E-mail customer service in the hospitality industry

May 11, 2003 |

For most hotel operators, Websites and e-mail fulfill an electronic customer interface function, enabling marketers to create and maintain one-to-one dialogues with customers.

Roland Schegg and Jamie Murphy

Information technology influences almost every aspect of our lives, especially communication in today’s new online environment. The fast development of the Internet and escalating e-mail use has created a new global marketplace as companies across all industries adopt and integrate these new technologies into their business models. Hospitality products adapt well to this new Internet environment, offering opportunities for hotel companies that efficiently implement these Internet technologies, such as Web sites and e-mail. Furthermore, wired tourists are a lucrative market. A study of 80,000 Australian tourists found for example that those using the Internet spent double that of their offline colleagues.

The e-hospitality industry: Delivering service online

Technology has become a strategic weapon and a main source of sustainable competitive advantage—especially in tourism and hospitality industries—placing information and diffusion of knowledge at the core of the hospitality enterprises. The web offers a wide range of services from pure sales and little service content to pure services delivered free as part of the service contract. The Internet differentiates itself from other media via interactivity and new customer service channels profit from this interaction. For most hotel operators, websites and e-mail fulfill this electronic customer interface function, enabling marketers to create and maintain one-to-one dialogues with customers and potential customers.

The role of e-mail communication

For reaching customers regardless of their age, from silver surfers to teens, at home and at work, e-mail is the most popular Internet activity. Compared to traditional customer service and direct marketing, e-mail costs significantly less and is faster to send than print mail. Furthermore, e-mail’s speed and simplicity lets marketers test multiple messages, changing the offer or segmentation to improve results. E-mail combines the advantages of traditional communication tools, such as the “immediacy�? of telephones and the asynchronous character of posted mail.

Just as telephones and toll free numbers pioneered new customer service delivery, email adds a channel that is ubiquitous, cheap, digital, asynchronous and virtual. As customers shift from phone to e-mail communication, companies increasingly use e-mail for customer service. For tourism organizations this means on the one hand changing their social structure to increase the speed of communication, flexibility and growth in information flow within the organization. On the other hand they gain a powerful tool to manage customer relationships and improve the ‘customer interface’. E-mail, effective for acquiring and retaining customers, is strategically important for the tourism industry.

E-service challenges for organizations

A high degree of interactivity characterizes e-mail and is an important component in maintaining and enhancing customer relationships. As organizations negotiate the dramatic power shift from sellers to buyers precipitated by increased information access due to customer Internet use, customer satisfaction has become a proxy measure for organisational performance along with traditional metrics such as net profit and return on assets. But new challenges balance e-mail’s cost advantages, time advantages and interactivity:

- E-Mail inquiries are unstructured: To deliver good service, each e-mail requires unique handling as customers expect a personalized response. To deliver personalized response and still profit from cost advantages, e-mail management standards have to be established, implemented and supported by user-friendly software and properly trained employees.

- Customers expect a rapid and real response: Customers expect accurate responses to e-mail within a short time. Various studies have shown that response speed is fundamental to customer service. Developers of self-service technologies anticipated such problems and are opting for the replacement of customer employee interaction by computer systems in order to increase accuracy of response times. A major disadvantage of purchasing travel online is little or no human interface. People like to deal with people not machines, as in customer service. Most non-standard problems or personal requests require human interaction. Hotel websites satisfy this need by offering customers a call button, phone or fax number and e-mail address for contacting customer service. A bad website experience, however, makes winning customers back difficult; promptly responding to e-mail is part of that experience.

- Re-Distribution of resources within the firm is necessary: The customer is aware that the e-mail response time is a business decision. Resources need to be devoted to shorten response times, provide unique and appropriate responses and improve the technology of interaction. This necessitates distributing resources according to local needs.

