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. 

Is Customer experience too much fluff for the CFO?

Often marketers are rapidly putting together rollout plans and aggressively chasing market share and customer centricity takes a back seat. But does customer centric action impact the bottomline!Do the CEO & CFO care?

Forrester’s previous research has shown a high correlation between customer experience and three key elements of loyal behavior: willingness to buy more, reluctance to switch, and likelihood to recommend.

Here is an extract from an interesting study from Forrester:

But how does Customer experience affect a company’s bottom line? To answer that question, we looked at the percentage of loyal customers within the customer bases of more than 100 companies. It turns out that customer experience leaders have an advantage of more than 14% over customer experience laggards across all three areas of loyalty. The annual revenue gains from a modest difference in customer experience can total $311 million for a large hotel. Banks and hotels garner the largest gains from their current customers, while airlines get the most from an increase in positive word of mouth. Customer experience professionals should use this information to build customized business plans.

I believe that in growth markets such as India the opportunity to embed "customer centric" processes into the fabric of the organization is very strong. This is because entire industries are being created right from "scratch"-Retail, telecom and many others.

It needs a strong CEO who drives the customer centricity agenda himself and makes it practical for the market to absorb. The CEO then must drive a technology agenda, with the CTO, which puts together the "plumbing" for crafting a great customer experience.

 

Superior Customer experience : "Organization instinct or Process"?

Robert G. Howard  has this interesting post on how Companies seeking to become more customer-centric should define the customer experience as a formal end-to-end process in their organization.

 

He makes a compelling point : "For those organizations that have formally adopted a process-centric approach to business, the process is often formally defined, measured, monitored, and continually optimized. This level of discipline is critical to deliver a process that is high performing, predictable, efficient, effective, and error-free. In order to become more customer-centric, businesses should add the customer experience end-to-end process to their portfolio of strategically important processes. The customer experience is a process. Like any process, the customer experience process can work perfectly (or go horribly wrong), may contain numerous scenarios, and it can be analyzed, re-engineered and optimized.
Great customer experiences don't happen by accident. They require a keen attention to detail, a focus on every touch point, and an orchestration of all customer encounters regardless of how each customer may navigate the company. Mastering the customer experience must begin with mastering the end-to-end customer experience process."

Read more about what Robert has to say at:

http://www.clearbrick.com/blog/labels/customer%20experience.html

My take is as follows:

• In many organizations no particular function is mandated with driving a "customer centric" agenda.
• Often Marketing picks up the gauntlet !But the reality in many Services organizations(banks, hotels, telecom companies) is that Marketing often does not have the clout to push through organizational changes which impact customer facing processes.
• However in growth markets such as India the opportunity to embed "customer centric" processes into the fabric of the organization is very strong . This is because entire industries are being created right from "scratch"-Retail, telecom and many others. It needs a strong CEO who drives the customer centricity agenda himself and makes it practical for the market to absorb. The CEO then must drive a technology agenda ,with the CTO, which puts together the "plumbing" for crafting a great customer experience.

 

 

The psychology of waiting!

Frank Capek has this very interesting take on something that we end up doing everyday-waiting! In fact today “waiting” has become multi channel-you wait in physical queues and you also wait on the IVR for the call centre agent.

 

 Here is what Frank says: It’s hard to overestimate the impact of waiting on your customers’ experience.  Across the research we’ve conducted, some of the most dramatic customer defections occur because of bad waiting experiences.You can help customers “lose wait” two ways: 1) reduce the actual waiting time and 2) design a better waiting experience; one that is more pleasurable or at least less frustrating.

Read Frank’s comments at:

http://customerinnovations.wordpress.com/2008/01/11/helping-customers-lose-wait/

Organized retail is India is growing rapidly and often in the operations intensive world of retailing, executives just don’t get the time to stop & think about the impact of simple innovations in their retail stores.  Carl Bialik writes this very interesting piece in the Wall street journal and  I quote: “But the primary goal often isn't a reduction in wait time. The simplest way to reduce wait time is also the most expensive: adding more employees. And people have inaccurate internal clocks, as research shows, so there's little benefit in shortening the lines, the thinking goes.Instead, retailers are appealing to consumers' sense of justice by ensuring no one is served after another customer who arrives later. And, in the hierarchy of unpleasant activities, they're seeking to elevate waiting above watching paint dry. Such measures can have a big effect on perceptions of wait times, highlighting how in customer service, psychology trumps the basic math of wait times.”

Check out Carl’s article at:

http://online.wsj.com/article/SB125063608198641491.html

Also see this fascinating article on “The psychology of waiting lines” by David Meister. He has made several very interesting observations regarding customers’ perceptions of waiting

http://davidmaister.com/pdf/PsycholgyofWaitingLines751.pdf

I have the following take on this:

1.    Apart from the psychology there is also the mathematics of Queues . Are Retailers looking at the numbers and actually plotting Cash tiller locations basis the consumer purchase data and the throughput of bills per teller point. Maybe analytics here will throw up some very interesting ideas for a Retailer to experiment on.

2.    Visual merchandizing-both visual and sensory –can go a long way in impacting the perception a consumer has about “wait times”. Are marketers doing enough in this area?

Steering customers to multiple channels!

