2. Contents
Contents................................................................................................................................................2
Session One Notes.................................................................................................................................4
Session 2 Notes......................................................................................................................................8
Introduction...........................................................................................................................................9
Session Three.......................................................................................................................................13
People..................................................................................................................................................15
Product................................................................................................................................................15
Profit....................................................................................................................................................15
Medium ..............................................................................................................................................15
Session Four.........................................................................................................................................16
3. Overview
• This study guide is divided into the weekly lecture topics for Service Management. It
includes both information from the textbook, as well as weekly lecture notes.
• You should read the learning objectives carefully before and after reading/studying the
material as this guides you to the key concepts of each module.”
• Read the commentary first, followed by the text, then the included articles, and the
activities. The activities are included to assist you with your learning.
• Suggesting to students that they create a glossary for terminology, concepts, and
definitions – a valuable revision tool.
5. Introduction
What is a service?
• Economic activities that create value and provide benefits for customers
• What are the value and benefits that hotel guests may perceive?
• What are the value and benefits that restaurant customers may perceive?
o performances are intangible, but may involve use of physical products
• Services are intangible performances
• Greater involvement of customers than in production
• Greater variability in inputs and outputs
• Difficult for customers to evaluate
Definition of Service Management
What is service management not?
1. It is NOT
how to serve customers food
2. It is NOT
how to check in a hotel guest
3. It IS
how to treat a guest to such a wonderful dining experience that he/she will rave about
and will bring friends and clients in, frequently
4. It IS
how to provide such a wonderful lodging experience for a traveler that he won’t stay
anywhere else
It focuses on providing Value to the customer and also on the
Customer Relationship.
6. Customer Management is
It is about
how to PROVIDE excellent service to customer
It is about
how to WIN internal and external customers
It is about
how to DEVELOP your management leadership skills effectively and
UNDERSTAND internal and external customers
Characteristics of Hospitality Industry
1. What is customer service?
o Customer service is taking care of customers.
2. What are the three main categories to providing excellent customer service?
o Listening to the customer
o Anticipating the customer’s needs
o Admitting your mistakes or if you don’t know
3. How can you show customers that you are listening?
o Don’t make assumptions.
7. o Let the customer finish speaking.
o If you cut a customer off, it’s because you’re assuming you know what
they’re going to say.
4. What are discovery questions?
o Discovery questions are specific questions that help figure out what the
customer needs.
5. Why is noticing a customer’s nonverbal cues important in your providing good
customer service?
o Nonverbal cues (body language) can tell you how the customer is feeling, if
they want to chat, or If they’re in a hurry.
6. How can you “give more than expected” to customers?
o Personalized care
o Genuine smile
o Positive attitude
o Timely Service
7. What should you do if you don’t know an answer to a customer’s question or you
don’t know what to do?
o If you don’t know the answer to a customer’s question, don’t guess. You
run a risk of angering or harming the customer. Tell the customer that
you will find the answer for them by asking someone (your co-
worker/manager) who knows
9. Introduction
• Strategic questions are an everyday part of marketing.
• Chapter two provides a basis for analysing the aspects of marketing so you can create
a marketing plan
• The big focus is on planning
Service Leadership
o What are the differences between a leader and a manager?
A Leader
o focuses on People
o helps individuals get better and better at their jobs
o motivates and inspires their followers (workers)
o shows direction
o When there is something to do says “Let’s go do it”
A Manager
o focuses on Things
o tells staff members to do their jobs
o controls and solves problems
o plans and budgets
o tells others to “Just go do it”
A definition of Leadership
o Leadership is the ability to influence and to guide people
Examples of Great Leaders in Business
o Steve Jobs
o Howard Schultz
o Bill Gates
o Donald Trump
o Jack Welch
o Isadore Sharp
Jack Welch’s Leadership
Welch moves from meeting to meeting, conveying that message – and the host of other ones
as well, some of which have become his trademarks:3
10. o Business is simple.
o Don't make it overly complicated.
o Face reality.
o Don't be afraid of change.
o Fight bureaucracy.
o Use the brains of your workers.
o Discover who has the best ideas, and put those ideas into practice.
