Mr. King

Sales & Marketing

Leveraging Interactive Relationship Marketing to Move Customers Through the Lifecycle

By Robert King, General Manager, Travel & Hospitality, ClickSquared

Marketing continues to experience a profound shift as customers bring new demands to organizations, and the travel and hospitality industry is no different. Customers are in control of where and how they engage and they expect an intelligent, real-time conversation with resorts, destinations and travel planners. Interactive relationship marketing is a converged discipline that blends timeliness, the power of Web 2.0, granular personalization, and analytical marketing models with the principles of traditional database marketing and deep vertical-domain expertise to unify and choreograph online (real-time) and offline (episodic) marketing capabilities. By achieving a 360-degree view of customer interests and requirements, travel and hospitality marketers can achieve unprecedented levels of personalization, timing, relevance, cost-efficiency, and accountability.

Today's Marketing Environment: More Options, More Speed, Less Control

In travel and hospitality, the fundamental nature of marketing is undergoing a profound change. Increasingly, customers are bringing dramatically different expectations to their travel decisions and interactions with organizations - about when, how, and where they choose to engage.

The Customer-Managed Relationship

Traditionally, the marketer has dictated the timing and pace of interactions. Today, travelers call the shots. They're screening telemarketing calls and tossing unsolicited mail into the trash. E-mail deliverability rates are plunging as spam filters trap commercial e-mail - solicited and unsolicited. Buyers are initiating and managing purchasing transactions and interactions, leaving many marketers in a reactive posture, without the predictability and control they're accustomed to. The challenge is no longer controlling the conversation, but listening to, sensing and remembering what guests are telling you about their needs and wants.

A Proliferation of Channels

Expensive advertising and direct mail are only smaller pieces of the puzzle. Savvy travel marketers - leveraging online and Web 2.0 technologies - are reaching out to prospects and customers through sophisticated Web sites, e-mail, social media, TXT, blogs, and more. There are more ways to reach the buyer - and more communications to manage and master - making marketing more complex than ever.

Real-Time Marketing

Driven by these channels, today's guest relationships are based on an interactive velocity that was unimaginable 10-15 years ago. In today's environment, you can secure a new guest, cross-sell another service to that guest, lose the guest, and see negative reviews online in the span of an hour. Success or failure are immediately evident. Relying simply on episodic direct-mail drops that may have a two- to six-week latency is antiquated thinking.

Shifting Cost Dynamics

Many companies have embraced database marketing with direct mail. But as energy, materials, and postage costs climb, hospitality marketers are under greater pressure to shift their dollars to lower-cost online channels. Unfortunately, in most organizations, the infrastructure to support real-time marketing across multiple channels doesn't exist.

Interactive Relationship Marketing: A Converged Discipline

To successfully market properties and services, travel and hospitality organizations need to recognize and respond to a game whose rules have changed significantly. To build, sustain, and expand a brand means mastering a 21st Century discipline called interactive relationship marketing (IRM).

With "interactive" I mean much more than simply the online marketers use of electronic tools. I'm referring to a definition that encompasses how the organization structures and engages in the full spectrum of two-way communication with guests - online, offline, telephone, and face-to-face.

IRM draws on the power, fluidity, and dynamism of online channels, adds the rigor and science of structured database marketing disciplines, and backs it with the solid execution of sound, proven online and offline marketing communications competencies. Collectively, IRM unifies the capability to drive online and offline marketing - in real-time and batch - with intelligent models and timely performance measures.

The result is the creation of relationships that captivate and motivate the buyer. With IRM, the guest/traveler and marketer co-manage the relationship. This means a collaborative and highly responsive interaction featuring unprecedented levels of personalization, timing, relevance, speed, cost-efficiency, and quantifiable accountability.

So what does an effective IRM program look like?

An Analysis-Driven, Strategic Framework

IRM starts with a sound grasp of financial models of customer and brand value as the basis for a thoughtful investment strategy. This includes an analysis of the opportunity value and expected marketing yield for each guest and guest segment. In the travel and hospitality market it means having a true understanding of who your most profitable guests are and why. The guests who bring the most revenue into your organization may not be the ones that visit your resort the most often.

