This report unpicks the guest experiences in the UK hospitality industry and is based on over 1400 mystery guest visits.

1. The Customer Experience in the
Hospitality Industry
Part 1
The Hospitality Sector Perspective
© Customer Service Benchmarking Ltd
1

2. Forward
“A vital piece of intelligence for all hospitality leaders.
Whether in preparation to welcome the world as hosts of the Olympic Games 2012 or
simply to grow sales and profit in the most competitive economic conditions for a
generation this report based on robust “actual” visit data identifies the challenges and
opportunities ahead.
The report presents compelling evidence for a shift in focus - to engage existing guests
and leave them with a desire to return and tell their friends. Peer to peer
recommendation has always been the most powerful marketing vehicle and in a
social media rich environment the opportunities and risks are even greater.
Such customer centric intelligence; vital for competitive advantage; was not previously
available but Customer Service Benchmarking now provides an accessible tool for all
leaders to assess where they currently are and to identify the scale of their opportunity
gap by measuring and benchmarking performance in areas that matter.
The report raises some important questions and challenges.”
Bob Cotton
“A vital piece of intelligence”
2

3. Introduction
This is the first in a series of three reports which unpick the reality of the customer experience in the hospitality industry, initially
considering the sector perspective, subsequent reports “mine” the wealth of data at our disposal to consider the sub sector and
competitive set performance before providing insight and intelligence gleaned from the performance of the best of the best.
We benchmark Experiences because It is the delivery of experiences; the added value, memories and emotions that matter,
rather than the provision of customer service or goods.
We will demonstrate that many fail to deliver even consistently excellent goods, most simply transact customers leaving competitive
advantage for those who genuinely value guests and provide them with experiences that cause them to leave with a burning desire
to return and bring their friends! What business are you in?
A great burger or pizza is not enough, good customer service and customer satisfaction are not enough and we will demonstrate
why! We will also identify critical metrics and customer “profiles” to help drive growth. Honestly appraising the experience you afford
guests is critical because average is not good enough, the competition for consumers time and money is intense and coming from
all quarters. Insight and Intelligence is key to supporting your goal of delivering memorable experiences which develop advocacy
and competitive advantage and we hope these reports help you shape your goals. These reports are a starting point, as you review
them consider the following questions:
What do your target market expect?
What do your target market want?
Who are your competitors?
What do you do better than your competitors?
What do they do better than you?
How are you going to excite your guests to become advocates and help you grow your business?
Be Better, Go Beyond Service and Satisfied!
Stop transacting and start exciting guests!
3

4. Apple have always understood
and continue to understand that
they are not in the business of
building computers!
What Business Are You In!
4

5. The Hospitality Sector
Performance
• Average cannot be the extent of your aspirations!
• 34% of all experiences diminish future sales!
Contents
• Grasp the competitive advantage opportunity
• Be In the business of delivering experiences
• Who cares wins!
• The training isn’t working!
• Don’t allow brand standards to inhibit your team!
• Guests need to feel enthusiasm, affection and
kindness!
• Think lifetime value!
• Most hospitality guests would not recommend!
• Stuck in the mentality of delivering goods!
• Cardinal Sin - Recruiting personality then training it
out!
Too many in the wrong business!
5

6. Measuring Experiences
Our Questions assess the following
aspects of the guest experience: We use SUBJECTIVE
questions to explore
Willingness to
the guest experience
Welcome Pace
Recommend
Perceived Value Warmth Training NOT the adherence to
Interest Knowledge
brand standards
Confidence
Our questions have been carefully
designed and robustly tested .
Reflections
They aggregate into the three
Personality Skills
categories above.
Measure outputs not inputs!
6

