DALLAS — Effective marketing efforts rely on quality data, and hoteliers need to be doing the most to amass and utilize data on their guests, according to panelists at the 2021 HSMAI Marketing Strategy Conference.
Speaking during the "First-Party Data: Optimizing the Opportunities and Mitigating the Challenges" session, Boston Consulting Group Principal Adam Goldberg said it's important the data hotel companies collect actually reflects how guests behave rather than just broad demographics.
"It's not just demographics, not just purchase history, but also things about how they engage with your product and getting your experience," he said.
He said research conducted by his group along with Google shows company's can double incremental revenues from marketing campaigns and ad placements by "effectively linking all of their first-party data sources across the value stack."
"The communication and outreach that you would do with the first-party data would be more integrated together, more targeted, and it's going to be more tied to the business outcomes you're looking to achieve," he said.
Edward Crouch, managing director and partner at Boston Consulting Group, said the efficiency and cost effectiveness delivered through better use of first-party data is all the more important in an era where marketing budgets have been slashed.
"This topic has gotten focus from our clients as they try to do two things: One, figure out how to make sure as they go back into the market and start to spend on media again that they extract as much as they possibly can, and two using assets like Brand.com to very quickly reestablish direct relationships with customers because people are going back into traveling," he said.
Goldberg said the effectiveness of first-party channels like Brand.com are hugely reliant on the first-party data available to hotel brands. Because of that, a lot of people focus on quantity over quality of data, which is ultimately the wrong tactic.
"What we typically see is people racing out there to collect as much first-party data as possible, just gimme, gimme, gimme," he said.
Instead, companies should build out a comprehensive data collection strategy that hit the points with the most value, he said.
If you formalize a strategy first "you're going to be collecting the data that you actually need and that you actually want to monetize off of," Goldberg said. "You're not going to be overextending and overinvesting in order to make that collection, and you'll be able to create the right value exchange with the customer in a way that doesn't feel invasive and actually leads to the outcomes we're looking for of a more personalized experience or a better targeted marketing campaign."
That strategy starts with assessing the value of different data points and what are the value-add trade-offs customers get from sharing that data — things like adding more personalization to booking, pricing and promotion.
Useful things to know include: "Better understanding of how your guest searches for — and ultimately books — their vacation and books their hotel stay, as well as better information on how guests utilize services and the actual amenities offered in the hotel," Goldberg said.
Small things like knowing dates for birthdays and anniversaries help better time and personalize marketing messages, Goldberg said. Hoteliers can also do things like offering discounts for amenities they know guests enjoy such as if they previously patronized an on-property spa.
Crouch said personalization has been the hot topic in hotel marketing for at least five years, and better first-party data collection and utilization are key to finally making it a reality.
"It does feel like there's a true investment behind it and a real commitment to get it right and catch up with other sectors," he said.
He said his group often finds when formulating data collection strategies that much of the data hoteliers want to amass they already have but not in an accessible way.
"We find very often much of it is actually sitting around the organization, but often not collected in one place and often not used," Crouch said.
He said one rich source of data that often goes untapped is data available through brand loyalty programs.
"There's a lot of opportunity there in the travel space," he said.