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Small Hotels & CRM

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April 01, 2002
Customer | Relationship Management
John Schweisberger - john.schweisberger@us.pwcglobal.com
AmitavaChatterjee- amitava.chatterjee@us.pwcglobal.com

View Magazine Version of This Article

© 2002 Hospitality Upgrade. No reproduction without written permission.

CRM is not only for the big chain hotels with deep pockets; CRM is equally within reach of the small, independent and boutique hotels.

In the hospitality industry, nothing is more important than your guests. Everything revolves around them. Do you know who they are? Do you know how they like to communicate with you? How they like to book their stays, and how often they stay with you? Do you know how much they spent in the restaurant, the bar, the gift shop and the spa? What did they consume from their minibar? How and when do they want to hear from you again? Do you know if they had a good time or if you’ll ever see them again?

Understanding your guests, knowing how to talk to them, making sure they generate repeat business and finding other guests like them are at the heart of customer relationship management (CRM). How do you ensure that your guests come back to you, when, in this day and age, competition is just a click away? CRM is not just fancy software capable of drawing a bunch of smart graphs and generating a targeted mailing list; it is a way to effectively communicate with your guests, not only using traditional marketing channels but also while they are booking their stay, waiting for check-in, while they are in-house and after they’ve left. Most importantly, CRM is not only for the big chain hotels with deep pockets; CRM is equally within reach of the small, independent and boutique hotels.

Remember – CRM is not about technology; it is a way of running the business. Powerful words. Read on.

How will CRM benefit the small hotel?
The success of a CRM implementation is not dependent on the size of the hotel. In fact, having a well-executed program will even allow a small hotel the opportunity to take advantage of various benefits, including:
- Increased revenue by identifying the most profitable guests and directing superior service their way;
- Increased each guest’s spend through strategic channel usage and cross-selling and up-selling techniques;
- Improved service by serving guests from various channels with consistent, quality information about their needs;
- Captured ongoing guest information to personalize their experience and make it truly memorable, ensuring that each moment-of-truth interaction enthralls the guest;
- Enhanced decision-making by better understanding and reacting to guest behaviors through analytics and measuring performance at all touch points.

Areas to Focus on. How does the small hotel implement CRM? Should the small hotel operator take out a checkbook and sign at the bottom? Will it require an elaborate, longwinded investment in technology? No, not really. Where should you begin? We offer the following pointers.

Staff training – ensuring that they understand what they need to do. You will find a knowledgeable and trained employee at the heart of every successful CRM initiative. How well the program is implemented is completely dependent upon employee training. Do your employees understand what their tasks are? Do they ensure that they collect accurate data? Are they aware of GIGO or Garbage In, Garbage Out, and its ramifications? At the risk of sounding repetitive, we offer this statement from an earlier article titled “Effective CRM Implementations” – All employees, at all properties, should have the training and up-to-date information that allows them to provide seamless, consistent, personalized service to the customer. Let us analyze that statement – it is laden with several key words that merit another read.

  1. Training – Is your employee well trained? Does he or she understand his or her roles and responsibilities with respect to the CRM initiative being implemented?
  2. Consistent – Staff should be adept at providing consistent service, visit after visit. No roller coaster-type ups and downs of guest experiences permitted.
  3. Personalized – Does your staff know that Mr. X likes a foam pillow and Ms. Y likes a feather pillow? Speak to your employees. Ensure that they understand service excellence and are experienced in delivering good service.
How do you gather data? There are many different tools and technologies that can help in implementing effective CRM. They may be as simple as 3 inch by 5 inch index cards with detailed notes about your frequent guests, which record their preferences, likes and dislikes, to some kind of searchable application, which may be standalone, or might even be a part of your existing PMS. In the words of Pat Barfield, director-business development/major accounts with Springer-Miller Systems, “Several PMSs have the capability to record some level of guest history. It is important for hotels to explore what capabilities already exist, and leverage those in their CRM initiatives.” Indeed, it makes financial sense to inventory your existing software assets and see what you can use, doesn’t it? See what capabilities are available, and what capabilities you can use but are not activated. Check with your software vendor if you can add additional columns to database tables, additional fields to screen masks, etc., which will allow you to collect the information you want. Find out and have new reports coded, which can generate meaningful information.
Real-life Experiences
One small hotelier recently decided to launch a broad CRM initiative across their seven properties. The first step involved defining the information that would be most useful to have about their guests – the information on which they could act. When the dust settled, what they found most surprising was that they already had the ability to track most of this information in their existing PMS – what they didn’t have was a rigorous process to capture and cleanse the data on an ongoing basis. Their processes were lagging behind their technological capabilities. The result: uncaptured and unusable data. It wasn’t the system’s fault, though they were only too ready to spend money for the latest whistles.

With that stark realization, they set about making changes in every guest interaction opportunity – when they call, when they visit the Web site, when they check in, when they make requests and even when they receive marketing offers. An executive was appointed with the unique responsibility of “owning” the guests. They recognized one of the core, but frequently lost truths, about CRM: it isn’t owned by marketing, IT or operations – rather, it permeates all of these areas. The small or large hotelier who understands and operationalizes this truth will quickly stand out in the most important eyes of all: the guests’.

Brian Schultz, a marketing analyst with Four Seasons Residence Clubs in Calif., said, “An essential element for any CRM strategy is data entry standards and training. It is definitely worth the time and resources to focus on data entry training, which will ensure a more accurate database of your customers’ information. These should all be a part of the planning process for CRM. Ultimately, organizations rely heavily on this information to maintain or enhance the relationship; however, if data is entered incorrectly, or entered into the wrong fields, organizations cannot report from or analyze their customer base no matter how expensive or sophisticated the CRM software is. Clean and accurate data is the link to building a strong customer relationship, and it all starts with proper training and standardized data entry.” In addition, it is important that you have ongoing monitoring and training processes in place, to ensure that data entry standards remain high.

Ensure you have a guest-centric view. Both Pat and Brian maintain the importance of having a guest-centric view, and ensuring that all your business processes revolve around your guests. Further, Brian said, “Today’s guests are beginning to look more for an overall service experience. It is not just about price, it is about the service, the product, the price and the overall experience. As guest expectations increase, business processes must remain flexible in order to meet their needs. By meeting or exceeding expectations, the organization strengthens the relationship and increases the likelihood of retaining loyal guests. Building a base of loyal guests is key to profitability and a high ROI for any CRM implementation.”

We do not recommend that small hotels shy away from implementing a CRM program. They should remember that CRM is about how the business is run. The bottom line is what every good hotelier, large and small, must focus on. And it is easy to be afraid for your bottom line when you hear statistics that claim that two-thirds of CRM initiatives fall short of the projected benefits, despite large investments of time and money. The bottom line of CRM is: it is not enough to market effectively if you can’t service effectively, and you can’t service effectively if even one employee doesn’t get it. No technology will overcome that.

Further, the concepts alluded to by Pat Barfield and Brian Schultz should be a part of the planning process for anyone contemplating a CRM implementation, and more specifically, for those entities who may have limited capital and resources. Leveraging existing capabilities, data accuracy, standards and training are the foundation for any such initiative and can be internalized and implemented to ensure the success of a CRM project. So start your CRM initiative right where it belongs: with your people and your processes.

John Schweisberger (john.schweisberger@us.pwcglobal.com) is a partner with PwC Consulting’s Hospitality & Leisure practice, based in Los Angeles, Calif. Amitava Chatterjee (amitava.chatterjee@us.pwcglobal.com) is a consultant in the practice’s Falls Church, Va. office.

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