Provision of Customer Service within Intercontinental Hotels Group - Case Study Example

 Provision of Customer Service within Intercontinental Hotels Group Executive Summary The increase of competition in all industries is a key characteristic of modern market. Firms in all industrial sectors try to increase their competitiveness towards their rivals. This phenomenon also involves in organizations, which are well established in the international marketplace. The reason is that, under the strong financial turbulences worldwide, the success of business projects cannot be guaranteed, even if they are initiated by firms, which have an important position in their industry. Intercontinental Hotels is a key competitor in the hospitality industry globally. The firm’s competitive advantage is considered to be the quality of its customer services, which have reached a level of excellence. Moreover, the firm targets a particular market: business executives and travelers who focus on the quality of services rather than on the cost involved (IHG 2011). The case of Intercontinental Hotels can be considered as an example of the critical role of the quality of customer services in the success of organizations. 1. Introduction The management of important organizational sectors has to be carefully planned; any potential failure in these sectors could lead to severe damages, either in the short or the long term. The risk could be higher in case of important organizational sectors, like the customer services sector. In the literature, particular emphasis has been given on the value of this sector for the development of organizational performance. More specifically, it is noted that one of the most effective ways for firms to achieve a long-term growth is through ‘leading customer services excellence’. In accordance with Hoffman et al. (2008) customer services excellence can be achieved in modern organizations by focusing on specific sectors, such as: ‘competence, credibility, security, communication, responsiveness, accessibility and understanding’ (Hoffman et al. 2008, p.418). On the other hand, McNeill (1993) notes that customer services excellence means that ‘the organization is able to identify and fulfill the customer’s unique expectations’ (McNeill 1993, p.87). It is explained that the above target offers to the organization a competitive advantage towards its rivals who are able to offer to their customer only a series of standardized services. In the study of Christopher (2005) another approach is used for explaining the service excellence is used; in accordance with the above researcher the achievement of service excellence is depended on the ability of the organization involved to create ‘a market-driven logistics strategy’ (Christopher 2005, p.65). Trying to explain the context of customer service excellence, Gallan (2008) supported that the specific term is used for referring to ‘service that meets or exceeds provider and customer expectations’ (Gallan 2008, p.30). It is made clear that customer services excellence can significantly help the development of organizational performance; however, the potential requirements of the specific initiative would be made clear ensuring that the risks for the organization involved are minimized. The benefits of customer service excellence for the organization can be various; a series of such benefits is presented in Figure 1 (Appendix). Moreover, each organization is expected to use its own methods for improving its customer services sector and for achieving ‘customer service excellence’ as the term has been analyzed above; the above fact is made clear in Figure 2 (Appendix) where an indicative plan of customer services excellence is presented. The contribution of customer services on the firm’s expansion is analyzed in this paper; the potential effects of the worsening of customer services across the organization are also presented, as estimated. It is proved that currently, the firm’s customer services sector can be characterized as quite successful; however, due to the critical role of this sector in the business performance measures should be taken ensuring that the risks for failures in this part of the organization are eliminated. 2. Customer service excellence for Intercontinental Hotels worldwide Intercontinental Hotels is a well-known business in the global hospitality industry. The long-term presence of the organization in the particular industry has been mostly achieved due to the quality of customer services. The customer services sector is regarded as of key criterion of success for the firms operating in this industry. In accordance with Hoffmann et al. (2008) customers are not interested in developing a relationship with a specific organization unless they expect to gain specific benefits (Hoffmann et al. 2008, p.415). On the other hand, in modern organizations customer service excellence is an effective strategy for developing existing customer base. However, when trying to develop customer service excellence, managers need to identify the methods that would most help towards the achievement of this target. For example, in Dr Phillip’s Hospital customer service excellence has been achieved by combining a series of communication methods, such as ‘phoning patients for following –up feedbacks, skylight technology in each patient room, randomly surveying patients after the discharge and so on’ (Aiello 2008, p.66). In order to understand the value of customer service excellence for