7. Benchmarking Performance
Over 3000 guest centric mystery visits inform our unique benchmark insight
offering competitive advantage for those who care!
From the data we provide performance benchmarks so that clients know where
they are on their journey to delivering experiences that engage & excite guests
generating competitive advantage and increasing guest advocacy
We can benchmark performance against the appropriate industry benchmark averages derived
from our ongoing “uninvited visits”
Hospitality Sector Casual Dining Budget Hotels Community Pubs
Drink Sub Sector Fast Food 5* Hotels High Street
Accommodation Sub Sector Coffee + B&B’s Destination Pubs
Food Sub Sector Fine Dining 3-4* Gastro Pubs
Ancillary Boutique Hotels
Most importantly we can benchmark performance against the best of the best from all available
visit data - with monthly reports identifying performance gaps and actionable recommendations
Eclectic Benchmark - “The best of the best”
Perhaps your business could contribute to The Eclectic!
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8. Hospitality Sector Benchmark
75.42%
Guest experiences have
76
improved but it remains a
mixed bag with visit scores
ranging from 18% - 100%
75.5
Evidence of belt tightening in
inflationary times served up
75 diminished performance in
October & November
75.42% is Average - the
74.5 target is 90%
Productivity improvements
74 can not be at the expense of
Feb 11 Sept 11 Jan 12 guest experiences
Average cannot be the extent of your aspirations!
8

9. Only 13% are gaining
recommendations
Only 13% of businesses scored ≥ 90% the level required for
recommendation - 87% of businesses are not delivering experiences
worthy of recommendation
34% of businesses scored ≤ 60%
40
30
20
10
0
0-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% 91-100%
The graph describes the % of average scores achieved in each percentile and is
based on over 1400 “uninvited visits” across the hospitality sector.
34% of all experiences diminish future sales!
9

10. A different perspective reveals
a substantial Opportunity.....
With the correct focus 30% could readily transform their business and convert existing
guests into their most powerful marketing vehicle - peer to peer recommendations.
This would not only transform their business but the dominant view of the sector.
Enticing ever more potential guests away from their streamed HD film, M&S meal and
wine deal, 50p bottles of lager and very comfy couch.
40
30
20
10
0
0-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% 91-100%
Grasp the competitive advantage opportunity!
10

11. Michael Porter
The basis of above-average
performance within an industry is
sustainable competitive advantage.
There are 2 basic types of
competitive advantage:
Cost Leadership
Differentiation
“The only truly sustainable competitive advantage is to learn faster
and deliver better than your competitors”
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12. Short on Personality and
short of the Target!
Personality is the worst 78
performing category, Target
90%
depressed by a failure to:
76.75
welcome, be interested in
the guest and demonstrate
warmth. 75.5
Reflections is limited by
ambivalence and guests
74.25
unwillingness to
recommend dragged down
by a lack of personality and 73
guest engagement
Personality Skills Reflections
Sector fails to engage and earn recommendations!
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13. “Experiences are as distinct from services as services are
from goods” - Tom Peters
What a year 2011 was! High debt burdens - spiralling fuel & food costs, squeezed profit margins, falling sales
or sales propped up by discount fuelled guests - labour cost controls - fearful teams dominated by part time
transient workers. Result - Too much debt - not enough personality!
Indeed many businesses closed as UK PLC fights for the available leisure spend in the face of ever more
discerning and value conscious guests who have more choice than ever before.
“Shall I go out to my local restaurant or relax in my comfortable sofa watching a streamed HD film washing
down a M&S £10 Meal for 2 and bottle of wine with a few 50p bottles of beer or lager?”
Hospitality businesses should be in the business of delivering experiences not selling goods or services!
The reality for guests is somewhat different:
Some sell Goods - burgers, pizzas, flat whites, cask ales, bottles of wine, steaks or beds
Some sell Services - they transact or process goods to guests - they simply get the job done
The best provide Experiences - delivering goods and service with the enthusiasm, expertise and style that
elevates the delivery of basic guest needs so as to create memorable moments - transforming a process into
an experience.
Too many customers are given goods for a price, most are simply transacted leaving the majority of guests
sufficiently disgruntled to share their thoughts on twitter and facebook thereby accelerating the demise of
operators who will certainly get what they deserve - faster than ever before.
Meanwhile the best continue to deliver and focus on team and guest experiences, growing the gap between
themselves and the rest while warmly, welcoming new friends with huge smiles, an open heart and many kind
words - delivering experiences guests pass on peer to peer.
Be in the business of delivering experiences!
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14. The Ownership factor
Independent hospitality businesses outperform Branded or Chain operations.
While both groups fail to attain the target 90% the 6.28% gap is significant.
Do owners care more than managers? The independent v chain data reveals a
significant challenge for sector chain owners - how to get corporate managers
thinking and behaving like owners.
“Most independents are best off, I
90 think doing what I prided myself on
doing for so many years as a
storekeeper: getting out on the
80 floor and meeting every one of the
76.97 78.17 customers. Let them know how
76.6
73.66 much you appreciate them, and
71.6 71.89 70 ring that cash register yourself.
That little personal touch is so
important for an independent
60 merchant because no matter how
hard Walmart tries to duplicate it -
and we try awfully hard - we can’t
Warmth 50 really do it.”
Personality Average Score Sam Walton,Walmart
Chains Independent
Who cares - Wins!
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15. Its time to review your slice of the reported
£4,242 million spent annually on training - Are
you getting a ROI?
No business needs to be exceptional in every area but it certainly needs to be exceptional
in some and particularly those that matter to their target audience.
The 4 weakest areas are the most important: Welcome, Warmth, Interest and Knowledge
The sector is below target on every measure!
79
78.91
77.92
77.31 77.28 77
75.42
75
74.49 74.43
73.57
73
72.66
71.71
71
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Score
The training isn’t working!
15