Customers are using your services through multiple channels. Customer's access their bank through either the branch or Internet banking or other channels such as ATMs and mobile banking. Multi channel behavior however needs to be intelligently decoded. Mc Kinsey research shows that Multichannel customers spend on average 20 to 30% more than single channel users. More than 80 percent of a broad cross-section of U.S. retailers now report that they sell merchandise through multiple channels. Currently, customer data are rarely analyzed to understand how individual customers behave across channels. This, however, seems to be the key to understanding the intricacies of how the channels work together.  Have a look at this interesting Mc Kinsey research- Steering customers to lower cost channels.pdf

Also it is no point doing the analytics and then not taking action! Multi channel behavior is  a huge opportunity for a marketer if you are able to consistently use each interaction to market better! Intelligent use of technology to improve the customer's multi channel experience can be a huge differentiator! Especially in growth markets such as India a lot of companies are at an early stage of customer acquisition. Relevant technology brought in early can make a huge difference.

James Taylor has this interesting take on how a bank can make your multi channel experience a powerful competitive advantage.

Here is what he says

"So, what if your bank...

• always identified you when you put your card in the ATM, called the call center, handed over a check at the teller
• remembered your preferences
• remembered your regular activities and prioritized them
• accurately predicted your likely behavior/needs
• applied constraints and circumstances (ATM wait time, call center wait time, teller v personal banker) to its approach
• used the information you gave them, no matter how you gave it to them

and so on...

How might that look?" Check out more at   http://www.edmblog.com/weblog/2006/09/using_decisioni.html

 

Creating "wow" at the Retail front end?

Last week, Cequity was speaking at an event hosted by the Retailers Association of India(RAI) and the topic was really about how Retailers can make Customer experience their true diffrentiator!

The interesting thing in Retail is that eventually ,competitive advantage in location,merchandize assortments & price can be replicated by competition ,but Customer experience can be a unique diffrentiator. The difficult thing about this is that Retail brands have so many touch points with customers and how do you make each of these interactions "memorable".

Many organizations,especially in growth markets & industries are already dangerously "out of synch" from their customers.  One of the indicators of this is this Bain’s research that found 80% of companies believed they were delivering a superior customer experience while only 8% of their customers thought they were receiving a superior experience.

I believe that the key lies in not making the "customer experience" the accountability for any one function but rather making it a key company competency across function. Bruce Temkin of Forrester has this interesting perspective "Treat customer experience as a competence, not a function. Delivering great customer experiences isn’t something that a small group of people can do on their own — everyone in the company needs to be fully engaged in the effort. It all starts at the top; the CEO and his executive team need to be fully engaged in the effort. To keep a companywide focus on customers, companies need a systematic and continuous approach for incorporating customer insights into all of their efforts. That’s why we recommend building a voice-of-the-customer program".

In the last 12 months Customer experience management (CEM) has started to get more profile but it is still just a good idea emerging into an area of marketing thought currently dominated by CRM. CEM is currently a poor cousin to CRM. If it is to grow up and become a powerful business tool it must move out of marketing and directly link itself to business outcomes.  See what Adam Ramshaw has to say about ‘Will Customer Experience Management grow up big and strong like its rich cousin CRM?

http://crmguru.custhelp.com/cgi-bin/crmguru.cfg/php/enduser/std_adp.php?p_faqid=1638

 

 

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

When a customer calls-make it count!

Each time a customer makes contact with an organization through any channel, it is an opportunity to build the relationship and also revenue!In fact even a customer complaint call is actually a gold mine,because very few customers actually care enough for the brand to actually complain! In growth countries like India ,the added opportunity is to use the inbound calls as vehicles for customer education leading to better onboarding of customers.

There are monumental gains to be realized when companies prepare themselves to engage with customers who are calling in. When consumers contact an organization, whether a communications firm, financial institution, retailer or otherwise, that organization has already incurred a cost, simply by answering the phone or putting up a Web site. The challenge is how to more effectively convert those interactions into value opportunities for the consumer and the brand alike.

In order to do this, marketers need to change their perspective and let the customer history, marketplace and business objective drive the engagement at an individual level. Aligning key elements of the customer engagement model, such as channel, cycle, content, cost and competition, as well as embedding advanced analytics into the offer catalog, facilitates personalized one-on-one communication. With an integrated process, high-volume consumer brands can increase conversion rates, identify qualified leads, improve retention and increase satisfaction levels by engaging consumers in targeted conversations.

See what Diane Lucero has to say about ‘Optimizing customer engagement'.

http://www.dmnews.com/Optimizing-customer-engagement/article/127545/

Really want Customer loyalty, improve the Customer experience first!

Customer loyalty is such an overused term today. Every brand wants it and the common thinking seems to be to just launch a card based loyalty program to buy customer loyalty. In fact recent reports from Forrester find an increasing emphasis on customer experience and a payoff in terms of customer retention. It is of course much harder to truly create a strong customer experience. Inadvertently companies make it more difficult for customers to engage and do business with them. How often in a bank, the relationship manager does not have a single view of all your financial investments with the same bank!! But make no mistake about it, building a superior customer experience is a difficult task and often “silo” based organization structures come in the way. Here is an interesting article by Christopher Musico on how to improve customer loyalty using improved customer experience