Submitted by: Recently Rebecca Hamilton, Roland Rust, Michel Wedel and Chekitan Dev
Service providers often provide extra goodies (amenities) to try to satisfy their customers and differentiate themselves from their competitors. How can they tell whether those extras pay off? Recently Rebecca Hamilton, Roland Rust, Michel Wedel and Chekitan Dev conducted a large-scale study in conjunction with a major hotel chain. They built an ROI model for service amenities and tested it across many hotel brands and properties, examining the ROI of free bottled water, fitness centers and wifi. The bottom line from their study is that sometimes giving away free stuff can be surprisingly profitable, often providing a substantial ROI from the initial investment and ongoing costs in less than a year.
An academic article (Hamilton, Rust, Wedel & Dev 2017) appears in the February 2017 issue of the Journal of Marketing Research. A managerial article describing the study in a way more accessible to a general readership (Hamilton, Rust & Dev 2017), appears in the Winter 2017 issue of the MIT Sloan Management Review.
Rebecca Hamilton: Professor of Marketing at Georgetown University
Roland Rust: The University of Maryland Professor and David Bruce Smith Chair in Marketing, Executive Director, Center for Excellence in Service, Executive Director, Center for Complexity in Business
Michael Wedel: The University of Maryland Professor and PepsiCo Chair in Consumer Science
Chekiten Dev: Associate Marketing Professor at Cornell University
