How to Avoid Being a Captive Customer to Your Property Management System Provider
A guide on what questions to ask and what commercial structures, technological architecture, and support frameworks to look for in a true strategic partner.
I recently came across an interesting article outlining a recent study by Jie Yu Kerguignas, Olivier Furrer, and Ikèle Landry exploring the phenomena of 'Customer Captivity' in the hospitality industry. According to the authors, customer captivity occurs when customers become dissatisfied with a service relationship but feel like they don't have the ability to alter or leave the relationship, due to a perceived need for the service and a lack of alternatives."
A sense of captivity can intensify negative emotions such as frustration or a sense of unfairness with the feeling that the customer's needs are going unheard and that they are ultimately powerless to change their situation. The result can be devastating to a brand's reputation, as captive customers often turn to negative word-of-mouth behavior to vent their frustrations and regain a sense of control. Kerguignas, Furrer, and Landry argue that companies can ease captivity feelings by empowering customers through increased transparency and additional service options, and by creating controlled channels for customers to vent their emotions.
While these solutions are viable, they aren't comprehensive enough to fully address customer captivity in the hospitality tech industry. This article will present a guide for hoteliers on how to avoid becoming a captive customer and actually identify a true technology partner, including what to look for and what questions to ask before entering a vendor agreement.
Make Sure You Understand Your Needs and Objectives Clearly – and Do Your Vendor Research!
Investing in a technology platform – especially a system as complex and essential as a property management system – is a major undertaking, potentially affecting your hotel's operations, service, and revenue. It's critical to start by clearly defining your needs and objectives: What exactly are you looking to achieve with the platform? What pain points are you looking to alleviate? How does the platform fit in with your hotel or group’s unique business goals and service philosophy?
Having a clear understanding of these requirements will help enormously as you search for a PMS vendor that can meet your hotel or group’s specific needs. Make sure your vendor research extends well beyond the vendor's website and marketing materials to include independent sources such as customer reviews, case studies, and references. Asking for recommendations or testimonials from peers in your industry is also an excellent way to get the 'inside story' on how the platform actually performs. You should also make sure that the vendor makes their Service-Level Agreements (SLAs) readily available and make a point to ask how they resolve support issues, ensuring that they support their answers with clear use cases and clear data on resolution and response times.
Choose a Commercial Relationship That Won't Lock You In
Legacy PMS platforms operated out of independent servers that had to be maintained on-site at the hotel. This required hotels to pay high installation costs upfront, and then pay additional recurring costs for server maintenance and product updates. On the other hand, hotels receive a lot more flexibility in SaaS-based ('Software-as-a-Service) commercial models. SaaS models offer shorter contracts where the customer can pay month-to-month, affording them more flexibility and control over the vendor relationship. And because most SaaS-based platforms do not require on-site servers, there is no need to charge hotels for server installation, maintenance, or manual product updates.
Of course, not all SaaS companies are the same. Pay close attention to a vendor's licensing and pricing models. Are they transparent, and can you predict your costs over time? Be wary of vendors with complex or hidden pricing structures, or vendors that keep their customers captive by locking them into a contract with a support structure that does not meet their needs.
Avoid Walled Gardens! Invest in a Flexible Architecture That Makes it Easy to Scale Your Tech Stack
Many platforms do not leverage open APIs, which places hotels into confined 'walled gardens,' forcing them to pay exorbitant fees for 'proprietary' integrations while restricting their ability to customize their tech stack. Instead, look for modern cloud PMS platforms that boast a comprehensive and growing library of integrations that are provided at no additional cost to the end user. The PMS platform should also be based on an open-API architecture – ideally enhanced by simplified webhooks – which can facilitate seamless data transfers between platforms while making it easy to develop custom integrations to new third-party systems.
Make sure your PMS vendor is also specific about what type of 'cloud' service they are delivering. Although many legacy providers are now offering 'cloud-based' versions of their on-site platforms, these systems often run on independent servers which suffer from issues with reliability, performance, and 'buck-passing' between multiple separate customer service teams. Instead, make sure your cloud-based platform is hosted on a native-cloud server such as Amazon AWS. Native-cloud servers deliver exceptional speed, performance, and reliability, as well as almost perfect uptime and automated scalability based on use.
Choose a Technology Partner That is Invested in Your Business's Success
Becoming a strategic partner involves more than just providing a service; it means actively supporting your clients throughout the customer lifecycle as they navigate challenges, achieve business goals, and realize their ideal service philosophy. It's critical that your technology vendor is committed to seamless change management, including having a clear understanding of your business needs and objectives and providing dedicated support and expertise throughout the customer lifecycle.
Any strategic partnership begins with a well-crafted implementation policy that reduces service and operational disruptions to an absolute minimum. Look for vendors that provide dedicated implementation teams and comprehensive training programs that can deploy their platform and onboard your staff in as little time as possible. The implementation team should remain actively engaged throughout the onboarding process, proactively addressing potential issues before they arise, while providing access to online tools and tutorials. Responsiveness is critical during this stage, with resources being shared promptly, ideally within the same hour and no later than within 24 hours. This level of proactive assistance must be continued throughout the customer lifecycle, with the provider offering continuous, 'follow the sun' support, providing assistance from product and industry experts at any time of day or night.
Monitor Vendor Performance to Ensure They Continue to Meet Your Needs
Once you choose a PMS provider, it's critical to monitor their performance regularly to ensure that they are meeting your expectations and that their platform helps you achieve your business goals. If they are not meeting your expectations, it goes without saying that you should consider switching to a more suitable vendor.
Set Quarterly Business Reviews (QBRs) to ensure that the vendor is always keeping up on their end of the bargain and identifying areas of improvement with the technology and the partnership. Your vendor should also provide access to a dedicated client success manager (CSM). The CSM acts as your advocate within the vendor's organization, ensuring the platform meets your business needs and facilitating a feedback loop that informs the product development and roadmap. This proactive approach forms the foundation of a robust and enduring strategic partnership, from implementation to the future of the platform itself.
About Stayntouch
Stayntouch delivers a cloud-native and guest-centric hotel property management system (PMS) with a comprehensive library of over 1,100 integrations. Stayntouch's cloud-native PMS empowers independent hotels, hotel groups, and management companies to drive revenue, reduce costs, enhance service, and captivate their guests. In 2022, Stayntouch launched Stayntouch 2.0, a fully integrated technology suite featuring its core cloud-native PMS and guest kiosk solution, a comprehensive chain management module, a seamless booking engine (Stayntouch Booking), a robust payment processing platform (Stayntouch Pay), and a powerful channel manager. Stayntouch 2.0 enables hotels to streamline their operations, maximize and diversify their revenue streams, and deliver an even more enhanced guest experience with the innovation and support of one trusted technology partner. Stayntouch is supported by a team of professionals with deep roots in the hospitality industry and is a trusted partner to industry-leading management companies including Sage Hospitality, HEI Hotels & Resorts, and EOS Hospitality, innovative independent brands such as Village Hotels, Pod Hotels, and First Hotels, and iconic flagship properties such as the TWA Hotel, Showboat Hotel Atlantic City, and Zoku Amsterdam. For more information, visit www.stayntouch.com.
Frewoini Golla
Director of Marketing
