Industry Update
Opinion Article 7 December 2020

CRM - the Central Element of Success

Advertorial by Michael Toedt, Managing Director at Dailypoint Gmbh

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Hardly any industry collects as much data about its customers as the hotel industry. Along the Customer Journey, each guest leaves hundreds, if not thousands, of digital traces. Modern hoteliers, especially in a post-COVID world must be able to make profit from the opportunities data offers. This requires the definition of a sustainable digitalization and CRM strategy. But what does it look like?

30 Profiles for one Guest is the Average!

Data is generated almost everywhere, when visiting the website, e.g. in the form of log files, during the booking process, whether via the IBE, OTA or directly in the hotel. Data are in the PMS, the POS, the spa system, the table reservation system, the newsletter tool, the loyalty program, the WLAN, etc. The list could be continued almost randomly, and it hardly matters if a single hotel or an entire hotel chain is considered for this purpose.

In a survey of 4.5 million bookings in two of the leading PMS systems, we identified an average of 2.3 profiles for each repeat guest. Due to the large number of systems operated, we calculate that a hotel today has stored up to 30 different profiles per guest in the different systems! How can "Data be the new gold" if dispersed in many different systems? So, what is missing?

The Holy Grail of Digitalization

The goal of Customer Relationship Management is to make profitable customers loyal, meaning increase the number of bookings. The way to achieve this goal is to provide an individual service at all touchpoints. In order to be able to offer this individuality, however, a comprehensive guest knowledge is indispensable. This requires a central, clean guest profile. The central guest profile is virtually the holy grail and should be the core element of any digitalization and CRM strategy.

Today, Big Data offers the opportunity to learn everything about its own guests in order to achieve an unprecedented individualization in marketing, sales and, of course, service. The core success variable today is a deep customer insight, which has to be used everywhere along the customer journey.

The hotel industry lies on a treasure of data which waits to be used. This requires two fundamental changes: hoteliers should accept that the PMS is no longer the leading system in which the central guest profile is managed and, on the other hand, a real CRM is not a newsletter or marketing tool.

A real CRM is not only a Marketing Tool

CRM consists of three area: Customer Relationship Marketing, Customer Relationship Operations (CRO) and Customer Relationship Analytics (CRA). In order to run a real Customer Relationship Management (CRM), it is first necessary to determine where the central guest profile should be located. A study by H2C in 2019 found that more and more decision makers are establishing the central guest profile within the CRM. However, only a few CRM systems today are suitable for this purpose. The reason is simple: most CRM systems are pure Customer Relationship Marketing tools. What is needed, however, is much more a Central Data Management platform (CDM), which acts as the core and to which all systems with guest data are connected.

DQM (Data Quality Management) is the Core of a real CRM

However, centralizing data is only the first step, the most difficult is the one based on it, namely the creation of the central guest profile and the necessary Data Quality Management (DQM). A process which must be fully automated in a Big Data environment. Studies show that up to 75% of all CRM projects do not achieve the desired results due to a lack of data quality. Thus, the ability of a CRM system to clean up data sustainably and continuously should be one of the most important, if not the most important, decision criterion in system selection.

AI is needed to transform Data into Knowledge

In the Big Data era, data is the new gold. But data can only be regarded as a raw material, it has to be processed or refined first, like other raw materials, in order for it to be usable. After data cleansing (see e.g. dailypoint™ Data Laundry), AI (Artificial Intelligence) is required, e.g. in terms of machine-learning processes to convert the data into deep guest knowledge.

In a 100-bedroom hotel, about 5,000 data points are created every day in the various systems, which can be transformed into valuable guest knowledge. The data exists and waits to be used! Why is it not used? The reasons are the heterogeneous system landscape, poor data quality and ultimately a lack of data management capabilities.

Thanks to the digitalization and the associated (data) traces, it has never been easier to build up a comprehensive guest knowledge so quickly when using the right strategy and working with the right partner.

In order to make the most targeted use of the new guest knowledge, it is also useful to weight interests by means of AI. The dailypoint™ Profile Engine uses the cleansed data in dailypoint™ not only to create interests, the system also weights and brings the interests into a sequence for each guest. This is the pre-requisite for a smart content marketing strategy.

All departments should be part of the CRM

For the sustainable implementation of a CRM, it is still important that all departments and used systems access the central guest profile. For example, the login-in section on the hotel website should only be the graphic front-end, the data should be pulled out of the CRM via the API. This avoids inconsistencies and data conflicts between different systems. One problem in this context, however, is that many software providers want to create and use their own profiles. But this is a contradiction of global CRM strategy. Therefore, choose vendors who understand the importance of a central profile and are willing to connect!

Top down

The hotel industry is often referred to as one of the sectors that do not benefit enough from digitalization. To change this, hoteliers must first and foremost understand that the PMS is no longer the leading system and that silo solutions are a thing of the past. A successful digitalization and CRM strategy requires the networking of all systems along the customer journey. This is not going to happen overnight, but the objective of sustainably strengthening one's own competitiveness should be worth it. CEOs take care and take over the lead!

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Michael Toedt

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    About dailypoint™

    dailypoint™ is the leading Data Management and CRM platform for sophisticated individual hotels and hotel groups. dailypoint™ collects data from all relevant sources such as PMS, POS, website, newsletter or WiFi and automatically creates a central and consolidated guest profile. In 350 steps, the data is processed and enriched by means of artificial intelligence (AI) to create a guest profile never seen before.

    The cloud-based SAAS solution consists of 15 modules and is complemented by the dailypoint™ Marketplace with more than 140 solution partners. dailypoint™ not only offers measurable marketing, but also covers the entire customer journey and thus supports all departments within a hotel. The integrated Privacy Dashboard is also the central element for the technical implementation of the GDPR.

    dailypoint™ is headquartered in Munich, Germany and is sold and supported worldwide directly or through its distribution partners D-EDGE and XNProtel.

    For more information visit www.dailypoint.com

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