Digital Disruption: Customers buy experiences not products
A recent CBS news segment showed that while major American hotel chains were just beginning to build their properties in Cuba, AirBnB already had several thousand properties for its customers to choose from. In an era of this kind of digital disruption, it should come as no surprise that the President of Hyatt hotels claims “customers today buy experiences not products”. As Hyatt and Marriott have discovered the physical room is no longer enough to win against new age market disruptors like AirBnB.
In Hyatt’s case, they are using customer data to discover patterns that will enable their hotels to truly excel at customer service. For example, they are using the data they have on flight connections as well as the buying patterns of their top customers to deliver new forms of customer service. With this, if a top customer has missed flight connections or been significantly bumped during their travel day, they can for example use this customers purchase history to notice they have bought Apple Martinis the last three times that they were at Hyatt property. Armed with this knowledge they can deliver the drink just as the customer gets to their room regardless of the hour.
Meanwhile Marriott says that it is working to “craft a customer experience that is the right measure of high tech and highly personal” (WSJ, May 31,2016, page B5). According to Bruce Hoffmeister, Marriott’s CIO, the rise of mobility has given the company more opportunities to interact with its customers including before, during, and after a stay. It enables as well customers to skip the front desk at check-in, order room service, or login into their Netflix account at their hotel room.
Bruce Hoffmeister says this is a huge change for Marriott. In the past, technology was used by Marriott Associates to deliver services to guests. Today, they are enabling guests to consume services directly. This allows Marriott to have interactions with their guests—including me—at more touch points during a stay. Today, Hoffmeister says “we look at customer experience through the entire journey from the beginning when customers are considering a trip, shopping and booking the trip to the actual travel and stay, and the return home. There is a “life cycle of a stay” that every guest will go through on every single trip. We ask how are we able to touch and influence our guests during all parts of the journey to enable them to have a more meaningful and easier experience” (WSJ, May 31, 2016, page B5). Hoffmeister says that whatever they do here needs to be ease to use; intuitive, and just work.
