Getting Closer to Guests to Create Customers for Life

By Sarah Santaella, Corporate Director of Quality Assurance for The Ritz-Carlton

When a company wins the Malcolm Baldrige National Quality Award not once, but twice, you frequently get approached with questions as to how you achieve your results. The Ritz-Carlton's focus on meeting the ever-changing needs of our customer has been one of the primary reasons for our success, and we are continuously striving to become even better at determining and meeting those needs.

The Ritz-Carlton has always been a company that analyzes customer satisfaction metrics to improve performance. It is part of our culture to determine our need areas using data analysis and to use quality improvement tools to close performance gaps and drive customer satisfaction results; however, our approach to these areas has changed drastically over the past few years as we have grown more sophisticated in our approach to data.

In 1982, when the modern Ritz-Carlton was formed, we used comment cards to determine how satisfied our guests were with our products and services. Each comment card was given a grade of A-F based on the tone of the guest comments, and our hotels were given the equivalent of a grade point average. The subjectivity of the grading process and the fact that traditionally guests only fill out comment cards if they fall at either end of the customer satisfaction continuum caused our company to look for a better way to gather and measure customer feedback. Although we use comment cards to this day, they are used in conjunction with other data sources.

Then began the age of the surveys. We started using third-party companies to obtain a statistically significant sample for each hotel per month to give us a satisfaction measure on important aspects of the stay (e.g. guestroom cleanliness, timeliness of check-in) as well as an overall satisfaction measure. Our outcome measure has changed from satisfaction, to loyalty, to emotional engagement over the years to drive higher levels of performance. High level analysis of the surveys worked well when luxury guests were a fairly homogenized group. They looked the same, bought the same things, and wanted the same type of facility and service from our hotels. Recently, however, the luxury guest has changed drastically. As our guests changed and the company grew, especially internationally, a need was discovered to get even more data so that we could better understand what different customer needs were. Do Asian customers actually have a bias against giving top box scores? Do aspirational luxury customers want the same experiences as the luxury customer? Are all of our hotels continuing to maintain the traditional Ritz- Carlton standards? All these questions and more needed to be understood so that we could continue to maintain our reputation and market share in an increasingly competitive luxury market.

In 2004, The Ritz-Carlton determined that we needed a cohesive Quality Assurance system to provide more insights into our customers' needs and expectations and also to better understand the performance gaps at each property. We had the traditional tools of the comment cards and the surveys, but we needed to leverage technology to delve deeper into the data. Comment cards are now scanned and coded, giving us a consistent measure across the brand and the results are correlated with the customer surveys. Our vendor started providing us with the raw data from our surveys to do additional analysis as well. We are able to determine what different types of travelers are thinking and feeling about our company and we can cut the data by business versus leisure customers, countries of origin, day of arrival, and hundreds of other ways to help hotels determine areas where they need to focus. A mystery shoppers program was developed to measure compliance on Ritz-Carlton standards across the brand. Finally, an internal customer relationship management system, called Mystique, tracks every problem that occurs during a guest's stay. It was a virtual explosion of data! Hotels went from analyzing 20 scores a month to being able to analyze hundreds of guest experiences in multiple ways. The Ritz-Carlton was a company in danger of getting "analysis paralysis".

So how do you manage this much data? Our answer was to create a diagnostic process to bubble up the vital issues that our hotels need to focus on. By benchmarking the FMEA (Failure Modes and Effects Analysis) tool from manufacturing, we are able to analyze all of our data together, rather than analyzing each separately and looking for golden threads. This FMEA pulls together defect data from all of our different QA sources and allows us to determine what defects are occurring most frequently, what their impact is on guest loyalty, and how effective our detection systems are. The analysis of these three factors for each defect makes it easy to prioritize our efforts on eliminating the defects that put our hotels at the most risk. Each hotel chooses their own top-three risk areas, and with the support of the senior leaders at the hotel is able to drive significant improvement cycles every 3 months.

Despite having a successful outcome, the process to complete an FMEA was long and time-consuming, and few of our hotels had the resources to be able to complete this analysis more than once a year. At this point, we entered our partnership with UniFocus. A data cube was created that takes approximately 15,000 pieces of data each month from our QA tools and organizes them into the FMEA. Each reported defect has an assigned severity rank and a detectability rating. The frequency of the defect in the data cube, along with the assigned severity and detectability, creates the calculation that determines the risk to our company. The analysis of all of this data used to take 12-15 hours per hotel to complete, but now can be completed in 45 minutes. This has allowed our hotels to complete an FMEA quarterly, ensuring that they adjust their strategic plans as needed to continuously improve their results.

The Ritz-Carlton has used data since its inception to ensure that, in the words of our Credo, "genuine care and comfort of our guest is our highest mission." The results are that our company has taken our already high levels of customer engagement and has increased our scores by 7 points since 2004. Measurement of data, and the technology that has made the process so easy, is a way for us to get closer to our guests and to create customers for life.