Customer Service in the Travel and Tourism Industry - Essay Example

Service in Travel and Tourism Industry Submitted by: XXXXXX Number: XXXXXXX of XXXXXXX XXXXXX XXXXXXX Subject Code: XXXXXX Date of Submission: XX – XX – 2010 Introduction: The paper aims at discussing the importance of customer service and customer experience in the travel and tourism industry. The paper will first start with a brief introduction to the importance of customer service in the travel and tourism industry. This will be followed by a detailed analysis of my placement organization, i.e. Premium Inn. A brief study of two other such organizations will also be taken and these will be compared to Premium Inn to learn the differences in their customer care models. The paper will finally conclude with the effects of continuous improvements of customer service and impact of change and change management on customer service. Customer Service and Travel & Tourism Industry: Customer service is a process used by the organisations to provide customers with the needs and wants. The travel and tourism industry is one which is very large and there is a high level of direct customer interaction in this industry. Over the years, with the level of disposable income rising in the country, the customers are able and willing to spend more on various services related to travel and tourism and various researches have highlighted that customers are able to spend heavily on their travel and tourism needs. Saying this is also important to understand, that with an increase of the number of people indulging in the travel and tourism, the need for customer service has also grown to a higher extent. The travel industry requires to follow the ABTA rules. The main aim of the ABTA policies is to ensure that all the members of the travel industry and that all the customers and the members of the travel industry are provided with high levels of quality and customer service. All the travel related companies need to follow the rules set down by the ABTA and are obliged to follow the rules and regulations and policies set down by the ABTA. Customer Service is an essential part of Customer relationship management. Customer relationship management, which is widely known as CRM holds an enormous importance in today’s competitive world. This is clear from the several different mission statements and the vision statements that are presented by the companies across the world. An excellent example for the mission statements is, ‘It is the policy of McDonnell & Miller to provide products and services to the market which meet or exceed the reasonable expectations of our customers. Satisfying our customers with the appropriate level of quality is a primary goal and a fundamental element of our business mission’ (Mission Statements, 2010). Various changes have taken place since the evolution of CRM and various definitions of CRM have come over a period of time. CRM is a business strategy that has been built around the notion of being customer-centric. The main aims are to have optimum revenue by better customer satisfaction through improved contacts at each client touch point. This is possible by an improved understanding of customers, on the basis of their demographics and purchasing patterns and a better interface with the customer at all touch / contact points (Learn that, 2007). “Making the Customer king is one way of improving sales. But a better one is making the right customer king. This discipline is called customer relationship management” (McCabe & Wolfe, 2000). As widely known, customer loyalty is always directly proportional to customer satisfaction as well as customer delight. According to Salvati (1999, p6), till a customer remains satisfied with the service, there are no major chances that he/she may drop or switch to another service provider. It is a fact that in a highly competitive atmosphere just as in the profit making sectors; customer loyalty is to be given a deep thought. Moreover, actions are to be taken to have a continuous improvement in the level of customer loyalty (Hsieh, 2002). Customer Service at Premier Inn: Premium Inn is one of UK’s largest and fastest growing hotel brands and currently has over 578 budget hotels with over 40,000 rooms across the country. The company provides customers with excellent en-suite bathrooms, and also television with free view and a WiFi connection within their bedrooms. The hotel provides excellent services and this, is clear from the guarantee that the company provides, ‘Good Night Guarantee’. The company is confident of the excellent friendly service, and the comfortable surroundings which it operates with. The company to a great extent follows its values and some of their main values include courtesy & consideration for others, innovation, excellence, perfection, fairness: healthy code of conduct, trust & team spirit and adherence to industry standards of quality and certification. The company believes in, “There are common things we believe in - people and team work; passion for winning; continuous improvement and caring for guests - but its the diversity of people who make up our company and their ability to meet the needs of our customers that make us successful” (Whitbread, 2010). The Premier Inn satisfies its customers by trusted for great value and a good night’s sleep, by transforming the hotel market by uniquely combining high quality bedrooms