It is with great frequency hotels and resorts ask us to help them put marketing and customer service solutions into Standard Operating Procedures for their staff to follow.   While we understand the importance of procedures in the back-of-the-house, we find a need for flexibility on its use in the front-of-the-house.  I want to clarify, this is not about production SOP’s and Six Sigma, this is about forcing processes on customers.

Standard Operating Procedures Mapping

Sample of mapping

When Valorem Group approaches the creation of SOPs for clients, we start by following the guest journey and connecting the dots along the way to key internal positions that are key drivers of customer satisfaction.  We look at the breakdown in repeat booking ratios of unsatisfied guests and analyze their dissatisfaction.  In 67% of the cases we have studied, we can peg back dissatisfaction SOP’s.  Yes, the typical escalation processes for improving service are really destroying service, loyalty and the lifetime value of customers.

While this discovery process seems simple, it takes time to rebuild the right procedures, and even more time to create the strategy to eliminate procedures.   We find that many companies with reduced staffs have limited time to look at the perspective from the outside in or from the inside out to establish the best and most sensible operating procedure.  Companies simply call on their employees to create the processes and procedures.  While staff is excellent at working to produce requests from their leaders, they may not be as proficient at mapping the internal value chain and allocating the right steps for the right resources.  In most cases, the staff simply doesn’t have the full range of internal visibility or the clear perspective of the customer’s personal value chain to determine the best approach to deliver service based on needs.  Yes, we are saying it; there is a huge gap between internal mapping and external mapping, and we find that we create policies that usually don’t satisfy customers but do satisfy the immediate need of managers who cannot themselves create proper SOPs.

Standard Operating Procedures that work

We have tested procedures using real guests, real staff, and this is what we have found:

1.  Based on observations at each touch point, both internal and external,  most written policies are barriers to guest satisfaction and add frustration for internal players who had no input in the co-creation of procedures.

2.  The only solution is the procedure itself, and how it satisfies management with no regard to internal or external customers, value chains, or satisfaction.  In such a collaborative corporate environment, we bypass the team for the sake of speed demanded by managers.

3.  We find that when the Directors request continuous SOP’s be written, that it becomes clear to the staff that while there is good “management” there is not real leadership.  Why do we say this?  The standard reaction for a manager if something is out of control is to create more process and procedures in order to manage the situation better the next time.  At the executive leadership level, vision, strategy, and reaching goals are the primary objectives, not battening the hatches on the ship for every wave.  We suggest laying down a customer service vision based on common sense.  What “common sense”?  We find a key difference between managers and leaders in the case of trust.  Manager’s don’t think common sense is found in the ranks, leaders trust the common sense of their staff.

4.  How these procedures are communicated is lackluster and directive.  In today’s highly engaging environments, it is common to see how procedures and processes break all the rules, and are one way streets directed by employees on other employees.  Collaborative mapping is never an option in the case of a time-constrained environment.

5.  Bad procedures are always communicated to guests whether, directly or indirectly, giving guests a worse experience than the one they are probably complaining about in the first place.  We shot ourselves in the foot with an abundance of SOP’s that make dealing with our brands intricate at best.

6.  By setting up excessive SOP’s we eliminate any use of “common sense”.  From our observations, those companies with tight management see a reduction in motivation and in the use of common sense always referring to SOP’s in lieu of thinking.  The lack of motivation in a procedure-driven company is at least 28% more than in less procedure-driven companies. Yes, they are less motivated the more processes are instilled. Employee attrition is higher, even in a time or low employment, and guest satisfaction is lower, with customer loyalty 21% lower due to constraints placed on guests to reach satisfaction.

7.  The most challenging thing about procedures is that it is a huge tradeoff for revolutionary thinking and action.  Procedure driven companies are evolutionary not revolutionary.  Imposing constraints keeps employees thinking inside the box and increases the topple rates of companies, even those that appear clear market leaders today, tomorrow will fall.  Do you think IBM, Microsoft and HP are revolutionary?  How long do you give them?  Is Apple evolutionary or revolutionary?  Test it. Call each with the same complaint and gauge your level of frustrations.  Yes, you can almost certainly peg it back to the blocking of satisfaction through constraining SOP’s.  Are you revolutionary?

8.  Procedures focus on reducing risk, eliminating the sporadic wins that produce high revenue and increase market share.  We are creating process-driven companies that turn out to be mediocre and will “lead” [in it’s manager’s heads] but always from behind.

The Standard Operating Procedure Solution

The solution is to analyze the custom journey, the solution needed, why the SOP is being created in the first place, the result of the SOP, and then map internally collaborating in building a world-class guest service experience.  Or, you could create a world of procedures and put an end to loyalty and profits.  You decide.

Read more articles about resort marketing.  Want to get your SOP’s focused on providing the best guest experience?  Want to have a greater lifetime value of your customer?  Contact us at 617.939.9698 for info, our first consultation is complimentary.

