More than any other industry, hospitality is all about customer relationship management (CRM) – making your customers feel as personally welcomed, valued and cared for as possible, by anticipating and taking care of their every need. And not just because it helps bring them back again, you do it because that’s what hospitable companies do, even for a guest who only stays one night and is unlikely ever to return.
However, a good experience during a stay doesn’t translate directly to loyalty. Most people expect good service as a right, and have no qualms about switching to another hotel or resort if it offers what they’re looking for the next time they book. After all, they expect good service there too. Frequent-guest recognition and reward programs encourage loyalty, certainly, but that’s a fuzzy concept when so many guests belong to several programs. For success, therefore, the emphasis must be on providing the best possible service for every guest so you don’t give them a reason not to come back, combined with highly personalized follow-up offers to give them a positive incentive to return.
The most dominant aspect of CRM these days is how the Internet has transformed the whole picture. E-mail- and Web-based marketing have massively extended hoteliers’ ability to interact with their guests, gather more information about them and tailor visits much more closely to their expectations.
Web sites have great influence. Most guests make their first contact with a hotel through one, either the property’s own or one where other travelers have posted comments about it, so a good first impression, ease of finding useful information and maintaining a good reputation are crucial. E-mail allows much more flexible and powerful interaction with each guest both before and after a visit, and the Internet itself is a huge trove of information about all guests, both current and potential, that can be used to enhance your knowledge of them and how to appeal to them.
Every aspect of a guest’s experience with a hotel contributes to its relationship with him or her. Therefore, all the traditional hospitality systems (PMS, CRS, etc.) and the newer ones (e-mail marketing, Web-based marketing, etc.) must work together to present a unified, consistent experience and to make that relationship a positive, lasting one. CRM systems bridge the inevitable gaps and make it happen.
The Two Faces of CRM
There are two main benefits to CRM:
1 Encouraging more repeat business from existing guests through better awareness and satisfaction of their wishes, habits and preferences. This includes ensuring the stay itself is as closely tailored to the guests’ wishes as possible, and tailoring personalized correspondence pre- and post-stay to maximize the current visit and encourage a return.
2 Using your knowledge to find new guests similar to the most valuable ones who already stay at your property, what Pinehurst’s Michael Schubach once memorably described as "forgoing development of a better mousetrap in favor of generating an ever-increasing supply of mice." Not that better mousetraps aren’t also a good thing, of course; adding a new facility such as a spa will attract a market segment that hasn’t considered your property before.
This is a crowded field for vendors; there are many alternatives for hoteliers looking for help in expanding or improving their CRM efforts. Most offer some general combination of services, such as SAS, Acxiom, Cendyn, Clairvoyix, ClickSquared, Infor, Serenata, TravelSciences and many others. Some (for example, Digital Alchemy and ZDirect) have a particular emphasis on e-mail marketing; others, such as GuestWare, HotelEXPERT and MTech's HotSOS, build off guest-request rapid-response functionality. But they all have one common core: as complete and accurate a guest profile database as possible.
The Keys to The Castle
The business intelligence article in the spring issue of Hospitality Upgrade described the challenges of collecting, cleaning and consolidating data from all the many separate systems on a typical property and using it to improve operational performance. That same thoroughly prepared database is also the basis for CRM, and CRM’s success depends just as completely and unequivocally on being able to trust what’s in it, that the data is meaningful and has been collected with specific usage goals in mind. This is actually even more critical for CRM since it deals with specific guests’ personal information, not the aggregate behavior which forms the basis for BI.
Information in a guest profile can be classified into four main types: behavioral (guest, room and activities information collected from previous stays), preferences (learned through direct input from the guest, usually from a Web form or loyalty program), inferred (interests deduced by tracking click-throughs on the Web site or from a marketing e-mail) and public data (from census or other third-party demographic sources). One ongoing challenge is how to track guests’ cash or credit card purchases on property. This would be a useful addition to their profiles, but it’s too much of a privacy and security hassle to consider linking through the credit card number.
This information must be constantly monitored, looking for duplicates that should be merged and watching for outlying data values that need to be verified. Most vendors regularly run their databases through the National Change of Address (NCOA) registry to keep them up to date. They also check them against third-party databases such as Acxiom, Equifax, Experian’s INSOURCE, infoUSA’s Donnelly Marketing and Transunion, which can add much useful socio/demographic detail. Anything that rounds out the picture and improves accuracy is helpful, especially for the more valuable guests it helps you identify. The more information you keep on a guest the more opportunities you have for tailoring their stay perfectly – but also for getting something wrong. If you’re going to act on it, it has to be accurate.
