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Correlation Between Profitability and Service, Culture, Passion
Are you making the connection between service and profitability?
Diana Oreck, former vice president of The Ritz-Carlton Leadership Center, knows from experience that the connection between service, profitability, culture and passion is “not just a fluffy, esoteric thing.” She provides statistics and experiences about the correlation and its payoff:
"In the hotel business, annual turnover runs 42 to 46 percent. At Ritz-Carlton, ours runs in the low 20s. That’s a huge savings, both financially and in wear and tear, on employees who stay behind. We know that our fully engaged customers at Ritz-Carlton stay more nights in a Ritz-Carlton hotel and spend 23 percent more on products and services."
There is a definite and strong correlation between service, profitability and success. Watch the video to learn more.
Here are some statistics to consider. In the hotel business, annually turnover runs 42% to 46%. At Ritz-Carlton, ours runs in the low 20s. That's a huge savings both financially and wear and tear on employees that stay behind. We know that our fully engaged customers at Ritz-Carlton stay more nights in a Ritz-Carlton hotel, but while they're there they are spending 23% more on products and services, more meals, more spa treatments, more massages.
There is definite correlation that this does pay off. At the end of the day, we're all in business, and regardless of what business you're in, I think everybody wants to increase their profitability, have more sales. In health care, for instance, rather than thinking necessarily about financial profits, you can think about less medical errors which cost a lot of money. Basically, in high tech, it's all a matter of making more sales.
What's interesting is that, regardless of what industry you're in, the great service, that's the money tree. That's the vehicle by which you get more customers.
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