with a total commitment to guest satisfaction at a low price and continuing to be the UK’s number one hotel network. The ‘Premier Inn’ considers guests’ satisfaction as its primary mission, so that feedback from its guests is incredibly important. It helps to understand customers needs better and also helps the company efficiency. These opinions are collected by ORC International and the conclusions are drawn to improve company’s service. Another aim for the Premier Inn is social engagement. Premier Inn is engaged in charity work and its guests’ are able to make donation through on-line booking system. The company also has a plan to open an additional 1,000 new sites by 2010, which could mean as many as 20,000 more people working for Whitbread by the end of the decade. Premier Inn also cares about health of its customers. From Monday 14th January 2008 every Premier Inn hotel in the UK has been completely smoke-free. Premier Inn has taken recent legislation banning smoking in public areas a step further by banning smoking from all of its bedrooms as well as in its integral restaurants and bars. (Premier Inn, 2009) The company mainly ensures that all personnel working on the premises are friendly, and serve the customers with a smile, to ensure complete customer satisfaction. Looking at the website of the company and with personal experience of a stay at the Premier Inn, it is clear that the hotel group has strong values where the company ensures that customer service is at its highest and that all customers’ needs are met in a timely manner. It is also essential to note that the company is a part of the service industry and there are separate and distinct features that delineate a service from a product. In fact there are five features that are often associated with the provision of a service. These are lack of ownership, intangibility, inseparability, perishibility and heterogeneity (Brassington and Pettitt, 2006, p.1050-1080, Bishop, 2004). A service cannot be ‘owned’ by the customer in the way that a product can. This is because it is often linked to a definitive time period – the specific time during which the service is rendered or ‘consumed’. The result of this is that a service lacks a concrete shape or form; it cannot be ‘touched’ in the same way that we can pick up a packet of teabags. Nevertheless the experience of having the service can make an impact on the customer to the extent that the customer will reuse the service provider again or recommend the company to others. In the service sector ‘word of mouth’ is a powerful way in which to gain new business. A service is usually inseparable from the service provider and when the provider is no longer on the premises then the service is usually finished, as when the wedding marquee is dismantled, packed away and transported back to the warehouse facility. Related to this feature of inseparability is the fact that a service is usually for a limited time only and cannot be stored in the same way a product can for future use. The final feature of a service is that it is difficult to homogenise in the same way as a mass produced consumable. There are of course levels of consistency in order to maintain a certain degree of quality, but there are always slight differences according to the perceptions and demands of the customer. Given these special features, marketing a service differs from classical product marketing in that it deals with intangibles. In fact “instead of talking of ‘goods’ and of ‘services’, it is better to talk of ‘tangibles’ and ‘intangibles’” (Levitt, T. 1981, p. 94-102). Hence the customer service of this company is based on the service that it provides and the experience that the customers leave the hotel with. Premier Inn goes ‘the extra mile’ to ensure that the customers are served with high quality and the best experience during their entire stay. The company has been able to recruit as many as 33,000 people who are the best in the industry and the according to the company’s website, ‘Together, they welcome with a smile around 9 million customers a month’ (Premier Inn, 2010). Customer Service at Hilton and Starwood: The two companies chosen for this research include Starwood Inc and Hilton. Before moving into the customer service of these companies, it is essential to gain an overview of these companies. Starwood Group of hotels was incorporated in 1980, and two of their largest brands Sheraton hotels and resort and Westin Hotel and resorts have been serving the market for over 60 years (Starwood, 2010). Starwood group of hotels and resorts stand 8th as per the worldwide hotel ranking 2007 on the basis of rooms. The operations of the group are divided into two main segments being: hotel and vacation ownership and residential operations. However the main business is from the hotels. Starwood has a large number of hotels worldwide naming a few: St. Regis, The Luxury Collection, Westin, Sheraton, Le Meridien, Aloft, Four Points, W and Element. As of 31st December 2007, Starwood group’s portfolio included a total of 897 Hotels with 275,000 rooms across 100 countries that primarily cater to the upscale markets of the lodging industry. The current competitive advantages that the company has in comparison to the above mentioned companies are mainly customer loyalty and technological knowhow. Starwood has gained a lot of trust and support from the customers. There is also a