Want to Grow Your Company? Learn from a Luxury Hotel How to Satisfy Customers

First, some bad news: North American hotel guests’ satisfaction fell last year, according to the results of a prominent annual survey. Chief complaints driving overall ratings down this year were about Internet charges, noise, and room maintenance.

However, for the third year in a row, a two-time winner of the Baldrige Award scored well, ranking highest in its group of competitors. Is it any wonder that when a company has a systematic approach to satisfying customers, as well as a culture of continuous improvement, it can lead its industry with high performance?

After gathering more than 61,700 survey responses, the 2012 North America Guest Satisfaction Index Study by J.D. Power and Associates ranked The Ritz-Carlton Hotel Company, L.L.C., highest for overall hotel guest satisfaction in the luxury brand hotel segment. Within each segment, the study tallied guests’ overall satisfaction as well as their satisfaction with reservations, check-in/check-out, guest room, food and beverage, hotel services, hotel facilities, and costs/fees. The results, from Canadian and U.S. guests staying in hotels in North America between May 2011 and May 2012, show The Ritz-Carlton outperforming peer organizations in every category.

This news will not surprise anyone familiar with The Ritz-Carlton’s history of performance excellence. The company is a 1992 and 1999 recipient of the Malcolm Baldrige National Quality Award. And it is the first and only service company to date to have twice earned this Presidential award for performance excellence. Herve Humler, president and chief operations officer of the company, stated that the recent satisfaction results show the “commitment of our service philosophy to exceed our guests’ needs and expectations.” 

Those who are familiar with the Baldrige Criteria for Performance Excellence will recognize that such a philosophy reflects requirements of the Customer Focus section (category 3). In Customer Engagement (item 3.2), the Criteria call for an organization to consider how, in building customer relationships, it retains customers, meets their requirements, and exceeds their expectations. “The Criteria framework is embedded in how we do business and how we work,” says Janet Crutchfield Souter, senior director of quality at The Ritz-Carlton. “Most important is the leadership component; our senior leaders are driving our Gold Standards that are central to our culture.”

What’s more, The Ritz-Carlton’s years of doing Baldrige evidently have grounded its focus on continuous improvement. “We regularly go through a formal review process of our strategic plan to ensure its relevancy to the needs of the customers,” says Souter. She makes clear that learning from and sharing best practices with other organizations is a part of this focus. “We’re constantly learning and taking back and applying best practices,” she says.

One example is how the company’s learning from a presentation (by manufacturer Cargill, Inc.) at the Baldrige Program’s Quest for Excellence® conference a few years ago was a catalyst for the Lion’s Share, the company’s internal best-practice-sharing site online. When the Ritz-Carlton Company won the Baldrige Award in 1999, it managed 36 luxury hotels. Today it operates 79, and by 2016 the number of hotels will top 100. Clearly, customer satisfaction is a strong foundation for organizational sustainability and growth.

Congratulations to the Ritz-Carlton for the latest results it has achieved through its focus on customers and continuous improvement! Now, what do you think other organizations in every sector can learn from this Baldrige role model?