Hotel Online Special Report


The ABCs of CRM
part 2 of 3
Part 1 of The ABCs of CRM defines customer relationship management for the hotel enterprise and identifies the key strategic elements for any CRM initiative. Part 2 discusses the various tactical issues in implementing and using a CRM platform in your hotel company. Part 3 examines the role of the art and science of change management in driving CRM Implementation.
This article is from Hospitality Upgrade magazine. To view more articles covering technology for the hospitality industry please visit the Hospitality Upgrade Web site or to request a free publication please call (678) 802-5303 or e-mail.
.
by Mark Haley & Bill Watson, March 2003
 
CRM is an approach to the customer that involves and embraces the hotel guest, making them want to be the guest of your property or your brand forever.

Customer relationship management systems, often shortened to CRM, are clearly the hot, new technology tool for hotel companies to grow their top lines, increase return patronage by keeping more of the guests they already have and to fatten up the bottom line. Sounds like a great idea, except there is nothing new about it and the dependency is on management and philosophy, not on technology. 

Last issue’s article presented five key strategic elements to any comprehensive CRM initiative. These core aspects included:

  • Guest recognition
  • Data capture and maintenance
  • Channel integration and consistency
  • Ranking and discrimination
  • Two-way personalized dialogs
In this issue the conversation will be about specific tactics for endowing your hotel company’s CRM program with those strategic elements. The key thing to remember here is that CRM is not a computer system, it isn’t a line item in a marketing budget and certainly is not a fad: CRM is an approach to the customer that involves and embraces the hotel guest, making them want to be the guest of your property or your brand forever.

The Four Ps

We all learned about the four Ps of marketing as undergraduates (and if you didn’t take marketing 101, here is the primer). Likewise, any self-respecting CRM toolbox contains its own four Ps:

  • Profiles
  • Preferences
  • Precision
  • Property management systems
Any CRM platform that fails to deal with each of these elements has dim prospects at best, most likely a train wreck. Let’s discuss each of these areas in turn.

Profiles

Effective profiling is at the heart of having one-to-one communications with your hotels’ guests. It has little to do with police officers determining whom to pull over or not, and everything to do with capturing relevant information about the guest and their behavior, both observed and reported. Identifying the data elements to capture and retain represents a major tactical decision in a hotel CRM initiative. The dilemma is between capturing so much information that service delivery is overwhelmed vs. not capturing enough detail to do anything useful with it. Related issues include guests’ legitimate concerns about the potential for privacy abuse.

A giant hotel company will typically store profiles in the central reservations system (CRS), usually under its frequency program. Smaller companies or independent hotels may choose to store profiles in the property management system (PMS). In either case, profiles are often pushed to an outboard CRM system with data hygiene and analytical tools.

The Wequassett Inn (www.wequassett.com) of Chatham, Mass. offers an outstanding example of effective profiling in action. The five-star seasonal resort on Cape Cod uses the off-season to maintain communications with its guests about everyone’s favorite subject, themselves. The resort offers guests the opportunity to complete or update lifestyle inventories that essentially comprise the profile data stored in their Lodging Touch PMS (www.hotelinfosys.com).

Some of the key elements to consider in defining your profile data include:

  • Multiple addresses and telephone numbers
  • Payment methods (i.e. credit card numbers)
  • Prior visit history, typically at some summary level with the detail available
  • Some ranking measurement indicative of value to the brand
  • Family composition
  • Comments
  • Correspondence history
  • Preferences, preferences, preferences
Preferences

Preference data may be either observed or reported. For example, a preference for golfing could be reported by the guest in a profile form completed when registering for a frequency program. Likewise, an observed golfing preference could be measured by noting that a given guest went to a golf resort and had greens fees and pro shop purchases on their folio. Either way, you now have a topic to engage the customer in a dialog about, a topic of value and interest to your guest. Make the communication enticing and attractive and you increase your share of that guest’s wallet and mind.

One challenging thing about preferences is that a single guest’s preferences vary according to the purpose of a given trip and the destination. The vacationer’s preference for a room near the pool usually doesn’t apply on a business trip to Manhattan. The trick for the hotel company is to identify what are global preferences vs. local ones unique to a property.

A sterling example of preference capture in action is Wyndham’s ByRequest (www.wyndham-byrequest.com) program. In addition to being a frequency program driven by personalized communications, guest recognition and service (rather than points, points and more points), ByRequest captures a detailed set of reported preferences, augmented by analysis of observed behaviors.


Figure 1.Screen shot showing reported preference capture from Wyndham ByRequest.
Note the prominent placement of the link to Wyndham’s Privacy Policy.


Precision

Precision of data input is a crucial element for any CRM effort in any industry. Go to the front desk and pull a dozen folios out of the trash can. Scan the address and comment fields for accurate, standardized data input. You are almost certain to find wild variations in abbreviations, addressing and formatting.

This variation cripples a CRM effort that attempts to match new stays with prior guest visits. It becomes almost impossible for the system to match the new record with the old one if the new one is a reservation for IBM and the old one is for I.B.M. The answer is standardized data input. 

Corporate management owns the responsibility to define data input standards for all address, comment or other fields that allow text entry. Property management owns the responsibility to train reservations and front office personnel on those standards and reinforce their use. GDS and Internet reservations often come in with non-standard addresses and must be tidied up or matched to a guest history record.

Sophisticated data hygiene and matching algorithms somewhat address the precision issue, but establishing, training and reinforcing data input standards is the only effective remedy. Note that some legacy PMSs will aggravate this problem by erroneously matching stay detail history records under the wrong history master record, making a bad situation worse. Again, data input standards will minimize the negative impact of the primitive logic used in these systems.

