In a sector characterised by fierce competition, the value of customer loyalty cannot be over emphasised. Establishing long-term relationships with customers through outstanding customer service and consistently positive engagements is key to nurturing loyalty, and loyal customers in travel, hospitality, and tourism typically spend 67% more than new customers. Retaining existing customers is more cost-effective than investing in marketing and advertising efforts to attract new ones as well. In fact, research indicates that acquiring a new customer can be five to seven times more expensive than retaining an existing one. And of course, long-standing loyal customers who are genuinely invested in your business also act as brand advocates, providing invaluable word-of-mouth marketing at no additional cost.
Market research reveals that 78% of people enthusiastically share their favourite recent experiences with their friends, acquaintances and even strangers online at least once every week. It’s an important statistic because around 90% of consumers are inclined to trust brands that are recommended to them, even if the recommendation comes from a stranger. The opposite is unfortunately true as well. A single negative customer service interaction can tarnish a brand’s reputation in the eyes of a consumer.
The keyword in all of these statistics and studies is customer service, which is delivered by employees. It is the foundation on which customer loyalty is built and a key differentiator in an industry where choices are abundant and switching costs are low.
Balancing challenges with rewards
The South African hospitality sector is currently facing several challenges. Firstly, substantial increases in the national minimum wage has led to a reduction in labour or a push towards further automation to maintain the same budget and to avoid increasing costs for customers. This shift can strain the quality of service as a fewer number of employees are expected to manage the same workload or machines are tasked to perform functions ideally still requiring a human touch. Secondly, cost pressures can result in cutting corners, which often compromise on service delivery, reducing the customer experience. This is compounded by high inflation, which has led to reduced consumer spending, directly affecting the industry’s revenue (and another reason why hospitality businesses are careful to ideally retain costs low to avoid raising prices).
The volatility of labour, including industrial action, low productivity, reliability as well as union activities, can also disrupt the consistent delivery of services, harming a business’s reputation. Loadshedding imposes additional costs due to the need for generators and diesel, or results in downtime, affecting service continuity. All these factors collectively impose a significant burden on business operations and customer service, potentially leading to a decline in customer satisfaction and loyalty.
The right people, in the right roles
Under such challenging operating conditions that are in many ways beyond a business’s control, having the right people in the right roles, on a flexible basis, is essential to continuing to deliver exceptional customer service. Strategically designed flexible staffing solutions for both front and back-of-house can play a crucial role in maintaining and elevating customer service quality. By partnering with staffing experts such as Zest Hospitality, which focuses on recruiting, developing, and managing exceptional individuals, hospitality businesses can ensure that their customer service remains top-notch, despite these challenges. Outsourcing staffing requirements to specialists allows for the flexibility to adjust staff numbers in response to occupancy fluctuations while sustaining an outstanding level of service. This strategic move helps hospitality businesses differentiate themselves from competitors through service excellence, fostering a resilient brand that can withstand operational pressures and maintain customer satisfaction.
As more hospitality establishments recognise the benefits of such partnerships, they find that outsourcing to hospitality experts not only mitigates the risks associated with staffing challenges but also enhances their overall customer experience. This approach enables them to focus on their core competencies, ensuring that every guest interaction is an opportunity to reinforce their brand’s promise of exceptional service delivery and guest experiences.
To find out more, speak to our Zest Hospitality team, today.
