Actionable Insights From APT's Retail Practice

Scoring on Satisfaction: Driving Value with Traveler Satisfaction Scores

October 6th, 2017 | Posted by APT in Hospitality & Travel

You have probably seen “Like” buttons on Facebook—but until now, it is unlikely you have come across them in your hotel. Yet, Marriott’s hotel laboratory in Charlotte, where it tests out new concepts, has created just that: “Beta Buttons” designed to track guest satisfaction with new features in real-time. The buttons are placed near all new features being tested out at the hotel, and if a guest likes a certain concept, she simply touches the button and her “Like” is recorded.

This living “Like” button is just one example that demonstrates how satisfying the customer is paramount in the hospitality and travel industries. However, while this may be a key consideration for many hotels and airlines, how can organizations ensure that higher satisfaction scores truly translate into an increase in profits and growth?

In order to answer this question, organizations must understand which programs have a meaningful impact on satisfaction, and determine what an improvement in satisfaction scores is really worth. However, extracting insights from satisfaction data is often easier said than done, as the datasets are typically much smaller than those of other metrics, like bookings.

Yet, there are two key analytical approaches organizations can take to unlock value from the customer satisfaction data they collect. The first is measuring the financial impact of a change in satisfaction, and the second is effectively understanding how the performance of new programs varies across certain properties or flights based on their average satisfaction scores.

While there are many potential approaches to growing customer satisfaction—including additional amenities and personalized service—investments in this area should align with the financial benefits associated with an improvement in satisfaction scores. To measure the financial value of an increase in customer satisfaction, the first approach outlined above, hotels can leverage test vs. control analysis.

Looking at historical data and identifying the properties that experienced increases in customer satisfaction over time enables organizations to measure natural experiments—that is, analyze the natural variation resulting from a given action that affected some parts of the business and not others. For example, by comparing the performance of properties that experienced a sustained increase in customer satisfaction against that of similar properties with consistently lower scores, all other factors held constant, a hotel executive could quantify the incremental impact of increased satisfaction. These insights could then inform the level of investment that should be allocated to grow satisfaction and determine which customer experiences will ultimately pay off.

Perhaps more commonly, organizations will deem a program successful based on its impact on financial metrics such as revenue improvement. Taking analysis a step further, leading hotels and airlines will then likely want to identify in which properties or flights and with which customer segments the program is most effective, to inform future rollout.

For example, consider an airline that wanted to implement a new flight attendant training program, but first rolled it out on a smaller scale to measure whether the investment would break even. By comparing the performance of flights staffed by employees that received the training to that of other, similar flights staffed by employees that did not receive the new training program, the airline could pinpoint the true program ROI.

The airline would then likely want to conduct further analysis to identify the characteristics of the flights for which the new training program had the greatest positive impact, to most effectively target future rollout. These drivers of performance may include longer-haul flights, flights with a large proportion of business travelers—or, flights with generally lower passenger satisfaction ratings to begin with. In this case, satisfaction data would be leveraged to most effectively segment and target a new program’s impact.

While customer satisfaction is a critical metric for airlines and hotels alike, it can be difficult to generate clear value and actionable insights from collecting this data. However, there are two key approaches travel organizations can use to understand whether new initiatives improve both the customer and experience and the bottom line. By evaluating the financial impact of shifts in satisfaction to more effectively allocate customer experience investments, and segmenting a program’s impact based on prior satisfaction scores, travel organizations can optimize their investments for maximum impact.

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