Increase consumer satisfaction and loyalty by using science to understand how they perceive value

In this month’s Marketing Science Cheat Sheet for brands we explore how hospitality (and other service focused) brands can increase consumer satisfaction and loyalty by understanding how they perceive value through an easy to understand and action science-based framework.

The Insight

When a consumer’s perceived value of a service brand is high, their level of satisfaction and loyalty increase.

For the purpose of the study, the seven dimensions of perceived value are defined as:

  • Self-gratification value is defined as the consumer’s mood improvement & ability to relax with reduced stress by being in the hotel & using its facilities
  • Price value is defined as the utility derived from the hotel due to a reduction of its costs and from obtaining other services at reasonable prices
  • Transaction value is defined as the exhilaration gained from getting a good deal
  • Hedonic value is the fun and enjoyment that the consumer gains from the experience
  • Quality value is the utility derived from the reliability & superiority of the service performance
  • Aesthetic Value is the guest’s perception of and reaction to the ambience, architecture, interiors, and visual displays
  • Prestige Value is the high status and feeling of belonging to a higher social class that a guest gets as a result of experiencing the hotel

 

The study found that five out of seven dimensions (self-gratification, price, quality, transaction and hedonic) positively influence consumer satisfaction and loyalty.

The Science

Findings from “Modelling The Relationship Between Hotel Perceived Value, Customer Satisfaction, And Customer Loyalty” by El-Adly, M.J., (2019) highlighted that five our of seven core value dimensions positively increased consumer satisfaction and increased consumer loyalty.

Consumer satisfaction was defined as a construct that reflects the consumer’s overall impression, formed over time about the hotel’s performance. Consumer loyalty is defined as the likelihood that guests would return to their present hotel in the future, will continue staying in the hotel and will recommend the hotel to others.

As the hotel and service industry is a highly competitive and saturated market, it is important for brands to achieve high levels of consumer satisfaction and secure consumer loyalty.

Summary

Abu Dhabi University in the United Arab Emirates tested whether seven dimensions of perceived value positively effected consumer satisfaction and loyalty and what values were most prevalent in this.

This research was published in the Journal of Retailing and Consumer Services, an international and interdisciplinary forum for research and debate in rapidly developing fields of retailing and services studies.

The findings revealed through a survey of UAE residents that individually, five out of the seven dimensions that influence perceived value, positively influenced consumer satisfaction and loyalty. The study also revealed that consumer satisfaction had a direct positive effect on consumer loyalty.

Who can benefit

Whilst this study focused on how consumers experience hotels, many other hospitality brands can benefit from the learnings, such as entertainment experiences and transportation (including airlines and cruise liners).

As mentioned above, the hospitality industry is highly competitive and saturated, meaning insights generated from this industry can be applicable to other service industries. For example, as the hospitality industry becomes more and more crowded with new hotels, restaurants, travel, and other tourism services, it’s cheaper for brands to retain existing customers than attract new customers. By focusing on existing customers and increasing consumer satisfaction to drive loyalty, brands will be able to utilise existing customers to provide word-of-mouth recommendations, whilst also retaining their business.

Opportunities to Create Brand Magic

To capitalise on these findings, brands can ensure that their communications effectively leverage the five dimensions to communicate consumer value and drive consumer satisfaction and loyalty.

Hospitality brands such as Rotana Hotels & Resorts use self-gratification in advertisements to showcase how guests at the brand’s resorts appear to be carefree and relaxed as they enjoy the facilities.

 

Hilton was able to communicate the brands price value to consumers and transaction value, by highlighting what additional services guests can enjoy when they book through the brand’s app or website.

 

In addition, British Airways uses quality value in advertising to reinforce the brand’s trustworthiness and reliability, as well as the fact that the brand prides itself on its service.

About StoryScience

StoryScience is the UK’s first scientific strategic creative agency. Moving away from the traditional opinion-led approach, StoryScience’s guiding purpose is to pioneer scientific creative and deliver brand magic that audiences want and the results clients need. We deliver creative and strategic marketing solutions underpinned by a scientific creative thinking. In short, we use science to create brand magic.

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