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. 

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)?

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

 

The Bottom Line on Marketing Accountability.

Peter DeLegge has this interesting take on Marketing accountability,which continues to be a hot topic for CEOs today! Often the challenge that Marketers face is that it is actually very hard to measure some aspects of marketing-how do you then direct your efforts at "measuring what can be measured". The other aspect is to co-opt the CFO in this journey towards establishing measurements.It helps to have the CFO on your side and maybe for that one has to choose the areas where you want Marketing measurement to make a mark! For companies which have abundance of Customer data ,an interesting way to do this is Analytical Marketing. It is of course difficult to implement Analytical marketing with well crafted Marketing measurements! And often  the reality is that there is a lot of talk, but not an equivalent degree of action. Consider a recent study by the CMO Council that found less than 20% of top technology marketers surveyed had developed “meaningful, comprehensive measures and metrics for their marketing organizations.” The last major study on marketing ROI found that 68% of marketers were unable to determine the ROI of their initiatives. While marketing accountability is a priority, these studies send a clear message: We’re not there yet.While determining marketing ROI is ideal for large initiatives and initiatives where it can be easily determined, such as direct mail or online marketing, it can be complex and cost prohibitive process to accurately determine marketing ROI on small offline branding campaigns. Marketing ROI is the ideal measure, but it can be costly to properly implement. The real bottom line is that CMOs need to sit down with CFOs to determine the appropriate marketing measures and who is best suited to monitor these measures.See what Peter DeLegge has to say about ‘The Bottom Line on Marketing Accountability’.http://www.marketingtoday.com/marketing/1204/bottom_line_marketing.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

 

Sales & marketing silo syndrome: a real problem

 

The CMO council recently released the findings of the Sales & Marketing Silo, emphasizing on how important it is for organization to have unified data sources for better customer management. Since data between sales & marketing need to be fused for increasing marketing ROI. At Cequity, we too see this gap existing in companies as a part of our client assignments. Enterprises need to effectively harness this data for increasing marketing ROI. Many companies have recently started to take steps in breaking this silo and ensuring there is better synergies between these two departments. Here are the survey findings:

• Less than 20% of respondents said that their sales and marketing organizations were "extremely collaborative", and most others felt that the two groups had "intermittent relations and interactions".
• Looking at the ways in which sales could add value to marketing messages and communications, survey participants felt that engaging strategically with customers to better understand their problems and needs was the most valuable contribution.
• Two of the most important roles that marketing can play in optimizing sales performance were cited as "fielding campaign services that generate and nurture leads and opportunities", and "providing customized value-selling content and presentation materials".
• Only 12% of sales and marketing professionals said that they have a well-integrated, real-time view of all customer interactions, and only 37% reported good visibility into prospects, sales pipeline, deal flow and conversion rates. At the same time, 20% indicated that marketing currently hands leads to sales but has no insight into conversion and sales closures.
• 13% said that most sales leads are never captured, qualified, or acted upon, while 11% reported that they have no on-premise or on-demand customer relationship system in place.
• Among those who have customer relationship applications, only 13% viewed the application as "highly valued and widely deployed", while 42% reported growing acceptance and adoption. And, while CRM systems tend to be mandated and adopted across the sales function, they tend to be more selectively embraced by marketing teams.
• Data analytics, reporting, and forecasting tend to be the biggest deficiencies in optimizing the functionality and usability of current customer relationship management solutions. The top three areas highlighted by nearly 50% of respondents were: the ability to easily create analytical reports; customization of the application; and forecasting capabilities.
• While 50% said they had "pretty good" or "extensive" visibility in to customer accounts and business activity, the remaining 50% said that they often had trouble finding customer account data, did not have enough information, or had no information at all.

Building brand agility thro' customer insights and integrated marketing techniques

 

A slow economy does not always mean death-knell for brand marketers. The ones who mine customer data, identify purchase patterns and discover useful insights will be the ones who will win in this environment. At Cequity, we continue to advice companies to walk this path with 3 specific strategies:

• 1. Accelerate your customer database management strategy
• 2. Embed analytical thinking within marketing teams where use of data & analysis is made mandatory
• 3. Micro-market - Identify smaller & smaller segments and increase campaign velocity with relevant offers

Here's what the article has to say:

According to Experian, companies that can gain useful customer insights through integrated marketing techniques will benefit from greater agility than their competitors and will be able to more quickly adapt to market changes and provide products, services, and value propositions that are more closely tuned to customer needs and purchasing patterns.

Collect insights, not just data
According to Marie Myles, director of marketing consulting at Experian's Integrated Marketing division, "Based on our experience with some of the world's largest consumer brands, the turbulent economy simply means a re-doubling of efforts to derive even more valuable intelligence from every consumer interaction."