Intercontinental Hotels worldwide, it would be necessary to refer to the common benefits of the particular strategy, as identified in existing literature. Shaw et al. (2005) note that customer experience is an important factor for the growth of organizations of all types; references is made particularly to the organizations of both the private and the public sector and it is explained that organizations in both these categories are strongly depended on customer experience; therefore, they should pay attention to the level of their customer services sector since failures in this sector could have severe consequences for the organization involved. On the other hand, Ford et al. (2001) note that the quality of customer services is of key importance for all organizations and that failures in this organizational sector should be immediately addressed, otherwise they could severely harm the organization. Moreover, Barnes (2006) explains that customer experience, as leading to customer excellence, is not necessarily complex but it can be rather based on simple customer requirements (Barnes 2006, p.87). Meeting these requirements helps an organization to achieve customer service excellence. It is also possible that customer experience is based on ‘what customer expects’ (Barnes 2006, p.87), meaning the level of service that the customer has been used to enjoy from a particular organization. The last case is quite important for Intercontinental Hotels where customers expect to receive services of high quality, a criterion on which their decision to choose the hotels of the Group is based. The level at which Intercontinental Hotels have achieved this target can be evaluated by referring to the organization’s current customer services practices as interpreted using the literature presented above. In accordance with the above customer services excellence is a significant element of organizational success, especially for firms operating in the services industry, such as the Intercontinental Hotels. Currently, the firm has achieved this level of quality of its customer service, a fact that has highly benefits its position in the international market. Potential failures in the firm’s customer services sector would have severe consequences on its performance, in the context described below. For this reason, the firm should try to secure its customer services excellence; the recommendations included in section 5 of this paper could help the firm to secure its customer service excellence. 3. Importance of the customer service experience and impact of poor delivery of service on Intercontinental Hotels Customer service is a vital sector for Intercontinental Hotels. The organization has developed a series of schemes for ensuring that the needs of its customers are addressed immediately. For example: the potential for making a reservation/ cancellation online or the ability to provide a feedback on a recent stay (IHG 2011). Moreover, the organization provides its regular customers with a series of benefits through the membership scheme (IHG 2011). On the other hand, through the organization’s website its customers can be informed on the hotels available within a particular area and the parking abilities at key areas, for example at nearest airport or a city’s central area (IHG 2011). The above services are just part of the organization’s operational scheme. The firm offers to its customers in-hotel services of high quality, including room services and arrangement of meetings (IHG 2011). The emphasis given by the firm’s manager on the quality of customer services reveals the importance of the specific sector for the organizational performance. The importance of the customer service experience and the potential impact of poor service in Intercontinental Hotels could be identified through the literature published on this subject, where the effects of customer service excellence and of poor customer service have been explored. Voortman (2004) notes that firms that offer excellent customer services have secured their customer base, in terms that the relationship between these organizations and their customers is a long-term one. The specific fact significantly helps the firm to secure its position in its industry even during periods of strong financial turbulences in the context of the national or the international market. The above view of Voortman (2004) is in accordance with that of Goodman (2009), who supported that poor customer services can negatively affect ‘the firm’s efforts to retain and expand its customer base’ (Goodman 2009, p.2). On the other hand, Cook (2011) notes that poor customer service, even when the customers make no complaint, can negatively affect the organizational performance, since customers are not likely to use the services of the organization involved in the future. Moreover, when failures are developed in a firm’s customer services sector, then just one chance is given for the recovery of the particular sector (Cook 2011), meaning that customers would not give a second chance to a firm to improve its services. Towards the same direction, Barnes (2006) explained that it is rather easy for customer service failures to appear especially in organization where no attention is paid to the needs of customers and when ‘these needs are taken for granted’ (Barnes 2006, p.87). From another point of view, Ford et al. (2011) claim that securing a great customer experience is a challenging task since in many cases customers are not satisfied not just because of a failure in the firm’s services but because of their personal thoughts and attitudes (Ford 2011, p.441). In this context, a failure in customer services delivery should be considered as unavoidable even in organizations that have developed their customer service at a level of excellence, like the firm under examination. Indeed, Intercontinental Hotels is a firm that has highly invested on the quality of its customer service. Currently, the firm’s customer service is excellent; however, since there is always the chance for failures and in order to avoid its effects, as described above, the firm should improve certain points of its customer service, as suggested below. 