Don Schultz, Heidi Schultz, Frank Mulhern and Robert Passikoff
For a complete copy of the study, click here. 
Abstract
While it is widely believed that employee attitudes and engagement directly influence customer experiences and customer spending behavior, there is little empirical evidence that has explicitly demonstrated this. This study combines results from an extensive survey of employees and customers at a hotel chain with the actual spending patterns of customers. Results show a direct, measurable relationship between the employee and customer perceptions of the hotel brand and customer spending behavior.
The main findings of the study are:
- The key drivers of brand value to customers can be identified and linked to customer behavior. The dimensions that drive brand value to hotel customers are fast and efficient check-in, employee efforts to satisfy customers, hotel options and amenities, and precision in service. These drivers of brand value are consistent across a set of six hotel locations studies.
- Perceptions of employees with respect to brand value are similar to those of customers, but lack the uniformity across hotel locations. This represents an inconsistency in employee attitudes and, consequently, customer experiences.
- Customer perceptions of the brand and the dimensions that influence it have a direct and positive impact on how much money customers spend per hotel visit. A 10% increase in one key driver, the extent to which employees try to satisfy customers, translates into a 22% increase in customer spending.
The findings of the study represent a formal test of an internal marketing model whereby management actions to influence employee attitudes and behaviors can translate into customer behavior and organizational performance.
This study is conducted under the auspices of the Forum for People Performance Management and Measurement, an organization that provides funding for research in understanding motivation, employee engagement, and internal/external alignment.
Research Purpose
This study presents the results of an Integrated Internal Marketing (IIM) Model testing at a major hotel chain. The IIM Model is designed to link employee and customer behaviors to financial outcomes as shown below.
The expectation of the IIM Model are: 1) There is a direct connection between employee and customer behaviors that can be measured, monitored and managed; 2) A key measure of employees’ value is their impact on the income flows from customers; and 3) Employee and customer behaviors can be linked and the financial value of change can be determined.
The essence of the IMM framework is:
- Identify a set of relevant customers – determine current and potential future financial value
- Survey identified customers to determine internal marketing issues and opportunities
- Relate and connect relevant employees to identified customers and current behaviors
- Identify potential value of changing employee behaviors which might impact customer behaviors
Research Methodology
To investigate the linkages between employee perceptions, customer perceptions and customer behavior, the study combined information from employee and customer surveys with customer spending behavior drawn from a loyalty program database. The objective of the employee and customer surveys was to calibrate the strength and meaning of the hotel brand and its services.
The research was conducted at six locations of a major hotel chain. The locations were selected to represent both business and leisure properties in three different cities. Surveys were administered in person by a research associate who visited each hotel and asked employees to complete a paper survey form.
The customers included in the study were randomly selected from the hotel’s loyalty club database. Selected customers were interviewed by telephone. The employees and the customers were asked the same set of questions about the hotel brand as well as about a theoretical ideal hotel and a major competing hotel. Collecting information about perceptions of an ideal and competing hotel allows for comparison of brand perceptions on key dimensions.
Information from the customer surveys was paired with data on customer visitation and spending behavior from the loyalty program database for the exact same customers. Matching customer survey responses to actual spending behavior allows for strong inferences about the relationships between perceptions and behavior.
Contact Information
For more information about these research findings, contact:
Frank Mulhern
Associate Dean for Research
Medill School
Northwestern University
207 Fisk
Evanston, IL 60208
fjm274@northwestern.edu
