“Have you stayed with us before?”
Hotels train staff to ask that question. But should they? We don’t think so. Firstly, posing that question to a returning guest will likely leave them feeling pretty underappreciated. Second, technology today makes it simple to find out your guests’ history and welcome them accordingly. Knowing your customers matters because it leads to better service and, all things being well, valuable repeat business.
So how do you do it? You implement customer relationship management (CRM). Broadly speaking, CRM refers to the way an organization uses its own resources like data, technology, people and processes, to manage its relationship with customers across their life cycles. For hotels specifically, it tends to involve employing data about customers to enhance service and inform overall strategy, and there are special software solutions dedicated to it.
The potential outcomes from CRM are many and varied. For example, you could use it to tune up email marketing or even to send handwritten birthday cards to past guests.
For the first in our CRM: A Hotelier’s Guide blog series, we spoke to Triptease’s CRM executive, Cristina Weber, who laid out the building blocks of an effective CRM system. These apply no matter what kind of hotel you’re running and, in fact, to any business, so listen up!
Step 1: Build up a use case
Many hotels seek out specialist software, or CRM systems, to help them get to know their customers. But some fall into the trap of rushing into a partnership with a software provider only to end up with an unwieldy system that no one knows how to use. Learn from their mistakes and make sure you first know why you might want a CRM system and how you would use it. If you still think you need an IT partner, pitch your specific use case to them and not just the need for a CRM system.
Step 2: Identify the data you need and create opportunities to collect it
Guest behavior, booking patterns, weather fluctuations — what information is going to see you accomplish the mission you’ve set out upon? Think carefully about the data you need and the ways you could collect and input it into your system. Do you need to train staff to ask specific questions or could you gather more details during the booking process?
Bear in mind that there may be cultural differences when it comes to personal information. Customers from Asia, for example, are said to be less willing to provide this.
Step 3: Create a plan for storing and tracking data
You’re going to need somewhere to put all that data and that somewhere has to be both secure and easily-accessible by everyone who will be using it. McKinsey’s Del Ross, who has many years of hospitality experience, recommends making the system as automated as possible, so it doesn’t add to the workload of busy staff.
It’s worth also doing regular audits to make sure information is being collected and stored correctly.
Step 4: Have rules for formatting and upgrading your database
We’re not ones to stamp out individuality, but when it comes to managing your data, you need everybody in your team to conform to one style. That means having your system organised in one logical framework and formatted in a consistent manner.
Where possible, use drop down options when inputting data rather than open fields. Guiding users to a preset style will prevent spelling mistakes and inconsistencies with data, for example having multiple variations of country names like UK, U.K. and United Kingdom.
If anything changes, for instance you decide to capture a new stream of data, you’ll need to have a method of updating your database in line with your existing framework.
Step 5: Create campaigns using data insight
Here’s where having a CRM really pays off. It's the bit we call CRM marketing. In a nutshell, it refers to the process of analysing the data you've gathered, generating insights into your customer base and building marketing campaigns around them.
For example, a group that was in town for an art fair last year might want to know about similar events this year and receive a special offer to coincide with it.
Each campaign will need a specific name or identifier, so you’ll need a naming convention. And remember to log which customers are exposed to which campaign (if that doesn’t happen automatically).
Our CRM guru Cris has these words of warning on campaigns:
- Don’t spam. We’re all used to marketing emails so don’t be shy about sending them. But there is a fine line between regular contact and spam and you need to have an idea where that falls.
- Don’t be creepy. You’ll have access to a lot of data about customers, some of which will be sensitive and not to be shared. Ditch any ideas that have a “Big Brother” feel.
- Don’t be overfamiliar. You wouldn’t greet someone you hadn’t seen in 10 years as if they were your closest friend and the same is true in marketing. Keep the tone of your communication appropriate for the audience.
- Think logically. Even if you find out many of your customers have a shared interest, don’t rush to build a campaign around it if it doesn’t fit with what your hotel and brand is about. Customers need to understand you so avoid campaigns that could muddy the waters.
Step 6: Assign key performance metrics and assess performance
Before you press the button on each campaign, set easily measurable and sensible KPIs to assess their success. It could be that you’re expecting a 5% increase in bookings, a 5% jump in email open rate or an additional £5 on-site spend per head. Monitor each campaign’s performance and adjust those benchmarks if necessary.
Step 7: Fine-tune your strategy
What do the results from step six tell you about your business overall and the opportunities at its disposal? Perhaps there’s a particular audience your brand resonates with, or a part of your hotel that is proving popular, or an area that needs a helping hand. Now you know, you can prioritise marketing and service improvements accordingly.
Step 8: Clean-up your database
Your new, informed view of your customers may change what you want from your CRM. In between dreaming up new campaigns, take the time to clean-up your database, removing anything extraneous or incorrect, and get it ready to receive the data you need to achieve your new goals.
Often hotels can be intimidated by the idea of CRM and what’s involved in bringing all their information together. We hope this breakdown shows that once you have a well-thought out plan and a logical approach to data collection and analysis, you are well on your way to having successful CRM.
Next up in the series, hospitality veteran and McKinsey senior advisor Del Ross gives his expert view on the importance of CRM and how hotels can make the most of it. Later in the series, we’ll hear from some CRM providers, who have some eye-opening data on the power of CRM. Hoteliers will be sharing some of their CRM success stories too, so keep an eye out for future instalments of CRM: A Hotelier’s Guide.
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