low switching cost among the buyers and the threat to substitute products is mainly where the other properties where the customers can stay and also the extended stay in hotels and teleconferencing. The other huge positive that the company has is the technical knowhow (Brown, et.al., 2008). The company has included a number of new technologies like the administered new mobile guest check in solution where there is a use of a wireless mobile computing application. Also Starwood Hotels has always and will continue to improve the technology and work within the entire industry (CRM Today, 2008). This is majorly because the company works with the value to provide their customers with excellence always. Hilton is one of the biggest competitors for Starwood. The company has been in the industry for a very long time and has developed a strong customer database based on its service and customer satisfaction. Hilton is recognized to be one of the most recognized places and names in the global lodging industry and was started way back in 1919 when Conrad Hilton purchased the first hotel in Cisco. The website of the company explains, ‘Since that time we have grown to over 500 hotels in cities all over the world. "Be My Guest" is still the gracious and warm way we want for our guests to feel at Hilton hotels and resorts whether its at the grand Waldorf Astoria, the Cavalieri Hilton in Rome, the Hilton Waikoloa Village or our brand new Hilton Omaha. With new products and services, business and leisure travelers alike now have even more reason to say, "Travel should take you places"’ (Hilton, 2010). Comparison of Customer Service: The essence of excellent customer service to a great extent is dependent on three main pillars, i.e. Customer, relationship, and management. Considering all the three companies, it is clear that they manage their customer based on these pillars. As widely known, customer is the king because he is the single chief source of profit as well as development of the company. However, these days, not all customers are to be crowned as king since it is important to value more important customers higher, than the less important ones (Trepper, 2000). Hence, the use of customer relationship management proves to be a collaborative effort to identify the important customers and take a step further in maintaining relationship with them. The advent of information technology can offer the ability to differentiate and manage customers. It can be thought of as a marketing approach that is based on customer information (Wyner, 1999). The interactions between the company and its customers involve a two-way communication relationship. The interactions with customers take place at several intervals - long term or short term. The customer relation and the repeated instructions help the study of the customers and as results can be derived on the attitudes, demographics and more importantly on the buying behaviour of the customers and also their needs to reach a level of customer satidsfaction (Evans & Moutinho, 1999). Moreover, the very essence of customer service lies in maintaining long lasting successful relationship with the customer. Customer service at its core refers to managing the customer relationship and thereby increases business. Customer Lifetime Value (CLV) is one of the tools of managing customer relations and identifying potential prospects for long-term relationships with the company (Evans, et al, 2004). Though the implementation and activities of customer service are carried through different marketing channels and customer touch points, this activity is more to do with the management. The data collected about customers through customer touch points is transformed into useful information that the telecoms can use towards better and improved business opportunities (Roberts-Witt & Sarah, 2000). “CRM revolves around change in the management pattern of the customer” (Gray & Byun, 2001). Considering the Hilton and Premier Inn, it is clear that the two companies clearly follow all of the above mentioned activities for their businesses and work with a set of strong principles and values. Premium Inn has a high possibility to change and improve its services and overall performance by making improvements to the rooms based on the ABTA Customer Service and Change Management: Customer service and support is one of the essential elements of building the relationship of the customer with the company. According to Kelly, Hoffman & Davis (1993), a better customer service and support ensures higher customer loyalty. Efficient customer service and personalized attention will help in understanding the customer preferences, queries and requirements in a better manner and hence reduce the time taken to solve the problems faced by customers. This will in turn lead to customer satisfaction which increases the loyalty level. With the development of technology and the use of online medium, information is freely available to everyone. An increase in the number of online portals discussing the services offered by various travel agents, price comparison applications and tourism websites is a clear indication that the tourism industry has become very competitive. As travel and tourism is basically a service oriented industry, the customer expectations grow everyday as are the number of service providers. Customers are looking for more information to take an informed