LRI's Research Methodology
LRI is losing out on customers and complaints against their service are increasing. They need to blueprint their service, figure out the weak points and decrease their delivery time while enhancing their service wherever they are slacking. Due to the decrease in their corporate market, they have a limited budget; therefore, they would need to prioritize issues and tackle them one by one. To highlight the most important issues, which are causing a decline in their market share, they will need feedback from their existing customers, lost customers (who once used LRI but never used it again), and the potential customers (who use competing hotels.) After receiving feedback, it will need to strategize according to their resources and use them to their advantage to increase their market share.
Being in the service sector, the quality of a hotel is measured by the execution of its service. To deal with the cut in staff and the increase in delivery time of services, LRI needs to use the limited resources and increase its productivity, the resource in this case is the staff. This would decrease the complaints and increase the efficiency of service which will result in customer loyalty.
To see what the customers look for in a hotel that they choose, a survey needs to be conducted through questionnaires, and focus groups. The questionnaire will give one dimensioned opinions, which can be further questioned and debated upon in the focus groups. Focus groups can also be solution oriented where the customers input is used to come with a solution within the limited resources which is acceptable to all parties involved.
For the survey, a cross sectional representation of the sample size, which includes all sorts of customers of hotels, should be used for the input. The relevant questionnaires with the number of people who need to be questioned are mentioned below, in their respected sections.
For the focus groups, again, representatives for all types of customers should be present. There should also be some representation on behalf of the hotel to bring the practical knowledge to the group. However, the participants should be shortlisted prior to the session, in which LRI should choose the people who are broad minded, and solution oriented. With the help of a moderator and an incentive for the participants they can come up with creative, yet realistic solutions. LRI can then take the input from this adjust it to the realities and implement in a way which is acceptable to all parties.
Below, we will be dealing with two different situations and explaining how to research for both problems respectively.
Problem 1: One to go to people who you know have used competing chains for leisure and holiday stays, but have not so far used LRI
For the customers who use competitor hotels:
1) Which hotel do you use?
a. Competitor A
b. Competitor B
c. Competitor C
e. If others, specify
2) What is your primary reason for using hotels?
ii. With family
b. For business
c. If other, specify
3) Why do you use it?
d. Room availability
e. Brand Image
f. Packages Offered
g. If others, specify
4) Are you aware of LRI?
5) If yes, then what was the means of awareness?
d. Print Ad
e. Word of Mouth
f. If others, specify
6) Have you used it?
7) If not, then why?
d. Room availability
e. Brand Image
f. If others, specify
8) If the above mentioned issue was solved, would you use it?
9) If no, then why not?
The objective of this part of the research is to find out why these potential customers use competing hotel chains and not LRI. The reasons should be looked at from all possible angles and analyzed in depth. The research should be divided into two parts; to find out;
a) if they prefer the competitors because their service is better,
b) or, if they dislike LRI
And the reasons for it.
To begin the research, feedback from the customers of other hotels would be required and it would need to be built upon by analyzing and concluding and giving recommendations to LRI. The questionnaires will tell us why they use the other hotels and not LRI. If, for example, majority of the potential customers have stated their preference for other hotels to be economical prices, a research comparing the prices of LRI with its competitors would need to be conducted and spot the areas in which LRI lacks. A possibility for this problem to arise might be because LRI fails to offer economical packages to its low end customers. Or giving value for money for their product might lack, which might be due to the fact that LRI fails to give satisfactory service to justify its prices.
If, for example, it has been deduced that LRI is less appealing to the hotel users as it doesn't offer additional incentives in the form of attractive packages to potential customers, the reason for this would need to be looked into. LRI would then need to revise its policy regarding packages that it offers keeping in mind the needs of the customer.
From the questionnaire, we will get an external perspective to what the potential customers prefer and the reasons why they think LRI lacks in that aspect. LRI will then have the starting point to begin making the required changes by incorporating those demands. LRI could then promote itself to their target market, highlighting the revised services offered by LRI.
While the concept behind Courtyard by Marriott was being developed, a lot of surveys were conducted to question the customers about what they were willing to trade off in the services offered by Marriott for lower prices. The thorough study was conducted by consulting the target market and the result was the perfect mix in the form of Courtyard by Marriott which incorporated the potential demand and supply elements.