It’s also essential to keep on top of privacy regulations that govern what data you can keep, for how long and for what purpose. European countries have long imposed stricter rules on this than are common in the United States, and are likely to continue to refine them. A recent European Commission recommendation, for example, is that the personal data of users conducting a search should not be stored or processed "beyond providing search results." It also recommends that this data should not be used to serve up personalized adverts if the user has not created an account or registered with the search engine, which could limit keyword marketing efforts to first-time searchers.
You Look Familiar…
Obviously, part of the trick is to recognize when someone making a booking is a repeat guest, whether he is doing so by phone to the property, calling the reservations 800 number or booking over the Internet. This isn’t always easy; most people usually visit a hotel in just one capacity, but some guests may quite easily come in several roles—convention attendee, family vacationer, meeting planner, one of the boys on a golf outing, etc.—with different room and package preferences for each visit. Name changes from marriages and divorces are also an obvious recognition challenge.
Matching to an existing profile is straightforward if the guest gives you a frequent-guest program ID or personal e-mail address, but you won’t always get those, especially for convention bookings made by the event organizer, or reservations that come in from merchant-model wholesalers such as Hotels.com. All CRM systems therefore use multiple fields to look for a match with an existing profile, usually some combination of name, phone number, ZIP code and e-mail address. The better ones have tight interfaces with the hotel’s PMS to track all changes to profiles and stay activity, progressively refining a possible match as more information is received about the guest. Conventioneers and wholesale bookers, for example, are very likely to make sure you record their frequent-guest number to ensure proper points credit, at checkin if not before. If the delegate contacts the property before arrival, the opportunity is there to take a personal e-mail address to send confirmation of any changes or special requests.
It’s important to distinguish between preferences that apply to all stays (e.g., USA Today every morning) and those that apply only to specific locations (e.g., ocean-view room) or types of stay (e.g., a ground floor suite near the pool for a family vacation vs. a high-floor single room for a business visit). Most PMSs keep records of all previous stays so property reservation agents can pick up these details quickly from a past visit similar to the one being booked. However, it’s much more of a challenge to provide the same flexibility to central reservations agents or in a CRM system. These can present a great deal of information about the guest, but it can be confusing and contradictory if the different roles aren’t understood. Few systems yet have a way of tracking roles in this way, and much still depends on the reservations agent asking the right questions.
Of course, it’s very beneficial if you can provide a way for a guest to update his or her own profiles and preferences, usually through the hotel’s Web page. This is common for frequent-guest programs, but even non-members will appreciate being able to tell you, for example, that they’ve finally quit smoking and no longer want to be automatically preassigned to one of the few remaining smoking rooms.
Personalized E-Mails…
The advent of customized e-mails has had a huge impact on CRM, both in making the guest feel more personally appreciated and in improving the revenue generated from each stay. Sent with the same look and feel as the property’s Web site and including personalized information and links, well-designed e-mails definitely reinforce your property’s image in guests’ minds and can lead to significant additional revenue.
Once guests have booked a visit with you they have a certain level of commitment, but there’s always the chance that they’ll cancel and stay somewhere else if they find a better offer. It’s therefore doubly useful to contact them again before arrival, both to confirm their stay and to offer additional services or activities. This is especially valuable if it’s their first visit to your property, maintaining your image in their mind and encouraging anticipation of enjoyment. Such up-selling e-mails should be customized to the particular groups of arriving guests you experience, of course, with different messages for first-timers, first-time returning guests and frequent visitors.
Upselling often focuses on a possible upgrade to a suite; many guests will respond favorably to learning how little extra it costs once they’ve bought into the concept of the stay in the first place. It’s also a real service to offer to book airport pick ups and other activities (e.g., spa or dining) ahead of time if these are popular and hard to reserve at short notice after arrival. This is especially effective if you know your guests’ activity preferences from their profiles, but it’s useful for all arriving guests. Including hot links in the e-mail to take them directly to the appropriate booking page on your Web site makes it as easy as possible to reserve additional activities—and every booking increases their commitment to coming to your property. In this multichannel world, good CRM systems will reformat the same personalized creative pieces for e-mail, PDA/phone browsers, privileged-access Web pages and printed direct mail to ensure the guest sees a consistent message however she prefers to be contacted.
Personalization also helps the reservation agents, of course. Because the CRM system tracks exactly which offers were sent to which guests, when someone calls to take advantage of "the e-mail offer you just sent me," the agent will know at once which one it was.
The key to good personalization is the intelligent use of the profile and activity data you’ve collected. It’s easy to accumulate a great mass of detailed information, and just as easy to generalize it too much from too fine a level. Don’t assume that a guest has a passion for cabernet sauvignon because he’s ordered it a couple of times in the restaurant. Rather assume, or maybe ask if, he has an interest in wine in general, or place more weight on the quality of wine he typically orders than on the specific variety.
