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Some time ago, I was at a meeting with a hotel group just to catch up with them. Regarding their history and loyalty – they’d been working for years with a colleague who managed their Pre/post-stay customer relations – out of all our services, they only used our email campaign solutions.
Their PMS and Channel Manager were connected well; but their PMS did not enable any 2-way comms (upstreaming and downstreaming of information) with any department outside their Channel Manager.
There was a real communication problem between all their tools. But it didn’t seem to be a problem for them because their customer satisfaction services and sales services were very separate from one another and were both managed from their HQ. They didn’t really need tools that communicated with each other. The same went for the hotels who used the group’s PMS. So everything seemed to be going very well.
Except that… this was all an illusion!
The meeting went well and the client told me that they were extremely happy with the results achieved with our latest email campaigns. The opening rates were good; they’d taken a lot of reservations and the cherry on top was that the new version of the tool was really intuitive and quick to use.
I should have been over the moon, and should have thanked them profusely and then returned to the office to congratulate everybody on the amazing job they’d done. But that isn’t what I did.
After hearing this positive speech from my client, I thanked them and replied with “That is all well and good, but the truth is that all these campaigns don’t achieve your main goal, which is reducing the commission you pay to OTAs. I’ll explain why.”
I then showed them their customer database (that they had previously loaded in my CRM) and I asked them to look at the figures since 2015. These figures looked excellent – around 13,600 client email addresses harvested over 4 years. That was very good considering the size of the hotel. My behaviour was therefore making my client more and more confused.
So I then filtered these 13,600 emails to only show the addresses containing @guest.booking.com. The client then realised what I was trying to tell them. Out of the 13,600 emails that were harvested, 8,000 were emails from @guest.booking.com. so they were totally unusable for email campaigns.
“In reality, your latest campaigns were ONLY sent to the clients who already book directly“.
The client then realised the amount of time that had been invested for several months only to push old “direct” customers into returning to direct booking. Even though they may have increased the amount of loyal customers, it was a long way off what they had originally wanted, which was to pay OTAs less commission.
Customer satisfaction, sales and marketing
No matter what the size of a hotel or hotel group, you often get this separation between the customer satisfaction, sales and operational departments. Each has their own way of structuring these departments, but usually you find the following things:
- Customer satisfaction: all the aspects of the customer experience, satisfaction surveys and e-reputation.
- Sales: distribution, revenue management, marketing, email campaigns and acquisition.
- Operational: accommodation, reception, check-in/check-out, etc.
Even though they deal with different areas, these 3 departments are based on the same foundation, which is the relationship maintained between your hotel/your hotel group and your customers. Whether it’s acquiring a customer, welcoming them and ensuring they have a good stay or making them loyal through email campaigns, it all goes back to customer relations management (CRM).
During their life cycle, your customer goes from department to department and is therefore (directly or indirectly) in contact with all of your personnel, where each of your staff departments seeks to achieve such and such a result to properly fulfil their role.
A damaging loss of information
My first example is flagrant with losing the email address of a customer so that they aren’t included in the email campaign solution. The revenue loss to a hotel through this is staggering.
This kind of incident and the loss it results in can also be compared to lots of other little niggling details like:
- Your customer has expressed dissatisfaction during their stay and your e-reputation software automatically asks them to leave a comment on Google about their stay;
- Your customer filled out a satisfaction survey after they left and expressed their dissatisfaction. You then send them several email campaigns to get them to return. You’re just rubbing more and more salt into the wound. The customer ends up getting annoyed and posts a negative comment online;
- Your customer orders a breakfast on your pre-arrival form and, the day they arrive, your receptionists ask them for a second time whether they’re having breakfast;
There’s lots of similar examples. They are all damaging to a lesser or greater extent… even if none of them are as damaging as “having no way of communicating with your customer after they leave”.
Why is the email address issue so destructive for you? Because OTAs absolutely love targeting your customer with buzz instead of you. And then the customer ends up turning to them instead of you.
Take the following analogy:
Mrs X usually does her shopping at the greengrocer’s. She buys her fruit and veg there every Saturday morning.
One day, because she’s not at home on Saturday, she doesn’t go to the grocer’s. The next day, she looks for what’s open and sees that the local supermarket only closes on Sunday at four. Great! She heads down there and does her shopping. The quality isn’t as good and it’s not necessarily cheaper. She really prefers buying her groceries on Saturday mornings at the grocer’s!
When she gets to the till, the cashier offers her a loyalty card she has to activate online. Mrs X thinks to herself that it doesn’t cost her anything to take this card and she activates her account a few days later.
The local supermarket has just harvested her email address!
Life goes on and Mrs X returns every Saturday morning to doing her shopping at her favourite grocer’s. However, she now gets regular newsletters from the supermarket.
Christmas is getting closer and Mrs X receives an amazing deal on Brussels sprouts and ham. She decides to take them up on this offer and goes to the supermarket. Then, since she’s already there, she may as well buy her fruit and veg at the same time… that will save her having to make two trips.
Life goes on and Mrs X returns to the grocer’s. A few months later, she’s a bit ill and decides to get her shopping delivered to her. She immediately thinks of the supermarket that writes to her every week. Didn’t she see a mail called “First delivery free” recently? Of course, wow, just the job! She decides to benefit from this by ordering online.
Gradually, Mrs X is becoming increasingly a supermarket customer instead of going to her local grocer’s. And all because the supermarket implemented a proper communications system to make its customers loyal.
What if the local greengrocer’s was able to do the same thing? It means they wouldn’t have gradually lost their customer.
The example of Mrs X is obviously massively simplified and only distantly applies to the hotel industry (where there isn’t weekly usage). But it illustrates perfectly what is going on between OTAs and you. It’s just the supermarket communicating with your customers instead of you all over again!
In 2020, it really isn’t justifiable any more to have information systems that don’t communicate with each other. If your PMS only allows you to communicate with your Channel Manager, then it’s bad software that is slowly digging your grave. This observation and this rule hold true for any digital supplier you work with, so:
Make sure you no longer lose any information!
And make smart, intelligent use of the information you have on your customers to make them come back to you.