Who is Jack Welch?
o John Francis "Jack" Welch, Jr. (born (1935-11-19-November 19, 1935) is an
American business executive, author and chemical engineer. He was chairman and
CEO of General Electric between 1981 and 2001. During his tenure at GE, the
company's value rose 4000%.[2] In 2006, Welch's net worth was estimated at $720
million.[1] Jack got a whopping amount of $417 million in form of his severance
payment, when he took retirement from GE. This is the biggest severance payment
done in the history till date, and consequently the main source to increase his net
worth. [3]
- Former CEO of General Electric between 1981-2001
- Joined GE in 1960 as a junior chemical engineer (Salary: $10,500)
- Vice President (1972)
- Senior Vice President (1977)
- Vice Chairman (1979)
- GE’s youngest chairman & CEO in 1981
- He increased company’s value to 4,000%
- Severance payment: $417 Mill. (Biggest in the history)
11. Jack Welch Video Transcript
yeah in this case we're you raised the top 20 you take a look in the middle
knows how they can improve to get higher and you never forget the critical part
of the organization and the bottom
themselves you don't find anybody do that maybe twenty percent of them but
most of them leave on their own because who wants to be in a place where they're
not wanted what he does and what about winning is everything
• every place you want to be then people are going to see other people when
is even more exciting once your leader good job is about you as much as
about them and what if you have a bad boss kind of turn it around a little
bit what if it's an employee who stuck with a bad boss
• first of all employees look at themselves a real marriage chest is it really
the boss was at them if they find out it's really the boss then they're going
to make some choices to get some options to leave before they take them
and they get it and then they gonna take it take it on they can't be a victim
do don't let anyone be a victim
Work Life Balance:
• companies talk about this work life balance but really I it comes down to the
employees the company wants to make money the company wants to succeed
so how can an employee really achieve work-life balance if they're more and
more demands from work well the first of all employees going to make it
quicker choices to what they want to do and they understand their life and
make a deal with themselves as to what they want to do but then they can't
12. think of the company you said it just right they can't think of the company
and solving the problem they've got deliver on their own and over-deliver i
call it the old-fashioned shit system if I work for you Joe and I deliver and
make you look good in the any win when I need flexibility you I’ll give me
the big word is if they're if on 3the other hand if I tell you I’m sorry Joe
you've got to be reported Friday but can't be around Thursday to help you
with it finds that a couple of times you're not going to be interested too
• best thing about being a boss and what's the most challenging part of
being a boss?
the best part about being bashed this is growing people it is the field that can
give stock options then watch the company win and watch the people light
up as they watch their lives change then I had such tricks over that I like to
watch these guys are out there i will work for me running companies it's an
enormous thrill the hands part of a job and making the other decisions letting
somebody go awful and that's why you can have to Surprise them you know
always be praising they're going to know where they stand
every time if you've got any manager watching the show and they
aren't thinking about to my people know where they stand and I told them
candidly how I feel about what i like about them and what they need to
improve then they shouldn't be imagined because once you imagine it's about
them not about you.
14. Service Leadership
The great service is based on the great leadership
Four Seasons Hotels & Resorts
About 100 hotels in 40 different countries
“One of the Fortune’s Best Companies to Work For
Four Seasons Hotels & Resorts
Services that the Four Seasons provided guests as the first hotel
1. A shampoo in a bathroom
2. TV over a treadmill in a fitness room
3. Make up mirrors
4. Minibars
5. Another telephone beside a toilet
15. 6. Comfortable mattress
7. 24/7 room service
8. Nonsmoking floors
The Man Behind the Brand (Isidore Sharp)
1. What is the golden rule of Four Seasons Hotels & Resorts?
Treat others as one would wish to be treated
2. Four Seasons Hotels & Resorts treat people as ( ) and not as a ( ).
People and Cost
3. In Four Seasons, what are 3 P’s?
People
Product
Profit
4. Four Seasons only operate ( )-sized hotels to be the best.
Medium
5. Four Seasons define the true luxury not by architecture or deco, but by ( ).
Service
6. Four Seasons create a ( ) based on the Golden Rule
Work Ethic
7. Employees serve their guests is the thing that can’t be ( ) by others.
Copied
The Golden Rule
The Golden Rule:
One should treat others as one would wish to be treated.
