Radisson Case Study

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Radisson Hotels, owned by the Carlson Company, was acquired in 1962 and grew at a rapid pace. Between 1978 and 1997 they went from 10 hotels to 360 locations in 47 countries. However, this huge growth came at a cost to their customer service. Realizing that changes were needed, the Radisson President and Executive Vice President, Brian Stage & Maureen O’Hanlon, worked actively to refocus the strategy of “growth at any cost” to a customer-focused strategy: “Champion of the guest.” This case study examines the steps they have taken and looks at ideas for how they can continue to improve services. Specifically, Radisson’s service agreement, the role of information technology, employee and customer satisfaction, commitment to service quality and goal alignment are discussed. How should Radisson define and implement their service guarantee? The service guarantee will benefit both the customers and the Radisson hotel owners, but careful thought must be taken to the intent of the guarantee and the wording that is communicated to customers. One proposed guarantee was “If you have a problem, please let us know and we’ll make it right or you won’t pay” (Schroeder, 2007). This is a great starting point. It puts the burden on Radisson but only after customers communicate concerns. The customer can rest at ease that any concerns will be dealt with adequately or their obligation to pay is erased. Radisson is smart to offer the guarantee this way, because a promise of service without complaint would be absolute, and customers may use minor annoyances to attempt to get a free stay. Customer concerns must be of high priority to the hotel manager or person in charge, and they must decide on the appropriate action. Sometimes an ongoing complaint may be due to specific equipment failure or room issue. Other times, the customer just has a particular expectation that is not being met. Either way, once managers learn of the complaint, they can delegate to employees the action to be taken. The guarantee statement should also convey a concern for the customer, that Radisson cares about finding a solution regardless of the problem, simply because it is the customer who is unhappy. An example would be “If your expectations are not being met, please let us know so that we can make it right, or you won’t pay.” This shows a more personal promise to customers, that their concerns will be dealt with until they are satisfied. The future potential for revenue from this customer depends on their satisfaction at the end of their stay, and they will communicate this experience to friends. What role should information technology play in accelerating the drive to improve service quality? Radisson already has in place the three pillars initiative: the Curtis-C worldwide distribution system, the customer database (Customer-KARE Systems), and the HARMONY property management system. Information technology improvements will be essential to keep these systems integrated allowing management to see trends and customize service to each guest. Radisson should continue to improve Customer-KARE, the existing fully integrated guest information system. It has already helped improve Radisson’s reach to 125 countries, but further expansion could result from continued embracement. Customers using this system could be able to book in advance, check availability, make changes, and have an interface that will be easier than using the phone, which will allow employees time for a more personalized service with current hotel guests. Additionally, this system could also be used to “observe trends and manage direct marketing campaigns” (Schroeder, 2007). The marketing team for Radisson could use these trends to determine when special discount rates can be used to fill empty rooms or set promotions for different seasons. The HARMONY property management system can be expanded on to assist with the needs of large conferences, room block management and meeting...
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