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Customer Relationship Management: It’s About Marketing

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June 01, 2003
Olaf Tennhardt

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© 2003 Hospitality Upgrade. No reproduction without written permission.

Ask a group of individuals to define exactly what they think CRM (customer relationship management) is and the best strategy for implementing it and you’ll likely get several different answers. This is because there are different schools of thought on the practices and execution of CRM programs.

However, you will find that most will agree on the reasons they want, and need, to implement a CRM program:
• To know who their customers are and retain a loyal, valuable customer base
• To be able to communicate to their customers appropriately and effectively
• To acquire and retain new customers
• To optimize sales and marketing efforts
• To increase revenue and/or decrease communication and marketing costs
lebensart technology’s strategies for realizing these goals are to focus on the communication and marketing aspects of CRM.

A large percentage of hospitality companies are investing a great deal of time and money to have the ability to meet and exceed their guests’ individual needs and expectations during a stay. Unfortunately, this philosophy rarely carries through to communication and marketing efforts. Campaigns, whether they be to past guests or potential guests, typically are executed delivering the same message to a wide variety of customer types, as opposed to carrying through with the philosophy that different customers have different needs and therefore should be treated accordingly.

To be able to communicate appropriately and effectively with their customers, hospitality companies need to first understand who those customers are. This cannot be done without a centralized, standardized marketing database. Every piece of information about a company’s customers, from PMS and call center systems to Web-sourced files and all other customer touch-points, is important and must be integrated into one database. One can never know too much about his customers. When multiple data collection points are not integrated with each other, which many times is the case, it is impossible to take advantage of the wealth of knowledge that is just sitting there waiting to be tapped. Data can simply not be easily analyzed, nor can it be utilized to its fullest extent, when it is spread throughout various systems and formats.

As customer data in the hospitality industry has a tendency to be in a pretty rough state, from comments in address fields to incomplete contact information and more, the data needs to be standardized, validated, de-duped, merged and householded, so that there is a clean template to start with. It is also important to make sure that contact information is kept current by periodically running data through NCOA (National Change of Address), so companies don’t lose track of a valuable customer merely because he or she has moved.

Once a company has a clean, standardized database that can be worked with, geo-demographic information can then be appended to each resulting customer’s master record. From here customers can be grouped into segments. Each segment can be profiled based on customers’ past histories, and their future potential, and value coding can be assigned to them. Not only does this provide great insight as to who a company’s customer base is comprised of, and who a company’s optimal guest is, but it also now affords the opportunity to seek other like-customers for continued growth and acquisition, as well as the ability to avoid communicating to those who are highly unlikely to respond to your offers.
At this point, different marketing campaigns, including customer retention and customer acquisition campaigns, can be developed depending on the company’s specific goal. A company now has the ability to target a number of different variables that are available in their database, pull a communication list from the same database and tailor messages to their guests, based on value and past history, a feat that previously would not have been possible.

Once a campaign has been defined, it needs to be executed through an integrated system that allows the campaign results to automatically be tied back to customer records and communication events, in order to best measure ROI and the impact of a particular campaign, and to continue building a complete customer profile.

If these steps are followed in an integrated manner, using a state-of-the-art system and infrastructure, it is guaranteed that this CRM initiative will not end up in the long list of failed CRM investments.

Selecting an ASP-oriented CRM approach is truly a win-win situation. Companies who are devoted to implementing a CRM initiative do not have to justify investing in high-cost items such as hardware, software, contractors or additional personnel. Companies get the benefit of data and marketing experts, top-of-the-line technology and an incredible support system, without disrupting their current personnel structure. Existing personnel have the luxury of being able to concentrate on their core competencies, while leaving the data and analytics work to the people who are data and marketing professionals. What could be better than that?

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