www.hsmai.org Ten MORE Ways to Pull More Revenue Through to Your Bottom Line | 1

Ten MORE Ways to Pull More Revenue Through to Your Bottom Line: Taking Ownership of Your Customer Relationships The white paper “Nine Ways to Pull More Revenue Through to Your Bottom Line,” previously published by HSMAI and Infor, continues to attract such broad and ongoing readership that both organizations thought it warranted another installment.

The scene is a crowded industry event. You know the type – heavy price tags and a sea of dark suited executives representing nearly every brand. There are power brokers, service providers, industry analysts and a veritable who’s who from every corner of hospitality. The session itself is packed as the most senior leaders of some of the largest hotel brands are offering their predictions for 2016. In the back of the room stand two young engineers from Google. They’re listening with mild interest. It’s their first time attending one of these events. One leans into the other and in a whispered tone says, “We’re letting the brands survive…for now.” Think this situation is the stuff of urban legends? Perhaps. But continuing pressure on the industry from a wide swath of entrants, including most recently Amazon, has many high profile industry experts debating the likelihood of such a future: one in which the hotel brand is meaningless, the traveler is loyal to their preferred search engine or booking channel, and their device and its operating system are more important than any advertising, marketing, or loyalty program designed by the hotelier. This scenario may not be so far-fetched. But it is one hotel operators have the power to change.

Traditional thinking is that whoever spends the money to acquire a customer owns the customer. In fact, there are a lot of OTA and hotel brand marketing executives who would still argue this today. But, with the multitude of marketing messages to which a potential customer is exposed, combined with the multiple distribution channels he can use to book, it’s much harder to know exactly who

should get credit for acquiring the customer. And, in many cases, it’s very clear that customers are loyal guests who may use different distribution channels on different devices to book their stay simply as a matter of convenience. There may be some merit to hotel operators increasingly crying foul at paying high distribution costs for customers that are essentially theirs already, and this is surely one of the ways recent RevPAR gains have failed to pull through to the bottom line. But the focus here is on the untapped potential for higher revenue and loyalty that could be gained from those exact guests, if only operators took more ownership of the overall relationship. To maximize your wallet share, ask yourself the following five questions. Then, evaluate your responses against the ten recommendations provided. Am I doing all I can to work the relationships I currently have? OTAs and franchisors perform a crucial role in generating new demand and brand awareness, and they will always have a need to build and own their customer databases. But, in order to lower acquisition costs and increase revenues, hotel operators must take ownership of those customers going forward, which means data quality is paramount. There is a constant desire to append additional information to customer records, and the advantage of harnessing that data is only as good as your ability to leverage it. In a recent article for Hotel Business Review, Bernard Ellis, vice president of industry strategy for Infor

www.hsmai.org Ten MORE Ways to Pull More Revenue Through to Your Bottom Line | 2

Hospitality, points out that “customer data has not only impact for marketing, but it presents a multitude of possibilities for sales and service business units as well.” “By ‘democratizing’ data – expanding business information and the tools to analyze it to a much broader audience – hoteliers can experience significantly greater benefits,” he goes on to say. “If sales representatives can easily run reports and drill down into account details, they can more easily confirm that customers’ needs are being met. If support representatives are provided with a single ‘snapshot’ of the guest when interacting face-to-face or over the phone, they are better equipped to assist with requests and create the feeling of a personalized relationship that makes the customer feel recognized and important. Ensuring that all guest-facing employees have 360 degree visibility into the same information ensures that interactions are consistent, which helps to build brand loyalty and allows hotels to interact with customers on a more intimate level.” For the hospitality industry today, big data is not necessarily the issue. Sometimes, it is a little data challenge – one that usually starts with data management. So, forget big data for a moment. Focus on the data you have. How many databases are in use at your hotel that house customer-related data? More than 5? As many as 15? Are you able to connect the dots from one to the other to gain a fuller picture of your customer? Going back to the desire to continue to collect information on your customers, can you properly identify repeat customers today? How you connect your disparate data sources is critical to overcoming the challenge of identity resolution. This leads directly into the next crucial question for owning your customer relationships.

