Customer engagement and brand vulnerability

The July issue of the eponymously named quarterly of leading consulting firm,  McKinsey & Company suggests five ways to ramp up customer engagement; all of which could go a long way to combat vulnerability the subject of a report titled Hotel Group Brand Vulnerability by another management consulting firm, cg42.

The Quarterly points out that "No organization can avoid coming to grips with the rapidly evolving behavior of consumers and business customers. They check prices at a keystroke and are increasingly selective about which brands share their lives."  More relevantly, particularly for travel related organizations, customers,  both current and potential, "form impressions from every encounter and post withering online reviews." The  multiplicity of customer interaction moments referred to as "touch points" in a variety of areas leads to customer engagement being the responsibility of everyone.

McKinsey breaks the foregoing down to five key areas for action termed "no regrets" moves as a way to get things going even as the processes and environment continually evolves. The suggestions include:

    (i) a "customer-engagement summit" that goes beyond the traditional business-planning porcesses where line and staff managers align on a clearly articulated vision for engagement. It also requires coordination across touch points along with a full understanding of the "customer engagement eco-system" or universe.

    (ii) creation of a customer-engagement council; an operational + decision making body.

    (iii)appoint a chief content officer stemming largely to cope with the many diverse channels that continually emerge in these digital times.

    (iv) create a "listening center" not to play big brother but to monitor feedback from the many touchpoints via new media and be ready with quick responses; de-rigueur these days.

    (v)challenge the customer-engagement budget. As in any "new" intitiative the consulting company foresees  a perceived lack of funds to be an impediment to the above and suggests that what is required instead is a new perspective that finds monies invested "in the wrong places".

The seemingly bewildering array of touchpoints and a lack of engagement can lead to brand vulnerability as cg42's report on hotel brands amplifies. The firm's research delves into the "vulnerability of the major hotel groups and their loyalty programs among their most valuable customers – the primary frequent-traveler member" and notes the "inter-relationship between the loyalty program (a potent touch point) and the associated hotel brands." 

cg42's study is a must read for all hoteliers but also for anyone in the loyalty marketing field. For hoteliers there are some nuggets of good news and pointers that could go a long way to resolving the many unresovled frustrations of travelers, a primary object of the study. Among the latter: nearly 80% of surveyed travelers revealed that they prefer internet access and breakfast to be included in the hotel rate. The good news for hotel companies is that loyalty programs offered by online booking sites came in very nearly at the bottom with a mere 33% finding value in them. The only item that fared worse was the need to use a travel agency which clocked in at 23%.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.