The Hindu Business Line : Targeting your market

Evolution within the hospitality industry is not uncommon; however, one thing has remained the same — its reputation as an industry of ‘people.’ A hotel revolves around its guests, and without them, the industry would plummet. The success of a hotel in a highly competitive marketplace, therefore, rests upon its knowledge of guests and their demands and successively meeting those demands.

Customer satisfaction depends on the delivery of services according to individual needs. However, diversity among people poses a challenge for hotels as the result is an array of thoughts, ideas, desires, and, of course, demands.

In order to meet these demands, it is absolutely necessary to effectively segregate and evaluate the consumer market when conducting market research. The solution is the market segmentation process. This process can be of extensive value to a hotel’s operations and its profit margin, provided the results are accurate in capturing the nature of a market.

Market segmentation proves to be advantageous in that it allows a hotel to not only understand what potential guests want and target people with those needs, but also offer services that fulfil those demands. Mass-marketing, on the other hand, would involve targeting an entire market in the same manner and disregarding individual differences, and it is infinitely less recommended.

One way in which a market can be segmented is by the benefits that a guest derives from the services provided. What benefits do hotel guests seek? Lower pricing? An all-inclusive getaway? Hotel-airport transportation service? The answers to these questions could determine the types of services or packaged deals that a hotel decides to offer.

A hotel marketing team can also opt to turn to more traditional segmenting variables such as demographic, behaviouralistic, geographic, and psychographic features. The focus here would be on specific aspects such as age, location, or attitudes. These characteristics must then be evaluated so that a hotel can accordingly decide the best way to market its services. Once a hotel has identified different market segments, it can select the groups that it will target. According to Subash Jain, author of Marketing Planning and Strategy, a profile of each segment should be made that identifies important customers, reasons for choosing a particular hotel, and anticipated changes in the customers’ perspectives. This will assist a hotel in offering a varied marketing mix to its selected target markets and ensure that each group is targeted in a manner that will be most beneficial to a hotel. With a rapidly growing hospitality industry of hotels and consumers, market segmentation is becoming more and more important. It is impossible to satisfy all individuals in a market through the same approach, and as a result, one must use innovative techniques to appeal to the maximum number of people. Whatever the basis of categorisation in the hospitality market, those in the industry must realise a segmented market is imperative to truly understand guests and make their stay exactly what they desire.

Customer satisfaction

Furthermore, to gain a good reputation, a company must meet its customers’ expectations. However, to gain a good reputation and beat competition, a company must surpass customer expectations. No matter what market a company caters to, a key success factor is customer satisfaction. Businesses that provide displeasing products or services run the risk of customers turning their attention and loyalty to the competition. People talk with acquaintances about unpleasant experiences more than pleasant ones. Therefore it is necessary to provide a highly fulfilling consumer experience to retain customers and keep them content. Foremost, to retain a customer, a company must deliver services with the little something ‘extra’ — that is ‘quality.’ As A. Parasuraman, V.A. Zeithaml, and L.L. Berry identified in Vol. 64 of the Journal of Retailing, there are five factors that determine service quality — reliability, assurance, tangibles, empathy, and responsiveness.

When a customer chooses a company to do business with, the service provider must produce a degree of reliability — deliver the service accurately and dependably. Employees need to be well informed about what they are offering and should be able to answer any question the customer might have. Only then will customers feel that they can fully trust in the company and its services.

No matter how hard we try to oversee certain things, it is inevitable — businesses come and go, but first impressions stay. That is why, depending on the type of business, it is important to keep tangibles in tip-top shape. Store personnel should be presentable, as they are the people who deal with customers first-hand. Appliances, other equipment, and communication materials — whether they are for sale or used to assist the business — should be well-maintained and in working condition. Every customer wants to feel he or she is at the top of a company’s priority list And of course, all of us believe that we deserve the best in quality. The obvious response for a business is to show empathy by giving each customer personalised attention and conveying a sense of understanding. This is a simple task which results in a low-cost/high-benefit equation. What is more is that it will help to retain a customer and prevent them from going to the competition.

How responsive are you

Responsiveness is another key determinant of service quality and refers to a company or its employees’ readiness to help customers and provide them with timely service. How many times have you tried calling a business only to find that you are left listening to classical musical for 45 minutes while on hold? Then, to make matters worse, when you finally hear a human voice on the other end, the company representative transfers you to another department and an additional 15-minute-wait lies ahead. To avoid customer frustration, a company should try to deliver the shortest possible wait-time.

Eventually, customer satisfaction helps a company retain its customers and gain their commitment. The cost of keeping an old customer in comparison to attracting a new one is significantly less — so why is it that so many businesses are stuck on the idea of “out with the old and in with the new?” Of course, new customers will benefit a company, but retaining old ones is just as important, if not more. According to the US News and World Report, 68 per cent of people who retract as customers of a company do it because of poor service and 9 per cent do it because they join the competitor.

Dealing with complaints

However, what about when a customer makes a complaint? In such an instance, it is imperative that a company finds out exactly what the complaint relates to and deals with the situation promptly. The last thing a customer wants is to find fault with a product or service and then be sent on the run around after they make a complaint. Software provider SPSS Inc reported that only 4 per cent of people who have a problem with a service or product actually complain. The best way to improve a service or product, however, is through customer feedback which includes complaints — after all, a product is made for the customer. Therefore, the key is providing a timely and effective solution, because, although surprising, it might just heighten customer loyalty. It does not take too much extra effort to provide a customer experience that is beyond satisfactory. All that is required is an awareness of customers’ needs and a determination to meet those needs. Most companies will attempt to get as many customers as they can without realising that if you try to be all things to all people, you run the risk of becoming everyone’s second choice.

(The writer is the Chief Marketing Officer of Berggruen Hotels, a subsidiary of the New York-based Berggruen Holdings.)

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