Making Hospitality Marketing Customer-centric

Most often hospitality industry talk a lot about customer service at the property as a key differentiator to customer experience & satisfaction.

I believe this is not the case and most often, it starts with even before the customer visits the hotel or the restaurant of choice. Also, there are many a times, the post usage experience is forgotten and very rarely have I ever seen any credible data-led customer marketing intiatives in this phase. 

It was interesting to see Intercontinental Hotels do very interesting customer marketing work in this area. Here are some interesting facts: 

• Intercontinental Hotel Group’s (IHG’s) uses of data-driven marketing to improve communications with existing customers and prospects is an interesting case study for many hotel groups across the world.
  

• Lincoln Barrett, vice president for guest marketing and alliances, shared that, for IHG, building a customer-centric marketing strategy is based on 3 Key pillars:
  

          - Invest in technology
          - Expand into new frontiers
          - Build a centralized customer organization

She was talking at the UNICA Marketing Innovation Summit in Orlando.

• She talked about the need for real-time data mart that would allow IHG to match the data it was gathering through proprietary and third-party sources to existing customer information. 
  
• According to her this step also made it possible to gain immediate access to data for analysis or campaign building purposes – a significant upgrade to IHG's previous functionality, which updated records in batches and only made data available some 30 days after a customer incident (like a hotel stay).
• She talked about some interesting trends in hospitality Marketing - Right Time marketing, Channel Synergy, Glocal Communication, Non-member marketing etc. 

How to make information affect behaviour?

I read an interesting article on how data which is coverted into information affects behaviour. Most often, all data analyzed and presented as information to users or even to customers may not necessarily have the desired impact to affect behaviour.

Here are some interesting perspectives and points that we need to think to help present data in a manner that can seriously help people change behaviour: 

1. Intuit/Mint are great examples of customers having their financial data(online) of where they spend their monies and how they invest & save. By uploading this data, do people change their behaviour to either spend less or save more? - Mint definitely believes so. According to Mint, they started as analysis tool but slowly progressed into providing insights to customers on their current behaviour and promoting actions that affect behaviour!
   
2. The question really is if data can help change behaviour, how do we present this data so that it really has a telling impact on the customers/users who are using it?
   

       The idea data according to this article that can help this is:

      a. Passive data ( The user has nothing to do with this data)

      b. Non-invasive

      c. Real-time

      d. Focussed ( Like a dashboard with key metrics)

      e. Linked in real-time to the desired effect

      f. Simple to gain insight and understand

      g.Linked to private and personal benefits ( Weight loss/gain)

      h. Linked to public benefits ( Reduces carbon footprint)

      i  Quirky positive feedback

      j. Non-threatening negative feedback

      k. Socially connected to take advantage of human nature

This led me to think how we present various data to our stakeholders across businesses and user departments today. We still have a long way to go especially given the fact that discovery of insights after mining the data, needs to be presented well for it to change behaviour across an organization. Also, if we want customers to either buy from us more or recommend alternative products or services, it needs to be done a lot more intuitively by presenting the facts & insights well to get them to consider our recommendation.   

 

Affiliate Marketing meets Social Marketing

With digital marketing taking centrestage, it time to reassess and evaluate age-old marketing techniques and adapt them to new digital world. Here's how Domino's Pizza is doing it.

Domino's Pizza is using the persuasive power  of socially connected consumers who have huge influence over each other; the key idea here is  how they harness that power and put it to work for thier brand—with rewards, of course, for the consumers in question.

Domino's Pizza has developed a widget that consumers can place on their social networking profile, blog or other online presence, which their friends can then click on in order to order a pizza. For every order, they get 0.5 percent of the sale.

 

Read more here

Talking to your CFO makes Marketing smarter!

The troubled economy is forcing corporate leaders to re-evaluate their spending plans across the board and marketing is not exempt. In reducing marketing budgets, corporate leaders face a difficult set of choices: How much is too much? Are we negatively impacting impacting Revenue producing potential with deep cuts.

Making these choices is particularly difficult if the marketing team lacks a systematic method of measuring the effectiveness and efficiency of marketing spending and a proven method to link marketing spending to business outcomes.

