CEM™ In Action

CEM is the concept of driving business from customer loyalty. For example, if a guest notes on a survey that she prefers a feather pillow, this information can be entered into the hotel database and a staff member may place a feather pillow in the room before the guest arrives for her next stay. This process is by no means necessary, but shows guests that their opinions do count. By taking proactive steps, customers feel appreciated and are more likely to return. Even a complaint, if handled properly and timely can result in customer loyalty.
The Value of Customer Experience Management:

What is the value of retaining a customer?

As a general rule, it costs a company 6 times more money to gain a new customer than to keep a current customer.

For example, by increasing the percentage of guests who responded positively to this survey question “How likely are you to return?” we can see that just a 5% increase in positive responses can make a substantial difference in revenue generated over the course of a year.

In this case a 5% increase accounts for an additional 2,500 guests; if this increase continues through the year, we would have 30,000 additional guests for the year. The revenue raised by these additional stays could reach $10.5 million or more.

What is the cost of losing a dissatisfied customer?

The cost of a dissatisfied customer should be thought of in terms of the lifetime value of the customer. If a customer has a bad enough experience to make him or her reject an organization in the future, the impact of this service failure can be expensive. On the other hand, a customer who has a bad visit yet experiences a corporate response to his or her complaint that exceeded expectations may be even more loyal than the customer who was never dissatisfied to begin with. Having tools to react to negative experiences as well as to monitor the efforts at resolving bad experiences can have a significant impact on customer loyalty.