Are you looking for a profitable New Year’s resolution? Why not resolve to create stronger customer relationships and more Brand Advocates for your luxury hotel.

The linkages between relationships on one end and profits on the other are well documented.

  • Research from the prestigious consulting firm Bain & Company shows that depending on the industry, when firms retain just 5% more of their best customers, corporate profits can be boosted 25 to 85%
  • There are numerous studies reporting that companies lose between 10% and 20% of their customers every year. At the high end, this equates to a 100% customer every five years.
  • In the seminal book on the subject, “The Loyalty Effect”, Frederick F. Reichheld informs us that companies with the strongest customer relationships grow at close to twice the industry average and do so more cost effectively.
  • In a 2004 McKinsey Report it’s stated that the average business spends $100 to acquire a new customer and only $10 to keep one.

Creating stronger customer relationships and building Brand Advocates offers a bonus – positive Word-of-Mouth. Studies abound showing recommendations from friends and relatives is the most effective advertising a company can have.

Richheld says is best: Customers who show up on the strength of a personal recommendation tend to be of a higher quality – that is, to be more profitable and stay with a business longer – than customers who respond to conquest advertising, sales pitches or price promotions.

So if you would like your luxury hotel to be more profitable in 2008 – resolve to strengthen customer relationships and build more Brand Advocates.

AUTHOR: harshadmethrath
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