Instead of relying on historical figures (whose utility becomes questionable in shifting markets) or old-fashioned hunches, IRM starts with an analytics-driven strategic framework on which to base the marketing plan. With a solid strategic foundation, organizations can confidently plan marketing strategies and programs that cross channels and media. Marketing opportunities identified early in the process should drive marketing objectives and investment-allocation decisions- i.e., what is sold, which tactics are used, and which channels should be leveraged.

After considering the marketing choices - along with the 360-degree understanding of the customer (including needs, demographics, and environment.) - hospitality marketers can leverage that information to create effective and relevant marketing messages.

An Integrated View

IRM works through a full 360-degree view of the guest across different channels. This requires the company to aggregate information from operational systems that touch the guest across the enterprise into a unified marketing database. It also requires sophisticated data analysis in real-time or near real-time. In some instances, online information presents a thin representation of the customer. However, customers engaging online might be very profitable and will expect to be served intelligently.

With IRM, the organization compares a guest's cumulative information history to its defined strategic framework to direct the next appropriate interaction. This incorporates guest and brand value models, behavioral and demographic data, contact strategies, and dynamic offers that optimize long-term guest value. The integrated view of guest's unifies offline and online activities so that marketers can execute smart real-time and episodic communications.

Choreographed Communication

A single direct-mail package or e-mail isn't a campaign. IRM takes a larger view of the relationship. It examines the trigger points, sequences, pacing, and channel mix, to create a comprehensive contact strategy that applies appropriate, relevant, and valued communication that is choreographed to deliver the right message, to the right person, in the right format, at the right time.

For example, if a new traveler books their first trip, the booking organization can capture an e-mail and send an electronic "welcome" kit within 72 hours. Then, based on traveler timing or status, the organization might also send a cross-sell or up-sell offer for an excursion or a trip extension. As the trip date approaches, she might receive outreach customized specifically to her trip, with important travel details. There are dozens of different metrics and opportunity points that can intersect to create a vast number of executions throughout the guest lifecycle - including acquisition, conversion, renewal, lapsed states, and re-engagements.

With IRM, these online and offline contacts can be very granular - relevant, personalized, channel-diverse, and timely. It's all about anticipating consumer information needs and responding with that information in real-time.

An Emphasis on Cost-Effectiveness

Online channels have an undeniable and tremendous advantage in cost-effectiveness compared to legacy channels such as direct mail and telemarketing. Increasingly, companies are looking for smart strategies to migrate their dollars to these lower-cost channels. As postal rates, energy costs, and materials continue to spiral, this dynamic will only intensify.

IRM provides a sound, data-driven approach to increasing the frequency of contact with customers and prospects - without the massive budgets. Instead of the expensive monthly "carpet bombings" of direct mail campaigns, online channels can provide strategy-driven, event-initiated, granular, and cost-effective communications to narrowly defined audiences.

Relevance Means Timeliness Means Relevance

Marketers must move out of the episodic model of marketing communications. Communications shouldn't be driven by a marketing calendar and broad segments. They should be driven by the individual guest context: his unique position in the lifecycle, his contact preferences, his likelihood to churn, and perhaps dozens of other metrics and factors - and the ability to pounce when a well-analyzed, pre-defined combination of factors arises - a behavior or an absence of behavior.

A Platform Combined with Domain Expertise to Manage the Complexity

It's easy to see that this type of marketing involves an unprecedented level of complexity. What's more, the only way to properly gain control over that complexity is to unify those efforts and eliminate the scenario where disparate tools, processes, and agencies deliver fragmented programs based on partial customer views. An appropriate IRM platform must bring the offline and online together and provide a proven process to design and execute programs effectively.

In Closing

It's not uncommon for a mature IRM program to have hundreds of different campaigns that run continuously. With IRM, your decision rules determine every hour, or every day, what to communicate with each individual guest. This foundation of marketing for all guests enables you to focus attention on fine-tuning these programs and addressing new challenges like adding new services to offer guests, finding new guest/traveler segments, and delivering a better overall guest experience before, during and after their stay.

With more than 20 years of experience in the travel and hospitality industry, Robert King has held marketing, sales and senior management positions at a variety of organizations. Mr. King works with ClickSquared clients throughout North America, Asia and Europe to develop and implement highly targeted, timely, interactive customer relationship programs that result in increased ROI. Mr. King can be contacted at 480-603-9403 or bking@clicksquared.com Extended Bio...

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