Lean management is a popular practice in manufacturing, but the concept is being adopted by other industries to help them cope with the ever-changing business landscape. One industry that could benefit from applying lean management methods is hospitality, which is estimated to become a $4.5 billion industry by the end of 2022, according to the Hospitality Global Market Report 2022. Ensuring continued growth while facing multiple global crises and new customer demands brought about by the pandemic will not be easy for an industry that is mainly about servicing customers.
A survey conducted by the American Customer Satisfaction Index (ACSI) found that customer satisfaction among 6,000 travelers fell to 2.7% over the course of 2021-2022. In addition, ACSI score has steadily decreased over the past decade, with 71 in 2022. Adopting lean principles can help hotels stay on top of shifting customer expectations.
What Is lean management?
Lean, according to the paper “Lean management in hospitality: methods, applications and future directions” published in the International. Journal of Services and Operations Management, is “a bundle of principles, methods and actions for the effective and efficient configuration and examination of the whole supply chain.”
The study pointed out that creating value without generating waste is the goal of lean management and that value is any action or process that customers would be “willing to pay for.” The researchers stressed that lean management tools help identify and eliminate waste of resources, and as waste is eliminated, quality improves while production time and costs are reduced.
Meanwhile, authors of the study “Lean management in hotels: Where we are and where we might go” published in the International Journal of Hospitality Management, explained that anything that buyers consider non-value adding to a product or service is a cause of losses.
The comprehensive framework developed by Malin Malmbrandt and Pär Åhlströmto and published in the paper “An instrument for assessing lean service adoption” for International Journal of Operations & Production Management shows how to apply and maximize lean benefits. It points out that lean service is enabled by employee training, management commitment and appreciation, infrastructure, and resources.
Customer identification value, customer involvement, waste identification, workplace design flow, alignment of organizational processes, standardization, continuous improvement, result visualization, and multi-functional teams are all important lean practices.
Evaluating lean methods
Not all lean principles are applicable to the hospitality industry. The 2016 paper “Lean Hospitality – Application of Lean Management Methods in the Hotel Sector” from Procedia CIRP examined the relevance of lean management methods to the needs of the hospitality industry. The methods evaluated are based on their performance using the following criteria:
- Effort and costs for implementation: Ideally, resources should be used efficiently and at a low cost to ensure a short amortization period.
- Time to visibility: Lean often fails due to missed results in the short term, so this criteria stresses the short-term visibility of positive effects.
- Impact on performance KPIs: A company’s management makes decisions based on performance KPIs. Performance results from the lean method need to be “measurable and convincing.”
- Sustainability of outcome and application: Lean-thinking aims for the long-term benefits of the organization. It takes time for people to change their mindsets. As a result, this criterion has also been incorporated into the validation model.
Using the evaluation process, the researchers came up with the top 20 lean hospitality methods (see Figure 1).
Successful lean practices
The hospitality industry has undoubtedly discovered the benefits of the lean phenomenon. In the hotel sector, Marriott in the U.K. conducted workshops on lean thinking and captured higher customer satisfaction rates in the post-implementation phase of lean. Sally Toister, the former senior director of operational excellence for Marriot Hotel, said in an interview with the CX Network podcast theatre that one of the ways they implemented lean strategies in their hotels was to refine food menus for guests who stayed five or more days.
Many guests staying at Marriot for longer periods usually dined outside, and since the hotel provided only standardized similar meals, they realized they were losing out their sales to other restaurants. Sally and other executives mobilized their experienced chefs to tailor different food offerings to cater to their customers’ needs but optimized costs by using the same ingredients for standard food meals. To track the performance of the project, they used a loyalty metric like the composite score (likelihood to recommend). They did not only boost sales in their menu but also drove up customer satisfaction.
Yukai resort in Japan is cited in the 2016 study mentioned above as a model for successful lean application. The establishment aims to eradicate wastes while not compromising quality of services. The resort provides half the standard market price of lodging services with the same industry-standard quality and less staff. Dinner, for instance, is served in a buffet manner to cut staffing costs, while receptionists work in areas that need assistance in their free time. Moreover, all the lodging duties are divided among all the employees. Training on Kaizen (continuous improvement) is conducted weekly and monthly by the managers.