Does the technology in place today support our customer relationship management strategy? A discussion on technology, especially in relation to driving customer loyalty, can get exponentially more complex by the minute. Start with the basics. To own the relationship, hotel operators must employ technology to take the limited information received via outside distribution channels and match it against existing data. This strategy ties directly back into the importance of the quality of the data. When a known customer returns, you can take control of the pre-stay dialogue as soon as you are contractually entitled. And with good data, you can communicate highly targeted and relevant offers to your guests, pre-, mid-, and post-stay. The goal here is to create meaningful guest interactions and enhance their stay without being obtrusive. Great Wolf Resorts, the largest chain of indoor waterpark resorts in North America, is an example of a company that contended with gaining a 360-degree view of customers. The organization struggled with campaign management; deployment was time-intensive and prone to human errors. There was data from multiple sources, but it was not integrated and thus of questionable quality. Database queries were time-intensive, and there was no access to dashboards or other reporting tools. There was also no integration with customer e-mail lists. Since implementing an integrated CRM solution, Great Wolf now enjoys a more complete snapshot of guest and business performance and consolidated data access to promote faster business decisions and specific customer targeting for promotions.i

Make data management a priority.

Integrate internal data sources for a more holistic customer view.

Match the limited information you receive via other distribution channels against your data.

www.hsmai.org Ten MORE Ways to Pull More Revenue Through to Your Bottom Line | 3

Technology can also be of great benefit as you leverage social media. From it, you can:

Learn more about your repeat guests’ preferences than they might have revealed to you;

Engage in direct dialogue with them about their reviews, both good and bad;

Find new customers whose “likes” are a good fit with your property; and, as appropriate,

Use that content for your own marketing purposes.

Technology as a strategy should also take into consideration how you leverage it to improve the customer experience – and not necessarily in terms of wowing customers or providing surprise and delight. What customers really want in this area is for it to be easy to do business with you. In other words, they want their experience with you to be effortless.

Personalize. Provide highly targeted and relevant offers to your guests, pre-, mid-, and post-stay.

Invest in and leverage technology wisely.

Engage in social media, and connect what you learn with your data. Am I delivering an effortless customer experience? CEB (formerly known as the Corporate Executive Board) has a body of research on sales that is changing how sellers interact with their customers – The Challenger Model. What hasn’t seen as much publicity is a piece of research on customer experience that has huge implications for hospitality, and quite frankly every industry. This particular research, a case study on “How Two Companies Drove Loyalty by Reducing Customer Effort,” was conducted across industries with more than 75,000 customers interacting with contact center representatives or using self-service channels.

CEB’s conclusion is that service providers should stop trying to delight customers. Instead focus on one simple concept: Make It Easy. As service professionals we all know, “We buy from a company because it delivers quality products, great value, or a compelling brand. We leave one, more often than not, because it fails to deliver on customer service.”ii But CEB’s findings are more remarkable when you understand that exceeding a customer’s expectations makes them only marginally more loyal than simply meeting their needs. In hospitality, an industry fraught with opportunities to dissatisfy, we would be wise to heed the report’s advice: “When it comes to service, companies create loyal customers primarily by helping them solve their problems quickly and easily.” What does this mean for hotel operators? Similar to the discussion on technology, the challenges can span from the obvious to the more problematic. Have you done everything you can to be the easiest hotel for the customer to do business with? Consider any service area that facilitates customers’ ability to keep their plans organized, such as the friendliness of your cancellation policies and the ease of submitting their expense reports after their stay. Instead of confusing your frontline employees with directives like “delight and surprise,” simply tell them to “make it easy.” Instituting a service culture that gives all relevant employees access to customer preference data and empowers them to remove obstacles for customers drives home the point that it’s you, not the channel, who know that guest best. Focus on reducing customer effort. It is a better predictor of loyalty than traditional satisfaction measures and Reichheld’s heralded net promoter score. But don’t assume reducing customer effort automatically means creating a complete self-service capability for guests on their mobile phones. Many pre-arrival mobile check-in

