Remaining Relevant in the Age of Airbnb

Noted Harvard Business professor Theodore Levitt once said that "People don't want a quarter-inch drill. They want quarter-inch holes." This expression gets to the heart of marketing and the desire not just to sell but to gain and foster a customer. Defining products or services as being defined by their practical use has since been seen as a critical feature in how advertisers go about selling.

But in addition to their practical use, Levitt also wanted advertisers to focus on the customer and their needs, rather than just see them as transactional partners. In his paper Marketing Myopia, Levitt expanded on this idea: Selling focuses on the needs of the seller; marketing on the needs of the buyer:

"Selling is preoccupied with the seller's need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it."

So, identifying the customer's needs become crucial when marketing a product or service, whether that be in the transportation industry or the sale of coffee. But how might the saying apply to the hotel industry? What are the "quarter-inch holes" that hotel guests are looking for? Moreover, how can great hotels deliver on their customer's needs and are there limits to Levitt's famous quote? In this article we go over the main ways in which to know your hotel guests and what their needs are. And this means first off knowing what makes for a great hotel experience.

The best performance hotels can give

Imagine a weary traveler has walked through the front doors to be welcomed by the front desk staff. As any hotel knows, there are an infinite number of ways things can pan out for them during their stay. But what about the first five minutes of them walking through the door? There are, also, a combination of scenarios that can play out in these pivotal moments. The best hotels can always whittle these poss¬ibilities down to the most common experiences and execute to the best of their abilities.

This includes realizing that when the guest comes through those doors, they're not just looking for a bed to sleep in, they're looking for an experience that they can take away with them. Hotels in this sense aren't just in the business of selling rooms, they're also a part of the travel journey and can be as much a part of the traveler's memories as a trip to the local beach. As stated recently by Hilton executive Kieron Johnson in Business Insider:

"We're not in the lodging industry, but the business of hospitality - people serving people to deliver exceptional experiences."

Major hotel brands like Hilton too are noticing that remaining relevant in the age of Airbnb require innovation in hospitality by servicing the actual needs of their clientele.

This idea of 'delivering experiences' raises a whole host of possibilities as the hotel is invited to see their establishment not as a property and labor force, but also as a way of keeping guests that identify with their brand on an emotional level.

One example might be bed and breakfasts. Cozy inns and B&Bs operate very differently from hotels in that they cater not only for those looking for rooms but also those looking for a more personable experience.

For those looking for more personal interactions with the owners, many prize the interactions they have along with customized inside knowledge of the region they're visiting. This might mean that bed and breakfasts would emphasize this aspect of their service when hosting guests.

However, the idea of being customer-centric in this regard doesn't mean that hotels should lose sight of the job at hand. As written recently in the Harvard Business Review;

"the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy."

As the authors note, this might sometimes mean that multiple trajectories might be necessary for different types of customers but essentially, it's the different type of job that might be necessary.

But this then raises a more interesting question: if a hotel's performance is intricately linked with a customer's needs and the specific jobs that hotels need to execute on, how would a hotel go about finding out what these needs are?

Knowing your guests' needs

Getting to know your guest's needs are easier said than done. As travel experiences come in all shapes and sizes, so too do the various needs of guests at hotels. This too comes at a time when the hotel industry is competing with home-share sites like Airbnb and losing out to them when offering a less authentic travel experience.

The case with Airbnb is an interesting one as the competition has actually challenged hotels into offering better services and think harder about their guest's needs. This can also be a reason for the rise of boutique hotels across the world and the "Airbnb effect" has played a large role in changing how the hospitality industry can better cater to the traveler's needs. This would mean focusing really on how to cater to smaller segments of the crowd, each segment needing something specific from your hotel, rather than catering to everyone.

Antoin Auburn of SiteMinder recently wrote on the importance of playing to a smaller more dedicated group rather than aiming for everyone and anyone. "It's about offering value and something special to create an innate sense of loyalty from your guests."

One great example would be the idea of pet-friendly hotels. CannonBeach.org listed the best stays for you and your pooch in Canon Beach, Oregon. To some, it might sound really niche to aim at dog-owners alone. But if a large number of people visit the state as a way to spend more time with the family (with dog in tow), it might just be the selling point for many travelling through the region.

Given that there are over 60.2 million people in the US alone that have a dog, this is by no means a small piece of the pie!

