Building Loyalty Through Understanding

By Adam Kirby, Associate Editor -- Hotels, 10/1/2007

Many hoteliers automatically think of customer relationship management as primarily a marketing tool, and it most certainly is. Valuable direct marketing opportunities invariably arise from effective data mining and comprehensive customer information management. That said, the CRM paradigm is shifting, as the technology becomes increasingly viewed as an amenity for the guests—a way to impress them by knowing their favorite wine, for instance, or when their children’s birthdays are. Loyalty programs are nice, but they mean little if they fail to also foster a personal connection between the guest and the brand.

Onestarisborn is championing the CRM-as-amenity concept as a key component of the nascent hotel company’s line of affordable luxury properties, set to launch this next month. When Onestarisborn’s first hotel opens at Amsterdam’s Schiphol Airport in November, it will be equipped with the latest CRM software from AltiusPAR. At the point of booking, guests will be able to determine not just preferred room type, but also details like lighting preferences, ideal television programming selections, target room temperature, even what genre of music they want playing when they enter their room. The dynamic data is stored in the guest’s digital profile. That profile is then linked to a personalized radio-frequency identification keyfob, which doubles as a room key and helps the property automatically recognize the guest upon arrival at the property. Additionally, the keyfob relays guest preference information as it changes—if the guest alters the room settings, that information is stored for future reference.

As the guest’s profile continues to grow and evolve, Onestarisborn can increasingly individualize the guest’s stay. “The guest will feel that, in every aspect and element of our operations, they will be recognized,” says Onestarisborn CEO Michael Levie. “The thing that is important is that the guest does not even notice it. It is seamless.” By tracking not just guest preferences, but their actual in-room habits, Onestarisborn is able to quantify just how much any particular amenity is actually driving guest satisfaction. With the industry-wide amenities arms race showing no signs of slowing down, such tracking technology figures to become standard. Hoteliers will have a much easier time justifying an expensive flatscreen TV purchase if they have quantifiable evidence that it is increasing bookings, for instance.

Some larger hotel groups are turning to concierge outsourcing services, like Virginia-based VIPdesk Inc., to help strengthen the loyalty of their most important guests. Interval International, plus a major worldwide chain that prefers to remain anonymous, include VIPdesk services as perks in the top levels of their loyalty programs. VIPdesk associates serve as virtual concierges for loyalty club members even when they are not on property or even heading to a hotel. If they merely want help scoring tickets to a big game or reservations to a top restaurant, VIPdesk can help with that—and the request is logged for future reference, of course. The guest is in turn grateful to the hotel company, and the hotel marketing folks get another helpful piece of guest data. “Most people equate CRM with software,” says VIPdesk CEO Mary Naylor, “but it really comes down to interacting with your guests. CRM should be viewed as the total guest experience.”

That is certainly the philosophy at The Rittenhouse Hotel in Philadelphia. The 5-star property uses Gold Key Solutions’ Concierge Assistant application to help hotel staff keep detailed tabs on the personal traits of its frequent high-profile guests. Additionally, the customizable software allows for the storage of easily sortable and updatable concierge information like off-property events, destinations and phone numbers. Since installing Concierge Assistant about three years ago, the Rittenhouse’s concierge operation has become more effective and less cluttered. “In the old days, we would have an enormous amount of paper on the concierge desk. It was time-consuming, embarrassing, and obviously, it was not very efficient,” says General Manager David Benton. “It is also saving us time and giving us more time to spend with guests than with paperwork.”

Silver Legacy Resort Casino in Reno, Nevada, selected the Concierge Assistant software due to its events information storage. In a gaming city like Reno, it is critical that the concierge staff know what is going on where and when, which would be difficult to keep track of without the software, says Anne Osear, concierge services manager. “I just cannot say enough good things about Concierge Assistant, because there are no sticky notes on our concierge desk now,” Osear says. “I love when guests walk up an it is just a computer and a telephone.”

CRM Still About Marketing
Even as the definition of CRM expands to further encompass specialized customer service, though, the marketing aspect remains a critical part. And sooner than later—perhaps even before the end of this decade—CRM software will become smart enough to predict a guest’s lifetime value, based on past spending patterns and typical financial life cycles. “That kind of data could actually be more valuable in the end than a hotel company’s actual assets,” says Connie Rheams, vice president of business development for AltiusPAR, which is in the process of developing such technology. “Imagine if the financial systems of the future say, ‘Yes, that is actually an asset, that you can carry the future value of your customers on your books.” At the very least, it will surely cast loyalty programs in an entirely different light.

Acxiom Corp., a customer data management firm that counts MGM Mirage and three of the world’s five largest hotel groups among is clients, helps the lodging sector gain a better understanding of its guest base by compiling and crunching data from properties all over the world. Spending patterns and guest preferences are stored and sorted for a staggering 180 million individuals, providing hotel marketers strategies to reach potential guests—and make them loyal customers. “Companies are coming to grips with the value of customer data,” says Bob Adams, a travel industry analyst for Acxiom. “There is a light bulb going off in the lodging industry, which has really transformed from being product-centric to service-centric to now being very customer-centric. Hoteliers are starting to understand how to use the customer data they have to gain deep insights.”

And like most aspects of marketing these days, those insights are paired with email technology to create highly targeted, highly relevant sales pitches that guests actually want to read. Since adopting Micros’ newest Opera version five years ago, Red Lion Hotels Corp. has found that guests are significantly more open to marketing efforts, thanks to Opera’s geo-social database filtering capabilities, says Barry Hughes, Red Lion’s vice president for marketing and distribution. Opera’s reservations database “is like nirvana,” Hughes says. “It enabled us from a CRM perspective to pinpoint our customer data. We are trying to maximize our revenue by identifying our best customers and using that information to understand their levels of loyalty, to make sure we are giving back to them a proper level of service.”

Similarly, direct email marketing firm iPost integrates with Diversified Computer Corp.’s GuestWare CRM platform to fire off automated, segmented appeals on behalf of Kimpton Hotels and Restaurants, among other hotel groups. iPost sorts GuestWare data and targets guests based on spend history, highlighting properties and amenities they would be likely to find interesting. “We focus on up-sell opportunities, based on past history,” says iPost CEO Russell McDonald. “If you are booking at a particular hotel, we can include information on those amenities in the confirmation email based specifically on the time you will be at the property.”

The confirmation email is going to be sent anyway, so it might as well include a marketing pitch targeted by CRM data, says Max Starkov, chief e-business strategist for New York City-based Hospitality eBusiness Strategies. It is an obvious chance to attempt up-sell. AmericInn International, which uses artificial intelligence-based CRM direct marketer ZDirect Inc. to execute its e-marketing campaign, does confirmation email up-sell as well as any hotelier, Starkov says. “Their guests are getting a confirmation email with a pre-arrival reminder about the weather, a list of happenings around the area, and a ‘Why don’t you upgrade?’ Just by some of those guests upgrading to a suite, AmericInn will generate hundreds of thousands in incremental revenue this year,” Starkov says.