Building Profitable Customer Relationships in Hospitality | Nguyên Lý Marketing | Đại học Tôn Đức Thắng

● Building profitable customer relationships:
Definition: In hospitality marketing, building profitable customer relationships means the company
has to create a strategy not only to build a strong bond with a client but also to maintain their
satisfaction, loyalty and bring financial benefits to the business. This goal requires the business to
understand their customer’s desires and needs deeply to deliver superior value and ensure their
satisfaction to strengthen loyalty and activism. According to Philip Koter in “Marketing for
Hospitality and Tourism”, building profitable customer relationships can be understood by dividing
customers based on their profitability and frequency of their interactions. There are 2 type of
customers: high profitability and low profitability -
High profitability: we can understand these customers maintain their interactions frequently
with the business by using the business’s services or products to bring back significant
revenue. They are considered as the most valuable resource to a business because they are
loyal, often willing to spend more and rarely need marketing effort to retain.
For example: In Hilton Saigon hotel, they offer their high frequency customers with loyalty
programs, personalized services like room preferences, free daily breakfast or food and beverage
credit, WiFi, free back of room services or snacks, etc to encourage their continued visits. -
Low profitability: with this type of customers, they use the services infrequently or spend
very little on the services or products. While they still contribute to the business, the return
on investment for marketing to them is much lower. The aim is to avoid overspending on
maintaining these clients but still offering them a positive experience.
For example: A tourist family that stays at a resort for one weekend a year during the off-season.
They might book the cheapest or basic room type and rarely use the hotel's restaurant by bringing
their own food, only occasionally buying a beverage from the bar. While the resort appreciates their
visits, they would not support significant resources to a personalized loyalty program for them, instead
focusing on broad marketing to boost them to visit again but doesn’t require a high level of individual attention.
That’s why the business should focus on high profitability customers, as expanding their preservation
even slightly can substantially raise revenue through personalized engagement to drive sustained
profitability. For example, escalating duplicate clients by 5% can increase profits by 25% to 125%. To
earn this profit, the hospitality businesses need to invest in personalized marketing, excellent service
and tailored offering to deepen relationships and maximize lifetime customer value.
● Guidelines for customer relationship:
Definition: For easy to understand, this is the organized rules and methods the business will apply to
their systems to manage their communications with guests and to build lasting relationships with
them. The main purpose is to upgrade customer satisfaction, encourage loyalty, and raise revenue.
These guidelines play the role as the working foundation of a hotel, restaurant, or tourism company’s
customer relationship management plan. They are known as a bridge between hospitality and tourism
marketing, which focus on creating unforgettable experiences for customers and recognizing the
long-term value each individual brings to the business. According to Philip Kotler, the key value of
building and retaining permanent, commercial connections with clients through trust and value
creation. Here is the goal guidelines for customer relationship management in hospitality marketing include:
− Customer Orientation: point on fully understanding and meeting the needs and preferences of customers.
− Segmentation and Targeting: Divide customers into groups based on profitability and
behavior, frequency, then design strategies to match to each group.
− Personalization: Adjust services and interactions to bring unique and memorable guest experiences.
− Value Creation: Consistently deliver worthy benefits to build customer satisfaction and loyalty.
− Communication and Engagement: Maintain frequent contact and feedback channels to strengthen relationships.
− Service Quality: Keeping upgrades excellent service standards to earn customer’s trust and positive impressions.
− Relationship Monitoring: Use customer information to track their satisfaction scale to predict
needs, and adjust services effectively.
− Loyalty Programs: Reward repeat customers with more benefits that encourage them to return.
− Complaint Resolution: Make sure to solve issues quickly to turn negative feedback into positive outcomes.
− Employee Involvement: Guarantee all staff joins in relationship management, since their
actions will affect directly to the customer’s experience.
For example: instead of investing in marketing programs to chase a wide range of unpromising
clients, the business should focus on the quality of the small number of potential customers. They
should pay attention and effort not only to create deeper but also more meaningful associations with
these customer types by attracting on a personal level. Companies can also associate through social
platforms networks, building two-way discussions instead of one-way messages. In a word, customers
should be inspired to take an active part in shaping products, services and brand messages, the
business needs to make them feel respect and more linked to the companies.
● Lifetime Value of the Customer:
Definition: this considerate as the key standard in marketing, especially in connection-based
departments like hospitality. It means the total revenue or profit a business looks forward to earning
from a single client throughout their whole bond with the business. Unlike other definitions which
only focus on 1 affair, customer lifetime value helps businesses understand which customers are most
potential throughout time, allowing pointed advertising efforts, customized services, and devotion
programs to gain customer maintenance and take full advantage of profits.
For example: in marketing for hospitality and tourism by philip kotler, he shows that a hotel that
raises its repeat clients from 35% to 40% could see profits grow by at least 25% . This demonstration
highlights that the cost of maintaining customer loyalty is much lower than attracting a new one, and
reliable customers devote more value over time. It shows the crucial value of building and enhancing
customer trustworthiness, the customer’s loyalty will bring back the number of repeat customers who
often pay a reasonable price and even promote the businesses' services, products to new customers,
which help developing the company's profitability and saving an amount of marketing efforts.
https://www.linkedin.com/advice/1/how-do-you-measure-customer-lifetime-value-j7jqf
https://docs.google.com/presentation/d/1iSZbi-Frykl4-5-Y-R2rHDJdraPsVxeR/edit?slide=id.p26#slid e=id.p26
Lifetime Value of the Customer