Wherever you find yourself in the hospitality industry, the customer experience is the foundation of your business. Investing in good practice is essential to your retention, growth, and success.
In a recent study conducted by Super Office, 86% of customers are inclined to pay more for a positive experience. Perhaps more shockingly, 95% tell others about poor customer experience. With a whole lot to gain (and even more to potentially lose), investing in your customers is essential.
Knowing how to measure customer experience can be a bit of a challenge. You can't just go off of gut feeling; you need to have hard data to back up your observations. By 2020, 40% of data analytics will be customer experience-related. What this roughly translates to is one main point: the future is going to be more customer-focused than ever before. Fortunately, there are a number of tried and true methods for measuring customer experience using the data you have available on your social channels, and the guest information stored in your venue management software right now.
While word-of-mouth is still the most powerful form of marketing, online reviews have become increasingly important in recent years. In fact, 86% of Australians say they won’t book a hotel if it has bad reviews online. That’s a pretty clear mandate for hotels to make sure they're putting their best foot forward when it comes to customer experience.
1. Net Promoter Score (NPS)
Net Promoter Score (NPS) is a metric that measures how likely customers are to recommend your hotel to friends and family on a scale from 0-10. To calculate your NPS, simply take the percentage of survey respondents who rated your hotel 9 or 10 (promoters), subtract the percentage who rated it 0-6 (detractors), and you have your NPS score. Anything above 0 is considered good, and anything above 50 is considered excellent.
2. Customer Effort Score (CES)
Customer Effort Score (CES) is a metric that measures how much effort customers feel they have to expend in order to resolve their issues or inquiries. CES is typically measured on a scale from 1-5, with 5 being the highest level of effort required and 1 being the lowest level of effort required. A CES score above 4 is considered poor, while anything below 4 is considered good. Use CES immediately after a guest has interacted and booked with your venue, or immediately after they have had a service-related experience.
Customer Satisfaction Score (CSAT) measures customers' satisfaction with their recent interactions with your hotel on a scale from 1-5, with 5 being very satisfied and 1 being very dissatisfied. A CSAT score above 4 is generally considered good, while anything below 4 is cause for concern. To calculate your hotel’s CSAT, you need to the number of satisfied customers (those who selected 4 or 5 on your rating survey), divide by the total number of responses, and multiply by 100.
4. First Call Resolution (FCR) Rate
First Call Resolution (FCR) rate measures the percentage of customer inquiries that are resolved during the first call. The average FCR rate across all industries is 70%, so anything above 70% is considered good. To calculate your FTR, divide the number of cases resolved the first time by the number of cases handled by staff members in total.
5. Churn Rate
Churn rate is the percentage of customers who stop doing business with your hotel within a given period of time. For hotels, an annual churn rate of 15% or less is considered good. Since it’s 6-7 times more costly to acquire a new guest than it is to retain an existing one, decreasing your churn rate can significantly improve your profit margin while improving your customer experience.
6. Average Handle Time (AHT)
Average Handle Time (AHT) measures the average amount of time it takes for customer service representatives to resolve an inquiry from start to finish. For hotels, an AHT of less than 3 minutes is ideal. Calculate your average handle time by adding together your total talk time, total hold time, and the time it takes to follow up, and then divide that by the total number of customer conversations.
Social Media Sentiment Analysis (also known as a social listening analysis) involves using social listening tools to track what people are saying about your hotel on various social media platforms. This can give you valuable insights into how people feel about their experiences with your hotel. You can also undertake your own social listening analysis by combing through your own business accounts, competitor accounts, and industry-relevant accounts across multiple social platforms to uncover common questions, reviews, themes, or comments.
8. Online Reviews
Online reviews are another great way to measure customer experience. Sites like TripAdvisor, Expedia, and Yelp allow guests to leave detailed reviews about their stays at hotels. These reviews can be incredibly helpful in identifying areas where your hotel needs improvement. Reviews are also a great way to improve your business's SEO. Google My Business is also another great online review platform for enhancing your search engine optimisation.
As you can see, there are a number of different ways to measure customer experience. While each method has its own advantages and disadvantages, all of them can give you valuable insights into how well your hotel is doing when it comes to providing excellent guest experiences.
All in all, it’s important to remember that hospitality is an ever-changing industry and that customers’ expectations are changing with it. As the world of marketing and technology continues to evolve, so too should the way we measure customer experience within hotels and venues. It’s an exciting time to be in such a fast-paced industry - make sure you’re equipped with the right tools to streamline venue operations and draw on the data right at your fingertips.