“The Golden Rule is the KEY to the success of the firm.”
–CEP Sharp-
People make the strength of this company.
The Four Pillars of Sharp’s Business Model: Four Seasons: The Story of a
Business Philosophy.
QUALITY
SERVICE
CULTURE
BRAND
16. Sharp’s first business lesson:
Never take anything for granted.
“All business proceeds on belief: Trying to run a company without a set of beliefs is like
trying to steer a ship without a rudder” ~ Anonymous
“They (customers) obviously need service they could count on: service to replace support
systems left at home and the office time-saving service that gave them assurance and
productivity; problem-solving service, fast personal, unobtrusive and consistently error free”
Isadore Sharp
“Our competitive edge is service,” we told our new managers, “service delivered by frontline
employees we expect you to develop” Four Seasons: The Story of a Business Philosophy
The 3 Ps:
People, Product, and Profit
◦ People come first!
Customers=Associates
Session Four
17. Service Management (Characteristics of Hospitality Industry)
Seasonality of the hospitality business
Short distribution chain and time span
Major investment in Fixed Assets
Labour intensive
Overview of the Hospitality Industry
One of the most important issues to hospitality managers is attracting and
retaining qualified employees under challenging work conditions with higher
turnover rates
There are more young employees compared to any other industry
Internal Marketing
Value employees as internal customers
Jobs as internal products
Important strategy in HR management
o to attract and retain qualified employees and
18. o to develop motivated and customer-minded employees to achieve customer
satisfaction and organization goals
Google HR Practices
Employees: about 34,000
Median age of employees is 27 years
All employees: a minimum of 120 hours/year for training and development sessions
Professional development opportunities:
o -classes on individual and team presentations skills,
o business writing, executive speaking, delivering
o feedback, management/leadership,
o and free foreign language lessons
Day care, elder care centres, spa and hair salons,
car wash and oil check facilities Innovative stock option system
Employees felt that they were paid more money than they needed
Employees formally demanded a wage cut themselves in 2005-6.
Unlimited sick leave
27 days of paid time off (PTO) after one year of employment
On-site medical and dental facilities, oil change and car wash, fitness center, banking
center, free breakfast, lunch, and dinner on a daily basis
18 weeks of additional paid time off post maternity leave, new fathers can take 7
weeks’ off
Google Secrets
The company believes that treating people well is more important than making a lot of
money.
It is all about treating people with respect, supporting their creative endeavors.
Hospitality Business on Fortune 100 Best Companies
19. The Six Categories of HR Practices
Raving Fans
The Process
The Raving Fans customer loyalty process responds to various organizational needs that have
bottom-line implications. Once customer product specifications are met, the quality of
customer service determines if your customers will choose to return to do long-term
business with your organization. Implementing the Raving Fans process will
20. • Retain your customers
• Develop and retain high performing employees
• Enhance accountability for results
• Encourage your employees to take initiative to
prevent and solve problems quickly
• Amplify your return on investment for the short
and long term
The Secrets
Step 1: Decide what you want
First you will need a detailed vision, creating a vision of your future customer service model
centered on your customers will take time and effort but without it you will not be able to
progress.
The examples in the book will assist you to think outside the square.
Step 2: Discover what the customer wants
Your customer service is part of your product and you should market test your product before
any major launch, it therefore follows that you should market test your customer service
vision with customers and be prepared to alter your vision in response to your customer’s
feedback.
In this step you will also decide which customer needs you will service and which customer
needs you will not service, you cannot be all things to all people.
Don’t forget to build a vision of the type of service you will provide to your internal
customers as well as external customers.
Step 3: Deliver your vision plus one percent
To create a raving fan you need to exceed on delivery of your customer service promise each
and every time the customer deals with you, the customer needs to believe that they can count
on you again and again. Consistency creates credibility.
Start by making small changes to your current customer service model and gradually build on
these changes, this way you will be able to achieve consistency of service.
