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I Don’t Want No Satisfaction, I Want…LOYALTY!

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June 01, 2001
Bill Fitzpatrick - bill_Fitzpatrick@spartancomputer.com

© 2001 Hospitality Upgrade. No reproduction or transmission without written permission.

As smart as you are, I know that you aren’t falling for that old 1980s trap where companies foolishly thought that by focusing on “customer satisfaction,” customers would appreciate the good service so much they wouldn’t shop anywhere else.

Dear Mr. or Ms. Hampton Inn CEO:
You don’t really know me, but back in 1996 when the Hampton Inn manager in Greenville, Miss., asked me if I would like coffee in the morning, and at what time would I like coffee in the morning, and that he was asking because some guests liked their coffee delivered right to their room at no charge—wow, was I impressed. Though I know you have an important job running thousands of these Hampton Inns and probably don’t have time for too many of my personal details, I want to tell you that I didn’t have such a hot sales day that day. “Don’t want to buy no fancy point-of-sale system,” the food and beverage manager told me later that morning at the riverboat casino I had called on. Then he added, “Hell, over half the people who want to work here can’t neither read nor write.”

Now that depressing thought stuck in my throat like a wad of cold grits, so by the time I got to Memphis and checked into the Holiday Inn, I wanted something to clear my throat, but the hotel bar was being renovated. I sat down in the dusty lobby where they had what they called a temporary bar, which, near as I can determine, since I’ve been in only one and that was it, is where they sell red Gallo for $4 in plastic cups that collect construction dust if you’re not careful and the one waitress scowls like she is the one with the stuck wad of cold grits.
I know this is way out of order, but by the way, thank you for sending me my shiny Hilton Honors card last year. Confidentially, you didn’t really have to do that because I was loyal without the card, which, in a backwards sort of way, brings me to the point of my letter and the enclosed check for $79.63.

Lots of the information systems executives I call on have been talking about something called CRM, or customer relationship management. They’re not exactly sure what it is, but I tell them heck, that’s OK, nobody else does either, and that’s one reason why NCR decided to fund the CRM Research Center at the Fuqua School of Business at Duke University to the tune of $1 million per year. That sounds like a lot until you calculate, like the Gartner Group did, that worldwide CRM spending will reach $76.3 billion in 2005, up from $23 billion in 2000. Gartner analysts said that to be successful in business, a CRM strategy is essential and executives must understand and leverage technologies across all customer channels.
This whole idea of CRM (if you don’t mind I’m just going to call it loyalty) is that since Americans aren’t reproducing Americans like they used to, it’s very important for businesses to not only get more money out of each shopper transaction but also to go all out to create a loyal customer; one that feels pulled to the offering, if you know what I mean.
As smart as you are, I know that you aren’t falling for that old 1980s trap where companies foolishly thought that by focusing on “customer satisfaction,” customers would appreciate the good service so much they wouldn’t shop anywhere else. Back then many well-meaning executives confused satisfaction and quality with loyalty. Now I know that quality is all well and good, but I also know that many other companies make a quality cup of coffee, but try telling that to one of those loyal Starbucks fanatics. They might wallop you with a sack of black beans or worse, try to wipe the smirk off your face with a low-fat raspberry muffin. But let me finish that point on satisfaction vs. loyalty by quoting a few facts, and then I promise I’ll get to the point.

  • Forum Corporation reports that up to 40 percent of the customers in its study who claimed to be satisfied switched suppliers without hesitation.1
  • Harvard Business Review reports that between 65 percent and 85 percent of customers who chose a new supplier say they were satisfied or very satisfied with their former supplier.2
  • Dr. Peter ZanDan, whose company Intelliquest conducts market research studies for computer manufacturers worldwide, reports that in more than 30,000 interviews, his company has never found high levels of customer satisfaction to be a reliable predictor of repeat purchase.
  • Dr. Robert Peterson of the University of Texas found that in most surveys of customer satisfaction, 85 percent of an organization’s customers claim to be “satisfied,” but still show a willingness to wander away to other providers.3
    That’s some powerfully scary data, isn’t it?

Well, the way I figure it, many companies attempt to separate themselves from the pack by offering free meals, free plane tickets and free room nights for frequent customers, and all of that is well and good, but now that I have 10 cards in my wallet, I want to scream “what next?”

I say they better study the Kano Model.

The Kano Model, which is named for a Japanese quality expert, recognizes that customers experience value at three dimensions—the basic, the expected and the unanticipated. Unanticipated value is delivered when companies provide well above and beyond what the customer expects. Only in operating in the unanticipated realm, so the Kano Model goes, can strong levels of customer loyalty be built.

And that’s the whole point to my letter.

Be careful what you do with CRM, won’t you? I know companies jump into CRM like it’s a one-time project. Well, it’s not. This whole idea takes a company effort to pull-off. Lawrence A. Crosby and Sheree L. Johnson, writing for the American Marketing Association’s Marketing Management, put it as follows:

CRM isn’t just about collecting, processing and deploying customer information. It is about serving customers in a fundamentally improved way. CRM needs to be about business strategy, supported by technology, not about reducing marketing costs or simply interacting more efficiently.

I suppose some day, by using my customer number and collecting my preferences, you will figure a way to turn on ESPN when my key hits the lock, my wake-up call will be from Enya instead of a computer voice, my in-room coffee will be Seattle’s Best, and instructions to the nearest Irish pub will be folded in the morning sports section. But we all know that it will be just a matter of time before your competition has all of that, too.

I wish I had kept the name of that fellow who delivered coffee to me in Greenville, Miss. I’ve never forgotten him.

I do have one last favor to ask, and it’s kind of embarrassing. If you would, please see to it that the enclosed check for $79.63 gets credited to the Hampton Inn in Fort Smith, Ark. Just once, I decided to test the “your satisfaction is always 100 percent guaranteed” line, even though I wasn’t really peeved, and it worked. Every employee with your company says that line with such conviction, and at every opportunity they can, that I just had to put the policy to the test.

But when I started having sleepless nights, particularly when I was staying in Hampton Inns, I dashed to confession. When Father Ralph said, “no, it wasn’t enough to simply repent, you must send the money back,” I thought it best to follow his advice. As soon as you cash this check I’m sure I’ll start having blissful sleep and pleasant dreams.

That’s about all I have to say. Sorry for being so long winded about this matter of loyalty, but I just felt like telling you how pleased I am with Hampton Inn.

Bill Fitzpatrick is the national sales manager for Spartan Computer Services and can be reached at (800) 866-3352 or bill_Fitzpatrick@spartancomputer.com.

1 David Stum and Alan Thiry, “Building Customer Loyalty,” Training and Development Journal, April 1991, 34.
2 Frederick F. Recihheld, “Loyalty-Based Management,” Harvard Business Review, March-April, 1993, 71.
3 Robert A. Peterson and William R. Wilson, “Measuring Customer Satisfaction: Fact and Artifact,” Journal of the Academy of Marketing Sciences, Winter 1992, 6.

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