Do you ever wonder how Netflix or Amazon find the perfect content or products for you when you log on? These industry leaders have cracked the code to keep customers coming back through data-driven personalization—using unique customer insights to recommend the ideal products or shows that are perfect for them.
This is not an outlandish concept. After all, the digital tools and innovations that facilitate many of our daily touchpoints are overwhelmingly ruled by convenience and data. Brands must prioritize their bottom line and, to do that, they must continuously shape their offering (and its delivery) to suit each customer's needs and preferences. The hospitality industry, as you surely guessed, is no exception. The technological trends adopted by hotels en masse are those that travelers have deemed integral to their experience and favor – and personalization can be found at the top of that list.
To this effect, McKinsey reveals that 71% of customers want businesses to provide personalized experiences, and 76% are frustrated when this does not occur. Moreover, 76% said personalized messages were essential in enhancing their consideration of a brand, and 78% said such communication made them more willing to repurchase. When we look specifically at hospitality, we see that over 70% of hotel guests report having a more positive experience at hotels that use personalization techniques.
Of course, individualization at scale would be a near-impossible task without data utilization; by collecting and leveraging guest data, hotels can curate a more relevant and seamless guest experience. Simply put, the consumer landscape (guests included) is now well accustomed to the benefits of a more personalized experience. So much so that they are almost entirely adverse to brands that fail to offer it – but this personalization cannot be achieved (and therefore cannot be promised) without the help of data.
Data Collection in a Privacy-Conscious Age
The consideration of data-driven personalization sometimes feels like a double-edged sword. On the one hand, guests are increasingly adamant in their preference for hospitality brands that offer a more personalized and meaningful experience. At the same time, however, consumers are understandably apprehensive of data collection strategies and notably concerned with the way(s) in which brands capture, utilize, and share their data. As data-related privacy concerns continue to percolate across the population, hospitality brands are under increased pressure to remain compliant in their data capture efforts and, more importantly, understand the data collection methods that guests are willing to consent to. I’ll give you a hint: guests are unwilling to give up their data for nothing in return.
The two primary methods of data capture are collecting first-party data, which is obtained from customers directly, and third-party data, which is collected from outside sources, usually via third-party cookies. For this method to work, the third-party cookie tracks user behavior, preferences, and demographics when users visit sites. Advertisers then use these cookies for audience-targeted ads. Cookies, in particular, have become somewhat infamous over the last few years – so much so that Google Chrome has launched a “Privacy Sandbox” initiative, which
aims to resolve click-based conversion measurements without third-party cookies by tracking conversions within the browser in 2023.
Since this announcement, the question on everyone’s mind has been – will the death of third-party data capture lead to the death of data capture altogether? The answer is, of course, no, but brands that have developed an over-reliance on lazy, third-party data capture methods will most certainly need to shift towards a mutually beneficial arrangement that focuses on first-party guest data and meaningful personalization.
Looking Towards First-Party Future
Here’s the good news; the 2021 Merkle Report revealed that 76% of customers are comfortable sharing their data for personalization. McKinsey found that companies that leverage personalization effectively generate 40% more revenue than companies that don’t. They also found that personalization can reduce CAC by up to 50% while increasing marketing spend efficiency by up to 30%.
Fortunately, first-party data provides plenty of context for hotel brands to unlock a more personalized guest experience, especially across key marketing mediums (such as email). Sources of first-party guest data include:
- Website or app behavior
- Email and newsletter subscribers
- Lead generation campaigns
- Social media
- Customer feedback
- Customer service/sales conversations
- Online chat
Hotel brands can leverage comprehensive marketing platforms to seamlessly track the actions of prospective travelers on their website (with their consent) and use that information (like their email addresses and booking dates) to curate personalized emails or push reminders.
As you might imagine, this is especially helpful in the event of a booking abandonment – that is, a traveler who almost booked their next vacation but got cold feet at check-out. Booking abandonment is, in fact, a major hurdle for hospitality brands, with research revealing an 84.63% booking abandonment rate for hotel websites, in particular. Fortunately, by sending the right message, to the right traveler, at the right time, hotels can employ a more effective marketing and re-marketing approach that reinforces their conversion funnel to drive more bookings.
The Conditional Content Advantage
With the ability to capture data such as location, potential booking dates, gender, travel destination, and booking type in real-time - hotels can easily segment their content marketing efforts to be more targeted and bespoke. RezRecover aims to create a truly frictionless personalization experience for both hotels and guests by leveraging their Booking Engine Data Sync (BEDS) feature, which effectively scrapes booking data from potential guests’ booking engine visits prior to abandonment, and then dynamically injects these booking details into email messaging to increase personalization. To auto-enhance relevancy even further, hotels can also employ the use of conditional content blocks. Using BEDS data (including room image, booking total, arrival date, departure date, number of nights/guests, and more), the RezRecover platform will automatically display conditional content blocks based on certain conditions. Conditional content, such as special upgrades/discounts based on room type abandoned, helps hotels increase the relevance and personalization of their emails while incentivizing a booking decision while a lead is still hot.
Using tools like RezRecover that automatically leverage first-party guest data in a way that is non-invasive and tailored to delight guests, hotels can transition into the cookie-less, personalization-driven future with ease. More importantly, they can unlock higher engagement and conversion rates, increased revenue, and happier guests.