16. Take the leap
Start Engaging and exciting According to the National Employment
Survey the sector spends £4,242 million on
your guests before they find
training each year.... yet:
your competitors
According to a recent Square Meal survey
45% of complaints are due to bad service....
and
Stop training process, and
transacting guests, release the 65% of employers report a need to improve
personality and measure what customer service skills according to The
National Employer Skills Survey
matters rather than brand
standards
“Not everything that can be counted counts”
Albert Einstein 16

17. Have you ever recommended a restaurant
on the basis of “its world class table
checks”?
While conducting another unnecessary
table check within the required timeframe,
are your team missing opportunities to
engage guests in a way that would grow
sales for today and tomorrow!
photo credit: Vinoth Chandar
Don’t allow brand standards to inhibit your team!
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18. Most Valuable Driver: Warmth
Warmth @ 30% is the most
4% 7%
4% cited positive driver of
3% recommendation
9% Value @ 31% is a prominent
30%
driver but most frequently
cited for negative reasons
Training is the least influential
factor @ 3%
31% Emotions drive value,
9% connection, willingness to
recommend and advocacy.
4%
Welcome Warmth Interest Confidence Value
Pace Training Knowledge Problems
Guests need to feel enthusiasm, affection and
kindness! 18

19. Introducing Net Promoter
90%+ or you are nowhere
Net Promoter® developed by Satmetrix, Bain & Company, and Fred
Reichheld, is a useful measure of customer loyalty. It polarises your
promoters and detractors and is calculated as:
(The percentage of guests scoring ≥90% on willingness to recommend) -
Disney’s own research has found that advocates - those scoring ≥90% are worth 4 times as much to
the company over their life than other guests.
There is clear evidence that for anyone considering their
satisfaction, loyalty and the willingness to recommend performance
a score in the realms of 7 or 8/10 (which might get you an A* at
school) cuts no mustard with consumers in the real world.
If guests are not rating 9/10+ they are not going to recommend
you!
Think life time value!
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20. Hospitality Industry Net
Promoter Score - 12.4
Unit Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Personality Skills Reflections
1 77.45% 73.02% 69.73% 74.85% 76.22% 76.46% 73.64% 75.46% 73.68% 74.13% 72.63% 75.44% 74.57%
2 80.00% 77.50% 82.50% 87.50% 82.50% 85.00% 90.00% 92.50% 97.50% 86.11% 81.88% 85.83% 95.00%
3 66.28% 68.02% 66.64% 73.10% 75.10% 77.70% 67.62% 70.90% 67.10% 70.48% 69.03% 73.47% 69.00%
4 78.89% 80.91% 83.64% 83.64% 83.64% 85.00% 83.64% 83.64% 82.27% 82.97% 82.12% 84.09% 82.95%
5 90.00% 70.00% 75.00% 75.00% 70.00% 90.00% 67.50% 67.50% 72.50% 75.28% 77.71% 75.83% 70.00%
6 75.95% 72.79% 72.31% 75.67% 78.17% 77.79% 75.77% 78.65% 74.62% 75.45% 73.21% 77.24% 76.63%
