Almost everything customers do today is connected to digital technology: searching for restaurants, cafes or hotels online – on their PCs, tablets or smartphones, watching videos on YouTube, sharing restaurant or hotel experiences or reviews on social media, clicking on adverts, or redeeming vouchers. Every interaction triggers data.
Hospitality and catering businesses can use this data to create insight about their customers and prospects to deliver targeted and personalised offers, content or adverts.
We are witnessing a major strategic shift in the customer relationship. The old days are gone when hospitality and catering businesses could simply push their services at customers. Time is scarce, choice and media are plentiful, and competition is stiff.
Hospitality and catering businesses increasingly need to adopt a more sophisticated approach to customer marketing.
Data informs digital experiences
Discerning and digitally savvy customers, guests and travellers expect restaurants, hotels and caterers to understand them and anticipate what they are looking for. They expect hospitality businesses to use the data they have about them as individuals intelligently to deliver meaningful experiences specific to suit their personal context.
If they are about to go on holiday, they are happy to engage with relevant tour operators and/or hotel brands. If they have just been on holiday, they are much less likely to be interested.
Because customers know that restaurants, hotels and caterers CAN deliver contextual information, intolerance of ‘spam’ or blanket communications is higher than ever. Investment in customer insight is fast becoming a strategic priority as restaurants and hotels are acutely aware that customers are spoilt for choice and they must create loyalty.
The ‘data deluge’
The challenge is magnified by the deluge of data: just a few years ago, in the ‘old media’ world, hotels, restaurants and caterers knew very little about their customers. Restaurateurs knew little about who dined in their restaurants, hotels about who stayed with them. At best, they had a list of frequent diners or guests.
Fast-forward to today’s multichannel world with multiple customer touch points – physical outlets, websites, social media, mobiles, tablets, online transactions, reviews – all with associated data streams. Managing the customer relationship is becoming a complex art. This complexity and data deluge is set to swell.
According to Microsoft, over the next five years we will generate more data as humankind than we have over the past five thousand years. Data is now the core currency of the digital universe, with commercial models increasingly based on real-time data, which has reinvented channels like digital advertising. Amazon, Google and Tesco are examples of massive disruptors in online retail, search, customer interaction and advertising – all powered by data.
Our increasing use of smartphones and mobile tablets, particularly in the UK where mobile data usage is highest globally, according to Ofcom has not only fuelled companies’ data banks but also opened up new opportunities for customer interactions.
Big data: small is the new big
Let’s deal with the ‘big data’ bandwagon that’s commanding so much attention. ‘Big data’ is a poorly defined buzzword (originating from computer science and machine learning) which has a broad application, however most organisations haven’t yet got to grips with ‘small’ data.
Creating the single customer view
The secret to creating value from customer data is not big data but useful or smart data that give businesses the strategic insights to meet business goals.
This exercise starts with identifying and pulling together a few key offline and online data sources to help providers build a picture of their customers’ preferences, spending and behaviours on different channels – the holy grail of the ‘single customer view’.
They can use this insight to give customers more of what they want – cross-sell and up-sell products to grow revenues. The customer benefits by receiving personalised offers relevant to them. It is a two-way value exchange – a necessary condition for loyalty.
As the customer deepens or widens his or her interaction with the restaurant, café, hotel or caterer, additional data sources are created and may be added to the original ‘single customer view’, thereby enriching the profile further.
Over time, this enables increasing granularity in the hospitality/caterer-customer relationship. Start small by creating two-way value from the lowest hanging fruits and build out from there.
The cost of data investment
This is a fundamental departure from the BI (business intelligence) and data warehouse world we once lived in, which gave rise to the fear that data projects take 10 years and require millions of pounds of investment against very uncertain ROI (return on investment). We at @newmedia2.0 sometimes hear this from clients at the start of a customer data-to-insight project.
The good news: a lot can be achieved in the short term without a major investment. The bad news: it’s easier for incumbents when the customer relationship becomes increasingly granular (insight-based), it becomes harder and harder for competitors to compete. This is true for both B2C and B2B customers.
Create meaningful relationships
Whereas traditional marketing approaches focus on taking share from competitors through new customer acquisition, data-centric marketing focuses on building deep and meaningful relationships – and two-way value – with existing customers.
After all it is a lot easier – and a lot less costly – to sell more to existing customers than it is to acquire new ones.
Hotels and caterers that gather this kind of insight can use the knowledge of what makes existing customers dine in their restaurants, visit their cafés, stay in their hotels, or buy their products and stay loyal to them, to target new prospects.
Jeanette Carlsson, CEO of @newmedia2.0
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