What's the ROI of Training Programs?

Albert Einstein once said, “Not everything that can be counted counts, and not everything that counts can be counted.” Although on occasion, this statement rings true, with growing competition and reduced budgets, hotel and resort owners and managers need measurable returns on investment (ROI) for their training programs.

Throughout my career, I've tried to show hoteliers that in some cases, the reality of what their guests and potential guests experience may be very different from what hoteliers think. To prove this point, I'll play mystery shop calls of employees answering the phone in a less-than-desirable way. Then, I'll play a call of a trained employee who creates customized value. Although the benefit of one call over the other is often startling, employers continually ask me to prove why the second call is better and explain why training is critical to their success.

While the most important training-based ROI is seeing a quantifiable increase in market share and financial gains, employee behavioral shifts are really the driving force behind ROI. Better skills can mean better results.

So, how do you measure behavior? Understand what can and should be measured. Items may include:

  • Incremental financial gains
  • Market share growth
  • Employee loyalty and turnover
  • Customer loyalty and repeat visits
  • Competitive strategic and tactical changes.

Before training, start a benchmarking process. Besides reviewing hard numbers, analyze your employees' skills through mystery shop calls. Benchmark skills several days leading up to a training seminar by analyzing how many inquiries a hotel or resort receives and how many calls are converted into reservations. Review potential reasons why reservations aren't made and determine what could be done to convert the inquiry. Understand why potential guests choose another property. Most hoteliers don't track potential guest loss and the reasons why they may choose another property.

Failing to know the reasons behind guest loss means you are likely converting just 30 to 40 percent of your inquiries into reservations. With the implementation of the right skills, converted inquiries could be closer to 70 or 80 percent.

During training classes, we thoroughly investigate what the potential guest's experience is by playing mystery shop calls and reviewing with the staff what they did well and where there is room for improvement. We also call the competition live during class to compare skills and value. Together we create service formulas and techniques for converting reservations that provide better customer service.

Immediately after training, it's critical to begin reinforcing and measuring the new skills. For example, we conduct follow-up appointments with some employees and role play over the phone to provide additional opportunities for focused, one-on-one training. We score calls based on the specific set of criteria taught during class, and put incentives in place to reward employees for using the right skills. Without the right reinforcement program, you hurt your ability to maximize gains.

Measuring the effects of training is crucial in proving its worth. Review your guest service scores. How has the training touched your customers? How has it affected your guest service scores? How much have reservations increased? How has it impacted your employees, your turnover and your bottom line? Successful training programs will touch and make a difference in all of these areas.

In analyzing ROI, don't just measure revenue changes. Look to better employee behavior, less turnover and better customer service. Although these factors may seem intangible, they are measurable, and changes in these areas will eventually lead to significant results.

Don Farrell knows hotels. Beginning at the age of 15 with Marriott as a pot scrubber, Farrell eventually advanced to the sales department. Farrell spent seven years with Holiday Inns, Inc., where he served in a variety of roles, including regional sales director for 70 company-owned hotels and hundreds of franchises. He was also vice president of marketing for Inn America and Flautt Properties. Farrell founded Signature Worldwide in 1986 as a sales and marketing consulting company for the hotel industry. For more information about Signature, go to www.Signature-Worldwide.com.

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