by: Jennifer Rice

Dear reader: this is a white-paper draft, and I’d love your comments (especially if I’m missing anything major in the audit framework) before publishing.

When building a reputation as an ethical company, actions speak louder than words. Yet in most businesses, these actions are happening behind the scenes through employee, philanthropy and supply chain initiatives. If customers can’t see these actions, there’s minimal impact on perceptions, purchase and loyalty.

If you want your good intentions and efforts to be recognized and appreciated by customers, you have to show them. And we’re not talking cause marketing. Customers give credit for experiencing goodness in the customer experience… in the ways in which they interact with your company every day. And the most powerful and memorable reputation-builders are those ethical experiences that are unique and support your brand promise.

The Fruitful Opportunity Audit below shows at a glance the social-impact initiatives of a handful of players within the hospitality industry. This is an illustrative chart based on available information, so don’t get too hung up on the details. What’s important is to see the overall macro-trends, which in this case shows that Fairmont Hotels and Resorts is doing a very effective job aligning CSR initiatives with their brand promise and integrating them into the customer experience relative to Marriott and Intercontinental Hotels. (click image to see full-size.)

hospitality-audit1

Let’s first back up and discuss the chart structure. The columns represent the locus of initiative; whether it’s primarily targeted to your suppliers, employers, community or customers. The bottom row shows tablestakes initiatives that most businesses are undertaking regardless of industry. These include basic blocking and tackling like CSR reporting, employee volunteerism, sustainability initiatives in energy, water, waste, IT and supply chain, and so on. Note that it also includes philanthropy efforts that are not directly aligned with the category or brand; while these efforts are admirable, they’re not aligned with brand and business. It’s likely that redirecting those funds into more brand-relevant programs will generate more bang for your buck.

The middle column represents activities that are industry-specific. Now we’re getting into actions that are more strategically in line with your business and therefore could be more effective in reputation-building. IHG offers the Innovation Hotel, an educational online tour through a prototype green hotel. It’s not yet a brand builder because none of these hotels (and therefore customer experiences) currently exist in the IHG portfolio, but it’s a great start. Green meetings, combating sex tourism, developing hospitality talent and ensuring diversity among hotel owners are all examples of hospitality-specific CSR.

The top column is where it gets really interesting… this is where you’ll see social-impact initiatives that directly support the brand promise. This specific comparison I’m doing is a bit unfair, as Fairmont Hotels has a more tightly defined value proposition than the master brands of Marriott and IHG. But you’ll see that Fairmont’s done a great job filtering their CSR activities through their brand lens of turning moments into memories through unrivaled presence (a large percentage of their properties are historic landmarks), authentically local experiences, and engaging service. One authentically local CSR initiative is supporting local farmers – the menus always reflect local, organic cuisine, and a unique travel package called “Shop with Chef” enables travelers to tap into the head chef’s knowledge of the local farmer’s market. They have private-label organic, free-trade tea for guests, numerous eco-travel packages, and hybrid cars available for guest use. Fairmont also has the largest number of hotels located in UNESCO World Heritage Sites, national and provincial parks and biosphere reserves of any major North American hotel company, so their partnership with World Heritage Alliance reinforces the brand.

Again, it’s possible that I’m missing some brand-building efforts for Marriott and IHG, yet the challenge is that they have very undifferentiated brand positions for the parent companies. For example, Marriott defines itself as “a leading lodging company.” IHG is “an international hotel company whose goal is to create Great Hotels Guests Love.” There’s not much that’s differentiating about either proposition, which makes it hard to create distinctive programs that are uniquely identified with either brand. Many of their sub-brands, like the luxury JW Marriott brand, have much more tightly defined positions and therefore would be easier to use as a filter and a guide for strategic CSR.

One next step for either of these corporations is to borrow an idea from Starwood and create a brand that is positioned entirely in a social or environmental impact space. Starwood’s Element brand is the company’s green hotel chain. Another example is Joie de Vivre’s Good Hotel which is anchored on doing good for people and planet. Or, take a cue from Fairmont Hotels; revise the vision/mission for a sub-brand to better incorporate strategic CSR and begin building a branded experience to match.

So to summarize: to build the ethical reputation you first need a strong brand position that can serve as a strategic lens for CSR initiatives. Next, think about how to embed social impact into the actual customer experience. Show, and you won’t need to tell. Stand out from your competitors. Be a company worth experiencing, and your customers will applaud you.

To discuss the implications for your own company’s brand and customer experience (along with how to measure shifts in customer perceptions), feel free to contact me at jennifer@fruitfulstrategy.com.

Original Post: http://www.fruitfulstrategy.com/blog/2009/05/building-the-ethical-reputation-strategic-csr-in-hospitality/

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