The Marriott example quoted above gives us an example as to how customer's feedback can be incorporated in effective strategizing. By taking feedback through the questionnaires and focus groups, LRI can do the same and regain their market share and cater better to their target market.
This questionnaire would need to be conducted among at least 2000 customers of other hotels. Surveyors can be placed near competing hotels and this survey could be taken manually, or online, through the websites which advertise for competitors.
Problem 2: One to go to past and current customers who have/are using the hotel chain for leisure and holidays
Customer Retention is one of the main problems for LRI and this section of the answer deals with that. Customers are decreasing for LRI due to reasons which we are assuming are unknown to LRI and it wants to make appropriate changes to retain its customers and regain the customers it has lost.
To start the study, LRI would need to use its customer database and gather data of 1000 customers which have used its services once or twice and have failed to return. LRI can then email the questionnaire to such customers and get feedback. It can then start investigating the source of dissatisfaction identified by the customers. Once brought out in the open, corrective measures can be taken and can be promoted to the customers through the marketing campaign that LRI will launch as a part of its strategy to increase its market share.
LRI will then collect data of 1000 of its loyal customers and get their input and suggestions through emailing them the questionnaire. This will highlight the reasons why its customers are attracted to LRI and it can perhaps enhance these aspects and make them more prominent in their marketing campaign so other people become aware of it.
Frequent User Hour
To increase the loyalty of these customers, LRI can introduce many deals, like frequent flier miles are given to customers of airlines who frequently use their airline, LRI can give Frequent User Hours in which for every 12 hours a person checks into a hotel, and they get a free additional hour to the time they check in for. This scheme can be cumulative, so they can save up their additional hours, and after some time can check in for a specified number of hours for free.
LRI could also give 10-20% discount to 100 of its customers who have used LRI the most number of times. This will create goodwill and give them an incentive to come back to LRI. This will also give free good word of mouth promotion.
The information given about LRI implies that it used to be a hotel which was very popular amongst its target market and since the height of its career, it is now coming downhill. After conducting the study and following through on the recommendations provided the main objective of LRI would be to keep a strict focus on the target market, and to evoke the same satisfaction in its customers now, as it had been doing so in the past.
With next to no information about LRI and to do a thorough study, we will assume the customer base to be upper middle class and upper class. For such a target market, class, status, and showing of wealth is extremely important with comfort as their highest priority. Therefore, the perception of the brand they endorse is a matter of pride and honor as well. Every product that this class uses has to be consistent with the image they have as a family, or the business that they are representing, as it is assumed to be a matter of their reputation as well. Therefore, LRI through its revision of its services and the extensive marketing campaign that it will be running, LRI will need to upgrade its image in the market.
For the change in the image LRI will have to take radical steps in order to insure that the target market sees the improvement in services brought about LRI. It will need to highlight them in a way which is subtle, yet gives off the message clearly.
1) When was the last time you used LRI?
2) How often do you use it?
a. Once a year
b. Once in 6 months
c. Once in 3 months
d. Once a month
e. If other, specify
3) Which LRI have you used?
4) Would you use LRI in the future?
5) If no, then why not?
d. If others, specify
6) Out of 5, how would you rate the service of LRI, 5 being the highest?
7) If you had to give a suggestion to LRI, which of the following would it be about?
a. Staff service
b. Room décor
e. If others, specify.
LRI needs to conduct a thorough research keeping in mind the suggestions given above. If they are successful in getting the relevant input from the customers and can effectively utilize the output of the focus group and implement it and then promote the changes efficiently to the target market, they will be highly successful in retaining their current customers, attracting their lost customers and divert their potential customers away from the competitors. With the increase in the competitiveness of its service which LRI will be looking into after the survey, this is highly possible.
Wind, J & Green, P., 1989. Courtyard by Marriott: Designing a Hotel Facility with Consumer-Based Marketing Models. Interfaces, Vol. 19, No. 1, Franz Edelman Award Papers (Jan. - Feb., 1989), pp. 25-47.