Actions for brand growth

• 1. Understand customers and their needs
  Customer insight needs to be continually revisited to ensure that it is up to date, focusing research investment on this area and not solely on the brand. Marketers need to use this intelligence to create engaging and relevant messages based on a solid understanding of each customer's preferences, needs and behaviors. This will pave the way for true one-to-one communication and enhanced brand loyalty.
• 2. Analyze and segment
  Customer profiling, clusters or RFV models are essential to identify which customers are spending the most, how to uplift sales and to detect high value customers that show signs of diminishing value. As new trends emerge, marketers can use this insight to adapt and refine retention marketing techniques on a personalized basis.
• 3. Adapt products and services
  It is imperative to assess the environment and for marketers to re-evaluate their propositions. In a changing economic climate brands need to be responsive to evolving buying habits. By taking this approach, marketers will be able to offer a better service to customers, making it harder for competitors to lure them away.
• 4. Integrate channels to increase customer engagement
  Customers expect to be contacted through different media. Companies need to understand these media links and weave different online and offline messages to build compelling, engaging and personal experiences. Integrating channels at different stages of the customer buying cycle and customer management programme will drive benefits including a more consistent and persistent message.

How Harrah’s Entertainment translates customer data points into the big picture.

 

At Cequity, we have always believed that "earning points" in a loyalty program is a means to an end and not the end itself. Many companies fail to see the data from such programs holistically and tend to treat it too tactically leading to managing the points rather than an effective customer management service intent with which they started these programs. One of the few companies that have made this transition happen is Harrah's Entertainment. Here's what David Norton, CMO of Harrah's Entertainment had to say on loyalty card scheme:

Pointillism is a painting style in which the artist dabs small dots of primary colors on the canvas. Viewing the artwork at nose-distance, you see nothing but adjacent points. But step back, and suddenly you see Georges-Pierre Seurat's A Sunday Afternoon on the Island of La Grande Jatte.

Analysis of customer behavioral and transactional data can similarly suffer from such granular myopia. Individual data points viewed without an overall perspective not only masks the larger view, it also blinds you to opportunity.

When I joined the company in 1998, we designated customers who played $400 in a given visit to one of our casinos as VIPs who received preferential treatment. But a customer who played $402 during one visit, triggering VIP treatment, might play only $398 on a subsequent visit and receive no such treatment. More importantly, customers who played only $50 a day but visited 50 times a year received no differentiated service at all.

As our goal is to see the total picture of a customer's play with Harrah's casinos, members earn credits across any one of our 12 casino brands. This feature not only benefits our members; it also allows us to measure their cross-market play. A third of our revenue comes from members playing in a property other than their home property-whether home is Las Vegas, Atlantic City, Reno, New Orleans or Tunica.

Our Total Rewards database also gives us unique insight into our customers' total relationship with Harrah's-including their non-gaming spend. Historically, Harrah's Entertainment earned 80 percent of its revenue from gaming; our initial data analysis revealed that we received less than a third of our customers' non-gaming budget. Once we acquired the Caesars Entertainment family of properties, however, non-gaming revenue-from hotel stays to fine dining to entertainment to shopping-became a significant portion of our business. Caesars Palace provides a strong gaming revenue stream from a relatively small number of VIP players, but many Caesars customers come to Vegas for non-gaming entertainment. We can now encourage non-gamers to use their Total Rewards card, for stays at Caesars Palace, trips to the spa and on our shows and still receive all the benefits of our loyalty programmes. Today, $2.1 billion of our revenue comes from non-gaming activity-and we want the total picture of those customer relationships too so we can customize their marketing and service interactions and thus increase marketing roi.

Why are you still waiting to automate your marketing programs?

 

Companies spend millions and millions of dollars running marketing programs to both acquire and retain customers. But, we do believe that in an increasingly multi-channel environment, companies will be able to realize multi-fold returns on their spends, only if they automate the marketing process. Erick Slack writes:

Perhaps the biggest stumbling block for companies debating whether to purchase a marketing automation platform is the fear it will be a high investment getting wasted. But if you're a business leader, you should really be concerned with how a marketing automation platform can increase sales. Whether you want to capture more leads, qualify the strength of leads or determine the value of leads after a marketing campaign, marketing automation platform can help, which inevitably results in higher sales numbers.

Integrated Marketing

Marketing-automation solutions integrate marketing and lead-management programs to improve their effectiveness. Criteria for determining the strength of leads can be combined with tools for permission-based emails, direct mail, customer surveys and market-research solutions to ensure that you're targeting the right customers.

Improved Sales Opportunities

Marketing automation also helps ensure that sales and marketing departments are in harmony about how to achieve the desired increase in sales. The software can provide tools, research prospective leads and conduct personalized marketing campaign services. According to strategist and business adviser Jill Konrath, "The only way to capture the attention of corporate decision makers is to create a very personalized message based on in-depth research of their firm."

Analyze Effectiveness

Marketing-automation software additionally helps you determine if your last marketing campaign was a boom or a bust. Whether campaign planning is done for short-term results or is part of a long-term strategy, you'll have access to real-time information about all of your company's marketing and lead-management efforts. Analytical tools give you the ability to track campaign success or failure, and can help companies create metrics and protocols for crafting consistently effective marketing campaigns. This results in more leads, which naturally boost sales.

Given these benefits, many companies have realized the value of having an automation platform for their marketing campaign planning and have proceeded to take action to show quick wins and expand, once a business case is built with the right ROI metrics.