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E-Mail Marketing - The Use of E-mail for Guest Relations

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October 01, 2005
John Cahill

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© 2005 Hospitality Upgrade. No reproduction without written permission.

Several years ago Affinia Hospitality, then known as Manhattan East Suite Hotels, created a strategic plan whose goal was to find and use the best technology available to supplement the very personal relationship that existed between our repeat guest and our long serving associates. The goal was to create a database of information about every guest that stays with us, not just the guests who sign up for a numbered reward or recognition membership program. This tailor-made customer relationship management (CRM) database, called MAGIC, has demographic, psychographic, personal preference and complete stay information for every guest who has ever roomed with Affinia since 1997.

The second part of the plan was to acquire business intelligence (BI) resources and tools that would allow easy mining of this data for a variety of purposes. This tool would also sit on top of our major corporate and hotel applications from booking to billing. Lastly, we wanted to take advantage of this massive CRM database and the BI tools to create some innovative e-mail marketing programs that would build relationships and generate revenue.

Like many who send a large number of e-mails, a third-party company is used. This is as much about self protection to avoid blacklisting as the conscious effort we take to be differentiated from a spammer by the e-mail recipient. Generic messages to the entire database of guests are seldom sent, rather, the business intelligence analytical capabilities are used to target, select and send e-mails that are relevant and personal to the individual. This is not yet a market of one but it is as close as costs will allow.

We use a control group with most campaigns. A percentage of guests who meet the selection criteria are set aside and do not receive the same message. This control group allows us to isolate and eliminate any extraneous market forces from the results achieved. Then measuring the incremental revenue generated by those who received the e-mail vs. the control group gives a clear indication of the effectiveness of the offer. One of our philosophies is that if we can’t measure the results, we don’t embark upon the program, so this last aspect is essential to insure success with future mailings.

Not all e-mail messages are designed to drive revenue. Some messages are simply to share information and some are designed to gather information.

Campaign fulfillment houses are great partners to have. They can help maximize your investment by providing statistical information about the habits of your e-mail recipients and which day of the week will have the best open rate. These companies know what time of the day your recipients are most likely to open an e-mail of this type or which of your guests are likely to read your message on a PC, a PDA or Blackberry, and tailor a message for each of these types of devices.

Here are three of our more recent successful programs. The first identifies our most valued guest (MVG). Using the BI mining tool, guests are identified as those who have contributed the most over a period of time, for instance the top 10 percent based on lifetime value, the past several years or the last 12 months. We tailor a message that is specific to them with a focus on something of added value or convenience. These are generally not terribly price sensitive guests. The intent of the message is to intrigue them to stay with us when they come to New York. It is a loyalty building effort.

The second program identifies our high potential guests (HPG). These are people who we want to become MVGs by coming back again and again. This e-mail campaign focuses on that very specific effort and usually begins with a specific offer. It could be a free night, a discounted suite or a package tailored to their particular interests. These targeted e-mail campaigns have had some terrific results.

The third program has one basic theme: we miss you, please come back. Using the BI analytical tools, we identify the return pattern of repeat guests. Some may come every month for three days. Others may only visit every six months for a weekend. Whatever the pattern, when it is broken we know and after a suitable amount of grace time, we send the we miss you mailing. A high percentage of these lapsed guests tell us why they have not come recently. Sometimes it is something that went wrong on their last stay that wasn’t resolved to their satisfaction. When they tell us this, it gives us a second chance by providing an incentive to invite them back so we can make it right. This program has been extremely successful. When executed properly a program like this can turn a lapsed guest into a most valued guest.

Because of these three programs, the repeat guest rate (using the industry standard of a return to the same hotel within a two-year window) for hotels in New York, is in the 17 percent range. Affinia Hospitality itself, with nine hotels in New York, has an overall repeat guest rate of almost 26 percent. This is for a regional hotel company competing against major domestic and international brands, many of whom have a frequent guest reward program, which we do not. The return rate of our HPGs is even higher at 38 percent and their ADR is 12 percent higher than the control group with average length of stay and average number of visits both 4 percent higher.

The value of e-mail marketing campaigns lies in having the analytic base, how quickly a campaign can be generated, the breadth of reach, the personalization and tailoring of the message and the low cost and high dollar return.

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