Editor’s Note: This article originally appeared in the 22nd edition of Performance Magazine – Print Edition.
Image Source: Pexels | cottonbro studio
Editor’s Note: “Fraud in the Travel Industry: Is Digital Footprinting the Solution?” is originally published in the latest edition of PERFORMANCE Magazine – Printed Edition. This article is written by Gergo Varga, Senior Content Manager / Evangelist at SEON.
Businesses in the travel and ticketing industry are seeing more and more customers buying travel tickets online rather than in person. With this convenience come some risks, creating the need to mitigate against established and emerging types of digital fraud alike.
Of course, fraud is not just an issue for ticketing companies but any industry that focuses on card-not-present transactions and services to streamline customer payments. However, there are different touchpoints and pain points in each sector, and you can only mitigate it if you know what kinds of fraud can hit your business and how you can deploy the right strategies to stop cybercriminals in their tracks.
According to Condor Ferries, online travel bookings now exceed $817 billion around the world in total worth, with an estimated 148.3 million individual bookings completed annually. Following this rise closely, travel and ticketing fraud has become an increasing problem for companies, with fraudsters usually targeting the online ticketing process itself.
Different Kinds of Fraud in Travel and Ticketing
Carding is one of the main types of fraud faced by companies. Carding involves the illegal acquisition of debit and credit card credentials and their use by fraudsters pretending to be the legitimate cardholder.
Tactics employed by fraudsters to gain this information from their victims include card cloning, RFID skimming, phishing, spyware, data breaches and BIN attacks, for instance. In the case of RFID skimming, for example, the public has been so concerned about this in recent years that companies like Duo have had to create guides explaining RFID blockers and similar devices to inform their customers. Fraudsters using a cloned card or stolen card information can then create an account on a website and attempt to buy tickets using it.
But why does this matter to companies selling travel and other types of tickets online? One concern is chargebacks. When the legitimate cardholder realizes a criminal has used their funds, they will ask the card-issuing bank for their money back. In these cases, the merchant ends up losing both the money and the ticket issued, as well as incurring certain admin fees to the bank.
Sometimes, fraudsters use ticketing websites to do testing – to test if the cards they’ve acquired illegally are still “live,” meaning that they haven’t already been frozen or canceled. This entails attempting a payment with each card number, usually small in value, before marking the live ones still in use and moving on to larger, more ambitious schemes with them.
Even when the money the ticketing service loses is small, this can have a knock-on effect because card-issuers keep track of what’s called a chargeback ratio, or how often a merchant incurs chargebacks. If it’s too often, they increase the standard processing fees the merchant pays for each payment — legitimate or not – and, in some cases, even ban merchants from using their networks outright. This means you can no longer serve customers paying with specific types of cards, such as Mastercard or Visa.
Criminals can also try to make a profit by reselling certain types of tickets (usually last-minute flight offers) on dark web marketplaces or via encrypted social media, such as Telegram, as explained in an article on the dark web on Peraton.
Other tactics that cybercriminals use on airline sites include booking a flight using card details that they’ve stolen and then cancelling them. This is so that their account can still be credited with any adjacent bonuses and miles, even if they have canceled the flight, which they will use for other fraud moving forward. Although not as common as they once were, bonus miles and other extras are advertised by airlines and other companies, such as United, as an incentive for travelers to choose them over competitors.
Ticket scalping is another pain point for travel as well as other types of ticketing websites. This occurs when fraudsters use bots to bulk buy tickets from ticketing or travel companies online, causing the flight or event to sell out.
First, they might use an auto refresher to spot when tickets have gone on sale. Then, they’ll employ scripts to automatically fill out forms and details during the transaction process. Fraudsters might also use pre-bots to create multiple fake accounts across many different websites. If a site requires customer identification, then fraudsters might attempt to provide this in the form of stolen or synthetic IDs.
Ticket scalping is a form of arbitrage, as they then resell tickets to customers for a marked-up price, generating a profit. This is also known as ticket touting or ticket reselling and doesn’t just affect travel companies but also music, entertainment, and sporting events.