7 74.48% 76.57% 73.78% 78.74% 78.13% 79.86% 76.32% 78.71% 76.50% 77.08% 76.06% 78.10% 77.61%
8 69.43% 71.24% 68.94% 77.24% 79.73% 80.48% 74.76% 77.06% 73.76% 74.93% 72.01% 78.32% 75.41%
9 68.52% 70.21% 69.69% 75.46% 75.67% 75.15% 71.08% 75.67% 72.22% 72.71% 71.13% 73.97% 73.94%
10 77.11% 80.20% 78.24% 82.35% 80.98% 82.55% 79.02% 79.80% 81.37% 80.37% 79.95% 80.85% 80.59%
11 70.14% 68.69% 66.97% 75.25% 78.74% 75.86% 69.49% 77.27% 69.29% 72.38% 69.99% 74.70% 73.28%
12 84.07% 85.00% 82.65% 86.18% 78.53% 88.53% 87.94% 79.71% 81.76% 83.66% 84.29% 85.00% 80.74%
13 75.33% 81.30% 83.48% 84.35% 83.04% 83.04% 80.87% 74.35% 86.52% 81.63% 81.92% 82.32% 80.43%
14 68.91% 70.00% 69.09% 74.24% 75.61% 74.09% 72.58% 80.76% 72.42% 73.23% 70.69% 74.09% 76.59%
In the example above only Unit 2 guests would act as advocates while in the case of Units 3 and 11 the
guests would leave sufficiently dissatisfied to act as detractors. Unit 2 guests would advocate and would
likely include the knowledge of the team and the value for money when recommending to colleagues or
friends.
The hospitality sector net promoter score (based on our “uninvited visits”) is 12.4
Definition: In every 100 guests there are only 12 more promoters than detractors. More guests are
ambivalent while 61% of guests would not be willing to recommend.
While this compares favourably with certain sectors of UK PLC such as Utilities @ -35 it is best put in
context by considering Apple 78.35 and Amazon 70.33 as reported by Satmetrix 17/2/2011
Most hospitality guests would not recommend!
20

21. Food & Drink Rating 78.45%
In the most recent 100
80
“uninvited visits” we have
Target
included the question: 90%
Please rate the food and
drink
While the sector is
75
substantially below the 90%
target on both experience and
F&B metrics guests rate the
food and drink more highly.
Better at delivering goods and 70
a long way from delivering
%
experiences. Experience Food & Drink
Stuck in the mentality of delivering goods!
21

22. Sector Headlines
• The hospitality benchmark is 75.42% - 14.58% below the 90% target level.
Average is not competitive advantage.
• 13% of businesses act as sector assassins - creating “hospitality detractors”
• 30% of businesses could transform their business with focus. A shift of less than
10% in current performance levels is all that is required.
• Personality is the weakest performing area for the Hospitality Sector
• Welcome, Warmth, Interest and Knowledge are of most concern
• All areas are well below the 90% target that is required to assure
recommendation
• Warmth is the most cited positive driver of recommendation
• Training scores best - What was the ROI on the £4,242m investment? A well
trained team does not of itself drive guest recommendation.
• The industry has a Net Promoter of 12.4 - another indication of guest
ambivalence, unwillingness to recommend and competitive opportunity
Cardinal Sin
Recruiting personality then training it out!
22

