Long-term relationships give long-term benefits

When the Premier League was the First Division and the First Division was the Second Division, Chelsea chairman Ken Bates came visiting.

He had driven from his Buckinghamshire farm to the Burnham Beeches hotel, then the headquarters for Select Country Hotels, to propose a deal. Chelsea were on the verge of promotion but their away form was better than their performances at Stamford Bridge. His plan was to create an away atmosphere for home games.

Once we dismissed his proposal for the hotel to buy his farm's dairy products we struck a deal; Chelsea would stay at Burnham Beeches each Friday before a home game, so building an "away" mindset for the players. They stayed, they started winning at home and they were promoted.

Weeks later, Bobby Robson wanted to move the national squad from another Buckinghamshire hotel, but he still needed the proximity to the national sports centre at Bisham Abbey. Where to go?

The answer was provided by the England team's coach driver, who happened to be - yes, you're there - the Chelsea coach driver. So began a long and successful relationship through first Select, then Queens Moat Houses, County and now Corus and Regal.

There are two important marketing principles to be drawn from this story.

First, the customer is not only the guest. If, as hoteliers, we see only the guest as our customer base we do not understand the channels of delivery of which the influencer is one. The coach driver was an influencer.

Identify your customers and the responsibilities they hold in the delivery of business; the travel agent, the purchasing manager, the secretary, the travel trade wholesaler, the incentive house, convention centre team and the tourist information centre. Extend this list to your experiences.

Draw a flow chart from prospect to the staying guest within the segments you wish to reach. Remember you are not all things to all people. Concentrate on the markets that are your strengths.

The second important lesson from the story is the need to understand the lifetime value of the customer. It is a fundamental concept in relationship marketing.

One major pizza company teaches all its staff that each customer has a price on their head of more than $5,000. They are not casual $5 purchasers, but valuable 10-year assets. Banks estimate that customers stay with them for an average of 12 years, solicitors 10 years, dentists and opticians 12 to 14 years in rural areas and eight years in a city. People keep the same doctor for between six and eight years.

Over 12 years the lifetime value of the England football team must be stratospheric compared with the price of milk and yogurt I discussed with Bates back in 1988.

In an increasingly competitive business market our emphasis must be on establishing long-term relationships between ourselves and the customer. It places the customer firmly at the centre of all we do.

The basis of relationship marketing is that the attraction of the new customer - the prospect - is merely the first step in the marketing process. The key is retaining and improving the relationship through to the ultimate, that of partner.

We need to move from being hunter gatherers, stalking the occasional customer, to farmers, tending valuable assets with good husbandry. Yet in business generally less than 20% of companies see relationship marketing as central to their strategy. Those which have adopted this, even as a marginal activity, have high expectations that an increase in loyalty will result in an improved customer relationship.

A challenge for our industry is in the ownership of customer service. Is it with operations which may be protective to service deliverables and use feedback as a tool against lack of capital expenditure, or by marketing which may interrogate the information to extend the database? Or is it, as it should be, at the centre of all our disciplines, shaping our product into benefits which match needs.

That Chelsea produced England doesn't stop there. Burnham Beeches has played host to many football clubs whose influential players first stayed at the hotel with England and provided a say on which hotels their club should use when in London. There are huge rewards in job satisfaction and financially from knowing your customer and tending your flock.

Stuart Harrison runs his own consultancy, the Profitable Hotel Company (profitablehotelcompany.co.uk). He is a Fellow of the Chartered Institute of Marketing, the Tourism Society and a Visiting Fellow of Oxford Brookes University