Customer Service Newsletter Incentive Programs

1 The following document offers advice that might be useful to any organization thinking about implementing an Incentive program. Editor Customer Service Newsletter Incentive Programs Compiled by: Kathy Friend, CHA. Performance Consultant and Director, Marketing Information Choice Hotels International This document was prepared for Property Systems, Choice Hotels International by Kathy Friend and is used to show how Choice Hotel operators can use an Incentive program to their best advantage. She can be reached by email at: Building your Revenue through technology, technique and strategy! Incentive Programs Performance Consulting Table of Contents Why an Incentive Program? ..3. Making the most of your program ..4. Rules of the program .5. Various Incentive program ideas: Upselling Program .6. Outlet Business Boost 7. Exceeding Budgeted Revenues .8. RevPAR Increase ..9. Return Reservations.

2 10. Choice Hotels International 2 Version - 05/08/00. Incentive Programs Performance Consulting Why an Incentive Program? If you're losing employees, you're losing customers! "On average, American companies lose half of their employees every four years, and half of their customers every five years. This suggests employee attrition may have a significant impact on Customer loyalty. Frederick Reichheld, author of The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value. KBS Research of Colorado Springs, Colorado, suggests an average cost for replacing a line level employee surpassed $5, in 1999. What is not included in this figure is loss of revenue due to unhappy customers. Finding exceptional staff is getting harder, why not go the extra mile to keep the great (and trained) team members you already have? Let's face it, the hospitality industry is not on the top of any career lists for high pay and short hours.

3 And most of us are not in a position to match the wages and benefits of the bigger hotels and top resorts in our market place. So what can you do to provide a competitive package? How about initiating an Incentive program starting with your front desk employees? Now, before you dismiss this idea, consider the following: COMMON PERCEPTIONS THE REALITY. This is going to cost me money. The suggested Programs pay only for performance, thus being self-funding (or paying). This is going to take me too much time to track and Excel based tracking forms are included. administer. If we do this, we have to keep it forever. Set start and end dates for each program. The owner won't let me spend any money. Remember that you only pay for incremental income so the program pays for itself and more. Why should we pay extra for the staff to do their Everyone needs motivation and recognition in addition, job?

4 Some extra $$$ or type of award (merchandise/certificate/travel) along with the competition . a contest generates is a bonus! How can do I decide what the award is? Don't do it yourself; let your people have input on the type of award that would motivate them. What about the other departments like housekeeping You have to start somewhere. The front desk makes sense as and maintenance? an income-generating department. Start there, see how it goes, then try it in other departments! I have too much turnover it will be too hard to Again, each contest has specified start and end dates. Only track. those team members that stay throughout receive the benefit. In addition, incentives may help reduce turnover issues. What if all the employees would like a different Ask them to get them involved! Cash always works, but if prize ? the group comes up with something else .. try to make it work!

5 How can I control guest Service personnel from Communication and training are the keys. Your guest Service underselling rates or turning away business IF it members need to be trained on how you expect them to interferes with their Incentive goal? handle specific scenarios. Choice Hotels International 3 Version - 05/08/00. Incentive Programs Performance Consulting Making the most of your program On the following pages you will find sample stock Incentive Programs that you can easily use at your hotel. Here are helpful tips to get you started. Start by getting the involvement of your staff. Let them know what your goal is (raise average daily rates ADR or revenue per available room RevPAR book more returning guests, increase revenues of outlets, etc.), and that you are considering using an Incentive program to accomplish that goal. Then ask what types of rewards would be suitable and enticing to them.

6 Remember, employees who are made a part of the process in developing a program will be more enthusiastic and quicker to endorse the program. Every Incentive program should have a specific goal. It is important to provide the staff with training and techniques to achieve that goal and helping them attain the reward. The Incentive Programs listed in this packet include training tips. Goals must be realistic and attainable. Incentive Programs can be individual or team oriented. Try a variety of Programs to reach your goals. Do not use incentives in lieu of fair and competitive wages and benefits. Consider different incentives. Our Programs indicate different cash levels for awards, but you could easily substitute any of the following: Movie theater tickets Amusement park tickets Department store or mall gift certificates Restaurant gift certificates Toys, games, other small gifts Comp time (this one is always a winner!)

7 Set beginning and end dates to meet the goal , usually one month or one quarter will work best. You can always extend or repeat a successful contest. Establish the rules of the program so there is no dispute or misinterpretation. A generic Incentive Program Rules' form is provided on the next page. To drive excitement, host a party for the staff involved to kick off the Incentive program. Post all Incentive program information, and keep it updated daily or weekly. At the conclusion of the program, post the results. Give personal praise and recognition for a job well done. Finally, solicit program feedback from the staff for future use. This is to find out what they liked or disliked and what will help improve the program for the next time. Choice Hotels International 4 Version - 05/08/00. Incentive Programs Performance Consulting Incentive Program Rules Rule #1 The program starts on _____ and ends on _____.

8 Rule #2 The following positions are eligible to participate in the program: _____ _____ _____. _____ _____ _____. Rule #3 To be eligible, you must be employed continuously from the start of to the end of the program. Rule #4 Any deceptive or dishonest practices will disqualify you from the program. Rule #5 If you are unsure of any aspect or rule of the program, please speak with the manager. In the event of any dispute, management's decision will be final. Rule #6 All rewards and incentives will be distributed on _____. Choice Hotels International 5 Version - 05/08/00. Incentive Programs Performance Consulting Upselling Program Goal: To book more rooms at higher rates and to upsell existing reservations into more expensive rooms. Time Can be continual but typically tracked and posted on a monthly basis. Frame: Who: Front Office staff with individual recognition. Method: Determine a booking and upgrade bonus system (example below).

9 As each staff member makes a new booking or upgrades within the system, they print a copy and place it in a folder with their name on it. The manager should review these weekly and keep a master tracking form. On a monthly basis (or quarterly), the manager posts the results. Upsell Bonus: $ upsell to poolside $ per night Upsell to mini-suite/specialty room $ per night Upsell to suite $ per night Upsell to Presidential/penthouse $ per night Booking Bonus: Sell a reservation at under Rack Rate $ per night Sell a reservation at Rack Rate $ per night Sell a reservation at Poolside Rate $ per night Sell a reservation at Suite Fallback Rate $ per night Sell a reservation at Suite Rack Rate $ per night Training Tips to sell a new reservation: Quote rates on a standard room and a suite. Point out extra features and benefits of a suite over a standard room. Training Tips to upsell existing reservations using the following dialog: "I see your reservation is for a standard double room.

10 Would you like to try our suite that includes (list features/benefits) and is only $ more per night?". Choice Hotels International 6 Version - 05/08/00. Incentive Programs Performance Consulting Outlet Business Boost Goal: To generate additional business for outlets such as restaurant, bar and/or recreational outlets. Time Can be continual but typically tracked and posted on a monthly basis. Frame: Who: Front office staff with individual recognition. Method: Print blank business card and have the staff print their name on them. When they refer a guest to an outlet they give the card to the guest who in turn gives it to the outlet. The outlet will collect the card, indicate the amount spent by the guest on the back and return the card to the manager on a daily or weekly basis for tracking. Or if the staff makes a reservation (restaurant, tee time) the outlet will note the staff name and track the amount spent by the guest.