Data is becoming an integral component of how the hospitality industry approaches marketing.  Hoteliers have a wealth of data they can leverage to provide guests with the best possible experience during their stay. Compiling data is now essential to ensuring customer loyalty and satisfaction, and has a direct and powerful impact on revenue growth. To make that data actionable, marketers use audience segmentation to enable content personalization. Rather than sending the same email to their entire database, hotels can communicate to different groups of guests based on common interests and lifestyles. It allows marketers to focus on the quality of their communications instead of the quantity. In other words, it is not about how many guests you reach, but how many guests are engaged with your content. As a result, hoteliers can connect with their guests before, during and after their stay by using a one-on-one marketing strategy.

Consolidating Your Data into One Central CRM

Hoteliers already have an array of databases that contain personalized information about each guest. That data includes property management systems (PMS), point of sale (POS), central reservation systems (CRS), call center and food and beverage, among others. By centralizing all of these systems and integrating marketing software such as emails and social media, hotels can create a detailed guest profile that covers guest history, value, status, behavior, preference, interest, intent and engagement.

Applying the Data to Your Audience

Once you have consolidated your data into a customer relationship management (CRM) system, it’s time to group the guests into segments.  This allows a marketer and/or hotelier to create a personalized campaign geared toward that specific cluster of guests.  There are quite a few techniques to accomplish these personalized segments, and each of them is easy to implement.  It comes down to a few exploratory techniques to best assess the outcome. 

A recommended way to start segmentation is through the RFM technique. Guests are differentiated by the date of their last visit, how often they visit, and how much they spend. By organizing guests in this manner, the following questions will be answered:

• When was their last visit?
• What are they spending on average?
• How many times have they stayed?
• Which guests have lapsed?
• What time of the year are they likely to stay?

It is highly recommended to segment customers based on their status in the guest lifecycle:

• Before their stay with a reservation
• Guests on property
• After their stay

Slicing Your Segments Even Further

Once your audience is segmented into basic groups, there is no limit as to how many times or ways the information can be sliced to make those groups even more precise. Dimensions can be added such as age, gender, income and more. The idea is to leverage your hotel CRM to move past the basic audience characteristics and discover more specific attributes. Offering promotions that are designed for those groups guarantee a larger return. 

Exploring the segmentations is especially beneficial when focused on the hotel’s specific needs:

• Potential Transactions
  • Offering room upgrades (upselling)
  • Remarketing to a guest who booked through a third party
  • Need period campaigns
  • Prospecting
• Operations
  • Confirming reservations
  • Issues in guest services
  • Offering personalized check-ins
• Management
  • Offering different terms and conditions for each segment
  • Monitoring occupancy, peak times of the year
  • Fencing

The ultimate goal is the ability to categorize your major marketing segments and equate them to buying personas (what your ideal customer looks like) by connecting a lifestyle designation to a specific guest experience, such as family vacations, spa offerings, romantic getaways, or excursions adventures.

Mining Your Data and Clustering Techniques

Clustering segments is an effective way to focus the marketing needs of a hotel or resort. Larger resorts may want to explore more advanced techniques that involve statistical algorithms to better grasp their more diverse audience. When clustering in this manner, there are pros and cons to each program. Even when using statistical analysis, it still remains a trial and error process. Clustering techniques are particularly sensitive to statistical assumptions. For example, some data samples need to follow a normal distribution in order to produce meaningful results.

When clustering, it is important to first perform a discriminant analysis to reduce the number of factors before utilizing another method like K means analysis. The K means method offers an interesting insight into the segmentation clusters. The difference among the groups means to explain what makes each one specific from a demographic and behavioral perspective. It is another way to discover what your ideal buyer looks like.

Keep in mind that the most important concern when personalizing content is manageability. The more audience segments you have, the more assets marketing must deliver to launch a new campaign. The number of segments should not affect the ability to create and deploy new campaigns. 

Continually exploring and mining your data is a great way to inspire marketers for future campaigns and become creative with your offerings. It is also a great way to keep an eye on the new technology your guests are adopting. 

Centralizing your data into one main CRM benefits both the marketing of the hotel and operations as well. It is our experience that relevant audience segmentation and personalizing content leads to a significant increase in campaign performance as measured with ROI, email open rates, click-through rates and likes.