"Psychographic, attitudinal and lifestyle data is beginning to be incorporated" - CRM and Loyalty Special
Published: 23 Feb 2009
Investing in technology and research that explains when/where/why a particular consumer is likely to purchase is where the hospitality industry should go next.
This was recommended by a senior CRM executive from Starwood Hotels during one of EyeforTravel's conferences a couple of years ago. It was recommended as a way to go forward considering that as an industry hotels have a long way to go in talking to guests about the product, its attributes, locale, etc. in a way that each individual guest wishes to receive that information.
As a collaborative effort by industry participants it could be a valuable exercise, saysSandeep Govil, Director of Revenue Management and Science Analytics, Wyndham Hotel Group.
"Funding and governance of such an industry initiative will not be easy. As travel markets evolve and events shape local destination attractiveness this research has to be ongoing and industry databases would have to be created to maintain such information. Further, user guidelines have to be defined. Participants have to understand how to leverage such information in value creation. This information could aid the participants in development, database marketing, product and travel package development etc," elaborated Govil.
Govil highlighted that various views of such information are available in data warehouses maintained by individual players in the industry. Package sales across the providers' offerings also provide valuable information today to each player including suppliers and distribution networks. Some of these have reasonably large databases with millions of customers and transactions and can already provide a wealth of information based on fairly large and representative sample sizes.
"The key questions to be asked in trying to initiate an industry wide collaborative effort are to define how this information will be used to create value. We should answer that question first and assess what incremental benefit it will create for suppliers, distribution players and customers," Govil told EyeforTravel.com's Ritesh Gupta.
In the past the travel industry has worked hard to collect data on each guest that can be acted upon. For example, targeting messages to a specific guest type based on a set of factors. Do these segments reach beyond fairly common demographics and behaviour data?
Commenting on this, Govil said, "There has been significant progress made in leveraging these insights to execute marketing campaigns both direct/e-mail and traditional media based. Psychographic and attitudinal and lifestyle data is beginning to be incorporated at least on pilot basis to assess lift from these insights. Purpose of travel as well as the composition of the travel party is also being assessed and used. Destination preferences and season preferences are also being used."
"Also, a lot of convincing still needs to be done and hard returns documented so that such additional spend in information sourcing and execution can be justified," he added.
Execution of CRM and measuring loyalty
Experts feel there is a great opportunity in hotel programmes to increase customer loyalty. The missing links are less about the technology and more about their data capture capabilities, and their ability to provide a differentiated and relevant customer experience in a franchised network.
"Loyalty in the travel and hospitality industry is hard to measure and share of wallet type information is not readily available," says Govil.
Most customers determine suppliers and booking channels based on many factors contingent upon the circumstances around the specific travel.
"Data has shown that most of the valuable customers for one supplier are also valuable customers for other suppliers," shared Govil.
When it comes to executing CRM effectively, Natasa Christodoulidou, Ph.D. California State University – Dominguez Hills says the biggest challenge in the same is to indulge into the luxury market as much as possible. "For example, research shows us, that if you offer a customer $100 off a vacation package or $100 in gas money they would not be as thrilled, had you offered them a suite upgrade or a luxury dinner for two in an exclusive restaurant when they arrive at their destination."
Suppliers are discovering that there is a world of marketing potential in the rich store of redemption information that can be leveraged from a loyalty programme. This does not require access to information at the individual customer level, but does open up the ability to develop full customer profiles from aggregated data. This is an under-leveraged tool in retail to understand who is buying their product, and to market cross-sell and up-sell opportunities.
At the same, the biggest initiative taken by suppliers in CRM have been related to guest recognition.
Companies need to create value for the customer when asking for personal data. Allowing guests special access to services and/or functionality is one way to create value in exchange for information.
According to Natasa, the key to working on CRM data gathering approaches in a manner that engages the customer as little as possible while obtaining the information that makes the biggest impact on the goals as a service provider is simply personalisation.
"Many customer will gladly share some data if they feel that it will help the company to personalise the travel promotions to their needs," she says.
