Industry Update
Opinion Article18 September 2019

Center Your Guests - Not Data - To Generate Repeat Business

By Anil Kaul, CEO at Absolutdata

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Repeat business is incredibly important in the hospitality sector. Building guest loyalty is typically less expensive than acquiring new customers and repeat guests tend to spend more and spread the word when they're happy about their visit. That upside might inspire you to build outreach campaigns based on guest data, but the key to generating repeat business is to center your guests, not the data.

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Data is essential, and companies in the hospitality industry usually have a large amount of information they can use to create guest-centered campaigns. But the traditional methods many hotel chains use aren't as effective as they could be because they focus more on what data says about large groups of people rather than what it tells us about individuals. A truly guest-centric approach requires:

  • Bringing guest survey information into the decision-making process quickly.
  • Using AI technology to connect data from a variety of sources (surveys, property characteristics, guest behavior, local information, demographics, etc.).
  • Taking a systematic approach and adding guest research data to the organization's institutional memory to scale its value rather than using it for one-off purposes.

The objective is to reach out to guests as individuals, offering highly personalized promotions and perks to gain their repeat business. Research data can provide meaningful takeaways that hospitality businesses can use for that purpose, especially when combined with other datasets. But centering outreach on the guest rather than the data requires another step: using AI to create a "digital twin."

Using a Digital Twin Approach to Identify Guest Motivations

The digital twin concept has been around for many years and is widely used not only in marketing but in clinical research, manufacturing, and engineering. A digital twin is a virtualized model of a person that researchers can create by using all the data they have — in the marketing and research field, a digital twin is a more advanced method of customer segmentation, its ultimate expression.

What this means in practical terms is that you can use AI to create a digital twin of every guest, applying research and other data to go beyond demographics and delve into the actions, behavior and feelings that motivate your guests. Research data is powerful when added to the other data you collect because it provides insights that drive successful personalization.

At a basic level, guest-centered campaigns meant to drive repeat business are designed to take the friction out of booking another stay by appealing to past guests with the right message at the right point in the decision-making process. To achieve this, you need to know what the guest knows, understand what drives them and know how the company can make their life better.

The digital twin approach allows you to identify these factors with much more precision than traditional market segmentation models because it centers the individual guest (the "twin") to create outreach rather than focusing on data for a larger cohort, for example, "business travelers age 25-35." AI is an essential ingredient because it has the capacity to analyze huge datasets.

With an AI-powered digital twin strategy, you can bring all the data together from surveys, reservations, digital key use, etc., and let AI and machine learning pinpoint where each guest is on their customer journey, predict their behavior around purchase intent, brand choice and budget and recommend promotions that will appeal to that individual.

Getting Personal with AI

Research data and guest metrics can tell a hospitality business a lot about a customer like when they made the reservation, when they checked in and out, their satisfaction with the room and likelihood to book a room in the next six months. But AI can consider all that data and more — like freely available information about the weather, nearby amenities and events — to drill down further.

For example, hotel data for two guests who stayed at the same property on the same date might be nearly identical, but the guests may have had very different motivations for the trip and therefore would have different responses to follow-up offers. Standard marketing segmentation wouldn't provide enough information to create a highly personalized offer to generate repeat business, but AI can.

An AI-powered digital twin approach could consider factors like check-in and check-out time (late vs. early) to intuit that one of the guests was traveling on business (late check-in, early check-out, used the gym, stayed in the room all evening) whereas the other may have been in town for a music festival (mid-day check-in, late check-out, came and went). The follow-up offers could appeal to these guests' individual needs.

Creating Scalable Impact with AI

Hospitality companies depend on research to understand what their guests want, but research projects are often aimed at answering a single business question and then shelved. That's a waste of valuable data. Instead of shelving data, consider adding it to all the available behavioral information, local data and property characteristics, etc., to create scalable impact across the organization.

With an AI-powered platform and a digital twin approach, you can make the most of your data, using it to identify pain points and conduct hyper-personalized outreach. By bringing survey information and other data into the decision-making process fast and using AI to generate recommendations, you can center guests rather than data and more effectively drive repeat business.

Anil Kaul

Anil has over 22 years of experience in advanced analytics, market research, and management consulting. He is very passionate about analytics and leveraging technology to improve business decision-making. Prior to founding Absolutdata, Anil worked at McKinsey & Co. and Personify. He is also on the board of Edutopia, an innovative start-up in the language learning space.

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