Engaging employees makes sense for customers and the bottom line!

I just read an interesting blog entry by Forrester's Bruce Temkin. It’s a story about how Joie de Vivre hospitality improved the performance of its hotels by focusing on employees.

After Joie de Vivre Hospitality Inc. took over operations in 2003, the new manager of the Hotel Carlton in San Francisco reduced employee turnover to 25% to 30% annually, about half of the industry average.

Here are some mind blowing statistics. Market Metrix estimates that each departure costs a midrange hotel about $5,000 in lost productivity, and recruiting and training a replacement Joie de Vivre has 2,500 employees. About 90% are hourly workers who take reservations, clean toilets and perform other low-status jobs.

So lets do some math with those numbers. Reducing the turnover from 50% to 25% for its 2,250 hourly workers means that the hotel chain has 562 fewer employees leaving each year. That saves the company more than $2.8 million each year. And that doesn’t even include any revenue from the likely uptick in loyalty and positive word-of-mouth.

Wow! How did they do it?
Former management at the Hotel Carlton in San Francisco didn’t like to replace aging vacuums, despite staff complaints. The new management bought a vacuum for each of the 15 housekeepers — and replaces them every year. This was just one example of how Hervé Blondel, the Hotel Carlton general manager, said he tried to treat workers as partners rather than employees. In addition, he did things like sitting in for front-desk workers on their lunch breaks and heeding staff suggestions to eliminate minibars, which generated little revenue at the midprice hotel.

The founder and CEO of the firm, Chip Conley, definitely seems to understand the strong link between employee satisfaction and good customer experience. The article talks about a number of things that he does to engage employees like sponsoring parties and awards, arranging paid annual retreats for employees, hosting regular dinners with those who want to chat, and offering free classes on subjects from Microsoft Excel to English as a second language.

It looks like Joie de Vivre Hospitality is a great example of a key principle of Experience-Based Differentiation: “Treat customer experience as a competence, not a function.”

What say you? Any thoughts, comments?

Eric Fraterman

Why creating a Customer Experience is tough

Customer Experience programmes are some of the most difficult for large corporations to manage, and many end up falling through the proverbial cracks, especially for larger companies.

Unfortunately, the touch-points that together create acustomer experience don't all fall into one nice department called "customer experience". In fact, most customers' first touch-point has nothing to do with service in many cases. Instead, people's first impression might be through the company's advertising, a speech given by the CEO, what their cousin told them about the company, or the fact that they couldn't find parking when they made their first visit.These are all critical touch-points that help to create the emotional bundle of experiences that customers are left with at the end of the day.What makes this all hard for companies, and for the heads of customer experience departments, is that they must somehow find a way to influence the entire company to provide a different set of touch-points for customers.

And this is why customer experience programmes often fail to deliver -- companies either reduce them to mere customer service, or they fail to get the entire company to buy in on the importance of looking at all the touch-points, from the CEO on down.

It takes a total organization wide commitment spearheaded by toally committed leadership teams to deal with all the touch-points that customers experience, for the truth is that customers don't care which department is failing to give them the experience they want at the moment, all they know is that the company is bad.

What say you? Comments? Ideas?

Eric Fraterman
eric@customerfocusconsult.com
http://www.customerfocusconsult.com