Enhancing Guest Loyalty Through CRM Strategies

Boosting Hotel Revenue through Personalized Guest Communication

Personalization is unavoidable, especially in the hospitality industry. According to McKinsey & Company, brands that implement personalized marketing measures, such as personalized emails, can generally expect a 40% increase in revenue. However, when looking specifically at the hotel sector, the figure is even higher at 76%. This is clearly an opportunity that should not be missed. But why are hotels so bad at personalizing their guest communication - an art that leading OTAs have long mastered?
In this article, dailypoint examines the four main reasons why hotels fail in this area and considers what needs to change in the future.

Maximize Guest Loyalty and CRM Efficiency with Targeted Email Marketing in Hotels

Traditionally, the PMS (Property Management System) is at the center of a hotel's technical setup. As explored in previous blogs and white papers, this is not the best approach. The PMS is an essential part of the IT structure, but problems arise when hotels make it the main source of guest data. Why? The clue is in the name - a Property Management System is not a Guest Management System!

Why Relying Solely on PMS Limits Guest Experience Potential

The information collected and stored by the PMS naturally pertains to front-office functions such as reservations, room rates, billing, etc. Valuable customer data from sources like F&B, POS, CRM, RMS, and IBE systems are usually not integrated. This leads to hoteliers missing the opportunity to create detailed guest profiles and, consequently, to craft personalized marketing messages that really hit the mark. The traditional hotel IT stack is fraught with problems. There is no central data management, which leads to multiple versions of the same guest profile being created. This makes both effective management and utilization challenging. The data is often unclean and faulty.

Enhancing CRM Efficiency by Avoiding Generic Email Blasts in Hotel Marketing

Sending Irrelevant Content When messages are not tailored to each guest, it’s likely that each message will be irrelevant to the recipient. And such messages will accordingly not achieve good results! To return to the earlier example: A guest who visited the hotel's fine dining restaurant twice last year might be interested in a special offer or coupon for that restaurant. However, they probably won't want to know about a 50% deal for the budget all-you-can-eat buffet!

Boosting Guest Loyalty with CRM-Driven Email Personalization

Prioritization is Key: What if the guest mentioned above used the hotel’s golf course six times or the spa and leisure center even more frequently? Prioritizing a preference for fine dining (if it can be considered a genuine preference after just two visits) would be the wrong approach. How much better it would be to create a 100% personalized email that starts with an offer from the hotel spa, followed by the latest tee times, and ends with a coupon for a fine dinner, thus enticing a third visit. Certainly, other information can be included in the email, some of which may be generic. However, personalized messages must come first, and in a prioritized order, so they are noticed even if the guest only scans the email briefly.

What Needs to Change? Simply put: Hotels need to adopt a new process for creating and managing their guest data. Only then can this data be effectively used for personalized marketing communication.

This might sound like a daunting task! However, with the deployment of leading technology solutions like dailypoint, this - and much more - is possible.

Sources:

• McKinsey & Company: “The value of getting personalization right—or wrong—is multiplying.! November 2021.
• Cendyn & Apaleo: “10 reasons why the guest profile no longer lives in the PMS". January 2020.
• Twilio segment: "2021 State of Personalization Report". 2021.