PUTTIN$$ ON THE RITZ

Luxury hotels are booming, and hotels are adding more and more expensive

rooms to compete for the highest$-$end customers$\mathrm{.}1$ Despite that vast number of

hotels in the luxury hotel market, though, the undisputed leaders remain RitzCarlton hotels. Ritz$-$Carlton competes by simply offering the best service. So

what exactly does this hotel chain do differently than its competitors, and how

does it maintain its advantage based on superior service?

Ritz$-$Carlton, owned by the hotel group Marriott International, consists of $70$

hotels in $23$ countries around the world. Ritz hotels employ $32,000$ people

worldwide and train their employees in the efforts necessary to create the perfect

service experience$\mathrm{.}2$ The history of Ritz$-$Carlton began in $1927$ with the opening

of the Ritz$-$Carlton Boston, a hotel renowned for the lengths it would go to for its

guests, such as reupholstering the chairs in Winston Churchill$$s room in red

fabric to match his favorite color or redecorating the d$$cor of Joan Crawford$$s

room with a theme of peppermint Lifesavers, her favorite candies$\mathrm{.}3$

Ritz$-$Carlton$$s superior customer service also is based on highly trained

employees who care for their guests, as well as a sophisticated customer

relationship management $($CRM$)$ system that ensures that Ritz guests receive

consistent and superlative service.

Attention to Employees

Ritz$-$Carlton combines extensive employee training and careful hiring practices to

create an environment that embraces the customer. For example, employees are

instructed to never say the word $$No$$ to a guest, and each concierge receives a

$$2,000$ daily fund for each guest that the concierge can use to solve problems for

hotel customers. Ritz guests are often surprised by the little things that hotel

employees do$,$ but this high$-$quality service gets eternally reinforced by constant

training. For instance, on every shift, on every Ritz property, a $15-$minute meeting

acts as a refresher to remind employees to act on one of the $12$Service Values$$

that constitute the company$$s $$Gold Standard.$$

Training is only one part of the excellent customer service; before it even gets to

that point, the Ritz$-$Carlton starts by hiring the right kind of employees. It looks for

people who are $$warm$$ and $$caring$$ and works to instill the Ritz$-$Carlton motto:

$$We are Ladies and Gentlemen serving Ladies and Gentlemen.$$

$4$ Before the

opening of the Ritz$-$Carlton Dallas, each employee had undergone more than $80$

hours of training. Of the $400$ employees who would run the hotel, half transferred

in from other Ritz hotels to ensure that the new opening would maintain the

customer service and attention to every detail for which the company continues

to be so well known.

Sophisticated IT Systems

To support its performance, the Ritz uses a CRM system called Mystique that

collects information about guests, from their special requests, to informal

observations by employees. This system is relatively difficult to implement

because observations need to be $$actionable$$ and confirmed by various aspects

of the customer$$s stay. For example, if a customer orders a martini with pearl

onions three times, the bartender should enter it into the system as the

customer$$s favorite drink, but if that same customer orders a similar martini only

once, it likely is not something worth noting. Yet employees are constantly trying

to $$wow$$ their customers, so any knowledge that helps them do so in the future

provides value to both employees and customers.

Ritz$-$Carlton$$s goal is to encourage guests to engage actively with the RitzCarlton brand. Its research shows that customers who connect with the brand

spend $23$ percent more than other customers. That makes customer service an

important driver of company value. After all, a mere $4$ percent increase in

customer engagement would be worth approximately $$40$ million in sales to the

company! Employees are trained how to engage their customers, realizing, for

example, that a rock star and a retired corporate executive probably should be

treated differently. Employees are taught to alter their style depending on the

situation, because their interactions should differ when greeted by a guest who

says, $$Good evening, young man; how are you?$$ versus another who nods, $$Hey

dude, how$$s it going?$$

Recognition of the Best

Finally, beyond the impressive loyalty that Ritz$-$Carlton enjoys from its customers,

it has earned some of the most prestigious awards in quality, including the

Malcolm Baldrige Award. To share what it has learned with other companies,

Ritz$-$Carlton recently created a customer service training program that costs

$$1,700$ per person. Now banks, hospitals, law firms, and car dealerships$$

industries often criticized for providing poor service$$send their employees to

training programs to improve their own level of service. Even employees of Lexus

dealerships, Macy$$s$,$ and Starbucks have been attendees at Ritz training