PMS

Many hotel enterprises use a third-party system or service as the heart of their CRM initiative. Some of these systems are specific to the hospitality industry such as GuestWare (www.guestware.com). Others are modules of horizontal CRM platforms from well-known vendors such as Group 1, Siebel Systems, Pivotal or others.

This approach makes sense: Property management systems are built to drive the operation, not perform detailed analyses or manage personalized communications. However, in the hotel environment the measure of excellence in service almost always comes down to a face-to-face interaction in the hotel with the guest. The PMS is a crucial part of servicing that interaction. Getting what we know about the guest and their preferences in front of the employee is a required element in supporting them through that moment of truth interaction. All the profiling and preference capture in the world won’t help if service delivery fails due to faulty or missing information.

Given the role of the PMS in service delivery, an integrated CRM initiative must incorporate two-way data transfers between any third-party system and the PMS. As guest stays are completed, the stay detail and any new master records must get passed from the PMS to CRM platform. Likewise, scrubbed and summarized data must get passed from the CRM system to the PMS to enhance service delivery and improve record matching for the next transaction.

The Four Ps described above are all tactical elements required for a successful CRM initiative in any hotel company. However, there is a fifth element that overarches all of the others: management commitment to embracing CRM as a way of doing business, and thus embracing the customer. Without deep and confirmed leadership, this kind of initiative will go nowhere. If you are concerned about the level of commitment from the leadership of your enterprise, and lack confidence in the ability to drive effective change management, then our advice is to address those issues before funding and launching a CRM effort. 

Read: The ABCs of CRM Part 1
Read: The ABCs of CRM Part 3

###

-

Bill Watson
Bill Watson is the managing partner of The Prism Partnership, LLC, and Mark Haley is a partner. Prism is a consulting practice servicing the global hospitality and travel industries based in Boston. You can contact the authors by phone (617) 236-4297 or e-mail BWatson@ThePrismPartnership.com or MHaley@ThePrismPartnership.com.
Mark Haley

©Hospitality Upgrade, 2003. No reproduction or transmission without written permission.

Contact:

Geneva Rinehart
Associate Editor
Hospitality Upgrade magazine 
and the Hospitality Upgrade.com website
http://www.hospitalityupgrade.com
grinehart@hospitalityupgrade.com

 
Also See: The ABCs of CRM (Part 1 of 3)  / Mark Haley & Bill Watson / Hospitality Upgrade Magazine / March 2003
Getting the Most out of Your IT Investment / By: Clay B. Dickinson / Hospitality Upgrade Magazine / Fall 2002
The Role of Paper in a Digital World / By: Bill Fitzpatrick / Hospitality Upgrade Magazine / Fall 2002
The Rotten Pineapple (international symbol of hospitality) / By: Steve D'Erasmo / Hospitality Upgrade Magazine / Fall  2002
Focusing on Labor Can Improve More Than Just Cost / Hospitality Upgrade Magazine / Summer 2002
Attention Hotels - An Ounce of Prevention is Worth a Pound of Cure / Elizabeth Lauer Ivey / Hospitality Upgrade Magazine / May 2002 
HOSTEC - EURHOTEC 2002 - Room for Improvement / Christel Dietzsch / Hospitality Upgrade Magazine / Feb 2002 
Technology and the Human Touch / Dan Phillips / Hospitality Upgrade Magazine / Spring 2002
Wireless Technology:  Where We Have Been, Where Are we Going? / Geneva Rinehart / Hospitality Upgrade Magazine / Spring 2002
Effective Customer Relationship Management (CRM) Implementations / John Schweisberger and Amitava Chatterjee, CHTP / Hospitality Upgrade Magazine / Fall 2001 
What's Up With Call Accounting Systems (CAS) / Dan Phillips / Hospitality Upgrade Magazine / Fall 2001 
Technology Dilemmas: What have IT investments done for you lately? / Elizabeth Lauer / Hospitality Upgrade Magazine / Summer 2001
Full Circle from Centralized to ASP - The Resurrection of Old Themes and a Payment Solution / Gary Eng / Hospitality Upgrade Magazine / Summer 2001 
A High Roller in the Game of System Integration / Elizabeth Lauer / Hospitality Upgrade Magazine / Spring 2001 
CAVEAT EMPTOR! Simple Steps to Selecting an E-procurement Solution / Mark Haley / Hospitality Upgrade Magazine / Spring 2001 
Your Bartender is Jessie James and He Needs to Pay for College / Beverly McCay / Hospitality Upgrade Magazine / Fall 2000 
Choosing a Reservation Representation Company / John Burns / Hospitality Upgrade Magazine / Spring 2001 
Understanding and Maximizing a Hotel’s Electronic Distribution Options / by John Burns / Hospitality Upgrade Magazine / Fall 2000 
The Future of Electronic Payments - From Paper to Plastic and Beyond / J. David Oder /  Hospitality Upgrade Magazine / Summer 2000
Timeshare Technology Steps Up / by Elizabeth Lauer / Hospitality Upgrade Magazine / July 2000 
Biometric Payment: The New Age of Currency / by Geneva Rinehart / Hospitality Upgrade Magazine / Mar 2000 

To search Hotel Online data base of News and Trends Go to Hotel.Online Search

Home | Welcome! | Hospitality News | Classifieds | Catalogs & Pricing | Viewpoint Forum | Ideas/Trends
Please contact Hotel.Online with your comments and suggestions.