How The "Service-Profit Cycle" Increases Revenue Through Team Engagement

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I love it when people take fancy business school ideas and explain them simply in a way everyone can use.

This week on the Hospitality Daily Podcast, Starwood strategy leader-turned-The Phoenicia Malta GM Robyn Pratt is doing this in episode after episode:

"Six Sigma" > find and fix problems really well
"Blue Ocean Strategy" > create things people want

Today, she shares how she's using the "Service-Profit Cycle" to boost team engagement, team satisfaction, service quality, and revenues - all at once.

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How the guest experience impacts financial performance
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How The "Service-Profit Cycle" Increases Revenue Through Team Engagement

Robyn Pratt

Today, Robyn Pratt shares her blueprint for making money through improving service. It comes from something she saw when leading operational innovation for Starwood Hotels:

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Where employee engagement was high, you had high guest satisfaction.

All of this is part of the "service-profit cycle,” - and this isn't just a theoretical concept: she gives concrete strategies for engaging your team that directly impact guest satisfaction and your bottom line.

As the current general manager of The Phoenicia Malta, Robyn is putting these ideas into practice every day. She's achieved an impressive 9.6 out of 10 in employee engagement scores, and she's seen guest satisfaction scores climb right alongside those.

Whether you're running a small B&B or managing a large resort, you're going to want to hear her talk about this. Robyn's insights could transform the way that you think about your team, your guests, and your overall strategy.

Listen now on the Hospitality Daily Podcast

Takeaways

A few takeaways from what Robyn shared:

Focus on Employee Engagement: Engagement is more important than happiness (and usually leads to happiness.) Hold all levels of management accountable for maintaining and improving this.
The “Service-Profit Cycle”: Employee engagement, guest satisfaction, and financial success are strongly interconnected.
Leadership Makes The Difference: You must genuinely care about your teams and demonstrate this through daily actions.
Take A Long-Term Perspective: Building a strong culture and improving employee engagement is an ongoing process that requires consistent effort and reinforcement. It's not a one-time training event but a continuous journey that yields long-term benefits.

Putting this into action

Let’s make this practical - here are some ways you can put Robyn’s advice to work in your hotel this week:

Put together an employee survey (if you don’t already have one). I’ve included an example later in this email.
Guest feedback review: Set aside time to review recent guest feedback. Look for patterns in comments about staff interactions and share positive feedback directly with the employees mentioned.
Schedule a "mix and mingle" session where guests can chat with your team. I loved this idea from Robyn! This can provide valuable direct feedback and show guests that their opinions are valued.
Align your leaders: Hold a meeting with your department heads to discuss the importance of employee engagement. Ask each to come prepared with one idea for improving engagement within their team.
Emphasize your values: In your next team meeting, discuss one of your hotel's core values. Ask team members to share what this value means to them and how they see it being applied in their daily work.
Lead by example: Choose one day this week to work alongside your front-line staff in a visible area. This could be helping to serve breakfast or assisting with check-ins during a busy period.
Improve transparency: Share some key performance indicators with your staff, such as recent guest satisfaction scores or occupancy rates. Explain how these metrics relate to the team's daily work.
Implement or reinvigorate your employee recognition program. (James Ferguson shares how he did this here.) Make sure you have a way to recognize and publicly acknowledge team members who have exemplified your values or provided exceptional guest service.

Example employee satisfaction survey

Today, Robyn mentioned surveying employees to understand satisfaction and engagement levels as you may be doing with your guests. If you’re looking for a starting point, you might consider using something like this:

Please rate the following statements on a scale of 1-10 (1 = Strongly Disagree, 10 = Strongly Agree):

I feel happy working at this hotel.
I would recommend this hotel as a great place to work to my friends and family.
I understand how my role contributes to the hotel's overall success.
I feel my ideas and opinions are valued by my immediate supervisor.
I have the tools and resources I need to do my job effectively.
I feel proud to be part of this hotel's team.
I understand and can explain our hotel's core values.
I feel supported in my professional growth and development.

Open-ended questions:

What's one thing we could do to improve your work experience?
How can we better support you in delivering excellent guest experiences?
Is there anything else you'd like to share about your experience working here?

Thank you for your feedback! Your input is valuable in helping us create a better workplace for everyone.

And that’s a wrap! If you found it helpful, I’d be very grateful if you could forward it to a friend or colleague who might also enjoy it.

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A few final things:

If you have any thoughts, ideas, questions, or suggestions for Hospitality Daily, please reply to this email. I’d love to hear from you.
If you have a product or service that would benefit the hospitality professionals who read, listen to, and watch Hospitality Daily, let’s work together to help you help more people.

Thank you for reading.

-Josiah

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