One prominent case of ticket scalping in the travel industry was during the height of the COVID-19 pandemic, at the start of which airports canceled flights in the face of impending lockdowns. In a report, CNN describes how scalpers seized an opportunity to sell air tickets on the black market to Chinese students looking to travel from the US to China to join their families. With rumors of airlines slashing seats and inbound flights, agents turned into scalpers by putting up a premium on these now highly desirable tickets.
The CNN reporter found a $300-450 booking was hiked up to the equivalent of $1,650 by agents acting as scalpers. According to the report, the Civil Aviation Administration of China claims that it has lost $70,000 to ticket scalpers and has since rolled out price control and outright bans on some ticket exchanges and proxies.
How Digital Footprinting Can Address Fraud
With the right fraud prevention and detection software in place, organizations can spot and prevent fraudulent accounts before they have a chance to target your transaction process.
Digital footprinting can be part of that process, helping assess the true intentions of any customer looking to transact. Imagine a fraudster who has acquired card details stolen during a data breach and is looking to register an account to buy tickets fraudulently and then resell them for a profit.
It’s at this sign-up touchpoint that digital footprinting techniques, such as reverse email and phone lookup, can help. The digital footprint module will check this new user’s email address or phone number to see if they have social media or other web histories.
Why does this matter? Because reverse lookup tools, as a form of data enrichment, tell you a lot about a user. Starting with information the customer submits, such as an email or phone number, digital footprint analysis sources hundreds of data points to create an accurate, real-time profile of the person who uses the address or phone number, from which we can evaluate their intentions – or even automatically ban or approve them.
For instance, when a customer provides a phone number as part of their check-out process, you can use the resulting data points to find out if this phone number is a disposable or VoIP number, as well as any associated names and addresses. As SEON’s guide to phone lookup explains, using reverse phone lookup, you can find out whether the phone number is valid, the country the carrier is based in (which you can combine with IP analysis), and any connected social media or instant messenger accounts, among other information.
Real people, even those who aren’t techies, almost always have some sort of online presence. But if a new user’s phone or email address is not linked up to any social media or online platforms – for instance, accounts on Airbnb, Skype or Facebook – you have good reason to be suspicious and thus request additional verification and proof of their identity. Furthermore, each country has its own mix of popular digital services, so a customer that deviates from the norm could also signal an anomaly that warrants closer inspection.
It’s incredibly difficult and complex for fraudsters to fake a legitimate digital footprint. The email address they create to defraud you will not have a digital presence, instead having been created recently just for this purpose. Scalpers use bots to bulk buy tickets, and these are typically in control of multiple accounts at a time (multi-accounting). All these accounts, of course, will have registered using new, not-before-seen-online email addresses. This is a huge red flag.
Digital footprinting can be a good low-friction fraud prevention and detection option, as it can help keep the transaction experience for your genuine customers efficient and enjoyable. With risk ratings, each individual looked at can be assigned a risk score on the basis of their profile, and a customer with no digital footprint will have a much higher risk score than a user with one. Such risk scoring can help introduce friction only where it is needed, in what’s called dynamic friction that changes based on the customer’s score.
Although digital footprinting is an excellent, cutting-edge tool for spotting fraudsters, it works most effectively when combined with other fraud prevention and detection tools. Device fingerprinting involves collecting information about a user’s device, while IP analysis looks at where in the world they connect from and how. These help in multitude ways. For example, it is suspicious if several different users use the exact same device and IP, so an extra check can be introduced.
Another consideration of fraud prevention is velocity checks, which examine customer actions through the lens of time. For example, if a customer has attempted to purchase multiple tickets from your website for events at various locations over the course of just a few hours, then this will be flagged by the velocity-checking process. While some customers may do this for legitimate, non-fraudulent reasons, it can also be a sign of fraud. Other kinds of behavioral analytics include looking at abnormal interactions and a user’s typing cadence.
By combining data points from digital footprinting, device fingerprinting, velocity checks and more, through sophisticated fraud prevention software, travel companies can be better protected.
Some vendors allow the merchant to fully customize each of these elements to match their risk appetite and past fraud events, while others promote a set-and-forget approach, often making use of blackbox (non-transparent) machine learning.
