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Standard Operating Procedures: Hotels & Resorts



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


Standard Operating Procedure 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.


Marketing Strategies – Focus on the Bad


“Way back in 2008”, the Vice President of our analytics group spoke at a corporate meeting about marketing strategies for 2014.  He said “We were all continuously saying”, he continues, “it’s all good”.  “Today, we no longer use the 2008 phrase, but we continuously compliment every action taken by anyone inside our companies no matter how insignificant.  We see emails back and forth about how amazing everyone is and how hard we all work, then we sit in long budget meetings to talk about how we are not making our numbers”.  He concluded.


How does that happen and who is to blame if anyone?


Is it marketing’s fault?  Did sales mess it up for us?  Was it the economy, more inventory on the market, price cutting by our competitors, or can we simply blame it on Obama’s new Affordable Care Act?  The answer is nobody inside our company really knows.   The reason we don’t know is because we spend little time analyzing failure and all of our time commending each other for a job well done.  While we do not suggest stopping the flow of emails regarding a job well done, we also suggest investigation into the continuous crisis discounting and the number of incidences of these types of activities.


We created an Incidence Index to help guide our marketing and sales efforts.  The index is a chart that details the number of times in one year that we have crisis discounting and track increases in these activities.  We have noted a considerable increase in the use of crisis discounting or pricing over the last three-year period to the point where crisis discounting has become part of daily life at hotels and resorts.


The Valorem team tries to understand why bad things happen and how often they happen.  Is it normal to have crisis discounts across Online Travel Agents 24-48 hours prior?  If so, should the meeting atmosphere about not making our numbers really be a nice meeting about what has become standard operating procedure?  If sales are down, then automatically open the flood gates by reducing prices.  Cant we put this into our Pallisades program and let it run without holding continuous meetings to scold sales for their inability to make good on their plans?


What we have noticed over the last five years is that while marketing creates those beautiful and amazing marketing plans, which we all praise, with amazing strategies to grow and increase revenue embedded, the effectiveness of the plan is low.


In our Valorem Group offices we have two camps of thought, one that believes that it is the process of writing a marketing plan and the other that believes that it is the use of a plan in a flexible age.  The first camp simply states that little time has been put into thinking about the best plan while the latter is concerned with the inflexibility of the plan.


While we wont bore you with a discussion about these two, we do want to go back to measuring failure as a path to success.  We have measured the incidences of price decreases within 24-48 hours across a three-year period and have noted considerable increases in most of the companies analyzed [see, we used the word increases which is a positive word, to refer to the rate of failure, which we think you should send us a kudos for].


So to get down to the grain of it all, we take existing marketing plans with elaborate calendars and match it to the incidences of price decreases in a crisis mode.  We analyze the cost of the marketing action, whether advertising, email campaigns, etc., and then identify those marketing practices which have had no impact on reducing the number of crisis events.  We identify the weakness in the marketing plan and come up with solutions that will work.  That doesn’t mean throwing solutions that have always been thrown at a problem in the past, it means giving some long and serious thought to activities and results based on your company’s Incidence Index.  If you set as a goal to reduce the incidence of crisis discounting, you would be better off than setting the goal to increase revenue.


We then help marketing gurus get their groove back on by opening the doors to a broader look at the market and competitive set.  The competitive strategy of price cutting is standard and we should plan on it, not use it as the excuse after plans fail.  We need to prevent and establish countermeasures without competing on a lower price point.   We stop and consider increased room inventory counts in our areas, competitive new market entry strategies, new airline lift in or away from your area and other market components that will always affect your plan, but are considered with less frequency.


We suggest you start your own incidence index at your property and gauge the effectiveness of your planning.  If you want some ideas, reach out to us at any time.  If you would like to see more tips about marketing, please click here