could try to expand its customer base by addressing customers of lower financial status, who are the highest percentage within each country. In this way, the competitiveness of the firm towards its rivals that offer economy packages to their customers would be increased, leading to the increase of the firm’s market share globally. Using the strategies suggested above, the firm would manage to standardize its customer services excellence; this fact would allow the organization to achieve a long-term growth securing its position in the global hospitality industry. Also, these strategies would help to the organization to achieve an advantage towards its competitors that target only customers with particular characteristics. In any case, the strategies chosen would be periodically reviewed so that they are aligned with the market trends and the firm’s strategic priorities, which are likely to change as customer expectations worldwide are differentiated. References Alegre, H. (2006). Performance indicators for water supply services. London: IWA Publishing. Clifton, R., Ahmad, S. (2009). Brands and Branding. Hoboken: John Wiley & Sons. Cook, S. (2010). Customer Care Excellence. London: Kogan Page Publishers. Gilbert-Jamison, T. (2005). The Six Principles of Service Excellence. Bloomington: AuthorHouse. Harkins, P. (2006). Leading the Global Workforce: Best Practices from Linkage, Inc. Hoboken: John Wiley & Sons. Heskett, J., Sasser, E., Wheeler, J. (2008). The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage. Boston: Harvard Business Press. MacNeill, D. (1993). Customer Service Excellence. New York: McGraw-Hill Professional. Snow, D., Yanovitch, T. (2009). Unleashing Excellence: The Complete Guide to Ultimate Customer Service. Hoboken: John Wiley & Sons. Sturman, M., Corgel, J., Verma, R. (2011). The Cornell School of Hotel Administration on Hospitality: Cutting Edge Thinking and Practice. Hoboken: John Wiley & Sons. Bibliography Afuah, A. (2009). Strategic innovation: new game strategies for competitive advantage. Oxon: Taylor & Francis. Billingsley, K., Billingsley, B. (2006). Turn Your Customer on: 23 Ways to Motivate Employees and Make Customers Love You. Indianapolis: Literary Architects. Jackson, S., Hitt, M., DeNisi, A. (2003). Managing Knowledge for Sustained Competitive Advantage: Designing Strategies for Effective Human Resource Management. Hoboken: John Wiley & Sons. Kusluvan, S. (2003). Managing employee attitudes and behaviors in the tourism and hospitality industry. New York: Nova Publishers. Montgomery, C., Porter, M. (1991). Strategy: seeking and securing competitive advantage. Boston: Harvard Business Press. Murley, P. (1997). Gower handbook of customer service. Hampshire: Gower Publishing, Ltd. Online sources Bennett, E. (2008) InterContinental Hotels Cultivates Customer Web Community to Improve Business. Baseline. Available at http://www.baselinemag.com/c/a/Projects-Customer-Service/InterContinental-Hotels-Cultivates-Customer-Web-Community-to-Improve-Business/ [Accessed 3 April 2012]. Intercontinental Hotels and Resorts (2012) Customer care. Available at http://www.ichotelsgroup.com/intercontinental/en/gb/customer-care [Accessed 3 April 2012]. 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