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Mr. Ellis

Guest Service / Customer Experience Mgmt

Extending the Value of CRM Investment

By Bernard Ellis, Vice President of Industry Strategy, Infor Hospitality

According to Gartner, the customer relationship management (CRM) market is projected to increase to $36.5 billion by 2017. Businesses across all industries are looking to improve customer interactions through technology, but this is particularly critical for hoteliers who are losing ownership of customer relationships to online travel agencies (OTAs) that are outspending them on CRM technology and marketing. CRM applications have the ability to enable real-time connections between hospitality companies and their customers, and benefits are only compounded when solutions are integrated with advanced platforms for revenue management, mobility and business intelligence.

Targeting the Right Guest with the Right Offer

Long gone are the days of "spray and pray" when sending customers every marketing offer imaginable, despite its relevance, was the best way to maximize return. Today's generation of guests expects a more personalized experience that allows them to interact with the hotel property in real-time. This is where CRM technology plays an essential role. By selecting the latest in marketing management solutions to help drive multi-channel and multi-wave campaigns, hoteliers can deliver promotional packages that take guest preferences, demographics and relevance into account. In today's increasingly competitive market, delivering the right offer to the right customer with the appropriate timing is essential to facilitate higher acceptance rates. Increased acceptance indicates greater guest satisfaction, ultimately impacting both revenue and the overall guest experience to help boost top line profits.

When selecting a CRM application, hoteliers should look for functionality that will allow the organization to build interaction profiles in real-time as customers engage with the property or chain. By automatically storing information on individual preferences and past responses, hoteliers have the necessary insight to send offers that are most likely to elicit a response. This makes the guest feel as if they have a more personal relationship with the property because offers are always timely and applicable, which helps to drive the customer's loyalty to the brand. A CRM system that simply automates email creation is no longer adequate. Communications must be meaningful and dynamic versus static, and "learn" from each interaction in order for hoteliers to maximize the return on offers and realize their full benefit.

Consider this illustration. Mr. X is a VIP guest and frequent patron at a luxury resort. Almost any property management system will display his VIP status and preferences to resort employees, and some more modern ones will show purchase history. However, without an integrated CRM application, that is usually where the information stops. Without more guidance from a CRM application, employees will miss opportunities to present him with offers during multiple interactions throughout the day. If the property equipped users with a real-time CRM system, information on this guest would not only be displayed, but it would also be accompanied by recommendations for relevant deals or experiences of interest.

Synchronizing Marketing and Revenue Management

The direct correlation between personalized offers and revenue is unmistakable. However, it is important that hoteliers coordinate CRM and revenue management strategies in order to fully capitalize on technology-driven marketing initiatives. When planning campaigns for the year, decision-makers should examine both prior booking trends and forecasts to determine not only potential need dates, but what market segments it makes the most sense to target, and even what kind of revenue. For example, if a property is located near a large sports venue and typically experiences high occupancy levels during the season, then marketers should utilize CRM applications to generate offers designed to boost ancillary revenue streams rather than fill rooms during that time period. "Fans" who frequent the property should receive emails and notifications about a free appetizer in the hotel's restaurant or discounted spa treatment, instead of offers designed around their room rate. With direct visibility into revenue management, marketers can also quickly roll out new offers if the hotel is experiencing an atypical lag in booking pace. There is no point in wasting marketing dollars during phases of success. Instead, closely examining revenue streams and then creating and timing offers accordingly is the most effective way to use CRM as a means to increase revenue.

The Mobile, Social, Next-Generation Guest

Next-generation travelers are accustomed to speed and efficiency in everyday interactions. Today's guests want 24x7 access to the information they need, when and where necessary. This means that hoteliers are looking to mobile platforms and social outlets as a means to remain competitive in the industry and maintain a high level of brand visibility with this upcoming group of consumers. CRM ties in directly with mobile and social strategies because these outlets create new channels in which to interact with guests.

Mobile platforms are not just for checking-in and managing reservations. They create another avenue through which to present relevant offers, demonstrating to guests that the property recognizes their desire for faster service and will cater to it via a familiar medium. By coupling intelligent CRM technology with mobile capabilities, hoteliers can pinpoint offers that have the highest likelihood of acceptance, and then deliver them to guests on a smart phone or tablet. If the guest installs the property's app, the hotel can also send push notifications as new relevant offers arise. This further improves the chance of a guest accepting an offer because it is received in a user-friendly format designed for today's consumer.

