Why do customers leave?

I am in IESE’s Aula Magna in Barcelona with the EMBA class of 2011.  Sebastian Escarrer, Vice President of Sol Melia (they have 300 hotels with 35,000 employees in 30 countries) is speaking to the group about the challenges facing family businesses, and business leaders in the current times.

One slide that I found of great interest was information from Sol Melia on why their customers stop using their hotels:

  • 1%      Death
  • 3%      Move
  • 5%      Influence of friends
  • 9%      Switch to the Competition
  • 14%    Dissatisfaction with product
  • 68%    Feel they have been treated with indifference by company employees.
7 out of 10 customers lost due to indifference of front-line employees.
Indifference from company employees is the destroyer of value.  A great product, a great price, good referrals…  all lead to nothing if my first interaction with a company is with a frustrated employee who does not care about me.
I wonder how much Sol Melia have invested in “product” – 300 hotels?  
I wonder how much Sol Melia have invested in developing employee attitude?  Would it reach even 1% of what is invested in land and buildings?

Author: Conor Neill

Hi, I’m Conor Neill, an Entrepreneur and Teacher at IESE Business School. I speak about Moving People to Action.

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