www.hsmai.org Ten MORE Ways to Pull More Revenue Through to Your Bottom Line | 4

programs are failing to live up to the hype, not only because of the decreased personal interaction, but because they’ve actually done little to make things easier for the guest. More successful are programs that take advantage of mobile technologies to empower your employees to do things such as check in guests and cut their keys as they wait to claim their luggage bus-side or at the airport. Garnering the loyalty of your customers means the staff at your property is paramount. In large part, your team is the customer experience. As such, you need to be certain you are hiring the right employees in the first place. Having the right tools at your disposal can eliminate much of the upfront pain in on-boarding new employees. In an article titled “Using Talent Science to Outperform the Competition” in Casino Enterprise Management, Dr. Jason Taylor, chief HCM scientist at Infor, helps us understand how the field of talent science can be used to identify the right candidate for the right role in a hospitality organization. Taylor states, “The task of documenting a person’s behavioral traits is the foundation of the industry of talent science. The concept is this: talent science uses big data and performance metrics to determine who is doing the best job for you, and then provides an employee profile that is used to predict those best equipped to succeed in your casino environment. Talent science provides valuable information that can be leveraged not only in the hiring process, but also for on-boarding, talent management, coaching and succession planning.” Taylor goes further to advise, “Hotel and casino management can no longer rely on gut-feel hiring, résumé scanning or face-to-face interviews to make the best hiring decisions. Keep those factors in the mix, but the real information you need is what drives the individual in your specific work environment. The talent science process starts with taking a

detailed look at your incumbent population. Using a proven behavioral assessment, a measure is made of every employee’s behavioral styles and characteristics that represent core behavioral preferences. Certain personality attributes—among them ambition, discipline, energy, acceptance of authority, attention to detail, flexibility, conscientiousness, et cetera—are evaluated. Additionally, talent science must answer the question of what performance measures define success. Behavioral assessment results are then matched to performance metrics at the individual level, and a performance profile is generated that represents a prediction model to identify individuals best suited for success in the specific position.” The bottom line for hoteliers is, guest facing staff must enjoy service delivery. The truly superior hires don’t simply reduce your hiring and training costs, but must possess the longevity to recognize repeat guests even without the aid of technology. Behind the scenes, your team must also understand the core of the business is serving customers – travelers, whether for business or leisure, who have selected your hotel as their temporary home away from home. This isn’t to suggest that you shouldn’t focus on the numbers. However, strong performance is more easily sustainable when it arises as the natural result of satisfied guests.

Be easy to do business with.

Hire (and occasionally you may need to fire) smartly.

What tools haven’t I leveraged? Have you taken stock of all the things you have in your toolbox, especially those that outside distribution channels don’t have? For example, you have access to more granular room type options and content. You also have more intimate knowledge of on-property amenities to offer and package in food and beverage, the

www.hsmai.org Ten MORE Ways to Pull More Revenue Through to Your Bottom Line | 5

spa, location attractions, and transportation, which gives you greater marketing advantage. Your existing property management system or email service provider may have functionality you are not utilizing, to upsell and cross-sell guests before arrival, at check-in, and throughout their stay. Moving from technologies and tools, owning your relationships also requires deliberate assessment of your customer base.

Focus on what is uniquely in your control.

Are there customers I have been overlooking? Don’t just think about individual travelers. How do you service the group customer? Are you providing the same level of service to your meeting planners who are usually the first to want to work directly with the property? Attention to effortlessness can certainly benefit this target group for whom billing, as an example, continues to be a point of dissatisfaction. Journey mapping is becoming more prevalent in marketing research today as organizations look to improve the customer experience. It is the identification of each and every touch point you have with your customer. Have you evaluated your different customers’ journeys to and through your property? In thinking about the meeting planner, from original booking to the presentation of their invoice, is every step as easy as it can be? And don’t forget about those other influencers who may never set foot on property, like travel agents and frequent accommodation bookers at local companies.

