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. 

The Complaining Customer-predict her!

The complaining customer - we just can’t stand them! Well, most of us can’t stand them.  The reality is that business organizations should love them.  Shep Hyken comments that "A complaining customer tells you where you can improve.  They actually come forward and show us where we make mistakes. But, most of the time, people hate to hear the complaints. First, a few facts you should know about people who complain.  Most of the time, when people have a complaint, they complain to everyone else rather than the person or people who caused the complaint. If you resolve your customers’ complaints, you will keep them most of the time.  But first you have to know there is a complaint.  So, how can we find those complainers? Well, most likely customers won’t tell us, so, we have to ask them. It is that simple.  Call them up or ask them in person.  Actively solicit feedback to find out what they are thinking." 

And most criticaly use Customer behaviour data to spot Customer service failures as they occur. Customers are constantly leaving behind a data footprint of "failed brand promises". Direct data analytics to spot incidents of customer promises "not met". The crux of " Analytical marketing" is using data to drive an improved customer experience. Imagine if a bank were to call you up and say " I am sorry sir ,we are one day behind schedule on your cheque book request,please accept our apologies and your cheque book will be with you tomorrow morning". Or better still build predictive models to find customers where "service levels are likely to slip" and then proactively monitor that customer's transactions to create a moment of delight.

And when you find a problem or complaint, resolve it on the spot. No company is perfect.  So find out what those imperfections might be. And, when you hear about a problem, fix it.  And make sure you give that customer a reason to come back so you can do it right the next time.  Take that moment of misery and turn it into a MOMENT OF MAGIC.See what Shep Hyken has to say about ‘The Complaining Customer’http://www.hyken.com/Article_11.html

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

The Data Deluge Makes the Scientific Method Obsolete

 

Chris Anderson has written a great article in Wired on the data deluge and how it poses new challenges to the companies. He writes that the petabyte age that we live in information is not a matter of simple three- and four-dimensional taxonomy and order but of dimensionally agnostic statistics. For companies, that have or gather loads and loads of data, the implications are about how can they quickly sift thro' this massive volumes of data and the successful ones will be the ones who can track and measure this with unprecedented precision and scale. Take a look:

Speaking at the O'Reilly Emerging Technology Conference this past March, Peter Norvig, Google's research director, offered an update to George Box's maxim: "All models are wrong, and increasingly you can succeed without them."

This is a world where massive amounts of data and applied mathematics replace every other tool that might be brought to bear. Out with every theory of human behavior, from linguistics to sociology. Forget taxonomy, ontology, and psychology. Who knows why people do what they do? The point is they do it, and we can track and measure it with unprecedented fidelity. With enough data, the numbers speak for themselves.

The big target here isn't advertising, though. It's science. The scientific method is built around testable hypotheses. These models, for the most part, are systems visualized in the minds of scientists. The models are then tested, and experiments confirm or falsify theoretical models of how the world works. This is the way science has worked for hundreds of years.

Scientists are trained to recognize that correlation is not causation, that no conclusions should be drawn simply on the basis of correlation between X and Y (it could just be a coincidence). Instead, you must understand the underlying mechanisms that connect the two. Once you have a model, you can connect the data sets with confidence. Data without a model is just noise.

But faced with massive data, this approach to science - hypothesize, model, test - is becoming obsolete. Consider physics: Newtonian models were crude approximations of the truth (wrong at the atomic level, but still useful). A hundred years ago, statistically based quantum mechanics offered a better picture - but quantum mechanics is yet another model, and as such it, too, is flawed, no doubt a caricature of a more complex underlying reality. The reason physics has drifted into theoretical speculation about n-dimensional grand unified models over the past few decades (the "beautiful story" phase of a discipline starved of data) is that we don't know how to run the experiments that would falsify the hypotheses - the energies are too high, the accelerators too expensive, and so on.

Read more on understanding data

Content on-demand will open more information about customers

 

Here's an interesting trend from emarketer on what to expect in the next couple of years on content and data of what & how customers will watch TV and consume entertainment which will become available for analytics &  customer centric marketing.

"At eMarketer, we believe TV viewers will watch more, not less, TV content in the future," says Ben Macklin, senior analyst at eMarketer and author of the new report, TV Trends: Consumers Demand Control. "But they will be accessing and viewing it in different ways from the past."

eMarketer estimates that by 2012 nearly 25% of all TV content watched each day will be time-shifted, on-demand, on the Web or on a mobile device.

"Video-on-demand, digital video recorders, the broadband Web and 3G mobile phones are giving consumers new ways to access and watch TV," says Mr. Macklin. This does not spell the end of the traditional live TV broadcast or the traditional 30-second ad break, but TV advertising will need to evolve if it is to keep pace with consumer usage.

"Traditional TV broadcasters and advertisers have little time to wait to reinvent themselves and their organizations to take advantage of the interactive, on-demand and mobile video future," says Mr. Macklin.

Loyalty Equals Growth for Sony

 

Here's an interesting article from 1:1 Media on how even a well established company like Sony wants to embrace customer-centricity:

At last week's Conference Board Customer Loyalty conference, Sony Electronics Senior Vice President of Service Platfom Dan Wiersma asked attendees how many of them owned Sony devices. Every hand in the room went up.

