A business that makes nothing but money is a poor kind of business. -Henry Ford
I happen to be a big fan of standardized processes and consistency as a way of controlling costs and delivering consistent products and services. McDonalds and KFC are prime examples. But when policies seem to be designed by accountants to maximize revenue and reduce cost at the expense of building long-term customer loyalty (and repeat business), then I can get pretty irate.
So last week I was in Pune, India, a delightful technology center southeast of Mumbai. The residents like to think of it as the “Oxford of India” since it is India’s center of education and high technology.
After many great Indian meals during the week I decided to have a semi-western meal and wandered into the brand new Hyatt Regency Hotel just across from one of the technology parks where I had been working all week. I was looking forward to some quiet music, a friendly barman, a dry martini and a buffet I could graze on. I was also looking forward to catching up on my emails through the hotel’s wifi system.
I was not a freeloader coming in to sponge off the organization, and although not a registered guest of the hotel, I was going to have a drink and dinner, which should qualify me as a profit-center and not a cost-center.
I opened my iPad2, quickly found a strong hotel wifi signal and tried to check my emails, only to be told by a pop-up window that I either had to be a hotel guest (name and room number required) or I could “easily” purchase a 1-hour or 24-hour access using my credit card.
Knowing my email work would only take a few minutes I called over the bar manager, after ordering the equivalent of a £10 martini, and asked politely that since I would be having a drink and dinner here in the hotel, could I have quick complementary access to the wifi to check my emails. He smiled and went off to find a senior manager.
The bar manager came back quickly with another smile (well-trained) and a reply that since I was not a hotel guest I could “easily” purchase wifi access for 1-hour or 24-hours ………. (you get the picture). I tried a second time with a different manager. Again, I could easily purchase . . .
The Hyatt rules and policies of profit maximization just created a significant negative experience for me with the Hyatt brand. My expectations of a brand that tries hard to cater to the every need of the business traveler were definitely not fulfilled.
And that night I was definitely a profit center since my drinks and buffet dinner, totaled close to £60 ($100). Definitely not an inexpensive hotel! They made a very good profit off of me that evening, but they also angered me with their rigid and short-sighted policies. Not only will I no longer choose Hyatt if given a choice, but this blog will spread the message far and wide (as most dissatisfied customers do among their circle of friends).
My recurring question to CEOs and senior leaders is: Are you in business for the short-term, grab all the profit you can? Or are you in business to build a strong, raving fan base of loyal customers who tell their friends they must frequent your establishment?
Customer loyalty doesn’t have a line item on the balance sheet or the P&L, but it does have a significant impact on your business, positively or negatively.
I can clearly see the business model of the Hyatt Regency in Pune. It’s evident in their policies. I doubt if executive management has taken the time to understand how their policies impact customer loyalty and repeat business. That evening they had the opportunity to make me a repeat customer and reap a continuing stream of profits from a global business traveler. But the policies said no!
PS: If you have a similar example of short-term profit maximization at the expense of customer loyalty, send me an email or attach it to this blog posting.
Tight Lines . . .
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