23. Conclusions
Having excellent products or goods available is not enough.
Processing guests through your service system leaves future sales in jeopardy in
the face of better operators and social media.
The sector performance is average - the majority do not deliver experiences that
develop advocacy and growth
The sector is significantly below the 90% benchmark level which promotes growth.
The sector is better at providing food, beverage and accommodation goods.
The sector is better at systems and processes.
Without personality hospitality businesses are simply expensive vending
machines. Personality drives connection and feelings of warmth yet this remains
the weakest area.
“To deliver better and learn faster than your competitors is the only truly
sustainable competitive advantage” M. Porter
Yet the majority are fighting on the battlefield of goods and efficiency.
Measure the things that count not what is easy or convenient!
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24. LET US DEVELOP YOUR COMPETITIVE
ADVANTAGE
WHAT YOU GET
A service dedicated to help provide you with the insight, intelligence and support to grow competitive
advantage. We will arrange independent mystery visitors who will appraise the experience against our
“fixed” benchmark questions as well as your 6 custom questions.
Each visit generates a PDF visit report - distributed to you by e mail within 48 hours of the visit.
Why we are different!
No internal analysis is necessary as we provide you with a performance report after each wave of visits
comprising:
• Internal benchmarking - you against you as you expect of any mystery guest program
• Benchmarking your performance against the sector, sub sector and competitive set benchmarks
• Benchmarking your performance against the best of the best using our Eclectic Benchmark
• Net Promoter Score indicator and benchmarking
• Certification for sites who achieve 3 or 6 consecutive 90% visits
• Draft press releases produced for your circulation - as appropriate
• Best practice INSIGHTS & RECOMMENDATIONS to support improvement
• Social media highlighting
We will also be pleased to attend one team meeting per annum to help focus and motivate the team as
an external and independent voice. Additional sessions can be arranged but will be charged.
No Annual Contracts | No Set Up Fees | No Hidden Costs
David McHattie: 07795813097
david@customerservicebenchmark.com
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25. In our hands the right questions + independent professional
mystery guests produce pragmatic, operator centric intelligence
reports that drive focus & improved customer service and
advocacy.
Flexibility as Standard COSTS
You decide the frequency: Our costs are based on a per visit cost
of £95 plus VAT - this price is based on
For a single site operator insight based on 3 visits may be our minimum requirement of one site
sufficient and all that the budget can stretch to. asking for three visits.
The only other cost will be the amount agreed to
cover guest expenses - this is your choice and
For larger organisations or collections of sites you may wish to
can range from nil in the case of a telephone
arrange weekly, monthly, bi-monthly or quarterly visits to develop enquiry to hundreds of pounds if a 5* hotel
robust benchmarking data by site, by collection or brand. requires guests to stay and sample the
restaurant, bar and breakfast in the morning.
Medium or larger PLC organisations; with one or multiple brands; These are entirely your decision and you can be
as prescriptive as you wish - most restaurant
may decide that one or two visits per site over the course of the
operators simply settle on - a meal for 2 capped
year is appropriate - visiting & reporting on one brand or region at £50 - or similar.
per quarter. Or simply ask that a quarter of all sites are visited and
benchmarked per quarter Your business your choice.
Focussing the team on what matters
Gather sufficient data to identify development opportunities
Acting upon the insights and recommendations
Limited
OFFER
Take 15%
until 30th June 2011
off
Performance Benchmarking + Consultancy for the cost of a mystery
guest!
25

26. Delving into Sub
Par t2 Sector & Competitive
Set Comparisons
coming soon....
• Food, Drink or Accommodation? Which sub sector is leading the way?
• The value of a receptionist - is it sufficient?
• The issues facing the pub industry
• Which accommodation competitive set is setting the bar for the rest?
• Unpicking the food led competitive sets
• Are coffee shops doing a better job than fine dining?
• Fast Food or Casual Dining? Budget or 5*?
• Guest migration patterns
• Going out of business in blissful ignorance
• Avoid Developing Negative Emotions!
A mixed bag!
26

27. What can we
P ar t3 learn from the
best of the best?
coming soon....
• Why some businesses prosper and others fail
• The genius of Steve Jobs
• Which businesses are setting the pace - the
Eclectic Benchmark Contributors
• Case 1: Knowledge = confidence and growth
• Case 2: The power of personality and pace
• Case 3: Engaging guests drives promotion
• Case 4: Budget Hotels - Better than you
imagined?
Differentiated, better and prospering!
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