decision and are expecting high quality services at nominal prices. The customer requirements curve specified by Jobber (2004) indicates that with information freely available, the services which were once considered as ‘value- added’ have now become the minimum expectations of the customers. In order to keep up with the customer needs and be competitive in this growing industry, it is essential that the companies constantly upgrade their services and offer high quality value added services at nominal prices. Service quality is given utmost importance especially in this segment, as it deals with customer’s comfort and leisure. The service providers should be flexible and be willing and ready to change and adapt to the dynamic nature of the industry. As customer expectations grow more, the companies should be able to accommodate those changes at reasonable prices and still manage to be profitable. This is only possible by effectively changing the structure and processes involved. Chang management, thus, plays an important role in maintain positive customer relationship and meeting the growing requirements of the customers. As discussed earlier, customer insight, customer experience and customer alignment are the three pillars of effective customer satisfaction (Peppers & Rodgers, 2005). It is evident that change management is crucial to include customer alignment so that the organization is structured to adapt to the varying demands of the target segments. Moreover customer insight and customer experience are also to be given high importance and taken into account, as they also vary with the increase in the level of competition. Hence effective change management is essential to ensure customer satisfaction. Conclusions and Recommendations: In conclusion, based on the above discussion, it is clear that the travel and tourism industry is one which requires a high level of customer service and customer care. It is very clear in today’s competitive scenario that customers are the most important part of the business. Hence it is crucial that the businesses understand the ways in which customers have an interaction with the company. Every single interaction with the customer holds equal importance and a careful note of it can help boost the revenue. There are three pillars of effective customer satisfaction leading to customer loyalty resulting in the return of the customer. These are mentioned as below. a) Customer Insight: “Who are my [the] most valuable customers and how do I [service provider] build relationships with them?” b) Customer Experience: “How do I [company] create interactions that maximise the profitability of each relationship?” c) Customer Alignment: “How do I [company] structure the organization to deliver on the promise of customer-centricity?” (Peppers & Rogers, 2005). This can be confirmed based on the examples set down by the above mentioned companies and their levels of success. It is also essential to note that relationship attitude of the respondents is affected mainly by two factors, namely, service provider treating the customer in a unique way and resolving queries and problems in a friendly manner. Also, it is important to note that, the information system of the company should always be built around the customer, i.e. it should be customer-centric and the service provider should make the customer feel that he/she is unique and is valued. Also another research that has been conducted in the past has also brought out that data warehousing and data mining are essential tools for identifying customers most likely to switch, prompt and friendly service also has a great effect on retaining customers and personalization of offers and services are also important. Bibliography Bishop, J. (2004) The Service Touch. Supply Management. 26th August 2004 [online] Available from: http://www.findarticles.com, Accessed: 19th January 2010 Brassington, F. and Pettitt, S. (2006) Principles Of Marketing. 4th Ed. Financial Times/Prentice-Hall, pp.1050-1080. Brown, S.A., 2000, ‘Customer Relationship Management: A Strategic Imperative in the World of E-Business’, John Wiley and Sons, New York CRM Today, 2008, ‘Starwood Hotels & Resorts Selects HP for $100 Million Services and Technology Contract’, Accessed on 15th January 2010, Retrieved from http://www.crm2day.com/content/t6_librarynews_1.php?news_id=EpAllyZkkZydXmUAUM Evans, M. and Moutinho, L., 1999, Contemporary Issues in Marketing, Palgrave Macmillan, New York Evans, M., O’Maley, L. and Patterson, M., 2004, Exploring Direct and Customer Relationship Marketing, 2nd Edition, Thomson Learning, London Gray, P. and Byun, J., 2001, ‘Customer Relationship Management’, Center for Research on Information Technology and Organizations, 23rd March 2001 Hilton, 2010, ‘About Hilton’, Accessed on 23rd January 2010, Retrieved from http://www.hilton.co.uk/ Kelley, S. W., Hoffman, D. K. and Davis, M. A., 1993, ‘A Typology of Retail Failures and Recoveries’, Journal of Retailing, p429-452 Learn That, 2007, CRM Definition, Free Definitions, available at http://www.learnthat.com/define/view.asp?id=292 (accessed on 23rd January, 2010) Jobber, D., 2004, Principles and Practice of Marketing, 4th edn, McGraw-Hill International, Berkshire Levitt, T. (1981) “Managing Intangible Products and Product Intangibles” Harvard Business Review May-June, 1981, pp. 94-102. 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