Customer Segmentation: Why It’s So Important
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When you ask yourself “What is hospitality?,” it’s an easy answer to explain examples of the good or bad.
Good: when you arrive to a restaurant and are quickly seated, can order your meal as soon as you’re ready, and the food and ambiance are ones that make you want to come back.
Bad: long wait to sit, rude waitstaff, delayed meals, bad food.
But giving an actual hospitality definition is much more difficult.
What is the meaning of hospitality?
To dig into the actual definition of the word "hospitality," we considered three perspectives: operator, tech, and guest.
Whether you’re in the service or tech industry, you have received hospitality countless times.
Hospitality is the thing that buffers our stress, boredom, or exhaustion and treats us with enjoyment and relaxation. It gives us an experience that replaces other emotions from the day.
We’re willing to pay for it, and we’re only satisfied if our expectations are met with the service we receive.
In a transactional sense, it’s the relationship between the guest and the host (in a restaurant, this is the venue and its entire staff, not just whoever is working the host stand).
In order for hospitality to be good, as a guest, we have to feel comfortable and well-served.
In a hospitality setting, the guest exists to be served; the operator exists to serve. An operator succeeds when he or she makes a guest feel comfortable and catered to. It’s delivering this experience that brings guests back and drives repeat revenue.
Here’s what this power balance means:
It’s not your a guest’s obligation to remember a restaurant or hotel. It is the venue’s obligation to remember the guest without fault and to deliver service that makes them never forget you.
How does an operator remember every single guest without fault, despite human fallacy and the number of guests greatly outweighing service staff?
With technology. Restaurants and hotels use reservation, seating, and guest management tools to make this happen.
Just take it from John Meadow, the founder and president of LDV Hospitality, a New-York-based group with 10 concepts across 9 cities:
“SevenRooms is the tool and the vehicle that we use to truly understand what the guest wants — who they are, what their patterns are. That data allows us to truly cultivate this customized, unique experience for the guest. [...] That’s why we’re in this business. To have that human engagement.” - John Meadow
Restaurant reservation systems in the industry were made to empower operators to overcome hospitality challenges.
Tech takes the best maître’d’s, hosts, servers, and it ten folds that knowledge. It aggregates it into one place that isn’t weathered by employee turnover and doesn’t rely on human memory.
How does this relate directly to the definition of hospitality?
Well, think about it this way:
Hospitality is the guest experience. It’s a combination of items offered but also the service quality in which those items are offered.
Hospitality tech focuses on optimizing the service component of this equation.
Tech helps give a good experience, or “the sweet life,” to guests. After all, that’s what LDV Hospitality is named after: la dolce vita, an Italian phrase that translates to just that.
Most of the problems below come back to this root problem: settling for third-party platforms that own your data, don’t share it completely with you, and charge you per cover.
The Scenario: Loyal guest books a dinner for 10 guests with a note about it being a birthday. This note gets lost somewhere between the reservation-booking and the in-service component of the reservation itself.
Why It Matters: You don’t recognize that it’s their birthday until a friend says something. This isn’t the birthday dinner the party was expecting.
The Fix: Have a process in place where reservation notes are guaranteed to get passed over to servers via the host stand.
The Scenario: A repeat guest has a shellfish allergy. That information never gets passed along to the waiter, who spends 3 minutes pitching a lobster special.
Why It Matters: You look bad. Not only that, but your guest then de-prioritizes your venue in the future for other restaurants that are more accommodating. So you lose repeat business.
The Fix: Use a system with guest profiles that have easy-to-see tags for arriving and seated guests. This way, a server can pull up the app from their smartphone and see the guest profile as they walk over. Acknowledging an allergy before a guest makes them feel like a VIP.
The Scenario: A guest has called in prior to a reservation and is ready to pay $100 upfront to secure a bottle of champagne for the table. But you can’t offer a secure form of pre-payment.
Why It Matters: They say to forget it, and you lose $100 in sales.
The Fix: Offer a PCI-compliant payment through a simple web link. Securing payment in advance reduces your no-show rate.
The Scenario: A server asks a repeat guest who has dined with the venue five times: “Have you ever dined with us before?”
Why It Matters: The guest perceives him/herself as unimportant to your restaurant. Because of it, he or she stops telling friends about you.
The Fix: Servers should have easy access to guest profiles with tags that tell them: first timer or repeat guest. Same as above, it’s a quick glance at as they arrive to the table. Repeat guests can then be greeted with “welcome back” to acknowledge their prior history.
The Scenario: A guest has a terrible experience with a server who is slow to come over, condescending and flippant in tone, and puts in orders wrong without any consolation.
Why It Matters: The guest not only does not come back, but goes on to tell friends about the bad experience. It takes two months before another guest speaks up and management becomes aware of the issue.
The Fix: Have an automated feedback email in place that asks guests about their experience after their reservation. This adds an actionable loop for receiving and acting on feedback.
The Scenario: A new host at the host stand doesn’t recognize the owner who shows up last minute without a reservation. The owner is then turned away because the book is full.
Why It Matters: This is greatly disrespectful to the owner of the restaurant and could threaten the host’s job, in addition to it being embarrassing for him or her.
The Fix: The host stand should be trained on Day 1 to recognize important names and faces. To factor in the fact that no one has perfect memory, though, there should be software at the host stand with a searchable database of guest profiles, each with a picture, name, and important tags like “VIP,” “Owner,” and “Always Accommodate.”
The Scenario: A high-spending regular shows up at a sister property and is told there is going to be an hour wait.
Why It Matters: Regulars should be given table priority no matter where they dine in the portfolio. They should receive the same great guest experience at every venue — not just the one where their face is recognized.
The Fix: Have a system allows all venues in a group to access the same database of guests and see full history across all venues. A bonus is to even have itemized order history for a guest at other properties so the server at the new venue knows what food and drink to recommend.
The Scenario: A guest booked online through a third party and requested a quiet table, but that request got lost in the transfer to your restaurant.
Why It Matters: The party has to talk loudly, gets exasperated that their request was seemingly ignored, and leaves a poor tip. No one comes back.
The Fix: When you use direct reservation-booking through your marketing channels, you can be sure that reservation notes are stored and sent over to your properly in a clearly visible way at the host stand.
The Scenario: A guest has been going to the restaurant for years and has formed a solid relationship with the GM. The GM leaves and all of a sudden that guest no longer has any tie/relationship to the restaurant.
Why It Matters: Staff turns over all the time; you don’t want guest relationships walking out the door when the staff does.
The Fix: Building robust guest profiles and making them accessible at key points of service ensures a consistent guest experience whether it’s the staff’s 5th day or 5th year on the job. Hospitality tech makes this theory a reality.
All in all, you want to find a partner who is working with you, not against you to make a buck.