To achieve this level of consistency you will need systems, training, alignment between your
vision and pay/promotion, these systems are required to build your vision in to the sole of the
company.
Customer expectations don’t remain static so be prepared to continually enhance your vision.
Fish Philosophy
Play ~ Work made fun gets done! Play is not about games or toys; it is about your state of
mind. Be creative in your problem solving. Encourage people to dare to dream. How can
everyday tasks be made fun and challenging? Play energizes you and the people around you.
What does this mean in terms of productivity for your team? Any job can be boring if you
make it boring. Note ~ this is not about throwing FISH!...
21. Make Their Day ~ Often when discussing the make their day principle, people complain
about being too busy to stop and think about someone else. When thinking about this
principle, remember to keep it simple. You might just start with smiling at someone you don’t
know very well. Turn an everyday encounter into a pleasant experience for someone. Your
kindness, patience and thoughtfulness will be returned. You might even enjoy making
someone’s day! Think about a leader who has inspired you. For sure, they made someone’s
day every day! Look at grumpy people as a challenge. What will bring a smile to their face?
Be Present ~ Many of us need to practice this. With so many demands on our time, we often
put being present way down on the list of priorities. When was the last time you were
completely in someone else’s moment? This principle means you are focused, listening, and
even empathizing with someone. Not typing or making coffee at the same time. Do you can
understand the private world of another person as if it were your own? Are you just going
through the motions or are you present at work?
Choose Your Attitude ~ If you look for negativity you will be sure to find it. Empower
yourself to respond to challenges and problems in a constructive and positive way. Celebrate
success and sit back; you will see the energy this can bring to a workplace. How do you start
your day? When you get dressed every morning, put on your attitude. There are dozens of
small things you can celebrate every day. Where do you invest your energy? Attitudes are
contagious. Is yours worth catching?
Customer Delight and Loyalty
One of the best ways to put this into practice is to use a psychological practice known as
implementation intentions, also called “if-then planning.” To continue with the example
above, you could encourage employees to act in this manner:
If a customer has been waiting for more than 20 minutes,
Then reset their internal clock with a complimentary item from the appetizer menu or
with a free drink.
22. Take, for instance, Bezos’ now infamous use of the “empty chair” in boardroom meetings,
which serves as a powerful reminder of who the real boss is:
Bezos periodically leaves one seat open at a conference table and informs all
attendees that they should consider that seat occupied by their customer, ‘the most
important person in the room.’
Instead, Zappos created a point scale called the Happiness Experience Form, which
encourages reps to make a personal emotional contact, create a “wow” experience,
and address unstated customer needs.
This effort to improve the less easily measured, but far more personal aspects, of
service contributed to a 5% improvement in the company’s overall Net Promoter
Score.
According to Verrill’s discussion with Zappos loyalty manager Derek Carder, this
was a HUGE win for the company because:
"70-75% of purchases came from returning customers. They order about 2.5x more
than single customers
24. THE SIMPLE LIFE
o Barraged by social media and endless decisions, we are increasingly seeking a
respite from the pressures of modern life. The hospitality sector is responding
to this desire with a host of less-is-more models including menu free dining
and the rise of wilderness experiences in heretofore un-trespassed destinations,
which offer total immersion and digital disconnection. We will also see the
emergence of summer camps for grownups, offering lonely millennials a
break from 'adulting'.
THE SCIENCE OF YOUR STAY
o The hospitality sector will continue to increasingly apply data and science to
help guests to be more efficient and sleep better during their stays. 2017 will
see a prominent rise of travel-oriented apps aiding us to experience the
smoothest of stays as guests, from monitoring the queue at the breakfast buffet
to digitally controlling the ambiance of our rooms. Hotels are also predicted to
engage with the functionality of sleep apps and wearables by going beyond
blackout shades to design rooms incorporating creative solutions like sound
and lighting technology and sensitive wake up tools and techniques.
