part 2 of 3
|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
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:
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:
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:
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.
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.
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.
|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 [email protected] or [email protected].||
©Hospitality Upgrade, 2003. No reproduction or transmission without written permission.
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|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|