According to Fred,all marketing investments do at least one of three things:

1.    They change customer perceptions in a way that encourages them to buy more.

2.    They provide temporary monetary incentives for customers to buy more.

3.    They make the brand more available so customers can buy more.

While budget cutting and planning for an economic downturn are never enjoyable, they can provide an opportunity for inserting greater rigor, and better capabilities and metrics to make marketing investments more effective in the long run.

See what Fred Geyer and Chiaki Nishino have to say about ‘Making Marketing Smarter Amidst the Cuts’.

http://www.prophet.com/downloads/articles/geyer-nishino-smarter.pdf

Also what this is doing is creating a much greater focus on Marketing accountability. Suddenly the CMO’s are talking to the CFO’s.

 The 2009 Association of National Advertisers (ANA)/Marketing Management Analytics' (MMA) Marketing Accountability Survey, which surveyed 95 senior-level marketers in June, revealed some surprising results. Despite a 75 percent decrease in marketers' marketing budgets this year, as well as 65 percent who said they were expected to drive more sales with the same or lower budget, marketing accountability programs have taken on a greater significance.

Some of those findings include:

1.    An increase in cross-functional marketing accountability teams. Thirty-two percent of respondents said their teams included representation from marketing, finance, and research, up 22 percent from 2008.

2.    An increase in speaking the language of finance. Thirty-eight percent agreed that marketing and finance share common metrics (up significantly from 27 percent).

3.    Use of more sophisticated analytics to determine marketing budgets. Seventeen percent of respondents said they use "what if" scenarios at different budget levels to determine sales and profits--more than double the response from the 2008 survey.

4.    A greater use of predictive modeling. Forty-three percent of respondents said they use customer lifetime value models as an accountability technique, up from 27 percent in the prior year's study.

 My take is the following:

1.    Have you created a set of metrics along with your CFO to measure the effectiveness of your marketing?

2.    Is someone from your Finance team actively measuring your investments in a way that creates joint ownerhip?

3.    Are you measuring both short term and longer term results- as an example a bank may measure short term impact of a promotion on Credit card spending and also evaluate whether in the longer term the credit card customers behaviour changed in terms of increased profitability(larger ticket sizes, more revolve etc)?

HOW TO DESIGN SMART BUSINESS EXPERIMENTS?

Gut feeling based decision making! All of us do it all the time. But doesn't data have a role to play? Wouldn't we be more effective if we can use data to conduct the equivalent of laboratory experiments! Managers now have the tools to conduct small-scale tests and gain real insight. More than the tools however,testing is actually about the discipline that an organization has to put in place a "fact based decisioning environment". Often many companies find it difficult to build the "eveidence based culture"-an environment in which everyone needs compelling data to take important decisions.

But what is too much testing? Thomas H. Davenport explains the ups and downs of testing in analytics.

http://hbr.harvardbusiness.org/2009/02/how-to-design-smart-business-experiments/ar/1

Data, Analysis key to Obama Campaign

When will Politics start using data analytics at an individual customer level. Apparently the Obama campaign did just that and made the political campaigning process that much more efficient. When will smart data usage for politics become a reality for the world's largest democracy,India.

Compared to Business marketers, perhaps political campaign strategists can find even more useful data, or more sophisticated analytics can make outreach even more effective. Imagine if they tapped into shopping behavior, economic status, and social network/Internet pattern use databases. Micro-targeting could allow a campaign to put resources where they would have the most impact. It could also provide individuals with an understanding of a candidate's position on issues of most interest. Some people might fear this level of knowledge is personally intrusive, but according to Steve Polilli: "I have to believe it would make candidates more responsive to the needs of the electorate. I also hope that it would alert the campaigns that some people such as me are completely turned off by negative messages".

The Obama campaign won more than only because of his motivational speeches. See how data was a key lever to this political campaign shown by Steve Polilli.

http://blogs.sas.com/sascom/index.php?/archives/391-Data,-analysis-key-to-Obama-campaign.html

Imagine a world where political organizations have the ability to use a precise mathematical fact-based science to create a one-to-one communication with voters based on in-depth personalized information culled from all available data. Check out more on this at:http://callcenterinfo.tmcnet.com/analysis/articles/21964-political-campaigns-discovering-predictive-analytics.htm

 

INNOVATION LESSONS FROM THE 1930S

History suggests that even the deepest downturns can create huge opportunities for companies with money and ideas. Recent turmoil in global financial markets and its spillover into the real economy have generated considerable interest in the Great Depression.

