Recency, Frequency and Monetary Modeling (RFM) platform provides hoteliers with vital tool to segment and target most valuable guests during all stages of the hotel stay experience.

Hallandale, FL – June 9, 2015 – ZDirect, a leader in above property marketing solutions and a pioneer in hotel marketing automation, has announced the launch of its Recency, Frequency and Monetary Modeling (RFM) functionality. ZDirect’s innovative eCRM platform can now analyze the spending behaviors of each guest and provide staff with an easy to understand numerical value that serves to score a guest’s financial value to the property. With RFM, hoteliers can observe a guest’s most recent spending, how often they may make a booking/purchase and what the value of his or her bookings, upgrades and purchases tend to be. Equipped with such data, hospitality professionals can effectively identify and better target guests that belong to their highest spending brackets and most valuable marketing segments, while also allowing them to recognize and devise a marketing strategy for guests that have reduced their spending with the property.

ZDirect RFM’s proprietary analytics feature a unique algorithm of data science that computes and assigns a comprehensive score for each guest, based on their purchase recency, booking frequency and monetary value of each purchase made. When combined with ZDirect’s Lifetime Value analysis, functionality that supplies regression models to property staff with a real-time prediction of a guest’s lifetime value in monetary terms, the two services complement each other to create various segments of guests; groupings (bins) that are organized into equal width or equal frequency with respect to value. A model is then generated that can forecast which tier a guest should belong to, based upon their future revenue-spending potential.

In utilizing a scoring system to evaluate the value of each guest, RFM assigns points for nights spent per stay, as well as each stay in general. Recency of visits and how much was spent on each stay is then factored in to calculate lifetime value. As a property’s marketing department becomes more familiar with RFM analytics, additional Recency bins can be added for increased segmentation and guest spending behavior insight. RFM also provides the added advantages of increased survey responses, through its use of segmentation and by targeting guests with relevant email marketing content.

“Once given the ability to efficiently identify a guest’s specific spending preferences, hoteliers are in a position to ensure that any potential for extra revenue is fully maximized,” said Matthew Kelly, Data Scientist at ZDirect. By leveraging RFM and Lifetime Value analysis together, property staff can apply a rapid, hands-off approach to identifying and targeting the most profitable guests, as well as those at risk of becoming inactive customers. This creates an ability to offer personalized promotions that are more likely to match a guest’s needs, thereby increasing both satisfaction and revenue.”

When combined with predictive and descriptive analytics, a hotel’s eCRM efforts can attain a significant boost in effectiveness given the existence of a centralized and much more comprehensive profile for each guest. With guest profiles incorporating both an RFM score and Lifetime Value information, marketers can be assured that past, present and future guests’ preferences are accurately represented. This ensures that any electronic surveys or promotions can be customized to address specific tastes or needs, and therefore dramatically increase successful response rates.

ZDirect will be exhibiting RFM analytics at HITEC 2015 (booth #631), alongside its eCRM and range of eMarketing tools. Company CIO, Shayne Paddock, has been invited to speak during the event’s “Personalization of the Guest Experience” session that will take place June 17th at 2:30 p.m. ZDirect will be joined by Coast Hotels to demonstrate how properties can increase ADR and brand-loyalty by implementing winning strategies and best practices to create a uniquely personalized travel experience for each guest. For more information or to schedule an appointment, please contact: [email protected]