A HEALTHY OBSESSION
o A preoccupation with mindfulness and wellness will see the rise of 'Feel good
hotels', jumping on the fitness bandwagon by offering bespoke classes and
exercise mashups. We'll see hotels committing to cultural and environmental
conservation by using locally sourced vendors and employing indigenous
people. 'Edible resorts' with micro-gardens, olive groves and vineyards are on
the rise alongside a return to resorts anchored in eco-agriculture and ambitious
village nature concepts.
25. FRIENDLY LODGINGS
o Legalised recreational marijuana, nearly a $40 billion industry, has brought
cannabis tourism to the United States and we predict the evolution of
cannabis-friendly accommodations will boom in the coming years. And while
plenty of hotels currently allow pets, we'll see an even greater evolution of top
notch pet-friendly programs with amenities including plush beds, food bowls,
dedicated dog parks and concierge lists.
Regional market growth
One of the headline figures from the report demonstrates the increasing strength of the
American hotel market when compared to its European counterpart. The US market is
expected to grow at more than six times the rate of the European market between 2013 and
2017, with the US showing a 6.8% compound annual growth rate and Europe just 1.1%.
We will see a resurgence of supply being built and enabled in the market, with limited and
select service dominating the landscape. The larger, ‘big box’ or full service properties will
be slower and more strategic as required investment is cautious to build big luxury and
meeting facilities versus limited service.
Chains v independent disparity
Despite the slower growth overall, the report notes a number of positive trends in Europe.
Chain hotels are the big winners, growing three times quicker than independents in the four-
year time period. This will see the independents’ share of the total lodging market fall from
58% in 2013 to 56% in 2017.
Again, the picture stateside is somewhat different, with the percentage split between
independents and chain hotels remaining steady at 28:72.
It is proving true that brands and big groups can perform better in the market by negotiating
distribution deals and reducing costs for their operators and investors. And, because these
benefits make it more likely to succeed as a viable business, it means banks like brands more,
giving them even greater leverage. While the independent hotelier has more tools than ever
before, the money right now is on brands, brands and more brands. The Marriott and
Starwood merger is the perfect example of The Big Brand getting bigger by the minute to
compete in the market and gain more negotiating power.
Overall growth in online bookings
26. Of course, the primary catalyst for the evolution of the market has been, and remains, the
changing nature of travelers.
The rise of online bookings has increased consumer power enormously and changed booking
habits almost entirely. In fact, research conducted by Nielsen for Google showed that
customers spend an average of 53 days booking their trip, during which they view 28
different sites over 76 sessions, while more than half of travelers use social media for travel
tips.
In Europe, 39% of bookings will be made online by 2017, a rise of 5% from current figures
and 8% from 2013. Online penetration is even bigger across the pond and will be close to
becoming the booking choice of the majority in two years, with 44% booking online in the
US by 2017, a rise of 2%.
Mobile
In almost every sphere of business, from news to music, mobile is rapidly becoming king –
and the hotel industry is no different. The statistics show that while only 8% of bookings are
currently made on mobile devices, by 2018, that figure will stand at 35%, meaning mobile-
friendly websites are critical for hotels wanting to drive up their revenues.
Although hotels are generally becoming more savvy with their own websites in an attempt to
drive more of that online business their own way, the rise of OTAs will continue over the
coming years. OTAs will enjoy a majority share of the US market by 2017 (52%).
A global distribution strategy
Despite this, the range of choice, and increasingly travel-savvy nature of guests, means hotels
must find the most effective mix of direct and indirect channels to meet expectation. The
changing nature of travelers has led to a boom in international tourism, which brings both
challenges and potential rewards for hotels.
Figures from the UNWTO Tourism 2020 Vision report suggest that international arrivals will
reach almost 1.6 billion by 2020. While this opens up ever larger markets for hotels, it also
means they are competing in an ever-increasing marketplace and must adapt accordingly.
Over the next few years, knowing your market will become ever more critical.
OTA market share
As global bookings from OTAs continue to rise, those businesses who identify themselves as
dealing with largely international travelers will increasingly rely on intermediaries such as
OTAs and wholesalers, while their domestic-trade-based colleagues should still look to bricks
and mortar sites and personal relationships.
The report also picks up some trends specific to certain European countries that, to some
extent, defy the wider trends our industry is seeing.