Digital footprinting is a great tool to stop fraudsters from hijacking your ticketing and other transaction systems. Thanks to data enrichment, it crucially involves scaling, which means that you can introduce as many or as few checks as you need, from 100 checks an hour to one check an hour.
By adopting strategies such as dynamic friction, suspicious accounts will need to provide more information, while customers proven to be trustworthy will enjoy frictionless check-out – all keeping you safe from instances of carding, account takeovers, and ticket scalping, as well as every other type of fraud.
About the author
Gergo Varga has been fighting online fraud since 2009 at various companies – even co-founding his own anti-fraud startup. He’s the author of the Fraud Prevention Guide for Dummies – SEON Special edition. He currently works as the Senior Content Manager / Evangelist at SEON, using his industry knowledge to keep marketing sharp, communicating between the different departments to understand what’s happening on the frontlines of fraud detection. He lives in Budapest, Hungary, and is an avid reader of philosophy and history.
Empathy has started to become one of the most essential skills that management should foster amongst their leaders. The Center for Creative Leadership conducted a study that included 6,732 managers in 38 countries and concluded that empathy has a positive impact on job performance. Namely, bosses perceive their subordinates (managers) who practice empathetic leadership as better performers in their jobs and it has proved to have a vital role across the business functions, such as Marketing, Customer Service, and Human Resources. Ultimately, it showed that embracing empathy within the culture of the workplace can positively influence the employees’ job satisfaction.
Empathy and Marketing/Product Development
In marketing, trying to understand your customers and putting yourself in their shoes, will definitely help you to better understand their needs. Consequently, this would help in creating and promoting the right products and services for the right customers. Empathizing is actually the first step in the design thinking process, which includes understanding the customers before you start to design your product. According to Stanford, empathy is an integral aspect when designing a human-centered process, and it further explains that the “Empathize mode is the work you do to understand people, within the context of your design challenge.”
Empathizing means observing, engaging, and listening to your customers; it does not focus only on talking with your customers and getting insights from interviewing them. It is about putting yourself in the customers’ shoes to try and figure out their pain points and thoughts concerning their attitude and behavior with a specific product/service while still having the perspective of a marketer or product developer. Marketers or product developers might even reach conclusions that could lead them to a whole new product that would actually create a need that their target market has not thought of.
An example that could illustrate this is IKEA’s marketing strategy involving products of flat packs and self-assembly furniture. One of the company’s frontline workers found difficulty in trying to get a table into his car, so he took the legs off to make the table fit. This led to an empathetic insight that consumers might be facing the same problem. To address the issue, IKEA initiated flat packs and self-assembly furniture. This example highlights empathetic reasoning in which employees are keen to put themselves in the shoes of customers, resulting in higher market performance.
Empathy and Customer Service
If you want to better serve your customers and solve their problems, empathy is the main key to a better customer experience and should be embraced in a customer service function’s strategy and culture. When customer service agents answer their clients, whether it is over the phone or face-to-face, they should show that they care about solving their clients’ issues and offer better alternatives. This is one way of keeping their customers and turning them from one-time purchase customers to loyal ones.
Talking and listening to your customers in an empathetic way is one of the strategies that will enable customer service functions to handle difficult customers while gathering more data and insights. This could help other departments in improving their products and services, such as adding more features or even coming up with new solutions. Empathetic behavior in customer service also helps organizations in maintaining good relationships with their customers, especially for industries that rely on the customers to create their image of the organization through their customer service agents.
Empathy and Human Resources
Dealing with your employees in an empathetic manner will definitely have a positive impact on their job satisfaction and performance. Empathy should be involved across the different HR areas and not just in communicating with employees, such as feedback meetings or training and development programs. Having an empathetic attitude will enable HR people to gather more data for developing better rewards, benefits systems, and training and development programs. Moreover, embracing an empathetic attitude will enable HR functions to foster inclusion and diversity in the workplace, which is one of the top priorities for HR leaders and managers.