Restoring Group and Incentive Fortunes in Today’s Business Environment.

For a little over four years we have watched many of our hotel and DMC partners focus on cost-cutting activities across their organizations in order to hold on to cash in uncertain times.  Cost cutting became the “new” old strategy used to reach their goals.

Since most General Managers and executives had not lived a recession of this magnitude, they quickly searched through their memory banks and latched onto a familiar strategy: cutting wherever possible.  Cut marketing, sales people, support staff and even c-level suite positions.  Marketing and sales staff worked in a permanent “triage” mode handling a multitude of tasks with as much speed and efficiency humanly possible.  This left teams in complete disarray and now executives must consider the Post Economic Stress Disorder (PESD) this recession and job cuts will cost them when they inevitably transition to a sales strategy for growth.

With this apparent shift from cost cutting to growth, the main question is whether executives should dive back into the familiar sales and marketing efforts in a new era, or do they reinvent the entire sales and marketing process.  Since no substantial thought was used to solve the economic woes of companies in 2008, I am fearful that no real brainpower will be used to reevaluate the sales process and marketing strategy for the years to come.  Some say “if it isn’t broke, don’t fix it”, but it is broken and it is time to fix it.

That being said, I offer a few quick observations for hospitality leaders to consider before they move forward on growth plans and strategies.

1. Consider the strength and weakness of your team. We must consider the traumatic experiences of living a long term recession battle will affect your growth plans.  An exhausted sales and marketing team characterized by little motivation, shock, anger, nervousness, fear, and even guilt, will negatively impact your plans for growth.

What’s the solution?  It’s time to rally your troops.  These crisis years have taken their toll on your team and they may not be ready to fight in the new battle ahead.  You must eliminate their nervousness, their guilt from having remained while their colleagues were let go, and remove their anxiety.  How?  Reinstate a training program, organize an effective retreat, involve them in change and reward them (using simple rewards) for their conscious efforts.

It’s also imperative to reevaluate the way you lead.  A good exercise is to make believe that you have just been hired to do your job.  What would you do differently?  Now go ahead and do it.  Past methods will not produce great results in the years to come so forget them and start anew.

2.  Break away from past year’s blueprints.  Yes, in order for you to transition from cutting costs to growth strategies you must reinvent the way you and your teams operate.  Start with candid conversations about what you have learned about your customers, your service and your real shortfalls as a hotel or DMC.

Your first plans should not be market plans, but plans on how to regain your footing with the new customer sentiment.  Don’t forget, you have gone through changes and so have your customers.

3.  Reevaluate your competitors.  Yes, you knew them, but lost track of them over these years while you were busy cutting costs.  Take a good look at their entire sales and marketing structure.  Are they less competitive because of a reduced staff?  Did they not cut back staffing at all?  Is their service worse or is it now better than yours?  Has their price point changed?

Take a careful look at your market share and see which competitor has walked out of this recent war with the most amounts of victories.  Understand your new situation before you start charting your course.

4.  Interview your clients.  Yes, it has been some time since you have engaged your clients and asked them what they would change about your hotel, its amenities and its service.  Know that customers have moved up and down the star rating line so analyze which ones moved from a 5 star property to your 4 star resort but without changing their deluxe expectations.

Consider changes in customer migration patterns as they moved around the U.S. searching for new jobs, relocating to affordable areas, etc.  Check the gender of your current consumer base. At one of our client properties we pulled a full data feed from customer check ins and discovered an increase in women as business travelers of 12% making them the dominant guest while all marketing plans still catered to men.  It is not time to step back, but to step forward with clarity.

5.  Plan differently.  Most plans are created in sync with the hotel’s fiscal year or calendar year to better understand the year’s budgetary needs.  This year you will need to develop an annual budget, but want short term gains from this long term planning.  It isn’t going to happen unless you change the way you create plans.

We suggest you not write a plan.  Write everything that your team believes will impact sales throughout the year on a long list.  Put these activities into a “backlog” of items.  Now that all items are listed, make sure that costs are associated with each activity along with a quick ROI figure (yes quick ROI).   Have your team tell you what they will take from the backlog list and execute during the next 30 days.  If one person decides they will go on a sales blitz to say New York City in the next 30 days, ask the rest of the team how they are going to help him make that trip as successful as possible.

Perhaps one person will help make appointments, the other will send an email to people in New York they have had contact with and one will set up a breakfast training at a high-end agency.  The key is to generate a tactical plan where the entire team is engaged in the attack.  No war was won without all elements of front line soldiers combined with back end services and support.

Our message is clear:  generate renewed energy to fight the battles to come and do this by motivating your team, changing the way you plan and lead, and understanding your new competitive set, market positioning and demographics.

Victor Bao is a Fellow of Valorem Consulting Group and a Professor of Marketing strategy at Florida International University and a Professor of Market Research at the University of Miami.