Post-stay thank-you e-mails should be similarly tailored for particular guest segments, worded differently for first-timers and repeat guests and including a satisfaction survey for the guest to complete and return. These surveys typically generate far more useful information than the printed comment cards used in the past. The latter were usually completed by only three small, non-representative fractions of visitors: the 2 percent who had a fabulous time, the 3 percent who had problems and are really angry, and the ever-present 1 percent who didn’t actually have any problems but are complaining just to try to get a free room next time.
In contrast, electronic surveys are regularly returned by at least 20 percent to 30 percent of guests, since they usually have a little more time to fill them out at home and have had time to reflect on the overall stay a little longer. Consequently, they provide a much more balanced response from a truly representative sample, along the lines of, "We generally had a really good time, especially thanks to concierge X, but there was a minor problem with the shower that ought to be taken care of."
Some systems can translate responses from foreign languages; others pick up key words from the free-form text and automatically route the survey form to the appropriate department for action. This feedback is tremendously useful, both to allow the prompt correction of incipient problems at the hotel and to improve customer loyalty by following up with the guest and thanking him or her personally. Surveys can also ask for generally useful information such as the guest’s interests, preferences and future travel plans, though this has to be phrased carefully to avoid being seen as an imposition.
Checking the surveys returned by guests who responded to a particular marketing campaign will also add an extra dimension when calculating the campaign’s ROI from the number of bookings and stays resulting from it. A great campaign may bring in plenty of business, but it’s not worth repeating if the guests didn’t like the experience when they actually arrived.
…But Not Spam
These e-mails are typically generated automatically by the CRM systems, triggered by the stay dates and events in the PMS two weeks before arrival, one week after departure, etc. It’s essential, therefore, that they be managed with business rules carefully crafted to prevent them becoming an intrusion.
Clearly an opt-in flag on the guest’s profile is mandatory to ensure that guests agree to being contacted. Some sites offer the opportunity to sign up on the Web site for news even before a booking has been made, which is a great way to build a profile ahead of time. Opt-in flags are more useful, though, if they’re multilevel enough to let guests set their own personal boundaries, for example that e-mail is welcome about specified areas of interest at certain properties in certain seasons, but not from others, and that direct mail printed material is not OK at all.
Even then, the rules need to be set up thoughtfully to prevent regular guests from feeling that you’re intruding. They can ensure, for example, that no e-mail is sent if the guest has been already received an offer in the last 30 days, or that a regular weekly visitor only receives a survey after every fifth visit or three months, and so on.
One refinement that can noticeably improve the success of e-mail communications is timing. E-mail specialists have analyzed huge quantities of data on this and can advise you when to send your messages to specific target groups for the best impact. Timing an attractive offer so that it’s delivered to someone’s e-mail inbox at the time of day and day of week when they’re most inclined to notice and open it can significantly reduce the chance that it’ll get lost in the morning pile of spam or just be deleted through lack of time.
Occasional re-opt-in campaigns are worth considering, both to remind guests that you care about their privacy and to remove old or unengaged subscribers from your list. Oddly enough, surveys show that offering guests a choice to renew or discontinue their e-mail permissions actually produces a significantly greater number of renewals than offering a renew option on its own.
May I Peel Another Grape for You, Sir?
All CRM success depends on the personal service offered by the staff at the hotel, of course. Good impressions start with proper preparation for the stay, running the PMS arrivals list through the CRM database a few days ahead to pick up guests’ preferences and requests and then making sure they’re actioned before check in. This raises two non-technical CRM issues: making sure the preference or special request options offered actually are available at the property being visited, and making sure it’s adequately staffed to deliver them. Promising attractive services or amenities can bring in more guests, but there’s nothing worse than failing to meet expectations the minute they walk through the door.
Throughout the stay good CRM is built on greeting all guests with a smile, the use of their names and a genuine willingness to help them in any way possible. This is obviously much, much easier if the staff has the right tools to find out quickly who’s on property, what packages they’re on, what their preferences are, what requests or complaints they’ve made since arrival and whether they’ve already been resolved. Some PMSs have good interfaces with CRM systems and sufficient on-screen space to display useful profile information from them, but it’s hard to provide enough room for everything that might help the agent. Consequently, it’s often more useful for PMSs to display a flag to the user to tell them when more information about this guest is available in the CRM system (Figure 2, previous page).
One key to maintaining a high level of guest satisfaction on-property is unquestionably the use of a guest-request rapid-response system such as GuestWare, HotSOS or HotelExpert. With the ability for any staff member to enter any guest request or complaint from any workstation or even by phone, these systems automatically assign the request by pager or other wireless communications to the most appropriate person for action. If no resolution or follow-up has been entered by a pre-set time appropriate to the issue, the request is automatically escalated to a manager.
