The fastest way to devalue a hotel is to compete on price alone, which can quickly commoditize any product, especially hotel rooms. Hoteliers have a choice to compete on price or reputation. Focusing on the latter can drive exponential returns.
Developing a solid reputation for creating memorable guest experiences can be achieved by paying close attention to your customers’ preferences and desires, recording that data and using it to develop services that anticipate guests’ needs. Successful implementation of a disciplined customer relationship management process at both a micro and macro level is the first step in effective engagement.
As an industry, we have done a fair job capturing rudimentary customer data, which is used with various degrees of success. For example, most property-management systems can capture a guest’s birthdate, anniversary, historical spend in both rooms and food & beverage revenue, and other customizable details. Some hotels have successfully implemented programs to consistently recognize guests by providing amenities on these special dates, while for others, it is merely a data point that rarely gets reviewed. While there is still much to be done at this micro level, properties must evolve to collect macro data, which can be used to develop targeted marketing campaigns to generate periods of focused demand.
Here’s an example: Many hotels collect guest birthdays and use that information to offer an amenity at check-in or a complimentary dessert after dinner. But consider using this data in a smarter way: Create an evergreen birthday package that is accessible only through a central reservations system booking link, sent to guests a few weeks before their birthday. It’s a great way to show your customers you know them and want to celebrate them.
Birthdays are an easy example to understand, but consider the more complex issue of guest acquisition through numerous channels. Online travel agencies are an excellent source for quick revenue heavily weighted on price, which leads to commoditization. Distribution data is rarely, if ever, tied to CRM data, which could be traced by understanding which distribution channel a customer or group of customers book through. For example, are all hotel guests who book through an OTA only focused on price? It would be easy to find out by asking a few simple questions through a pre-arrival survey or at check-in. Questions like, “How did you find out about us?” or “We know you had lots of choices, why did you choose us?”
If guests who book through OTAs say, “rate,” it is easy to validate those guests are booking based on price. However, if responses are different, this data would be useful in developing revenue management and rate strategies. It would also help the hotel identify and target marketing demographics for transient travelers.
Another prime opportunity for using CRM technology is to fill need-periods at your property. By closely monitoring pace performance, hotel revenue managers can work closely with the marketing team to create exclusive offers for a particular timeframe. What hotel would not like to be full over the week of Passover? Emailing VIP guests with a high lifetime-stay values and rewarding them with a free night or value-add offer to incentivize them to book directly would have significant payback. The opportunities with using CRM technology are endless when it comes to segmenting and communicating with guests and converting prospects. Hotels must have the marketing strategies in place, working hand in hand with revenue strategists, and employ a disciplined CRM program.
John Naisbitt wrote, “We are drowning in information but starved for knowledge.” Hotels wishing to drive profitability must evolve to a better process of collecting, synthesizing and taking action on CRM data through the investment in people and technology on all levels.
William P. Perry Jr. is director of revenue strategy with Revenue Matters, and a hotel professional whose career spans more than two decades both domestically and internationally with major hotel brands including Ritz-Carlton, Marriott, Hilton, St. Regis and Conrad.
Catherine Smagala is a director of marketing with Revenue Matters.
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