Empathy in HR has never been more important than today as people and businesses around the world are trying to recover from the effects of COVID-19. Encouraging and supporting managers and leaders to practice empathetic listening with employees is not a waste of time. While leaders and managers do not have to agree with everything being said by their employees, it is imperative for them to show their employees that they care about their opinions, ideas, and thoughts. With the challenges of remote working amongst others, empathy has become vital as it increases the employees’ sense of belonging and appreciation in the workplace.
However, some business owners might think that empathy is overrated and can have a negative impact. For instance, some managers or leaders may think empathy could cause emotional and psychological burdens that could lead to burnout. Moreover, it might even lead to poor decision-making as it encourages managers and leaders to be emotionally involved which may push them to make wrong decisions rather than focus on data and facts. Furthermore, some organizations might be worried that empathy may create a messy or chaotic environment to work in; structured and professional feedback meetings, for instance, may turn into informal chats.
Everything has its pros and cons, but it depends on how the organization embraces empathy in the workplace and to what extent. It is essential that organizations differentiate between empathy and sympathy as the two concepts are completely different. It is the responsibility of HR people to highlight the difference between the two concepts starting from the top management to the most junior person in the workplace. Moreover, setting the limits of practicing empathy in the workplace is essential; it is not about agreeing to everything being said by the employees or giving false promises, but it is about listening and making an effort to understand what the other person is trying to explain to reach a decision that can benefit both employer and employee.
Like any skill, empathy is good up to a certain extent. Organizations need to understand how they want to involve it in their culture and in what sense. HR functions should provide sessions/workshops or training sessions that explain the definition of empathy and the methods of practicing it. HR functions also should monitor how leaders and managers are practicing empathy within their functions and how their employees are perceiving it.
“If communication is more art than science, then it’s more sculpture than painting. While you’re adding to build your picture in painting, you’re chipping away at sculpting. And when you’re deciding on the insights to use, you’re chipping away everything you have to reveal the core key insights that will best achieve your purpose,” according to Craig Smith, McKinsey & Company’s client communication expert.
The same principle applies in the context of data visualization. Chipping away is important to not overdress data with complicated graphs, special effects, and excess colors. Data presentations with too many elements can confuse and overwhelm the audience.
Keep in mind that data must convey information. Allow data visualization elements to communicate and not to serve as a decoration. The simpler it is, the more accessible and understandable it is. “Less is more” as long as the visuals still convey the intended message.
Finding the parallel processes of exploratory and explanatory data visualization and the practice of sculpting could help improve how data visualization is done. How can chipping away truly add more clarity to data visualization?
Exploratory Visualization: Adding Lumps of Clay
Exploratory visualization is the phase where you are trying to understand the data yourself before deciding what interesting insights it might hold in its depths. You can hunt and polish these insights in the later stage before presenting them to your audience.
In this stage, you might end up creating maybe a hundred charts. You may create some of them to get a better sense of the statistical description of the data: means, medians, maximum and minimum values, and many more.
You can also recognize in exploratory if there are any interesting outliers and experience a few things to test relationships between different values. Out of the 100 hypotheses that you visually analyze to figure your way through the data in your hands, you may end up settling on two of them to work on and present to your audience.
In the parallel world of sculpting, artists do a similar thing. They start with an armature-like raw data in designing. Then, they continue to add up lumps of clay on it in exploratory visualizations.
Artists know for sure that a lot of this clay will end up out of the final sculpture. But they are aware that this accumulation of material is essential because it starts giving them a sense of ideal materialization. Also, adding enough material will ensure that they have plenty to work with when they begin shaping up their work.
In the exploratory stage, approaching data visualization as a form of sculpting may remind us to resist two common and fatal urges:
- The urge to rush into the explanatory stage – Heading to the chipping away stage too early will lead to flawed results.
- The urge to show all of what has been done in the exploratory stage to the audience, begrudging all the effort that we have put into it – When you feel that urge, remember that you don’t want to show your audience that big lump of clay; you want to show a beautified result.
Explanatory Visualization: Chipping Away the Unnecessary
Explanatory visualization is where you settle on the worth-reporting insights. You start polishing the visualizations to do what they are supposed to do, which is explaining or conveying the meaning at a glance.