Recognize the different needs of your various customers.

Recommendations Owning your customer relationships requires diligence. In spite of what are very favorable supply and demand conditions in many markets today, the hospitality industry remains under constant siege from escalating costs, unpredictable economic shifts that impact travel, market and channel competition, and consumer driven pressures. The questions posed here are offered to help you think critically about opportunities, not only to overcome new and existing challenges, but to pull even more revenue to your bottom line. In summary, to take ownership and drive more revenue hoteliers should:

1. Focus on what is uniquely in your control.

2. Make data management a priority. 3. Invest in and leverage technology wisely. 4. Integrate internal data sources for a

more holistic customer view. 5. Match the limited information you

receive via other distribution channels against your data.

6. Personalize. Provide highly targeted and relevant offers to your guests, pre-, mid-, and post-stay.

7. Engage in social media. 8. Be easy to do business with. 9. Hire (and occasionally you may need to

fire) smartly. 10. Recognize the different needs of your

various customers. The name of the game here isn’t merely fighting for relevance. It’s also about lowering acquisition costs, increasing conversions, and improving customer retention and loyalty. If you don’t step in and own your guest relationships, someone else will.

www.hsmai.org Ten MORE Ways to Pull More Revenue Through to Your Bottom Line | 6

The Hospitality Sales & Marketing Association International (HSMAI) is committed to growing business for hotels and their partners, and is the industry’s leading advocate for intelligent, sustainable hotel revenue growth. The association provides hotel professionals & their partners with tools, insights, and expertise to fuel sales, inspire marketing, and optimize revenue. www.hsmai.org About the Author

Janet Gerhard, Principal of Hospitality Gal LLC, trans-forms the way organizations understand and manage the customer experience. By analyzing and strategically changing how organizations interact with their customers,

she helps organizations redefine their growth strategy and customer experience ecosystem thereby driving top-line growth and bottom line results. In 2013, Janet was honored as one of HSMAI’s Top 25 Most Extraordinary Minds in Sales, Marketing, & Revenue Optimization. At Hospitality Gal she consults on the customer experience within the hospitality sector, as well as in the automotive, business services, healthcare, retail, and technology industries among others. Prior to the launch of Hospitality Gal, Janet led the Hospitality sector of newBrandAnalytics, spent nine years with Maritz Research, and began her customer experience journey with The Ritz-Carlton Hotel Company. She has a Bachelor of Science degree in Hotel Administration from Cornell University.

Infor Hospitality is designed to address the specialized requirements of hotels, resorts, and casinos. With a full suite of financial and operations applications that help you manage the online and guest experience, Infor Hospitality solutions let your employees focus on improving guest service and enhancing your bottom line. Decrease costs, raise profits, grow your business, and build the loyalty that keeps guests coming back for more. You’ll be able to solve old problems in new ways with hospitality-driven, flexible, collaborative solutions for: property management, revenue management, customer relationship management, call center management, financial and back-office management, performance management, asset management and human capital management. Join more than 20,000 hotels, restaurants, and casinos worldwide—including 9 the world’s 10 largest hotel companies—that use Infor Hospitality software to improve guest experiences and drive more profit. With Infor Hospitality you’ll get better information, more efficient processes, and award winning support and services. www.infor.com/solutions/hospitality/ i "CRM Delivers 360 Degree View of Customers for Great Wolf Lodge." Hospitality Technology. N.p., 16 Jan. 2014. Web. 19 Aug. 2015. ii Dixon, Matthew, Karen Freeman, and Nicholas Toman. "Stop Trying to Delight Your Customers." Harvard Business Review. 01 July 2010. Web. 19 Aug. 2015. Lightbulb icon made by Freepik from www.flaticon.com