Personalized experiences = more revenue

Another way that hotels might hold the edge over home-sharing may be in the many quirky examples of customized room-service options out there. From gourmet and high-art in-room dining to requesting bespoke furniture within rooms, eccentric choices on the part of hotel guests are now making a splash in the industry. What's more? People are willing to pay for it as well. A recent study showed that over 61% of customers would accept a higher price for unique personalized requests. This is one crucial way in which hotels can still use their upper hand over home-sharing sites like Airbnb.

The use of technology to ascertain what exactly guests are looking for in their hotel stay is another way to understand customer's needs. This might be either directly from stated preferences by the guests but also more indirectly by their actions. This may include gathering as much information at all touch points in the modern-day travel journey to assess how behaviors form and whether changes may be necessary in how the hotel operates. Collecting this kind of data also improves on face-to-face interactions at the hotel as it gives the staff a better, rounder picture of the customer than they otherwise might have."

A recent article in Hotel Management listed the inevitable collection of data to make more informed decisions on travelers and the best performance they can procure from the hotel.

"Invest wisely in mining, managing and maximizing the data to remain relevant to the consumer and both meet and exceed their expectations - it's the "new normal" driving guest loyalty, hotel sustainability and profitability."

Leveraging customer data to your advantage also comes with great responsibility as it requires high levels of discretion to ensure that bond of trust is never broken between hotel and guest. After all, it's that trust that breeds loyalty and ensures that guests choose your hotel the next time they're in town.

In hotels we trust

Building trust in your brand can be one of the hardest parts of building a business as it's a quality that's difficult to win but devilishly simple to lose. Sometimes taking decades to build, trust goes hand in hand with building a loyal customer base as well as being a key ingredient in performing the client's needs.

As stated before, collecting data might be an important step in getting to know traveler's needs in making the best hotel experience they can have in a new place. Whether they give that information over, either in person or through their actions, will depend on the level of trust they have in your business or brand.

And while there are no quick solutions to building on trust, there are highly effective strategies in making sure that, in addition to fulfilling the customer's needs, you've also given them a reason to come back and recommend you to their friends and family.

Jenny Moore, Corporate Director of Revenue Strategy at Noble House Hotels & Resorts, says:

"To build customer trust in today's online environment you have to customize your message at every customer touchpoint. You need strong data collection to know how to reach your customer in the way that they want to be reached and will enable them to make a comfortable buying decision.

Customers have an abundance of information and booking options at their fingertips and we as hoteliers need to use strategic digital campaigns, smaller targeted email campaigns and even extensive training in sales and reservations to help deliver a personalized, experiential message that will speak to the guest above the noise."
This is hardly a surprise to large hotel chains that already commit large sums to marketing but it's interesting to note how important effective responses to guest reviews and the monitoring of online reviews can be in ensuring high performances.

" When your prospects and customers trust you, they are more likely to buy from you. When you have their trust, you can also command a higher price and boost the lifetime value of each customer. "
Thomas Smale - Contributor
Entrepreneur

Another aspect here that might be of help is showing precisely why and how much certain things are worth by being openly transparent in your pricing. As previously noted, people are happy to pay for services of value. Remember that they want "a quarter-inch hole" and if you're transparent about precisely how much your hotel experience is worth then they're likely to trust you for it as well. Fortunately, this works both ways as well.

And finally, often the first access points for building trust for your business will be the hotel staff. Professionalism from your staff will be pivotal in determining what exactly your clients' needs are and how much trust they will place in your business.

How to train your staff to identify customer needs

Training your staff to isolate what your customer's needs are is essential to a hotel looking to provide the best travel experiences. Given they are often the first and last point of contact between your business and the customer, it's imperative that all the moving parts function as one and provide consistent quality service.

"Hotels that don't want to be viewed as a commodity need to stop treating their guests like one. A guest is so much more than their reservation," Christopher Elliot once wrote for Forbes Magazine. "Guests deserve to be treated like family. Once they are, meaningful and authentic relationships will not only forge, but flourish."

This 'familial' attitude is key to understanding what your clients are looking for and can help your staff ascertain what 'quarter-inch holes', as Levitt put it, the travelers are in need of. Traits that apply to adopting this approach include empathy and understanding when it comes to dealing with customer inquiries.