4. Conclusion The potentials of firms to improve their performance can be differentiated among organizations, even within the same industry. Intercontinental Hotels is a firm which is highly based on the quality of its services; in fact, it is the firm’s quality of services that has led to its positioning as a leader in the global hospitality industry. Currently, the firm’s customer services are of exceptional quality but there are, still, certain points that would be improved. These points, even of minor importance, could help the firm to significantly improve its communication with its customers, a fact that could also benefit its customer services. Therefore, the firm’s key priority is not to achieve customer services excellence but, rather, to secure its position as a firm offering excellent customer services. 5. Recommendations for how Intercontinental Hotels might improve customer services. In order to improve their position in their industry especially through their customer services, firms can choose among two different plans: they can either implement ‘a full scale strategic customer service or they can simply improve certain aspects of their service’ (Goodman 2009, p.19). On the other hand, Voortman (2004) notes that poor customer services can be related to a series of factors, especially to the continuous failures in regard to a firm’s logistics or to the lack of adequate analysis of the firm’s needs and resources (Voortman 2004, p.30). Currently, the level of quality of customer services in Intercontinental Hotels can be characterized as high, reaching, in fact a level of excellence, as explained above. In other words, there would be no need for changes in the firm’s customer services strategy. However, there are certain aspects that could be improved, securing the firm’s customer services excellence. For instance, the communication between the organization and its customers could be further improved by adding an additional feature in the organization’s website: online chat could offer to customers the possibility to contact in cases of emergent events and notify for a last –minute reservation or cancellation. Also, customers would be informed on the organization’s offers or availability of rooms during a particular period. In fact, the review of the firm’s website proves that the organization has avoided engaging advanced communication features, such as chat or social networking, for communicating with its customers. However, such practices are common in most organizations today, especially those that operate in the context of the international market. These features could help to improve the firm’s customer services in all their aspects, including reservations, cancellations and complaints. Most important, these features could help the firm to outreach its rivals as a firm that has reached the ‘customer services excellence’, as explained earlier. References Aiello, T. (2008) Top management's perceptions of service excellence and hospitality. Ann Arbor: ProQuest. Barnes, J. (2006) Build your customer strategy: a guide to creating profitable customer relationships. Hoboken: John Wiley and Sons. Christopher, M. (2005) Logistics and supply chain management: creating value-added networks. Essex: Pearson Education. Cook, S. (2011) Customer Care Excellence: How to Create an Effective Customer Focus. London: Kogan Page Publishers. Ford, R., Sturman, M., Heaton, C. (2011) Managing Quality Service in Hospitality: How Organizations Achieve Excellence in the Guest Experience. Belmont: Cengage Learning. Gallan, A. (2008) Effects of interorganizational coordination and customer participation on service excellence: Evidence from the healthcare sector. Ann Arbor: ProQuest Goodman, J. (2009) Strategic customer service: managing the customer experience to increase positive word of mouth, build loyalty, and maximize profits. New York: AMACOM Division of American Management Association Hoffmann, E., Farrell, D., Lilford, N., Ellis, M., Cant, M. (2008) Operations & Management Principles for Contact Centres. Cape Town: Juta and Company Ltd Intercontinental Hotels Group (2011) Corporate website. Retrieved in November 14, 2011 from http://www.ihgplc.com/ MacNeill, D. (1993). Customer Service Excellence. Dubuque: McGraw-Hill Professional Shaw, C., Ivens, J. (2005) Building great customer experiences. Hampshire: Palgrave Macmillan. Voortman, C. (2004) Global Logistics Management. Cape Town: Juta and Company Ltd Appendix Figure 1 – Benefits from cross-cultural Service Excellence training (Source: http://tjitra.com/services/culture/cross-cultural-service-excellence/) Figure 2 – Customer services excellence in practice – RTS Customer Services Excellence Model, (Source: http://www.flextronics.com/rts/vision/pages/brandstewards.aspx) Read More