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Service companies may want to rethink the billions they spend on
customer-loyalty programs. A new research report from Cornell graduate Iselin
Skogland and Cornell faculty member Judy Siguaw indicates that brand switching sometimes occurs even among a hotel’s most satisfied guests, while
some of the least satisfied guests cannot be bothered to do the same.
The report analyzed behavior according to four distinct guest segments --
satisfied switchers, dissatisfied switchers, satisfied stayers, and dissatisfied
stayers. Two groups, satisfied stayers and dissatisfied switchers, generally
behave as one might expect, either staying or defecting based on their level of
satisfaction. The other two groups, satisfied switchers and dissatisfied
stayers, do not conform to expectations.
Most confounding are satisfied switchers, who report being satisfied but then
choose alternative hotels, rather than routinely choosing the hotel where they
have had satisfactory experience. Thus, although marketers have long held that
guest satisfaction is instrumental in ensuring repeat business, satisfaction does
not appear to drive repeat purchases for all consumers. Also intriguing,
dissatisfied stayers are unwilling or unable to exert the effort to identify and use
alternative hotels, even though they are unhappy with elements of the hotel at
which they stay.
The report indicated that business travelers were the least satisfied, least loyal,
and least involved of the guest segments. Results further showed that among
the four segments, business travelers were most likely to be dissatisfied
switchers.
“Hotel managers can use this information to better define those groups with
which they want to develop strategic investments and drive the greatest long-term value,” said Dr. Siguaw. “Hotel companies might find value in refining
their customer-retention programs to aim at customer groups most likely to
respond to those programs.” To access the report, please click
here (note
the link is for a PDF file).
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