The main goal of this stage is to ensure that there are no distractions in your visualization. Also, this stage makes sure that there are no unnecessary lumps of clay that hide the intended meaning or the envisioned shape.
In the explanatory stage, sculptors use various tools. But what they aim for is the same. They first begin furtherly shaping the basic form by taking away large amounts of material. It is to ensure they are on track. Then, they move to finer forming using more precise tools to carve in the shape features and others to add texture. The main question driving this stage for sculptors is, what uncovers the envisioned shape underneath?
In data visualization, you can try taking out each element in your visualization like titles, legends, labels, colors, and so on. Then, ask yourself the same question each time, does the visualization still convey its meaning?
If yes, keep that element out. If not, try to figure out what is missing and think of less distracting alternatives, if any. For example, do you have multiple categories that you need to name? Try using labels attached to data points instead of separate legends.
There are a lot of things that you can always take away to make your visualization less distracting and more oriented towards your goal. But to make the chipping away stage simpler, C there are five main things to consider according to Cole Nussbaumer Knaflic as cited in her well-known book, Storytelling with Data:
- De-emphasize the chart title; to not drive more attention than it deserves
- Remove chart border and gridlines
- Send the x- and y-axis lines and labels to the background (Plus tip from me: Also consider completely taking them out)
- Remove the variance in colors between the various data points
- Label the data points directly
In the explanatory stage, approaching data visualization as a form of sculpting may remind us of how vital it is to keep chipping away the unnecessary parts to uncover what’s beneath, that what you intend to convey is not perfectly visible until you shape it up.
Overall, approaching data visualization as a form of sculpting may remind us of the true sole purpose of the practice and crystalize design in the best possible form.
Sign up for The KPI Institute’s Certified Data Visualization Professional course to learn the fundamentals of creating visual representations, the most effective layouts, channel selection, and reporting best practices.
The CRM process is a business technique that allows firms to better identify and comprehend their customers. Often, Customer Relationship Management (CRM) programs and methods are used to gather the information needed to understand the current experience of a customer. CRM systems typically collect and store information about potential and current customers, which makes them very useful for both marketing and sales processes.
Recently, almost all companies use CRM to achieve their business goals. It is reported that 65% of companies implement a CRM software platform within the first five years of operation, indicating a clear need for solutions to help companies manage large volumes of customer data. Of course, this type of CRM is different from B2C (business to customer) management software because B2B and B2C companies live in different realities.
The Objectives of CRM
CRM systems collect customer data through various channels or points of contact between the customer and the company, which may include your company’s website, phone calls, live chat, direct mail, marketing, and social media. Companies are trying to integrate social CRM data with other customer data from sales or marketing to get a single view of their customers. These systems collect data about customers and the organization’s interactions with those customers. Many CRM systems are capable of tracking customer interactions and developing relationships from first contact to final sale and beyond, providing a 360-degree view of customer relationships.
When marketers or salespeople learn more about a customer, CRM information tells them details such as who the customer is, how the company found the customer, and what information they requested. From there, they can anticipate people’s needs and set up the next set of interactions to help your company progress in the adoption process. With all the necessary customer data, CRM tools allow you to perform this process. CRM solutions can display past customer and contact patterns, giving marketing teams a clear picture of their target audience. Although CRM may seem like an internal process, customers will have the best experience with you.
Analytics in CRM helps improve customer satisfaction by analyzing user data and helping you create targeted marketing campaigns. Quickly discovering the benefits associated with CRM initiatives means a better understanding of who the customer is and how best to talk to them. The best customer support system is a key strategy for influencing the customer to support the company.
The overall business goal of a CRM system is to help an organization:
- Attract new prospects and guide them through the sales process.
- Maintain and manage relationships with existing customers to maximize their lifetime value to the company.
- Increase productivity and reduce overall marketing, sales, and customer management costs.
Meanwhile, the goal of a CRM process is to improve a company’s marketing efforts, product development, customer service, and sales.
CRM can help you identify customer needs, track feedback, and manage customer service improvement. One possible strategy for improving CRM in your business is to serve customer-centric goals. Be prepared to test different ways you can use CRM to achieve your business goals. Get in touch with the experts to help you in choosing the right solution so you can have a completely customized CRM system.