The same concept rings true for social media as well. With more individuals turning to social platforms as a means to plan vacations and business trips, mediums such as Facebook can be leveraged by hotels as an additional avenue to provide guests with unique promotions and packages. However, it is essential that a CRM application with multi-channel functionality is in place first, as this will prevent guests from receiving the same offer multiple times. Unified visibility across all touch points is critical to maintain the sense of an individualized relationship with each guest.

Building a Predictive Model with Business Intelligence

According to Info-Tech Research Group applications "have the potential to help gaming and hospitality organizations of all sizes gain valuable patron insights from otherwise disparate and siloed transactional systems and empower guest-facing employees with actionable data to enhance and personalize the guest experience and increase revenues." In order to gain these actionable insights, hoteliers must extend beyond traditional CRM to incorporate a business intelligence (BI) platform with in-context analytics capabilities.

BI is critical to effectively measure, refine and maximize results from marketing initiatives. By flexibly integrating BI and CRM applications, hoteliers can create a powerful technology environment designed to improve response rates by analyzing guest behavior and preferences. CRM systems provide the ability to create a single record of the guest, but it is BI that delivers the necessary drill down capabilities to derive actionable insights from this data. If marketing decision-makers do not achieve anticipated results from a particular campaign, they can use integrated BI and CRM applications to analyze response data. This allows them to identify common characteristics of guests that did or did not accept the promotion, often helping to answer the question of why a promotion was or was not successful. With the ability to examine responses in-depth, marketers are equipped with the necessary visibility to make beneficial adjustments to strategy, planning and execution.

Consider this scenario. An account executive that travels weekly to visit with clients stays at a property approximately twice a month. She frequently accepts promotional offers for dining in the hotel's restaurant and often treats clients to an afternoon on the hotel's golf course. With an effective CRM application in place, marketers know that this individual is a high-value repeat customer who should receive frequent promotions for both of these ancillary revenue streams. Taking it one step further, an integrated BI platform would allow decision-makers to build a predictive model for insight into future patron behaviors based on the guest's tracked responses in combination with her demographic attributes. Marketers could then utilize this predictive model to determine which guests are most likely to accept an offer, essentially creating a target "group" based on analysis of a single individual to identify repeat behavior patterns.

Predictive analytics also ties into revenue management because similar to the analysis of guest behavior, it enables assessment of key trends in profitability to help optimize pricing. Collaboration between revenue management and marketing in response to actionable insights allows hoteliers to make necessary adjustments, such as matching a competitor's room rate during a slow period, to help boost returns. When key decision-makers on both sides are equipped with advanced drill down capabilities, they can work together to determine the best methods to maximize revenue opportunities.

Extending Value

As a standalone application, CRM technology allows hoteliers to present the best offer at the right point in time to the right candidate, via the right interaction channel. Why present a promotion for a hotel in New York when a guest has a history of staying at properties in California? Why target a VIP customer with offers designed for first-time visitors? CRM applications help hospitality organizations avoid wasting their marketing dollars by taking guest patterns and behavior into account, helping to generate a higher return on investment from ongoing programs and campaigns. By delivering timely, personalized offers, hotels not only increase the likelihood that the promotion will be accepted, but also build a better relationship with guests, as they feel the hotel understands their individual wants and needs. However, it is the combination of CRM with revenue management, mobility, social platforms, and business intelligence that truly allows hoteliers to derive value for the organization. Creating an integrated, holistic technology environment where these applications and their stakeholders are able to collaborate is the true key to enhancing the guest experience and facilitating higher top line revenue.

Bernard Ellis, Vice President of Industry Strategy for Infor Hospitality is responsible for defining the global go-to-market strategy for the entire Infor solution suite for the hospitality, travel, and leisure industry vertical. In addition to general product positioning, brand messaging, and industry relations, Mr. Ellis directly oversees product management of Infor’s hospitality-specific PMS, RMS, and POS industry applications, and pursues their tight integration with Infor’s world-class solutions.. Mr. Ellis also guides these other solution groups on the “last mile” functionality required to achieve specialized hospitality editions that outperform best-of-breed industry solutions, yet are still cost-effective to implement. With his launch of Infor CloudSuite™ Hospitality in 2014, Mr. Ellis marked over 15 years of evangelizing SaaS solutions. Mr. Ellis can be contacted at 202-232-3839 or bernard.ellis@infor.com Extended Bio...

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