Faculty & Research
Understanding Switchers and Stayers in the Lodging Industry
Vol 4 No 1
By: Iselin Skogland and Judy Siguaw D.B.A.
Executive Summary: Service companies worldwide spend
billions every year on customer-loyalty
programs and other preferred-guest programs
aimed at getting their guests to continue
their patronage, although it's clear that
many customers defect to competitors. One
way to improve customer retention is to
analyze guests' behavior according to four
distinct guest segments, which are based on
their staying or switching behavior. The four
groups are satisfied switchers, dissatisfied
stayers, satisfied stayers, and dissatisfied
switchers.
Two groups, satisfied stayers and
dissatisfied switchers, generally behave as
one might expect-either staying or defecting
based on their level of satisfaction. The other
two groups, satisfied switchers and dissatisfied
stayers, do not conform to expectations.
Most confounding are satisfied switchers,
who report being satisfied but then choose
alternative hotels, rather than routinely
choosing the hotel with which they have
expressed high levels of satisfaction. Thus,
although marketers have long advanced the
presence of guest satisfaction as instrumental
in ensuring repeat business, satisfaction does
not appear to drive repeat purchases for all
consumers, as previously had been assumed.
Also intriguing, dissatisfied stayers are
unwilling or unable to exert the effort to
identify and use alternative hotels, even
though they are unhappy with the elements
of the hotel at which they stay.
Looking at demographic differences,
older guests and women selected the hotel
for familiarity and self-image needs. Older
guests were more likely to be satisfied
stayers, while younger respondents were
more inclined to be satisfied switchers.
Hence, while the respondents in this study
reported equivalent levels of satisfaction with
the hotel regardless of age, they demonstrated
different switching behavior. Respondents'
educational level did not affect
satisfaction or loyalty, but purpose of travel
differentiated the respondents. Business
travelers were the least satisfied, least loyal,
and least involved of the guest segments.
Additionally, business travelers were more
likely to be dissatisfied switchers than other
types of travelers.
Hotel managers can use this information
to better define those groups in which
they want to develop strategic investments
and from which they are most likely to
obtain the greatest long-term value. The
findings suggest that hotel companies should
reexamine the target markets for their
customer-retention programs to aim at
customers groups that are most likely to
respond to those programs.
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- Understanding Switchers and Stayers in the Lodging Industry By: Iselin Skogland and Judy Siguaw D.B.A.
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