A snapshot of eService quality in the hotel industry

Given the challenges of managing e-mail, how well are hotels handling their e-mail inquiries? Do they answer their customers’ requests politely, timely and accurately? Hotels and restaurants have long used mystery shoppers to analyze their service. In a series of three different research projects the Ecole hôtelière de Lausanne together with the Department of Information Management and Marketing at the University of Western Australia assessed the eService quality of hotel properties in a wide range of settings:

- Frey et al. (2002) studied 200 independent 1-5 stars hotels in Switzerland
- Gherissi et al. (2002) analysed eService levels of over 250 hotels in Tunisia
- Leuenberger et al. (2003) looked into the eService management of 461 international upscale hotels across 13 international upscale hotel chains

In all our studies, individual hotels responded to an e-mail asking for room availability for a specific date. Three items gauged e-mail responsiveness and assessed thus one of the fundamental dimensions of eService quality: response rate, did they reply; prompt response, did they reply in less than 24 hours; and answering the question (room availability), was a follow-up e-mail necessary? Although a hotel responds, some electronic receptionists may fail to address the customer’s questions.

Our results showed that in international upscale hotels and in Swiss hotels only about three out of four hotels responded to the clients’ request, in Tunisia this ratio was even worse as less than one out of two hotels replied (see table).

Of those cyberguests meriting a response, merely one out of two received a reply in one day from the international upscale hotels; three out of four Swiss properties and only one out of four Tunisian hotels came back to their potential client within 24 hours. Some of the replies dribbled in 14 days later! The results for the international upscale hotels showed that the 348 respondents answered in average of 34.2 hours after receiving the e-mail room query compared to only 22 hours for 3-4 stars hotels in the Tirol and Trentino. The reply time by hotel chain can vary from 19 hours for properties of the Mandarin Oriental to 44 hours for hotels associated with Millenium Copthorne.

An important element in the exchange of information for both parties, customer and hotelier, is information about the core service, the room. Our results show that 94% of the international upscale hotels gave the potential customer information on availability and price of their rooms, for the dates requested.

Managerial implications

Delivering outstanding customer service will form a critical part of a sustainable business strategy in hospitality. Today’s customer demand more acces time, are less willing to wait, want more information and complain more easily. Our results indicate that many hotel properties do not yet meet the needs of their customers and that even in the most upscale segment of the hotel industry, there is a large potential for improvement.

E-mail is an implicit promise to customers; therefore, if firms provide email addresses, they must answer incoming mail. That the results of upscale hotels resemble similar studies of lower category and independent hotels may be an equality of opportunity. E-mail is a technology with few resource and knowledge restrictions and meets all criteria for rapid adoption of innovation (e.g. relative advantage, compatibility, complexity, triability and observability), making e-mail perhaps too easy to adopt and handle effectively.

In order for hotels to use e-mail for active customer relationship management, hotel chains must improve their communication within this new electronic environment. Customers are using e-mail more frequently in business and private situations; they expect, probably demand, fast e-mail response that answer their questions. Our research showed that still a significant part of the customers never received a response that answered their initial questions. The analyzed hotels demonstrated various levels of commitment to e-service.

It would be goofy to list phone numbers in the phone book and fail to answer the phone. Yet hotels list e-mail addresses on their site and fail to answer e-mails. Management and staff must appreciate that e-mail is as important as a phone call, fax or letter. For legal, marketing and organizational reasons, hotels should establish—and train staff on – e-Service protocols and policies. Analyzing current e-mails is a key to this initiative. Based on customers’ frequently asked e-mail questions, hotels should develop a Frequently Asked Questions section on their web sites. Hotels should also craft template e-mail answers that use basic business communication procedures such as polite greetings, thanking the recipient, addressing the recipient by name, answering the questions, and identifying the hotel—name, postal address, phone and fax numbers and web site address—as well as sender.

As our research illustrates, better e-mail policies and training would give hotels an immediate competitive advantage via improved e-Service. Depending upon hotel characteristics, some hotels provided markedly better e-mail responses than their competitors did. As e-mail programs are relatively simple and inexpensive, hotels may realize a better Internet investment return by focusing on this basic technology in lieu of additional trendy and web site features.

Roland Schegg is from the Lausanne Institute for Hospitality Research (LIHR), Ecole hôtelière de Lausanne (EHL), Switzerland, and Jamie Murphy is from the University of Western Australia, Department of Information Management and Marketing, Western Australia