Make service recovery first priority
THE Middle East’s tourism industry needs to prioritise service recovery if it is to secure repeat business, decrease customer maintenance costs and reduce exposure to price competition, according to one of the region’s leading performance experts.
Karen Storey, managing partner of Dubai-headquartered X-Logic, says the very nature of the travel and tourism sector and its high degree of human interaction makes it vulnerable to mistakes.
“That’s precisely why service recovery has to be prioritised in any sales and marketing plan, it’s critical,” says Storey, who is a member of the Chartered Institute of Marketing and a fellow member of the Chartered Institute of Personnel Management.
“As the Middle East’s tourism industry continues to boom, so does the competition and their ever increasing value proposition to customers – but how many of them are actually delivering? Unless companies are relentless about right, first-time service delivery, mistakes can, and do, happen.”
Storey, who is to address a seminar devoted to service delivery at Arabian Travel Market – the region’s premier travel and tourism exhibition being held in Dubai, United Arab Emirates next May, says though recent evidence suggests there is no replacement for ‘right, first-time’ service delivery in travel and tourism, service recovery does impact the bottom line and long-term customer perceptions.
“Considering how much it costs to lose a customer, few companies take service recovery seriously,” says Storey. “In many tourism-based industries, one lost customer costs the company at least $2,400. A loyal guest at one of the region’s resorts may visit an average of four times after the initial stay and spends roughly $1,000 per visit. The contribution margin in most cases could be as much as 60 percent. So, when a customer does not return, the company loses 60 percent of $4,000 – it also has to replace that customer through expensive marketing.”
Arabian Travel Market 2007 will be held at the Dubai World Trade Centre, United Arab Emirates from May 1 to 4.