Zero Defections, Zero presence in the Hospitality Industry?

I have recently jumped back into the topic of Zero Defections and how relevant it is for your outlets customer service plan.

I studied the topic in depth in college and I remember at the time (2005) thinking the concept and ideas behind it were all so ahead of its time it was a revolutionary way to practice business. As I began to refresh myself with the fundamentals of Zero Defections I began to realise how many outlets are actively practicing it.

In 1990 The Harvard business review defined “zero defections” as —keeping every customer the company can profitably serve—.

Zero defections is a process that looks at the customers you already have and how we can keep them coming back, here is where service quality and service loyalty come in.

We all understand the close relationship between achieving a high service quality will create a high level of service loyalty but how many hospitality outlets are actively monitoring their defected customers, the reasons why and how they can prevent it?

I personally have defected from outlets in the past year or two that I would have been known as a regular customer, these companies had details of my age profile ,email and phone number all because I had a ‘’VIP CLUB CARD’’. To date I have received no contact from any of these outlets. The club card systems should be advanced enough to highlight inactive customers so why are outlets not targeting this issue.

Why are these outlets supplying VIP LOYALTY cards if the marketing departments are not monitoring the Loyalty?

If defection rates are not being monitored, how are management and marketing team’s strategizing the company’s profits scale, market share, and unit costs accurately?

The cost of continuously recruiting new customers outweighs the investment a company has to make in a comprehensive customer service strategy. Companies that have devoted, long term customers can financially outperform their competitors that have lower unit cost and high market share but high customer attrition.

‘’Companies can boost profits by almost 100% by retaining just 5% more of their customers’’ Harvard Business review

To achieve Zero Defections you have to continually outperform your competitors. I have been developing outlet specific training manuals and the importance of Zero Defections is at the forefront of my customer service training strategies.

Management and marketing teams should know their outlets defection rates and how to monitor it correctly, and if they don’t my company is here to help them!