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Gorin: Real Story About The Value Of A Customer

December 22, 2016 by   - () Comments Off on Gorin: Real Story About The Value Of A Customer

The following InSites column by David Gorin of Gorin+Cohen Consulting Group appears in the December issue of Woodall’s Campground Management.

Recently, I had a very early morning flight and I was about 45 minutes from the airport. Rather than set up a cab for 5:15 a.m. and hustle to the airport, I decided to get a room right near the airport and spend the night about 300 yards from the terminal.

So, reservation made, I arrive to check in and casually ask the clerk what time I need to get the shuttle to get to the terminal by about 5:45.

“Oh, our shuttle doesn’t start running until 7,”was the reply.

“How do your guests with early flights get to the airport?  They can’t really walk over even though it’s close by,” I responded.

“They either take a cab or call an Uber.”

Cab fare, the clerk told me is about $10.

“So here I am in the lobby of a major national hotel chain that obviously built this hotel because of its location near the airport, and you don’t provide airport transportation for your guests who have early flights? How about deducting the $10 cab fare from the cost of my room and calling me a cab for 5:30 a.m.?”

“I can’t do that. The owners don’t want me to lower room rates.”

Just about then, several airline personnel showed up and checked in, and I heard their clerk tell one of the pilots that they’ve arranged a 5:30 a.m. pick-up for the airline folks.

Of course, their shuttle didn’t have room for me.

“So how are you going to help me get to the airport in the morning? I never expected you wouldn’t have a shuttle. I stay at your hotels all over the country and I’ve never encountered one that couldn’t provide transportation to the airport at just about any time. I wouldn’t have made the reservation here except that I’m a loyal frequent stay member and have never encountered this at any of your hotels.”

“Mr. Gorin, I’m very sorry we don’t have the shuttle running that early but I don’t know what I can do other than call a cab for you. Would you like to check in?”

“No, I think I’ll call the Hyatt Place across the street and see if they can help me. It’s not the $10 cab fare, it’s your 100% satisfaction guarantee that you can’t guarantee, so I’ll just check my options. You can cancel my reservation.”

Fortunately it was about 5:45 p.m., just in time to cancel without penalty, and as it turned out, the Hyatt Place had a room at even $25 less than my hotel of choice — and shuttle service.

While waiting, I checked my frequent stay record at my hotel of choice and find out that I’ve spent 33 nights in that chain during 2016. The average stay runs at least $115 a night so I’ve spent at least $3,700 with this chain this year.

The inability of that clerk— who was the manager on duty —  to get me to the airport the next morning not only cost the hotel the $135 nightly rate that went across the street, but the national chain might be in jeopardy of losing $3,700 a year or more for years to come. While I might not stop staying at this hotel chain entirely, perhaps I’ll take my business to Hyatt Place in the future.

The moral of the story:

  • Whether you’re a single independent RV park or a large chain, don’t let a customer get away over nickels and dimes. Make customer decisions with a view toward the lifetime value of the customer, not just their value at the moment.
  • Empower your employees to take action using their own judgment. What can they possibly do that would have a long-term negative impact on your business by satisfying one unhappy customer?
  • Keep track of how much your repeat guests spend at your park. Track those long-term big spenders and make sure your key staff knows who they are and how to treat them.

The 180-Day Stay

As I work with developers throughout the U.S., and in developing my own park in Florida, I repeatedly come across zoning ordinances or development orders that command that no occupied RV shall remain on a site for more than 180 days in any 365-day period. In some cases, the RV may stay on the site if unoccupied for another 185 days.

As my partner and I (and our attorney) were confronted by this provision in our permits allowing us to build an RV park in south Florida, we began to question why this provision was inserted into our documents when numerous parks throughout the state offer their guests annual leases or month-to-month leases with no maximum number of months stated.

Perhaps they don’t want anyone living in the park and sending their kids to the local schools. Well, we are a 55-plus community.

If that’s not it, are they concerned the park may become a haven for cheap housing and become a run-down trailer park? We’ve shown the powers that be the amount of money paid for the property and the development budget and we clearly would be nuts to invest that much money in cheap housing or trailer trash. We intend to make a significant profit on this park and allowing it to run down in any way would be incredibly dumb.

The next thought was they don’t want people living in the park full time because they are afraid that the 450 family units enjoying their full time RVing lifestyle may all register to vote in the town and become a voting bloc to vote against some of the wishes of long-time residents. This may be a concern as there are probably about 6,000 RV sites in the immediate area and adding another 450 voters might sway some issues. But that really didn’t seem to be a big concern.

We suspect, at least here in Florida, the motivation has to do with sales and hotel taxes. In Florida, if the RV has a lease for more than six months and a day, they are not subject to sales and hotel taxes from day one and the park owner can file for tax refunds for taxes paid during the initial six-month period. This can lead to a significant cash drop for the county, which gets at least a small part of the state sales tax and all of the hotel or tourism taxes.

We are working with the county to try to change the 180-day rule but it’s not going to be easy.  And it’s going to take longer than we would have hoped. Construction was to have started in November or December

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