So why would a company like Sony, which has so many customers, look at customer-focused initiatives to drive loyalty programmes? "Customer loyalty is the pathway to long-term sustainable growth," he said. Even a company as successful as Sony can't rest on its laurels as competitors flood the marketplace. "Technology is still important, but the customer experience is critical."

Sony discovered that customers have very high expectations of quality across the customer experience, from the products themselves to the packaging. "In some cases the packaging inside the box was just a pile of papers," Wiersma said. "Customers expected something more sophisticated and organized from Sony."

In another example, Sony discovered that customers shopping in a Sony Style store consider it a high-end experience. They wanted a nice box and bag for their purchases, so they could walk around showing off their purchase [à la the very recognizable Tiffany's blue bag.] As a result, in November the company redesigned its Vaio computer box and reorganized its packaging. As an added touch, each box now contains a thank-you card from Vaio's senior general manager, containing his direct phone number and email address.

These are just some of the first steps in Sony's loyalty journey, Wiersma said. While the Vaio product group has been very aggressive with its loyalty programme strategy, some other groups are a little slower to take action. In addition, Sony plans to start working with retailers to identify and interact with the majority of Sony consumers who remain anonymous.

Wiersma hopes to keep internal momentum going with assigned "loyalty leads" for each business unit to help support the loyalty programme strategy. Sony has also set up an internal website called Customer Experience Excellence, where every employee can view loyalty data such as customer verbatim, survey results, and business unit action plans. "It gives employees the opportunity to leverage their capabilities and compare themselves to other business units," Wiersma said.

Marketing metrics in action - Case study

 

It's always easy to think about marketing metrics but very difficult to implement on the ground. Here's a great case study by US Bank presented at the recent ANA Marketing Conference last week:

 

If marketing is getting real-time, it's time analytics gets real time too

 

In a fast paced world, where customers' search and buy products thro' multi-channels, marketers have to take action based on customer behavior realtime. Analytics tends to be back-end but it has to move and adapt to this new world order in marketing even if means companies start doing simple things well. It's about getting back to basics first.  Information Week has a review of the book New Age of Innovation on the importance of real time analytics for better customer management:

Managers are aware that data is one of their most valuable assets. In a survey of more than 700 corporate managers and CIOs for InformationWeek, corporate execs say they've put these action points on their list of opportunities for CIOs: "use customer/business data to drive sales growth," and "use customer/business data to influence new product development." Unfortunately, many of the analytical tools available, such as business intelligence and enterprise search tools are complicated, expensive, and temperamental. Add to that the fact that many organizations don't treat their data assets with the scrupulousness they should, and you see why real-time analytics is a challenge.

Real-time analytics is the key to the intersecting forces shaping the New Age of Innovation. Those forces involve co-creating value with each customer individually and accessing resources from the global supply chain wherever they're available, represented by authors M.S. Krishnan and C.K. Prahalad with the formulas N = 1 and R = G. In this dynamic environment, "foresight, not hindsight, is of value," they say (p. 84)

Loyalty in a tough economic climate

 

Adage provides some fine point of view on how loyalty schemes can support business in a recessionary or slow growth economy - by targeting loyal customers and customizing offers:

As a 15-year employee of Hilton Hotels, Adam Burke, senior VP-customer loyalty, has had to contend with the problems caused by economic slowdowns and recessions.

"Like a lot of people in the [hospitality] industry, we're starting to see some slowing," Mr. Burke said. "Our Honors members tend to be the group that buoys us through a downturn. They are the core audience and tend to stay loyal and sustain the business especially through those downturns."

Hilton's Mr. Burke said that's why the company focuses on customizing its offers. "We're in an environment where we have, at any given time, as many as 100 offers in market being personalized on individual customer preferences. It's become a very cost-effective way to run the business and generated a ton of business for the hotels."

Dawn Marie, head of retail practice at Rapp Collins, said ""It's important for us to help our clients understand that loyalty card schemes are not creating plastic cards. It's about creating experiences and recognition with programs versus just making it a plastic card inside a wallet. That's what is next for loyalty."

Customer Engagement - Best Practices

 

Companies always talk about customer engagement but many a times there is always a gap between planning & execution. What really differentiates the best from the not so good are the ones that identify the key levers and practice this consistently. Allegiance shares some best practices on loyalty schemes and customer engagement:

It is important to be able to quantify engagement for a number of reasons. Most importantly is by understanding where you stand with your customers-i.e. how many are engaged, disengaged or on the fence (swing)-you will be able to focus your efforts on developing products, services and programs that will help move people off the fence into your engaged customer group or possibly reverse negative perceptions of disengaged customers and help them become loyal customers.

Four primary economic measurements of engaged customers are:

1. Share of wallet-Engaged people buy more products/services

2. Positive referral-Engaged customers convert potential customers to switch

3. Customer Churn-Engaged people stay longer

4. Feedback Response-Engaged people give more feedback, which in turn gives you the opportunity to address issues and concerns and preserve potentially lost revenue