A more extreme form of the customer engagement is the customer complaint, where something hasn't gone according to plan or, at the very least, according to their expectations. Thoughtful staff recognize that it's natural to have expectations and not be brought down that the traveler is not having an ideal team. Most staff recognize, after all, that they too are travelers and will have their own expectations when travelling. Moreover, simply because a guest has complained doesn't entail that their travel experience is ruined or otherwise irreparable. In fact, the most highly trained staff will find unique solutions to make sure that a complaint in person doesn't derail a customer's trip altogether.

In a time of viral complaints, where ranting online can rack up millions of views and be highly detrimental to a business' image, it's important that service staff members know how to put out fires at the earliest possible moment. This has been the approach of Doug Kennedy at the Kennedy Training Network, the lodging industry's best source for hotel training programs.

"Step one in training your staff to conquer complaints is to make sure they fully understand the root causes run deeper than what is being presented to them in person or on the phone.

In order to have compassion for the complainer, they need to realize there is probably a story behind the guest's frustration, which on the surface might otherwise seem to them as being a bit overblown. "
One size does not fit all

Another key aspect to staff training is the consistency with which they behave with the customers. Once again, keep in mind that consistency shouldn't be confused with a one-size-fits-all method as this might work out badly with customers of different temperaments. Instead, staff should be trained to validate and ensure that the traveler's ideas of a great hotel experience is being catered to.

In addition to this, staff will also be the interface of the business which means that much of the information and personal story from the customer will be directed at them. As this data increases, so too will the workload in making sense of the information that they take in. One thing that may be getting in the way of your trained staff might be this higher volume of workload. In which case it would be best to consider what tasks they should be left doing and what would be best taken on by others outside of the business.

Best left to others

Your staff are experts at providing quality service. But this doesn't mean that they should be in charge of every aspect of the traveler journey. Sometimes it makes sense to offload tasks that would be better suited for other companies to take on. This is particularly true in the age of data where many hotels are looking for software support to help comb through the information. As a result, hotels can act on things within the company that they may have overlooked.

But excess customer or business data shouldn't be the only place that hotels might need "a fresh pair of eyes". Even on more personable interactions, some hotels are turning to outside help in establishing bookings and customer support. This can particularly be handy for smaller to medium-sized hotels, who might not have the same infrastructure or budget to pull off things like 24/7 customer support.

These hotels also find, however, that this support is best not left to software solutions for a number of important reasons.

According to Brett Puffenberger, Vice President of Operations for Travel Outlook;

The costs that a hotel can save as a result of outsourcing a call center for reservations or customer support would easily be worth the investment in the time it would save your hotel staff. That includes critical support for a hotel's front desk staff that frees them to provide an uninterrupted flow of service to hotel guests.

It, also, dampens anxiety allowing them to remain focused on their core business—providing hotel guests with the genuine hospitality they expect and deserve. "

What really matters

It's the customer experience that matters here and, for many, it might come as counter-intuitive to have a separate call-center to deal with personal one-on-one interactions. But consider this. In a blog posted by New York Times and Wall Street Journal Bestselling Author Shep Hyken;

"60% of customers feel that waiting on hold for just one minute is too long. "
Over-reliance on automated services and overburdening staff with reservations calls has led to a loss in revenue.

Hotels have found that the multi-lingual 24/7 support can also increase the occupancy and average daily rate. What's more, there can also be additional marketing benefits that a reservations call center can add to the hotel's brand as a trusted and personable place to stay.

Which is why converting calls into bookings with the aid of an around-the-clock team dedicated just towards these tasks might be a business-saver for some hotels.

Conclusion

Let's take it back to Theodore Levitt's dictum that "people don't want quarter-inch drills, they want quarter-inch holes." On a recent podcast, marketing whiz Seth Godin reframed the ideas behind the quote. Godin believed that Levitt didn't get it quite right. Instead of saying that wanting a drill was connected with wanting a quarter-inch hole, Godin said that the quarter-inch hole was connected to a desire for putting a lugnut somewhere. And this in turn reflected a desire for putting a shelf up which would hold books that would make one's significant other happier. "What they want is satisfaction and security and safety and freedom from fear. That's what people want."

The same applies to your hotel guests as well. They are on a journey where they want their ideal trip to be played out. They want to be secure in a trusted brand and know that your hotel will provide it for them.

John Smallwood
CEO | Travel Outlook
505-470-3241
Solar Plexus Inc., dba Travel Outlook