Technology helping personalize guests\' stays.
Mass marketing is dead. Consumers want customized offers and personalized
When a guest checks in to Motel X, he or she gives a credit card and signs multiple forms. At any of 55 Fairmont hotels or resorts around the globe, loyalty program members just pick up their key and go to their room. What makes the difference? Fairmont captures customer intelligence on guest preferences and previous behavior in a centralized database, says Sean Taggart, executive director of marketing in Toronto. The technology supporting paperless check-in also enables call center concierges to quickly arrange preferred tee-times, spa treatments, and welcome amenities ahead of time. Members who like to exercise will find gym togs and shoes in their correct size waiting for them through Fairmont's affinity link with Adidas. "This has worked out to be a really great program for us," Taggart says.
Wyndham Worldwide, a franchise company with 10 lodging brands (Wyndham Hotels and Resorts, Ramada, Super 8, Days Inn) and 542,000 rooms in different price points around the globe, has been using customer intelligence (CI) to differentiate service to its best customers for four years, according to Jill Noblett, Wyndham Hotel Group senior vice president of loyalty and direct marketing. In a legacy loyalty program acquired in the purchase of Wyndham Hotels and Resorts in 2005, customers indicate preferences in call center and online contacts which, along with company-wide stay activity records, are compiled into customer profiles in a centralized database. Managers in all locations can access individual profiles and deliver customized service when the guest arrives—such as smoking room, type of pillow, choice of snack and beverage, etc.
This program is "one of the main reasons members choose Wyndham hotels, so it's really an integral part of that brand," Noblett says. Lesser degrees of personalization take place through a different program (TripRewards) at Wyndham's more modestly priced brands but, at the very least, economy and midscale hotels are urged to use member information to assign room preferences.
Robo-Concierge At Your Service..., Service..., Service...
Well, maybe not, but robot vacuums did go into service at the Novotel London West in 2004. Perhaps robots will find wider application in the lodging industry for cleaning, information kiosks, and 'companionship'—or perhaps not, given the 'high-touch' nature of the industry.
Here's a round-up of other recent developments:
* RFID Food Tray Detector —room signs sense empty trays outside the door and alert staff for pickup (Axxess Industries)
* Digital Peephole—visitors smile for the camera and are shown on a flat-screen LCD monitor inside the room (First View Security)
* Biometric Security—fight internal theft with fingerprint scanning at the point of sale tied into security cameras, installed at the Koi upscale sushi restaurant in the Bryant Park Hotel, NYC (Aloha POS)
* Web 2.0 Trolling—numerous start-ups gather information from Facebook and other
Hoteliers also can use CI to suggest open times at the golf course or restaurant for guests partial to those purchases, says Matt Muta, industry director for Microsoft's Worldwide Hospitality Group. Microsoft is moving into the hotel CI market now in partnership with developers who bake in customer-desired solutions, such as scripting. Muta's favorite CI example: 'We see your conference breaks from 2 to 3, I can make another spa appointment for you if you like.'
But there's more. CI can be used with customer segmentation to gain insight into high-value guests and support targeted marketing campaigns geared toward them, what some call 'business intelligence' (BI). Wyndham's TripRewards program has many years of member information. Noblett's 30-person team tracks program member behavior, runs value- and stay-based analytics, and creates tailored e-mail, newsletter, and promotional campaigns based on preferred hotel brand, type of room, destination, response to prior campaigns, and other data.
The company knows exactly where people are in the reward points-earning process and spurs them on to additional activity ('you're just one night away from a free stay'). Newsletters to members who elect to earn airline miles instead of points feature more airline promotions. Previous purchases from a floral partner may lead to future offers from other affinity partners that provide like products or services. People whose activity level is dropping receive a series
of retention messages. Wyndham Hotel Group also uses some of the data (the magazines that Ramada customers read, for example) for customer acquisition, i.e., understanding who becomes a higher value customer over time and aiming marketing dollars with laser-like focus on finding like-minded prospects. Effort is also devoted to keeping guests 'inside the network,' e.g., tracking Super 8 cardholders who show up at a Days Inn, for example, to increase share-of-wallet.
Microsoft's Muta says that the technology can be used to provide insight into the increasingly important and tech-savvy Gen-Y demographic (today's twenty-somethings). They have new interests (frisbee golf) and expect to be engaged differently than previous generations.
Fairmont recently embarked on a major customer segmentation effort which will drive future marketing plans. "Our next stage is to predict the potential or lifetime value of our guests, to understand what revenue and opportunity they will bring us in the future," Fairmont's director of database marketing Tracey Jarosz says.
In order for all of this to work, customer-facing computer systems must be integrated into a tool that, hopefully, is easy to use (single data entry, single sign-on, etc.). In Matt Muta's view, there are degrees of integration and most vendors stop short of integrating all silos from all guest-interfacing and consumption systems, beyond property management to every point-of-sale (POS), for example.
For Wyndham Hotel Group, the challenge was to pull together all the disparate property management systems in use across this heavily-franchised 6,500-property multi-brand enterprise. There is a central database, but it's not accessed through a single tool. Instead, enough infrastructure is layered onto the property management system at each location to make customer intelligence applications work seamlessly enterprise-wide.
Fairmont started the integration process in 2001 and has recently folded its reservation system into the mix. Information is available at all locations but, as Fairmont has gone international, foreign languages and local marketing nuances posed hurdles. "What's appealing to someone in China is quite different from what is appealing to someone in the United States," Taggart says.
Anyone wandering into this area will find privacy issues awaiting them. Laws, opt-ins and -outs, and the need not to be overbearing are some of the issues Fairmont, Wyndham, and Microsoft have already worked through. Customers are willing to provide information "as long as you are showing [them] there's real value," Muta says. This includes making relevant offers that are meaningful to the individual.
Noblett advises introducing CI solutions incrementally. It's important to show modest wins to build proof of concept and justify further investment. Also, she says, don't think you can 'buy it and forget it.' CI/BI systems require continual maintenance and tweaking to respond to new competitive environments, she says.
The return on investment? For Taggart, the payback is in being able to track subsequent behavior after an offer is made to a customer segment. You can see the additional revenue and, through surveys, increases in customer satisfaction. In this way, the effect of marketing on segment profitability can be assessed over time.
Wyndham Hotel Group has looked at groups of people with similar stay behavior and found that those who enrolled in rewards program were five times more likely to remain customers than those who were not enrolled. "That's really powerful for us because that says this is definitely the glue that's holding them to our hotels," Noblett says.
In the future, expect more systems integration within the hotel and beyond, Muta says. Already, there are in-room video/Internet/computing boxes that tie into room service and other on-property points of sale (Microsoft partner SuiteLinq). Muta believes that integration will spill outside the four walls of the hotel. Unified itineraries are coming, he says, that will present all trip purchases (transportation, hotel, external activities) in one message to the customer.
For now, CI/BI in the hotel space "will only get more and more sophisticated," Taggart says, pointing to casinos and grocery stores as industries where business insight practices are more advanced. As mass marketing gives way to mass customization, customers want to feel that you know who they are and that communications will be relevant to them, Noblett believes. "It's becoming an expectation, so companies really have to deliver on it," she says.