In addition to ensuring guests receive prompt service, rapid-response systems also provide a wealth of management information. Tracking how long it takes to respond to specific types of requests can lead to work flow realignments for quicker action and better service. Repeated complaints by different guests from a specific room can highlight an otherwise undetected engineering problem, and so on.
Fixing a problem quickly has a very significant impact on guest satisfaction. Surveys report that satisfaction after a good visit tends to be around 70 percent, plummets to 40 percent if something goes wrong and isn’t corrected, but rises to the 80 percent to 90 percent range if the guest had a problem but it was fixed before departure.
Concierge systems such as Gold Key and GoConcierge are another way of providing seamless guest service, using a single database for all staff to ensure that no guest request for outside activity bookings goes ignored or is booked twice. Adding a link to the PMS to confirm the booking and including it on the guest’s itinerary add another level of reassurance.
Of course, guests are going to have a better relationship with any property that makes their stay easier or more productive. Some property management systems already offer guests the convenience of sending text messages to their phones or PDAs when their room is ready after an early arrival; reminders of spa, golf or dining reservations are sure to follow. Even more appealing to those attending conferences or other meetings is the ability to have the systems involved (PMS, sales and catering, CRM) work together to download each guest’s specific itinerary and agenda to her phone or PDA (Figure 3). A map of the property highlighting the meeting rooms involved is a logical next step, and with more phones having a built-in GPS capability, so is providing maps and directions to nearby restaurants or other attractions in the hotel’s concierge database.
Anyone for Tennis?
Another CRM approach focused on upselling is to track guests’ activities during their stay and compare this data with prior stay information and preferences. This allows you to contact them and suggest things they may still like to take advantage of and book while they’re on property.
Even owner or management companies with multiple properties under different franchise flags are adopting CRM systems, despite the fact that their guests may not know that the various hotels they visit are owned or managed by the same company. There are still benefits to knowing who the guests are and working to maximize their experiences and repeat business. This does have challenges, since franchise brands are very reluctant to share data on their guests, and consequently the management company won’t always have as complete a picture of the guest as the guest might expect.
This can make it a challenge for an independent resort operator, for example, to prepare adequately for a guest’s repeat visit to a neighboring hotel which uses the resort’s spa, tennis or other activities but restricts access to its guest profile data. A good working relationship between the two properties is essential to build trust, of course, but keeping within the franchise brand’s rules may require a custom interface to define very precisely the allowable stay and profile data that can be passed to the resort.
Attracting New Guests
Catching new guests in the first place is a pure marketing function, using various combinations of advertising, special promotions, generally distributed newsletters and so on. Web site design has become a critical and highly competitive aspect of this. Most guests visit a hotel’s Web site—or others commenting on it—before booking, which both provides the opportunity to make a good impression to potential first-time visitors to your own site and requires constant vigilance to respond to negative postings on the public-comment ones. After all, you need to maintain good relations even with customers you haven’t met yet.
Consider including interactive Web 2.0 applications on the Web site, such as a place for guests to share experiences and photos, or customer-generated top 10 lists of the coolest bars, museums and other things to do near the hotel. These can form another reason for guests to feel attracted to and interested in your property, and encourage more business through the word-of-mouth approval so important to younger generations.
Good design involves an attractive home page, simple access to key information, appropriate search engine optimization (SEO) and many other strategies, all of which really need a Web marketing specialist’s advice. Don’t forget to include a link for repeat guests to use to update their profile. The more invested they are in your property, the more often they’re likely to visit.
But your CRM database is a key tool when looking for new guests. Using it to identify your higher-value current guests from many different viewpoints lets you segment them into clearly identifiable groups with common demographic or socio-graphic characteristics. Running these parameters through third-party population databases to identify people with similar interests and habits can produce a target audience likely to be highly receptive to carefully phrased marketing campaigns.
Summary
All CRM must be done with a light touch and a sense of appropriateness. As with all powerful tools, the benefits can be remarkable, but the potential for abuse can lead to major damage. It’s easy to offend guests through sending them too much or the wrong type of marketing material, and misusing or losing control over confidential guest information can lead to significant financial and reputation problems from potential identity theft.
Nevertheless, three thoughts will probably always be relevant:
>> Loyalty is a fickle thing, so you need to keep coming up with good reasons for each guest to return to your property. Past good experiences are essential, but not enough.
>>Don’t overdo the marketing or you’ll turn people off.
>>It still comes down to the property staff’s ability to deliver everything expected.
No one said maintaining a good relationship was easy.
Jon Inge is an independent consultant specializing in technology at the property level. He can be reached by e-mail at jon@joninge.com or by phone at (206) 546-0966.
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