|By Harry W. Rivkin & John W. Clevenger, April 2005
There has been a lot of talk in the hotel industry the last several years over something called Customer Relationship Management (CRM). In fact, if you asked a room full of hotel operators and technology vendors if they were developing CRM programs and methodologies, just about everyone would raise their hand. This indicates there are many, if not misconceptions, than certainly different definitions regarding the application of CRM. No doubt you have read about CRM, attended seminars and listened to presentations and maybe even invested precious time and resources in either planning or attempting to institute some form of CRM. The good news is that hoteliers are increasingly realizing the need to be aware of not just Revenue Per Available Room (REVPAR), but Revenue Per Available Guest as well. This realization and practice will result in significant increases in revenues.
This, then, could be called the pursuit of true Guest Knowledge.
Let’s start with some definitions. One of my favorite definitions of CRM comes from Brian Cryer's Glossary of IT Terms:
“A sales slogan meaning in summary: it would be helpful to know a little about who buys your products and services.”That’s a great sales slogan, and spot-on, but a more specific definition is this: CRM is a Data-Driven, Customer-Centric program that enables a company to manage customer relationships in an efficient, organized and profitable manner. It is a vehicle to gain trust from customers by understanding the buying behavior and meeting the needs of each customer in a more personalized way in order to increase sales and engender Loyalty though Guest Knowledge.
Hotel operators have attempted to meet and manage their guest management challenges by implementing CRM systems designed to address specific customer related activities such as direct marketing, loyalty programs and customer service. From a technology perspective, the biggest challenge in implementing a true Guest Knowledge model is the fact that customer information is stored in multiple and non-related operational systems and is, well, messy. The same customer may have created transaction records in many or all of the operational systems they encounter during their hotel experience (CRS, PMS, Event Booking, Internet Reservations, etc). In the hotel environment, most often the basic transaction events are transferred over to a guest folio residing in the Front Office System (PMS), often with great detail. Even so, because of the difficulty of correctly identifying the guest at each touch point this often results in fragmented customer information across multiple systems, generating several “truths” for each customer. Unless great care is taken when these data are consolidated, multiple records can and will be created for each guest. Without a single view, or “truth”, for each customer, the hotel operator cannot realize the profitable promise and full economic value of their guests.
If you look at the business process and touch points for a typical hotel guest, you will see there is a vast amount of data collected about each guest and for each visit.
For instance, here are some examples of the data that can be captured in the reservation process alone, even before that first visit:
Here is a strategic approach; build a “cleansed” database that consolidates all of the available source data in one repository with regular updates to maintain the database.
Why this approach?
1. Develop the appropriate scripts for scheduled automated extraction and transfer of data from the operational systems. These automated processes run in background and are essentially one-way – i.e., they will bring data out of the operational systems (primarily the PMS) and will not interfere in any way with operations. Extraction processes can be implemented on a monthly or daily basis.The development of guest knowledge can improve the guest experience, increase revenues and provide you with a competitive advantage. We have happily arrived at the confluence of two great forces that will allow the hotelier to implement and reap the rewards of a Guest Knowledge system. Those great forces are Awareness and Technology.
CRM, or true Guest Knowledge, is first and foremost a philosophical awareness. This awareness allows us to make the commitment to better know and understand the guest company-wide and to develop strategies to make the best use of guest knowledge. The technology provides the opportunity to support this commitment to cost effectively collect, consolidate, “cleanse”, manage, mine and act on guest data from diverse sources and systems. This, in turn, allows the operator to anticipate guest needs and preferences and to exceed expectations and delight the guest with the delivery of personalized services.
Now we are on or way to developing true Guest Knowledge!
About the authors
|Also See:||The ABCs of CRM / Mark Haley & Bill Watson / Hospitality Upgrade Magazine / March 2003|
|Understanding the Power of Customer Relationship Management / Neil Holm / Hospitality Upgrade Magazine / November 2003|