Especially in growing economies like India,isn't this the best time to challenge all "accepted norms". In many businesses not enough innovation has been directed towards improving the "customer experience". A side effect of a "slowdown" is also that as a retail business or a bank you have fewer customers walking into your stores & branches. That is a great opportunity to invest in innovation at the front end. During boom times such ideas were considered heretical because the front end employee was too busy managing the "footfall".

Can the business practices of the 1930s yield useful lessons for executives setting priorities in today's uncertain and evolving environment? For investments to promote innovation, the answer may be yes. Executives are often told to maintain investment during downturns. It's easy to question this countercyclical advice, however, in times like the Depression or the present, when the volatility of financial markets (an indicator of uncertainty) reaches historic highs. Is the typical behavior of executives-act cautiously and delay investment projects until confidence returns-the wiser course?

Tom Nicholas, an associate professor at the Harvard Business School illustrates the broader points businesses must learn from the experience of the 1930s.

http://www.sata.ca/docs/InnovationLessons.pdf

 

Making experimentation work "in store"!!

What do Silly Putty, Viagra, and penicillin have in common? They are all accidental discoveries or unexpected applications of existing products that came about when researchers were looking for something else. What does this have to do with grocery retailing - especially with tools that promote the cross-sale of national and store brands as well as using communications in fresh departments to drive shoppers into center-store? Maybe the point that can be made is that Retail stores can be used as a great platform for experimentation and the sales data can provide very strong linkages to Marketing strategies that work! But how often do Store managers actually experiment within their stores and do they set up scientific experiments which can be measured with sales & loyalty card data.

In an intensive, long-range in-store test, Miller Zell did indeed "accidentally" find a unique set of strategies and tactics that drove significant incremental revenue across a broad selection of store brands, including a notable lift in both national brands as well as fresh-food sales.

Hear Chip Miller's Innovation on Retail Strategies.

http://www.hubmagazine.com/content/store-brand-surprise-0

The One-to-One Marketing Myth

We have all fallen into the "one-to-one" marketing trap. Songwriter Randy Newman once penned, "One is the loneliest number," yet we promote one-to-one marketing as a strategy to be embraced.

Often it is hard to support the strategy in the "trenches" and then not only does "one to one" lose its value-it can even do damage. An example could be a Retailer who promise Express check out lines to PLatinum customers on paper but at the store they do not have the manpower to run the extra line! 

Many companies manage some powerful database-driven, relationship-marketing programs. All have the overriding objectives of driving frequency and building individual consumer sales. But it's a bumpy road and "one to one" marketing should not become the art of compromise argues Bart Foreman in a compelling article! For example, one client has almost 1,400 stores, so management says it's impossible to keep a list of store managers current and all communications come from the vice president of marketing. The net result is that one of the "ones" in one-to-one marketing is a faceless manager in a big company.

Every customer has potential: Your best customers have the potential to leave; your marginal customers have the potential to buy more; and other consumers have the potential to buy. A carefully crafted relationship marketing strategy, coupled with a customer-centric focus from your front-line sales associates, will bring marketing and service closer together. The end result should be sustainable, long-term growth one customer at a time.

Bart Foreman replaces the original concept of one-to-one marketing with a literal, but convincing view in this article.

http://promomagazine.com/mag/marketing_onetoone_marketing_myth/

How do CIOs tame the CRM beast?

MOST chief information officers (CIOs) may believe that these are not the right times for new projects with expensive funding requirements. But this might prove myopic, especially where customer relationship management (CRM) is concerned.

The last thing an organization would want now is to lose customers. This is the time to deepen relationships with customers. It is on the strength of these relationships that companies will survive the downturn. In fact, most market analysts are telling companies to invest in the most suitable CRM technology before the competition beats them to it.

I also feel that the key point here is that it takes time for key benefits to accrue out of a CRM strategy. For a large organization,it may take 2 to 4 years to extract enough value to make Business impact happen. This is largely because the Change management required in process,people,structure & incentives takes time to play out!

Most companies have invested huge quantities of capital in their back-office environments. To move forward in today's economic reality, these companies need to free investments in one area of the business to fund more important business strategies such as CRM.

See what Nitin Pradhan,has to say about the Customer being King.

http://www.blonnet.com/ew/2002/02/27/stories/2002022700100200.htm